Sunday, February 21, 2010

Value-added Pricing

Value-added Pricing is when companies attach features or services to their products to differentiate them from competing products and support having higher prices.

I was just browsing Yahoo News and I found this article about the "Safest House in the World." It's about a house in L.A. that is a modern-day fortress. I thought it was a good example because it lists a bunch of features that makes this particular house so much better than other houses with panic rooms. It's not only safe but luxurious too which helps account for it's selling price of $7.25 million.

Here are some examples of the features it includes:

"The heavily fortified and super secure residence occupies an easily defended promontory with 360-degree views. The well-defended dwelling stands five stories tall, measures almost 8,000 square feet and includes 32 rooms that all sit atop a virtually impenetrable batcave-like garage that will hold six, preferably armored, cars."

"deluxe creature comforts such as an elevator for whisking folks from the garage level to the living levels, a gourmet kitchen with granite counter tops and commercial grade appliances, two offices, a wine cellar and a home theater."

"The safe cores consist of entire sections of the residence that can be isolated from the rest of the home and where the homeowner can retreat in complete safety -- not to mention luxury -- from an outside threat that might include an intruder, a natural disaster or even a nuclear, biological or chemical attack."

"There is also a built-in barbecue center and a spa situated under the heliport designed for emergency evacuations in the event of a home intrusion or for fire emergencies."

These are all examples of value-added features that justify the house's price of $7.25 million. It incredibly safe and can keep it's residents safe from even nuclear attacks. With it's luxurious design and top of the line security system, I'm sure Al V. Corbi (the man who designed the home) could even have his share or market-skimming and get maximum revenues layer by layer.

see article here

Nikki Macgregor, Section G

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