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Jason George provides a riveting read on cost and value, cunning tactics, and strategies from behind the scenes of manufacturers and pricing models.

Sleep tight

The choice of a mattress is fraught with implications, given how much of life is spent asleep and the infrequency of their purchase, not to mention the high price tag. Manufacturers are keenly aware of this and do their best to stoke the wallet-opening concerns of customers, using florid language to highlight coil counts or the latest in cushioning technology. Models receive names that evoke cruise ships or luxury sedans or vaguely European locales, and are further tagged with inscrutable indicators somehow related to quality.

Buyers are at a natural disadvantage as the innards of the product are invisible, leaving them to trust that the features advertised are present in the product and actually meaningful. Mattresses are difficult to transport and even harder to return, so the category does not lend itself to comparison shopping.

Behind the scenes, manufacturers have quietly consolidated and gained scale, rolling up the industry into a handful of mega-players, each with numerous offerings across the price spectrum. As the market matured these were increasingly sold in standalone shops dedicated solely to mattresses, featuring spartan décor, opaque pricing and a haggling experience not unlike that of a car dealership.

To top it off manufacturers adopted an especially cunning tactic to obscure costs and keep prices high. They created unique names for identical products and distributed them to exclusive sales outlets, ensuring that consumers would be unable to check prices at a competing store. Imagine if a Honda Accord was called by a different name at every dealership and you get the idea. Maximizing bewilderment and confusion led to a highly profitable business model for many years, such that mattress stores sprouted up across the United States, jammed into often marginal real estate.

Key points include:

• Transparent fixed pricing
• Profitability through complication and confusion
• Authenticity as a core value

Read the full article, Coercing customers or creating true value, on jasongeorge.net.