Even the richest customer simply has to wait — sometimes months — before the new suit is finished. No wonder so many pass up a $4,000 bespoke suit for a ready-to-wear Kiton version at twice the price.
Isn't it pretty clear here that he should raise prices dramatically?
Clearly the demand is there (people spend twice the price on a inferior product).
The whole point of paying twice as much is that you spend a fraction of the time defining product specs, and don't have to wait.
If so many pass up a 50% discount to get immediate satisfaction, they aren't likely to change their preference for waiting once the product they already didn't buy becomes dramatically more expensive.
The whole point of paying twice as much is that you spend a fraction of the time defining product specs, and don't have to wait.
Raising the price stops you competing in the whole "I need a new suit" market. Now you are in the custom luxury good market, and there the time to buy isn't an inconvenience, it is a feature.
The whole pay-to-pick-my-Ferrari-up-in-Maranello takes a lot longer than the normal Ferrari ordering process (and is hugely inconvenient) and yet still is used by a reasonable number of orders.
You don't buy a Ferrari for transport, nor do you buy a luxury suit to cover your nakedness.
If people can sell $500,000 watches[1], then a $20,000 suit seems reasonable, especially when it comes with custom consultations etc..
Kiton is in an altogether higher tier. According to the Wikipedia, their ready-to-wear line ranges from $5500 to $8000, and their bespoke suits command $20K to $50K. They sell about 20,000 suits a year.
Clearly pricing below their ready-to-wear line only gets customers who are looking to save money, and people trying to do bespoke suits in that price bracket will get squeezed from below (premium made-to-measure (not the same as bespoke) suits) and low-end ready-to-wear suits from premium manufactures like Kiton.
Isn't it pretty clear here that he should raise prices dramatically?
Clearly the demand is there (people spend twice the price on a inferior product).