Comments on: Pop quiz

By: Chewxy

Chewxy — Tue, 18 Mar 2008 07:37:16 +0000

My mom pays a membership fee to her hairdresser and does pay extra when she wants extra things done too.

p.s hah, she can’t constantly be on my back asking me to cut my hair now that I’m bald.

By: aaron

aaron — Tue, 18 Mar 2008 04:04:01 +0000

Felix: Hmm, interesting. I thought hairdressing should be pretty competitive because there are basically no economies of scale (one can only do so many haircuts per day) and entry doesn’t seem very difficult.

But maybe brand loyalty is very strong, as you said. So why don’t we see more subscription pricing, especially for women?

By: Felix

Felix — Tue, 18 Mar 2008 03:55:27 +0000

Aaron, you think that hairdressers are (a) competitive and (b) don’t have brand loyalty? Do you know any, um, females? They’d sooner shoot a puppy than cheat on their hairdresser, most of them. John Allan’s realizes that men don’t have the same brand loyalty, so they lock it in with pool tables and membership fees (and cute female hairdressers).

By: aaron

aaron — Tue, 18 Mar 2008 02:53:22 +0000

Jiani: Nope. It’s because gasoline can be easily arbitraged between consumers whereas phone minutes (and haircuts) cannot.

By: Jiani

Jiani — Tue, 18 Mar 2008 02:28:25 +0000

I was waiting for the answer for the 1st Q for a while… Anyway, I guess it’s because the unit cost of call/air time is a lot lower than the unit cost of gasoline. And for fixed costs, that is the other way around.

By: aaron

aaron — Tue, 18 Mar 2008 00:52:55 +0000

Felix: Man, you Americans are so much more sophisticated than the rest of the world. My theory was that hairdressers don’t offer subscription plans because they are quite competitive (competition undermines price discrimination). Maybe this John Allans has a lot of brand loyalty?

By: Felix

Felix — Tue, 18 Mar 2008 00:35:27 +0000

http://www.johnallans.com/