EconAir

  One of the biggest shifts since 2013 is that a majority (52%, up from 39%) now say they are “willing to spend extra for a brand with an image that appeals to me.” Ipsos,  Global Trends, September 19, 2025. STARTING POINT Pareto's Law, the 80/20 rule, is the starting point for marketing and price discrimination. As discussed in a related post on basic concepts, Pareto's Law says, among other things, that a relatively small percent of customers account for a relatively large percent of sales and profits. One reason is the concentration of income and wealth. Recent studies indicate increasing concentration of income and wealth in the United States. A company's choice of target market and market niches is critical to marketing and pricing strategy.   CONTENTIONS Pricing is a strategy, not something a company accepts or beyond its control. Price discrimination is one pricing  strategy. Price discrimination can be practice by individual companies or all compa...

  THE COMPANY Parker Hannifin (PH) is something of a mystery. How does economic theory explain the existence of a large capital goods corporation that produces 800,000 different industrial products, many of them commodities that could be produced by specialized small companies?  Parker Hannifin (PH) is a $12 billion industrial parts manufacturer that produces its 800,000 parts and systems in 100 divisions.  They produce valves, hoses, motors, pumps, tubing systems, metering devices, and many other products that are components in larger industrial products or systems. PH competes with other large, diversified capital goods companies.   Customers are large companies and wholesale distributors, in virtually all parts of the transportation, aerospace and manufacturing industries.  One example is Ingersoll-Rand, a large producer of industrial equipment, including Bobcat loaders and excavators.  The hydraulic system that opens and closes the d...