There are two very interesting schools of thought as it pertains to pricing and consumerism. One theory is if you want to move more product, reduce the cost; thereby increase your target market to include a wider economic base as well as make your current market more tempted to buy because everyone simply loves a good deal. The other theory, fascinatingly enough, is jack up the price a ridiculous amount; thereby draw attention to it, both positive and negative, and create the perception of an inflated demand for such an elite, exclusive item. An item that must be worth the extra money because why else would it be priced that way? Such is the case of Nike's new LeBron James shoe, priced at a record setting $315.
At $315, the price of King James's shoe is a bit ridiculous. Personally, I'd like to see more athletes come up with shoe concepts that are profitable for the manufacturers but also economical for the not so affluent fans from underprivileged homes that consider these athletes to be heroes. Making those kinds of shoes can be both heroic and economic to the fans. With shoes priced at $40 and $15 respectively, Shaquille O Neal's Dunkman line and Stephen Marbury's Starbury One line are heroic and economic moves in the right direction. I applaud their efforts and can only hope that more athletes will follow suit.
Predictably, despite the floundering economy, consumers are expected the flock the stores and snap up King James's shoes and other overpriced status symbols like hotcakes, spurring praise and criticism of every layer of the transaction. Some question what kind of message it sends that in spite of people struggling to make ends meet, they still find it perfectly acceptable to drop an outrageous amount of money on shoes. Others question the lack of social responsibility of the athletes the shoes are named after, by suggesting their influence on young people is being abused.
Nothing democratizes power more than the free market. If Nike wants to charge too much for a pair of sneakers and people are willing to shell out their own money to pay for them, who are we to judge?
Notice I said, "their own money."
While some may look at the booming sales of such an extravagant item as a sign of a recovering economy, I caution that optimism. How many customers are on food stamps, welfare, or unemployment? How many people have you seen below the poverty line talking on a bedazzled smartphone? How many kids will be walking around wearing the LeBron shoe with parents on government assistance of some kind? These are real issues that justify the criticism of an otherwise innocuous economic scenario.
This country definitely has real economic problems. But just as real is the problem with priorities; Fueled by out of control and easily abused entitlement programs. When I drive by a mall on Saturdays and see full parking lots, my first thought isn't, "The economy is improving". Unfortunately it's, "How many people whose basic needs are being supported by tax payers so they can buy Gucci jeans?"
Follow Ike Ikokwu on Twitter: www.twitter.com/ikeficoach