Friday, August 7, 2015

The worst advertising campaign in history

Value is in the eye of the beholder. Value is subjective. What's valuable to me may not be valuable to you.

Define value:

Define economic utility:

Value is like utility. Utility is how useful a thing is to me (or to you or to us or to them). I like to think of "value" as the ratio of usefulness-to-cost. The more useful a thing is, compared to its cost, the better the value. The more costly it is, compared to its usefulness, the worse the value. I think that's intuitive, but maybe people don't generally put it into words.

So what does it mean when GMC and Chevy run ads like this:

The MSRP is $44,000 plus. They'll give me 6 grand off the price. So they'll sell it to me for 38 grand. But they're telling me the car has a "total value" of $6000.

Why would I pay $38,000 for a car that's worth $6000? This must be the worst advertising campaign in history.

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