CNN Money Price Gouging Article

I was just making a snarky reference to the other thread where anyone who said they would like RR to expand production to make obtaining their beer less of a pain in the ass was labeled as whiny and "entitled." RR complains about people selling their beer on the black and grey market. One way they could alleviate these problems is by expanding production. Just sayin'.

 

@matedog totally read the post in the intended tone, just was a rusty on my own conversion of sarcasm to text.

 

It is unfair and it's the product of hype. If you have to have it, to tick, to keep up with the joneses or because you just don't know any better, then you will buy it. Beer by it's vary nature, cost of ingredients, cost of labor, cost of packaging should not cost that much more from brewer to brewer or from style to style. . . . but that's a whole different thread.

 

They could also alleviate "this problem" by charging what the market will bare.

 

Exactly. It just seems hypocritical to get upset about price gouging when you don't produce enough supply to meet demand.

 

Then the beers would no longer be limited and would be less sought after. Rare=better.

 

First, we have this article: Pliny the Elder: A case study in scarcity marketing , wherein Natalie Cilurzo says “scarcity breeds demand", and that this has been a winning formula for RR.

Then, we have the OP's posted article, wherein she says, ""It's not a good way to build your brand. Our recommended selling price can be $5, and yet we see it in a liquor store that bootlegged it and put it on the shelf for $25. The consumer doesn't understand we have nothing to do with that."

C'mon, RR, you can't have it both ways. When being interviewed about how clever they are with scarcity marketing, it is a winning formula. But, when being interviewed about the evil black market, it is not good, and they pretend (my opinion) to disapprove.

So, who, exactly, is "unsavory" here? I'm confused.

 

I don't get the "to try it once" mentality.
If its not at a price that I feel comfortable buying over and over again, I have no interest in trying it once.

 

There is one huge difference in the two situations........who gets the money.

 

True, that is a difference, but it is not one that impacts the "morality" of the situation. And, it is one that is fully within the control of RR... just raise their prices!

 

Or, they could actually just increase the initial price, since the price the market will bear is clearly higher than what they are charging.

I love how the "solutions" that tend to be offered up by BAs are only the side of the coin that benefits them in some way.

How is it hypocritical? I guess I don't understand how they are saying one thing and doing another.

I mentioned this in the other thread about RR, but I think that quote from Cilurzo saying "scarcity breeds demand" is being taken completely out of context. Here is the full quote:

“This is always been a lifestyle venture for us, you know we’re a married couple,” Cilurzo said. And plus, “scarcity breeds demand and that’s not that by design for us.”

It's pretty clear that she's making an observation about one of the quirky side effects of their desire not to become larger than they currently are, rather than lauding that as a strategy they actively pursue to sell their beer. It's not clever, and "scarcity marketing" was a term that Marketplace.org invented--not once do you hear either of the Cilurzos or a RR representative talk about "scarcity marketing".

The article does go on to say "she says it's a winning formula", but without any direct quotes, it's pretty much impossible to know what she actually said. It's entirely possible that she is acknowledging that the low supply makes it easy to ensure that they aren't being wasteful with the money they pour into production, because they know they will always sell out. It's one thing to acknowledge the benefits that come from having low supply and high demand. It's quite another to actively embrace that as a formula.

As I noted above, I fail to see how being bothered at the negative association that comes to them through retailers implementing high markups is hypocritical or at odds with the idea that their decision to remain small has helped their success. It is, in fact, possible to enjoy the benefits and lament the drawbacks to a single strategy without being hypocritical.

 

This could be said about Ferrari too.

 

I think that somewhat misrepresents what she said in the article on scarcity.

“This is always been a lifestyle venture for us, you know we’re a married couple,” Cilurzo said. And plus, “scarcity breeds demand and that’s not that by design for us.”


Just because they don't want to expand their production any more than they already have (which they actually did a few years ago) doesn't mean they are thrilled to see fans of their beer getting blocked out by the mules and horders who are in it just to make money. You're making this a black and white argument - and it's not.

 

I didn't say that. What I find two-faced on their part is that they say they benefit from the market scarcity while also saying they are bothered by the black market and want to distance themselves from it. Increasing production is not the only solution available to them. They can also raise prices if they are truly bothered by the black market. They (IMO) are trying to have it both ways... below true market prices for a scarce product while objecting to the black market this causes.

 

See my above post. Expanding production is not the only solution. They apparently like being the darling of the craft beer world while also being a scold wrt the down and dirty craft beer market that they helped create.

 

Aren't we all trying to have it both ways? Drinking great beer, rare even, and not wanting to pay any more than necessary? If they doubled the price of Pliny, sure you could find it a little easier, but then people would complain about the prices.

 

I understand that but there is no chance of me being able to buy Heady over and over again at that price. If it becomes easy to get it would cost much less.

 

Let me explain then. They are saying they don't like price gouging when they are doing business practices that unavoidably lead to price gouging (not producing enough or not suggesting a high enough retail price, however you see it).

 

Yes. They are the root cause (and one of the beneficiaries) of what they are objecting to. (NB: It is not price gouging. It is a black market, but it is not price gouging.)