Product sabotage

In marketing and retail, product sabotage is a practice used to encourage the customer to purchase a more profitable product or service as opposed to cheaper alternatives. It is also the practice where a company attempts to aim different prices at different types of customer. There are several methods used in achieving this:

Cheap packaging

This method is commonly used in supermarkets, where their cheapest products are packaged in a cheap and basic packaging. These products are normally displayed alongside the more attractively packed and expensive items, in an attempt to persuade richer customers to buy the more expensive alternative instead.

For example, the Tesco supermarket chain sell a "value" range of products in garish 4 color (purple, orange, white and black) packaging to make them appear unappealing and inferior to their regular brand.

Omitting products from advertisements

Not advertising the cheaper alternatives. An example of this method is Coffee companies, who hide or downplay the cheaper drinks in the hope that customers will buy something pricier. Starbucks and Coffee Republic, who both have a product called 'short cappuccino', are known to use this practice. The staff know what it is, the tills have a button for it, but the product is not listed anywhere on the menu boards. The customers who are not aware of it are likely to purchase one of the more profitable items listed on the menu.

Duplicate manufacture

Manufacturing two versions of the same product at different prices. In the hi-tech world it is common for companies to produce a high-specification product, sold at a premium price, and then sell the same product more cheaply with some of the functions disabled. IBM did this with a printer in the 1990s, where an economy version for a home user was the top-of-the-range model with a microchip in it to slow it down. All versions of Microsoft Vista will ship on an identical DVD, with the precise version installed based on the installation code entered by the consumer.The 486DX CPU came with a floating point calculation unit, the 486SX was exactly the same chip with the electrical connections to the floating point unit cut. (Officially this was done to chips where the floating point unit was not working properly but the CPU was fine. If this was the case it can't be said to be product sabotage.)

References

Various information extracted from:cite news
title = 'Product sabotage' helps consumers
publisher = BBC News
date = 2006-08-24
url = http://news.bbc.co.uk/1/hi/business/5274352.stm
accessdate = 2006-09-11