Real Options

Just musing here. Mulling over the comments about the Range Rover thing, how's this for a concept....

A.) you pay a healthy amount of money for a luxury car, maybe double what you'd pay for a similar mainstream non-luxury version of something similar, b.) you get presented with a list of options, and c.) tick as many boxes as you want, configure your car just the way you like...

...NO CHARGE.

That's having options!

I predict the first company to do this will make out like bandits. Kia could do it, maybe. As a differentiator. Or Genesis.

And lest you say this is off topic, oh no, because it's exactly the way I'd like to buy premium (luxury) cameras. Pay one price, and they'll configure it the way you want it. Put everything on it, take everything off it, or anything in between.

To my knowledge only Leica has ever done this, with its à la carte program with film M's back in the day (and you paid an à la carte charge but nothing past that, right? I think), but that was mostly for cosmetic choices.

Mike

P.S. I'm sure people will say it can't be done. Nonsense. If it was what the market expected and the only way anyone could make money selling premium cameras, everyone would be doing it.

Original contents copyright 2019 by Michael C. Johnston and/or the bylined author. All Rights Reserved. Links in this post may be to our affiliates; sales through affiliate links may benefit this site.

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Featured Comments from:

Speed: "Prix Fixe."

Walter, from girlfriends account...: "Sorry to disappoint, within this à la carte program Leica charged and charges for everything extra, besides a hefty basic fee to do so at all."

Comments

[Mark Layne]

That is in effect the way I bought a Lexus 12 years ago. I still have the car with no need to change it. You get what you pay for sometimes.
They still give a loaner for service work.
Mark

[Michael Perini]

They sort of do that now with “packages” and “ platinum editions “
There didn’t used to be packages ( which only group a bunch of options that usually go together) or buying the same car in different trim levels, with more and more options included.
But you are still paying for the options you get, and the cars are priced accordingly.
I do agree that buying a car for $75 -100k only to find that the heated steering wheel is extra is frustrating, but since cars are sold in warm climates too, adding the ‘cold weather package’ seems ok to me.
Similarly paying extra for brembo brakes when your car will never be driven to its limits is a nice option to be able to de-select

[KeithB]

What peeves me is buying a very expensive piece of electronics test equipment (in the dollar range of the SUV's we are talking about here) and deciding later to purchase some add-on. The mfg. will simply send you a code so that you can unlock the functionality!

(I am looking at you, Keysight!)

[mishka]

Suppose, the barebones version has a price X.
A version with an option set A has a price X + A

Question: How much will a company charge if it were to have a flat price regardless of the option set?

My rough guess is P ~ w*X + (1-w)*(X+A) where w is the fraction of barebones product sold. From here, it's easy to see that P ~ X + A/(1-w).
So selling for the flat price would make people who would want a barebones version pay more to subsidize those who want to have option A.

Surely, it is fair for those who will save money buying a more expensive version at a hefty discount! As they said in Rome:

https://www.youtube.com/watch?v=MqkT4B-9MGk

Speaking of film M: did you have an option to chose between 50/1.0 and 50/3.5 for the same 'a la carte' price?

[Jeff]

Leica still has an a la carte digital M program, but alas, there is a charge for customization.

[Paul]

Hmm. I've seen how this works out at a salad bar, and doubt it would be much different for most car buyers these days.

[MikeK]

I often wonder if it wouldn't be cheaper to have no real options, just load the car with reasonable stuff for its price point, and then you can choose the colour and engine and that's it. Think of how much simpler the manufacturing process would be, and how much easier for the dealers, who wouldn't have to worry about having some bizarrely configured car in stock that no one wanted to buy.

And as a tangentially related question: Who is buying brown cars? Of all the colours available these days, why do people pick brown?

[Rob Campbell]

Mike, it's the many options that confuse and compound the price issue. The more flexible the manufacturer makes it, the more varied his production line setup. Remember the story about any colour you like as long as it's black?

It was exactly the same in my darkroom days: any client who wanted different sized sets of print runs of the same shot was silently cursed for complicating my life. That's no problem today with digital, of course, but it sure was in the day. All change costs money which the client ends up paying, unless the producer is nuts.

