Eastman Kodak could sell the brownie for very little because it’s knew he could make money on film our photo processing. What would be the best equivalent to this in today’s society
The best equivalent to Eastman Kodak's strategy of selling the Brownie camera for cheap and making profit from film/photo processing in today's society could be the "razor and blade model." This business model is widely used by companies like Gillette and Nespresso.
In this model, companies sell the primary product (razor or coffee machine) at a relatively low price or even give it away for free. However, they make profits by selling the consumable or complementary products (razor blades or coffee pods) that are required to use the primary product. These complementary products often have a higher profit margin, ensuring consistent revenue for the company.
Similarly, in today's society, a technology company could provide a low-cost or subsidized smartphone, knowing that consumers will constantly need to purchase accessories, apps, or subscriptions, generating revenue in the long run. This approach allows the company to establish a customer base and create a consistent stream of profits through the sale of complementary products or services.
In today's society, the best equivalent to Eastman Kodak's strategy with the Brownie camera could be offering a low-cost or even free hardware device alongside a profitable service or subscription model. Here are a few examples:
1. Gaming Consoles and Online Game Subscription: Companies like Microsoft (Xbox Game Pass) and Sony (PlayStation Plus) offer gaming consoles at affordable prices, or sometimes even at a loss, while making money through subscription services that provide access to a wide library of games.
2. Printer Manufacturers and Ink Cartridges: Printer manufacturers often sell their printers at relatively low prices but make profits by selling ink cartridges that are typically expensive and need regular replacement.
3. Mobile Phones and Data Plans: Many mobile phone companies offer smartphones at reduced prices or as part of a contract, where they recoup the cost through data plans that customers subscribe to for a specific period.
4. Smart Home Devices and Cloud Services: Companies like Amazon (with Alexa devices) and Google (with Google Nest) sometimes release their smart home devices at affordable prices to encourage adoption. They then generate revenue through services like cloud storage, device integration, and personalized recommendations.
It's important to note that this is just a general comparison, and each modern-day equivalent may have its unique factors and variations.
In today's society, the best equivalent to the scenario you mentioned would be a company offering a low-cost or even free product with the intention of making money from related services or additional products. This is a common strategy known as a "razor and blades" model, where the initial product is sold at a low profit margin or even at a loss, but the company makes profits on complimentary or required products or services. Here are a few examples of this strategy in action today:
1. Printer and ink cartridges: Printer manufacturers often sell printers at a low cost, knowing they can make significant profits on the sale of ink cartridges, which are required for printing.
2. Gaming consoles and video games: Gaming console manufacturers often sell the hardware at a lower price point, but they generate revenue from the sales of video games, accessories, and online subscriptions.
3. Streaming services: Some streaming platforms like Netflix or Amazon Prime Video offer affordable subscription plans to attract customers, and then make money from advertising, content licensing deals, or higher-tier subscription options.
4. Mobile phones and mobile data plans: Mobile phone companies often offer smartphones at discounted prices, subsidizing them with mobile data plans that consumers need to purchase.
By employing this strategy, companies can create an entry point for customers with a low-cost or free product, and then leverage their user base to generate revenue through supplementary products, services, or add-ons.