Digital Cameras – “Value Equivalence Line” Economics of Price and Quality

EconomicvelvaluemapWe do a decent amount of internal training, including the basics of economics.  I don’t think you can really grasp branding and positioning without also understanding the concept of a Value Equivalence Line.  I have always used digital cameras as my example with megapixels going up, price going down, and the VEL moving to the right over time to demonstrate the economics of technology.

Well, I guess I can’t do that anymore…  From David Pogue at the NYT with emphasis added by me.

* Another InfoTrends analyst reported, surprisingly, that digital camera sales have actually peaked, and has declined since last year. Meanwhile, the manufacturers are feeling the pain: Konica Minolta has exited the Canadian market, Sony and Olympus have cut camera production and workforces, and the Kyocera/Yashica/Contax corporation has exited the digital camera market entirely.

The VEL image (above) is from The Price Advantage, by Marn, Roegner and Zawada – definitely worth the $70 USD if you are in marketing given the importance of price in communicating brand value and moving products and services "off the shelf".