When business is slow raise the prices?

[flyingsaucersarereal]

So I see this all the time here in Thailand when business is slow the prices go up.

When the economy is hurting and the baht is down a lot of the small vendors will raise there prices.

Don't they realize that this will just make it harder to sell and they will get fewer customers.

I see empty shops and restaurants in the tourist areas but the prices have gone up.

I understand you want to make as much money as you can but it is far more effective by having promotions and giving good deals.

[wilfrid lussier]

Of course,because Thaï do not have the common sense.MNot only for business,look the way they work....

[samran]

Of course,because Thaï do not have the common sense.MNot only for business,look the way they work....

Cause clearly those here on Thai visa are business owners themselves and are experts on commenting.

[konying]

A stupid business owner is a stupid business owner .

Laundry shop I used , raised prices by 50% without even telling customers, now it's empty.

If they were to lower the price , I still would not go back

[WitawatWatawit]

VOTE!

[h90]

For me it doesn't seem like the Baht is down.

[Naam]

For me it doesn't seem like the Baht is down.

how dare you to contradict an eggsburt?

[Jingthing]

That is the pattern in Thailand ... and it often signals a desperate business on its last legs.

Of course they should look at the fundamental issues ... WORK much harder in delivering satisfaction to the customer at an attractive and competitive price ... that would give real hope of turning things around and create a business that can last and grow for many years.

Not saying businesses shouldn't raise prices when they can get away with it, but the pattern here is they jump the gun (raise prices for their own desperate reasons rather than raises that are justified and customers can agree they are justified) and kill their own business.

I've seen this same short sighted desperate move in businesses in the USA ... but much less common ... here you can see this tactic everywhere.

Edited August 30, 2014 by Jingthing

[samran]

That is the pattern in Thailand ... and it often signals a desperate business on its last legs.

Of course they should look at the fundamental issues ... WORK much harder in delivering satisfaction to the customer at an attractive and competitive price ... that would give real hope of turning things around and create a business that can last and grow for many years.

Not saying businesses shouldn't raise prices when they can get away with it, but the pattern here is they jump the gun (raise prices for their own desperate reasons rather than raises that are justified and customers can agree they are justified) and kill their own business.

I've seen this same short sighted desperate move in businesses in the USA ... but much less common ... here you can see this tactic everywhere.

Really? Where?

I see lots of talk about this it for me but it is something I've never experienced.

Edited August 30, 2014 by samran

[Jingthing]

Really? Where?

I see lots of talk about this it for me but it is something I've never experienced.

You're not looking then.

Next ...

Edited August 30, 2014 by Jingthing

[96tehtarp]

This method may actually work when used within the confines of a cartel or monopoly and in near total absence of competition. Does this sound familiar?

[Jingthing]

This method may actually work when used within the confines of a cartel or monopoly and in near total absence of competition. Does this sound familiar?

That is true, of course.

What I was talking about is businesses operating in a competitive environment where there are other, better choices, offering the same or better product or service in similar locations for LESS money.

Edited August 30, 2014 by Jingthing

[samran]

Really? Where?

I see lots of talk about this it for me but it is something I've never experienced.

You're not looking then.

Next ...

Gotta do better than that. Solid evidence please.

[fletchsmile]

Welcome to Thailand

A lot of small business owners don't realise concepts such as price elasticity of demand. Part of it is they start adjusting prices too late, after number of customers have decreased and don't know what else to do, so just do simple maths. Count the number of people coming in and multiply it what they need on prices. By the time they realise the ever decreasing spiral it's too late.

Another thing I've often seen is that customer levels have sometimes reached a point where those still coming aren't coming because of the prices, so to an extent when they up their prices, many of the remaining customers just take it.

BTW Not to say there aren't people who get it. Just I've seen this more in Thailand than where I came from too

Cheers

Fletch

Edited August 30, 2014 by fletchsmile

[Jingthing]

Really? Where?

I see lots of talk about this it for me but it is something I've never experienced.

You're not looking then.

Next ...

Gotta do better than that. Solid evidence please.

