Hemingways_Shotgun

  • 0 Posts
  • 14 Comments
Joined 2 years ago
Cake day: June 7th, 2023
  • Hemingways_Shotgun@lemmy.catoAsk Lemmy@lemmy.world•What is your personal most hated company or corporation?English
    12·
    14 hours ago

    Apple. But not because of the tech. But because they popularized a very disturbing corporate trend that I feel is a direct contributor to the wealth gap and the current state of affairs vis a vis tech oligarchies.

    I touched on it in another thread, and I’ll expand on it here, but in short, Apple was one of the first companies to stop defining their profit margin by real world economic factors like what the market can conceivably bear, and instead by marketing…ie. How high your profit margin can go is determined by how much your advertising can convince people to spend.

    Even back when Reagonimics first came around in the 80s, most corporations were still operating with a traditional profit margin calculation. You take the cost of your product to make (that includes labour, research and development, manufacturing, etc…) You determine your growth projection for the year, allowing you to cover all your expenses and reinvest in your company to achieve a modicum of growth and provide a rise to the share price, and you set the products selling price accordingly. (That profit margin traditionally would come to anywhere from 30-50 percent depending on the product.

    One of the factors that you look at as a company is what can the market bear? You try to ride a profit balance between what you need to make to continue growth and what your targeting customer base can afford. With the reasonable thinking being that if you over-price, then your customers will just go to the competition.

    What Apple figured out is that with enough money invested in advertising and marketing, a corporation can completely override that affordability and just keep upping their profit margin as much as they want so long as they can convince people that it’s worth it. That’s how you end up with a trillion dollar company that not only has the profits to grow their business, but also to start producing fucking television shows with money they found in their sofa.

    With enough advertising, affordability no longer matters. Humans will happily skip a mortgage payment, or a trip to grocery store, to contribute to your inflated profit margin if you can convince them that it’s worth it.

    How they do that is a combination of traditional advertising and in-store shenanigans. STORY TIME:

    When I was working at Staples, we started off selling the ipod. We weren’t allowed to sell the iPad at first, and when we were finally given permission to, it came with conditions.

    • We were to construct a separate section for them to keep them segregated from the other tablets, with very noticeable and expensive signage.

    • We are not allowed to refer to them as “tablets”. Only as “iPads”.

    • We were to begin every tech conversation with “Have you seen our iPads”.

    Similar rules came out when we decided we wanted to sell Macbooks. Similar rules.

    …

    Long story short, Apple figured out that if you spend more money in advertising (both traditional and non traditional like in-store display merchandising) than you do on the product itself, people will shoot themselves in the foot to give you their money, whether or not they can afford it. Whether or not they have to skip this months mortgage payment. Whether or not they have food in their fridge. . It doesn’t matter how good Apple products are. What matters is from an Ethics standpoint, Apple said “fuck what the market can handle. If people are stupid enough to pay us a 300% profit margin while they’re on food stamps…that’s their fault. we’re just doing business”

    A number of companies have now followed that lead since then, leading to the sharp sharp (disastrous) divide between the billionaire class and the rest of us

    And yes, in a lot of ways, it’s just capitalism and personal responsibility. But without that traditional profit margin calculation in place; with the sky’s the limit approach that Apple introduced, the class war is just going to get more and more pronounced.

  • Hemingways_Shotgun@lemmy.catoNo Stupid Questions@lemmy.world•Why do most Americans use an iPhone?English
    202·
    2 days ago

    Marketing.

    Convincing stupid people that their self-worth is based on how much they spend.

    Not a thing that is exclusive to Apple, of course. It’s how society has been since the 80s and Reaganomics, with Nike and other running shoes being the first really noticeable marketing push in that regard.

    Where Apple paved the way is that, even back then, a company would make a product, assign a profit margin to it (traditionally about 30-40%), and sell it at that price…

    Apple came along and said, “the only limit to a profit margin is how much you can convince stupid people to pay. We’ll use billions of dollars in advertising to convince people that they’re sub-human if they don’t agree with it. If the consumer is dumb enough to pay 250% profit margin for a phone device that costs us literally a couple hundred bucks to make…than that’s on them and their own stupidity.”

    So in short, profit margin is no longer a relatively stable number dictated by market forces and the relative strength of the economy, and (thanks to Apple) instead has become a function of marketing. How much can you convince suckers to spend.