Thursday, December 6

Captive Markets

Like hot chocolate in a small mountain cabin after a long day skiing, like a bottle of fresh water during a walk through the desert, like shops opened all day on Sundays before Christmas. We have all been in certain situations where, by choice or obligation, we have become victims of the so-called "Captive Markets". By definition, capitive markets have a much more specific meaning. A web sites offers this comprehensive definition: *A captive market is a group of consumers who have limited choice in terms of the products they can select/purchase (no choice)! This type of market was common during the production era when there was a limited supply of goods (and great demand). It occurs when the market is monopolistic, thus there is only one supplier in the marketplace. This is more likely to occur with digital products (Microsoft is a good example of this). It can occur when a marketer has achieved significant lock-in for its installed based. Thus the switching costs for the consumer to try a competing product become prohibitive.* In' my book', a captive market is when the "producers" know exactly that you will need their product, hence they will make it available to you at prohibiting conditions: if you can afford it, good for you; if you can't, on the contrary, too bad. In "developing" countries, this form of dispotism is, renownly and shamefully, common practice. Liverpool John Lennon Airport has got their own take on the matter. Given that only 'economy flights' land and take off from there, one assumes that they are saving on their travelling costs...big misunderstanding! The mere price of the shuttle from Manchester to Liverpool has gone from £5 to £10 in a mere 6 month! That's like a 100% increase, 100%!! And how do you explain that one set of scales indicates one is 2.5 kg overweight and the other check in set of scales indicates 3 kg less than the first?! (every kg overweight is charged at a price, of course!). Then there is the cue for the compulsory security check - 25 minutes long. Long enough to miss a flight. But, at the accessible price of £2 per passenger you can soar through the cue and get priority. What kind of message are we preaching? Money as a tool for priviledge even in a context, security, where everyone should be the same? It's £2, I know, but it is the principles that concerns me. And makes me cross.

1 comment:

john heasley said...

I was reading a book recently where someone said that if they had the wish they would not get rid of poverty but would get rid of greed. This is where all this comes from, people being greedy, its what causes poverty and suffering everywhere, greed.