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What's in the Price of a Name
12/29/2003

Glenn Reynolds ponders the odd currents of marketing, branding, and signature lines. I'm not an expert on any of these matters, but since the price comparison in question has to do with Fall River's Emeril, whose "bams" have long echoed across the bay to my hometown (metaphorically speaking), I thought I'd offer a consideration.

The crux of the matter is that an All-Clad stainless 12-Inch fry pan goes for about $130, while essentially the same item, from the same company, goes for $60 in the Emerilware line. So, does having a famous chef endorse its products lose All-Clad money? Surely not.

I suspect that including a product within a signature line changes the entire marketing dynamic. Prof. Reynolds may be inclined to avoid signature lines, but they obviously attract customers if companies pay for them. The question is whom Emeril attracts... probably not people willing to pay $130 for a pan. They are people who wouldn't otherwise depart from the baseline pan product (say a $10 to $20 iron job), but for whom Emeril's name might inspire them to pay three or four times as much to upgrade.

In a somewhat paradoxical way, if my guess is right, Emeril can be seen as a sort of collective negotiator for his fans — on the payroll of the company. He brings a bunch of new customers, who mightn't otherwise be in the market for the product, to the store, and to entice the greatest number of them to actually lay down their credit cards, All-Clad lowers the price.

The "generic" All-Clad stainless steel pan, on the other hand, brings a customer in search of a high-end pan. Hey, it may even be that under-pricing the Emeril pan makes such customers value the high-brow pan even more. At any rate, even if the company loses $70 from those among this group willing to live with a pan from that bam guy, or willing to do the research to discover that the pans are effectively the same, the numbers are small relative to customer pick-ups from the low-end.

Of course, having the pricing brought into the light by somebody like the famous Instapundit might shift the calculation.

Posted by Justin Katz @ 09:08 AM EST