Nov
17
Some comments on Erick’s Blog
Posted by: jfung | November 17, 2010 | Leave a Comment
I read another comm 296 blog and felt I needed to respond to a few things
Erick’s Blog
Cars are really just a mode of transportation. However, the consumer could look at it as buying status or “looks”. As a mode of transportation, Hyundai probably provides pretty good value. The new Sonata looks pretty good. Analysts argue that the Genesis is comparable to some of the luxury German models. 
So why do some people have to spend, as Erick puts it, $200 000 – $400 000 on a Aston Martin or Lamborghini? Could be someone trying to show off their new found wealth. Humble people won’t usually do that though. A while back I read that some Chinese billionaire said that she didn’t even know what model car she was driving, and that she wouldn’t pay more for first class airfare compared to business class because business class was good enough. So, there are different types of consumers. Some people want to show off their wealth by buying the most expensive goods available. Modest, humble people will stop at a certain point, even though they could easily afford more. I think Warren Buffet still lives in Omaha. I read that people who need to buy expensive, black cars tend to have lower confidence. Is buying confidence worth (valued at) $200 000- $400 000? To some people it might be. Not that all Aston Martin owners are buying confidence. Is it still buying status if all of your neighbours have similar cars? Erick says that BMWs are common in the Vancouver area. True, in some parts. If all of the neighbours have the same car, does that give you “status”? I argue that it doesn’t.
If everyone has the same product, none of them are buying status over their neighbours. If you buy a BMW and live in a suburb of Prince George, that BMW might be the only one for miles. Then, in my opinion, that would be buying status. Some people are naturally confident, and status is earned, not bought. Buffet might be an example of that. Yes, safety and such matters when car shopping, but going over the top really isn’t needed. Remember, the best things in life are free (well, in monetary terms, not including time and energy).
Erick’s comments on the Service industry are also interesting.
Yes, the service sector provides the most jobs. Yes, nothing tangible is exchanged. But almost everything these days isn’t tangible. E-books are not physical products. Using Netflix doesn’t give you anything tangible. Itunes doesn’t sell tangible products. I would argue that people will still leave their houses to buy products. Yes, HMV is being phased out, just like Blockbusters.
Nobody wants to stay home everyday, all day. Who buys their food online? Can you convince your hair cutter to come to your house to cut your hair? People will still go out to buy and consume. People still like to have the experience of going out and doing things. If you go bowling, I would consider that to be a service, since you don’t leave with anything physical. So, I disagree with the idea of people being reluctant to leave their homes. People want to go out, maybe try on their clothes before they buy it.