No, I don't gotta. Open your eyes. This isn't a court of law.

[rgs2001uk]

Really? Where?

I see lots of talk about this it for me but it is something I've never experienced.

You're not looking then.

Next ...

Gotta do better than that. Solid evidence please.

Samran, I live in a non tourist part of Bkk, never seen it, I visit Chan on a regular basis never seen it, I go to lower Issan on a regular basis never seen it.

Do you see a pattern starting to emerge here, Bling Pugh can see it.

Some would do well to get out the farang enclave in which they find themselves.

[96tehtarp]

This method may actually work when used within the confines of a cartel or monopoly and in near total absence of competition. Does this sound familiar?

That is true, of course.

What I was talking about is businesses operating in a competitive environment where there are other, better choices, offering the same or better product or service in similar locations for LESS money.

There's no doubt about what you were talking about. In Thailand the people who use this model have failed to adapt to a competitive market and refused to recognize that the old-style market has changed to one that is competitive. If not that they (also) may often try to use a cartel monopoly mentality and fix prices by a cartel like mechanism. e.g. taxi mafias who subvert competition and fix prices. In a monopoly, or a cartel (where competition is fixed across the board), they can increase revenue.

In the long term they ultimately always fail. IMO. Thai Airways is a good example. OPEC on the other hand is a success. In order for this model to increase revenue it requires a captive market which has no other options.

The problem in Thailand and its tourism industry is the small operators are not outward looking and fail to see competition outside of Thailand as either existing or relevant.

Edited August 30, 2014 by 96tehtarp

[mikebike]

There's no doubt about what you were talking about. In Thailand the people who use this model have failed to adapt to a competitive market and refused to recognize that the old-style market has changed to one that is competitive. If not that they (also) may often try to use a cartel monopoly mentality and fix prices by a cartel like mechanism. e.g. taxi mafias who subvert competition and fix prices. In a monopoly, or a cartel (where competition is fixed across the board), they can increase revenue.

In the long term they ultimately always fail.

Yeah... tell that to telecom and internet providers in the west, the old-style market seems to work for them!!!

[96tehtarp]

There's no doubt about what you were talking about. In Thailand the people who use this model have failed to adapt to a competitive market and refused to recognize that the old-style market has changed to one that is competitive. If not that they (also) may often try to use a cartel monopoly mentality and fix prices by a cartel like mechanism. e.g. taxi mafias who subvert competition and fix prices. In a monopoly, or a cartel (where competition is fixed across the board), they can increase revenue.

In the long term they ultimately always fail.

Yeah... tell that to telecom and internet providers in the west, the old-style market seems to work for them!!!

You had better believe it. Look at Microsoft, although their marketplace has changed quite a bit from what it once was.

If a government is corrupt enough to pass legislation legalizing a cartel (FCC/CRTC?) then the old-style model still works.

[samran]

Really? Where?

I see lots of talk about this it for me but it is something I've never experienced.

You're not looking then.

Next ...

Gotta do better than that. Solid evidence please.

No, I don't gotta. Open your eyes. This isn't a court of law.

Just like I thought. You're spinning sh!t.

[Jingthing]

Just like I thought. You're spinning sh!t.

Think what you like.

We are discussing here a thing many people including me have noticed many times over many years. You come on here in a kind of Thai apologist mode (in character) and assert this thing doesn't happen. That isn't the topic. The topic is why it DOES happen. Not going to play games providing "evidence" to someone who doesn't accept the premise of the thread in the first place. What difference would it make? If I told you a specific story, and I could tell several, of local businesses doing this and then dying, you would just call me a liar anyway ... because your apologist bias is so evident.

So I won't bother.

Cheers.

More on point to the actual thread topic ... these businesses that get slow and raise prices and then die would of course probably died anyway if they didn't raise prices ... unless they had capital to make it to a fatter time. So just doing NOTHING (without enough capital) is not the answer ... some changes are needed of course.

Unless we are privy to the internal story of particular businesses we can't really know for sure, but can only superficially observe.

