Why not just say "price?"

April 14, 2009 9:18 PM

Why do people say or write "price point" instead of "price?"

Over the past few years, I've noticed an increase in usage of the phrase "price point" where I would just say or write "price." I first noticed the phrase "price point" in writing about new iPod releases on blogs, but now I find the phrase moving outside of electronics writing and punditry. I'm sure there's confirmation bias involved in my notice of frequency of usage, but that doesn't make me any less confused about why one would use "price point" when "price" seems completely adequate.

Why do writers and speakers use the phrase "price point?" Is there a technical difference between the terms that isn't obvious to the economics or business layperson?

posted by msbrauer to writing & language (19 comments total)

Price Point
posted by sanko at 9:22 PM on April 14 [2 favorites]

yeah, sanko's wikipedia link explains exactly what a price point is.

but in general, I doubt that most people according to its canonical meaning. sadly, I think people just like to sprinkle fancy jargon throughout their everyday speech to make themselves sound smart / official (e.g. the ridiculous phenomenon of "cop talk"), without any idea of what they're actually saying. generally the smarter you are, the less you do this, because you realize how dumb you sound.
posted by randomstriker at 9:31 PM on April 14 [1 favorite]

When you're a trend-forward, pro-active, and aggressive node in the volatile matrix of a fast-changing marketplace, it's task-adaptive to adopt language that secures and retains your strategic vantage by effectively re-labeling whatever variables and parameters you can isolate... in a manner that outsiders might find confusing... just like a squid sprays ink to ward off predators.

Good corporate-language is effectively value-adding, by making simple things seem complex. Remember: If you're paying someone to do something, every bit of obscurity he or she attaches to what he or she does raises his or her apparent value...
posted by darth_tedious at 9:31 PM on April 14 [62 favorites]

but in general, I doubt that most people according to its canonical meaning.

Doh...that should be "I doubt that most people use it according to its canonical meaning. Talk about inadvertently illustrating one's own point.
posted by randomstriker at 9:32 PM on April 14

Apple's default configurations for Macs and iPods is deliberately limited, and while the specs change, the base prices remain pretty stable. (John Gruber talks about it here.) That's to say, if you want to replace your 2006 entry-level base-config iMac, you'll be paying $1199 instead of $1299, but it's basically the same in dollars.

The usage has been greatly loosened from its definition in economics, as randomstriker says, but in the case of Apple, you can definitely point to "customary price points": if you asked people vaguely knowledgeable of computer pricing to rank Apple's base-config models from cheapest to most expensive, and guess the difference in price between them, they'd likely do a better job than, say, the Dell range, because the difference is in round hundreds of dollars.

In short, if there are psychological, brand-driven or market-related reasons determining the price at which something needs be sold -- for instance, the new Fiesta having to go on the US market at less than $15k to compete with the Fit and Echo -- then price points are at work.
posted by holgate at 9:53 PM on April 14

This invasion of one's mind by ready-made phrases...can only be prevented if one is constantly on guard against them, and every such phrase anaesthetizes a portion of one's brain.
posted by felix betachat at 11:40 PM on April 14 [1 favorite]

I like the Wikipedia link, but I think the common usage actually is trying to get to a rather different spot.

Perhaps an elaboration of Holgate's third case, I hear "price point" being used in lieu of "price" to reflect strategic intentionality about pricing -- not only about the objective of brand, margin preservation, yield management, etc. -- but about the means: some strong steps being taken not to allow the organic forces of pricing (marginal cost of production, intersection of supply/demand curve, auction pricing, etc.) to operate. Implied is a willingness to incur short-term loss in so doing ... leaving production unbought by refusing to sell below the price point when above the market-clearing price, or continuing to sell at the price point when less than the market clearin price of the marginal cost of production.

Here's a great example: 21-day-advance, Saturday-stay-over coach seats on airlines have a price, but walk-up seats and first class seats each has a price point.
posted by MattD at 12:14 AM on April 15 [2 favorites]

when less than the market clearing price or the marginal cost of production.
posted by MattD at 12:15 AM on April 15

Same reason they say "form factor" when they mean "form" or "typology" when they mean "type" - the former has a specific meaning but many use the latter, incorrectly, to sound important.
posted by otherwordlyglow at 12:21 AM on April 15

and guess the difference in price between them

In the spirit of this post, I suggest we upgrade this phrase to "price differential".
posted by IvyMike at 12:22 AM on April 15 [1 favorite]

Heh. Picking up on MattD's elaboration, I can point at a prosaic example: the fast-food dollar menu, which, if costs necessitate going over a dollar, becomes a different thing:

At Carl’s Jr., a Big Hamburger is still 99 cents, but that may be changing.

"The price is probably going to have to go up in the very near future to $1.29," Haley said.

He expects some consumers to balk.

"The $1.29 price point is not as popular. It doesn’t sell as well. When you cross a psychological barrier (in terms of price) you expect that," he said.

That "$1.29 price point" doesn't really fit. The price point for cheap fast food is the buck; at 99¢ or $1.00, you're selling to the price point, even if it's a loss-leader, but a dollar and change is really just a price.
posted by holgate at 12:37 AM on April 15

Yes, MattD nailed it. Idiot marketing drones use the economics term incorrectly just to express that they want control.
posted by jeffburdges at 2:00 AM on April 15

Price Points are a kind of abstraction of actual prices, and I think you use that term to stress the abstraction point (without focusing on what the actual price on a give day is).

For Example Apple has well defined and Fixed Price Points for all its laptops. However the actual prices for a price point in a given country will/may fluctuate by large amounts due to currency exchange fluctuations.

So the price point refers to the abstraction of the actual price that corresponds to the relative price in a given economic environemnt of say some basket of similar goods? - if that even makes sense ;)
posted by mary8nne at 2:59 AM on April 15

darth_tedious nails it impressively. That answer should be engraved on a heavy brass plaque which can then be used to pound flat the head of any marketing drone spouting such gibberish.

See also, "impact" instead of "effect."
posted by Thorzdad at 5:01 AM on April 15

"Price point" is marketing speak. One sets the price at a certain point. That is the price point. What you pay for an item is the price. But where that price lies in the continuum of similar products in the same marketplace is the price point.

(Darth_tedious, I like the rant. But proactive is a real word with a specific meaning. (That surely gets misused in corporate speak.) Reactive < active < proactive. Think about inventory management- reactive would be running out of stuff and scrambling to fill the hole. Active would be ordering stuff to arrive just in time. Proactive would be looking at your trends and maintaining a buffer that allows you to not have to be reactive, and to take advantage of cheaper shipping and volume discounts. I know I use 10 widgets a month, by being proactive, I can maintain stock levels at a cheaper price. It is action + anticipation. Sorry, just a pet peeve of mine.)
posted by gjc at 5:07 AM on April 15 [1 favorite]

Generally used to increase the level of bombast a few percentage points.
posted by Killick at 7:19 AM on April 15

So are you suggesting that by enhancing the aggressive uptake of proactive inventory monitoring policy, we can promote continuous improvement in our monthly spend going forward?
posted by flabdablet at 7:25 AM on April 15

Only at the current price point.
posted by Caviar at 10:24 AM on April 15

I suppose the economists should give up and rename their price points to price cusps.
posted by jeffburdges at 12:55 PM on April 15