Rob

[James]

Isn't that already done?
You buy the top model for options by its designated number being shorter than its (slightly) less optimal sibling - i.e. a 5 or a 500?
And didn't Canon, back in film days have a 1 and a 10 and a 100?
They did coz I had 'em.

[Joseph Reid]

If I recall correctly, the old Leica a la carte did have options -- both cosmetic and functional -- that affected price. Style of rewind and viewfinder magnification were two function options. There may have been others.

[Ryan Cousineau]

Some car companies kind-of sort-of do this, for reasonably sensible versions of this idea.

Genesis (Hyundai’s luxury marque) seems to sell its cars such that the only real option is between two motors. Whichever one you pick, the only other choices are interior and exterior colors; everything else is included.

I guess this means you can’t pick to delete, say, the stereo system (or change it out), but you do get the package at one price.

Many luxury brands have some sort of “individual” special-order program, where you can sit down with the sales rep and specify, oh, non-standard paint colors (maybe a color normally only offered on a different model) or interior trims, or option adds/deletes not in the standard catalogue. If you go high enough up the food chain (Rolls Royce and similar) the only limits are your imagination and your bank account, truly bespoke choices are there to be purchased.

Now, this isn’t all one price, but I think you’re missing that once you’re talking about a customer who can afford a high-end luxury car, and who has a desire for bespoke options, price is rarely relevant. It’s a small detail mentioned at the end of the transaction.

For the camera comparison, I’m not aware of any bespoke options out there, but camera systems are already pretty modular: you choose the package of lenses, flashes and other accessories, and to a degree the way you choose control configurations is by shifting from line to line (Micro 4/3 may be the perfect example of this, where you can find the same sensor in multiple body styles from two companies, and effectively you’re buying packaging and control concepts).

But again, having a single price is probably not an important element: maybe a modular one-price bespoke idea could exist in either cars or cameras, but teasing out price discrimination (that is, selling the same or very similar products for two different prices based on different buyer needs and desires) is a HUGE way that marketing departments earn their keep.

[c.d.embrey]

Canon can do it with the less than $1300 FF Eos RP 26 megapixel mirrorless. It comes with an Android or iOS app that is a complete remote control as well as a remote viwer. Add a lens with or without IS, Then you’re good to go. If you insist on useing legacy lenses there’s a $100 adapter that lets you autofocus any EF or EF-S lens. You can shoot crop or FF at 3:2, 16:9, 1:1, etc. I can’t think of any options I’d want/need. YMMV.

[Kodachromeguy]

Hi Mike, as I recall, the Leica a la carte program was mostly for cosmetic features, such as the color of the leather cover. But (at least for a while) you had the choice of the 0.58, 0.72, and 0.85 magnifications for the viewfinder. There may have been some options for engraving the top plate, as well.

[Bob Johnston]

I fear that you may be wrong about the complexity thing. Us folks that just want to take photographs need a simple camera of course. However I don't think that we are the main market. Most cameras are aimed at the gadget freaks who revel in the complexity. These are the same people who inhabit the forums with endless pixel peeping and arguments about dynamic range and frames per second etc. Every new camera release has to have some unique selling point and so the complexity escalates. I think that Fuji has got this right. The essential functions of their cameras are accessed with dials. Some more can be assigned to buttons if desired and the really esoteric stuff is left to the menus. So they keep both types satisfied.

[Daniel]

I'll stay with my 80 VW diesel rabbit and 50 mpg. It works. I did add a CD player about 15 years ago. Even have new set covers a few years back.
I'm not buying a new vehicle that costs more than our home.

[Huw Morgan]

It seems to me that Zeiss is on the right track. If the camera runs a well-known operating system like Android, part of the complexity is already solved though familiarity of the interface. Photo sharing also comes bundled in.

You could then bundle some of the more complex functions into separate apps that could be purchased only if needed. For example, video adds complexity, so why not separate it out so that still shooters don't even see video controls. Similarly, the complex tracking and focusing controls needed by sports and bird photographers could be packaged out as a separate app.

The base model app would support most still photography use cases with a simple set of controls that would be easy to master.