I have seen businesses hang on for years and very few visible customers ... you know they aren't making money ... so it's only logical to assume someone has the money to just eat the losses.

Edited August 30, 2014 by Jingthing

[samran]

Just like I thought. You're spinning sh!t.

Think what you like.

We are discussing here a thing many people including me have noticed many times over many years. You come on here in a kind of Thai apologist mode (in character) and assert this thing doesn't happen. That isn't the topic. The topic is why it DOES happen. Not going to play games providing "evidence" to someone who doesn't accept the premise of the thread in the first place. What difference would it make? If I told you a specific story, and I could tell several, of local businesses doing this and then dying, you would just call me a liar anyway ... because your apologist bias is so evident.

So I won't bother.

Cheers.

Oh, you've pulled out the T.A term.

Please go find where I've acted as such. Go on.

[Pundi6446]

The Thai logic is missing, or never had it in the first place

[monkey4u]

It happens in Cha Am every year.

Local taxi's jumps from 250 to 350 or 400 baht

The other stupid thing is buy a run down mini bus or old pick up about 20 years old and ask the same price per trip as some one with a new VIP mini bus

Where else but Thailand that's why I love to be here

Interesting to say the least

[96tehtarp]

It happens in Cha Am every year.

Local taxi's jumps from 250 to 350 or 400 baht

Is this practice getting them the desired results, or are the customers refusing to pay the inflated price and leaving Cha Am on mass?

[FireMedic]

One of my old favorite bars raised the prices on us one time. I asked the owner why such a sharp increase and the response: "no have customer". I pointed to the bar sign next door that advertised beer for maybe 10 or 15 baht less and the place was packed. I said if you want to draw new customers advertise the same as the rest, don't overcharge the few regular customer you still have. Her response: "Then go over there if you want cheap beer". Gladly. Another lesson in "Thainess".

[Gutterboy]

Really? Where?

I see lots of talk about this it for me but it is something I've never experienced.

You're not looking then.

Next ...

Gotta do better than that. Solid evidence please.

No, I don't gotta. Open your eyes. This isn't a court of law.

Just like I thought. You're spinning sh!t.

Samran it's everywhere mate. This thread would not exist if it wasn't. All the people commenting here are not just making it up! I agree with Jingthing there's no need for examples, as you're obviously just arguing for the sake of arguing, but there are plenty of them out there. The one most obvious to me is the Thai company I work for: this company is in direct competition with a rival, but when business got slow they put the prices up - with predictably disastrous results! As someone mentioned above, it's a case of simple mathematics - "fewer customers means I have to charge each one more to get the revenue I need". Absolutely no clue that this might cause customers to go with the cheaper rival! Amazing Thailand.

Edited September 1, 2014 by Gutterboy

[Emster23]

Economics don't seem to be studied or taught here, which is a pity. Look at the rubber price supports being proposed. Similar to rice scheme that did such wonders. Maybe need some cause and effect classes also. Those of us who propose purpose of education is to teach how to think, process data from real world and implement change when needed are chastised for trying to import those silly farang philosophies, lack of appreciation for "Thainess".

[tomyumchai]

One of my old favorite bars raised the prices on us one time. I asked the owner why such a sharp increase and the response: "no have customer". I pointed to the bar sign next door that advertised beer for maybe 10 or 15 baht less and the place was packed. I said if you want to draw new customers advertise the same as the rest, don't overcharge the few regular customer you still have. Her response: "Then go over there if you want cheap beer". Gladly. Another lesson in "Thainess".

thats exactly what id have written to explain the logic....its illogical! i wont bother naming bars but i sit across the road in quite a few now while getting dirty looks from the owner of the ( empty) bar i used to spend good money in.

[Bcgardener]

_{A prime example that I saw for myself and not from a small Thai company... I had to go to Australia a while back, just after the coup. Qantas, Emirates and THAI have direct flights to Sydney but obviously tourist numbers are down so planes are not full. Business class fares on Emirates and Qantas price down about 12,000 Baht. Business class on THAI up about 14,000 Baht.}