Get back to me when it has 200,000 miles on it and let me know if you’re still happy with it.
But Mike, you missed an important point. They already make as many Oreos as they can sell. Do you think they could double the output of Oreos and still sell all of them? The point I made was you don’t diversify your portfolio until you maximize the most profitable offering. Especially, if you already offer the other products but their popularity and profitability is waning…
You think car manufacturers aren’t making as many high profit vehicles as they possibly can?
Know company I’ve ever worked with or know of manufacturers products that way. Would you show me one that does?
Obviously not. The trend is continuing and sales volumes continue to increase in that segment.
Well, the ones I work for at least 
Do you really believe it makes any sense to devote your efforts to something that pays less than another? If you had two delivery jobs; papers and pizza. The papers job is minimum wage, low tips. The pizza job pays more, the tips are better and you’re getting more calls than you can handle. You might be the only one that chooses to continue delivering papers over pizzas so that you’re diversified 
I don’t think they are. I think it would be foolish to do so. I think they carefully plot the Marginal Cost curve and the Marginal Revenue curve for each vehicle, and aim to produce the amount where the two curves intersect.
Yes…As reason stated by myself and others. Putting all your eggs in one basket is foolish. My company makes only about 30 products for the telecom industry. 3 are very very very high profit. 3 aren’t even profitable. The 20+ rest are profitable, but no where near the profit of the others. If we dropped those other 20 products we’d be out of business. Most companies see that. Higher profit is only ONE factor for keeping a product line.
Well, somewhere in here we’d have to examine the volume and product history of these examples for it to make any sense as a comparison. You make three products that cover costs or are losing propositions…how are those helping your company survive or better yet, thrive? Wouldn’t your efforts be better served taking those resources and devoting them to the higher profit jobs? Or are those maximized already?
Let’s keep this focused on the topic- they are eliminating ONE less profitable product line- cars. They still manufacture other vehicle types in multiple product lines; SUVs, cross-overs, trucks… They HAVE a diversified portfolio but they’re smart enough to dump the biggest loser and devote those efforts to R&D on the next best thing that’s on the horizon…
I’ll rephrase the point I was making. Car manufacturers are making as many higher profit vehicles as they WANT TO.
Many companies make a lot of products some are high profit…but most aren’t. They need those lower profit products for cash flow.
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Absolutely not.
#1 - Even though those other products don’t make us as much profit as the top 3 products they also account for a good chunk of our cash flow.
#2 - Way more then 70% of sales of those top products came from existing customers who already owned our other products.
#3 - Many of our clients need a whole solution company, not just one that is specialized in one segment even though they may only buy our higher profit systems.
The one view of higher-profit products only does NOT fit every company.
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I’m talking about THESE three-
Mike, again, we’re talking about a consumer product company. When I buy a car, I don’t care if they also make trucks. I’m not looking to single source a product portfolio. The comparison you’re making is not relevant.
Nobody said it did. We happen to be discussing CAR manufacturing. At least I was…
We are betting they will be profitable. Companies do this all the time. Ever year of Amazon? They didn’t make a profit for 10 years.
In fact one of our very high profit products - we were loosing $15,000,000 a year for it’s first 2 years. We made that back and then some the next 2 years. It’s now 6 years at the end of it’s life cycle. and sales are 10 fold of what they were the first year. We could actually keep going with that product for a long time but that’s very short sighted. We need those lower profit products to keep our business going.
WHAT???
You specifically said - “Any business that continued to waste resources producing less profitable products when they haven’t saturated the market with more profitable product”. You didn’t say Car manufacturing. You specifically said ANY BUSINESS.
You are now changing your argument AGAIN.
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Of course they did. Don’t forget Dodge and Chrysler. The Detroit 3 have trailed in the small and medium car market for decades. As market trailers, they have to either increase market share or make more per vehicle to cover the non-recurring costs as quickly as the market leaders. It’s possible that they may never cover those costs. The Cadillac CT6, though a large car, is a good example. It is a terrific car: comfortable, quiet, handles well, and has lots of passenger and cargo room. Despite being an excellent car, it is a failure because they couldn’t talk their target market into the showroom for a drive.
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No. As always I feel many things on the internet are being monitored for advertising purposes.
I don’t know about you, but that’s the funding model we’ve embraced as a culture. It started with television. We got programming for free, funded by paid advertising. We were all willing to make that trade: giving away exposure to ads in exchange for free programming.
The natural evolution of that was for advertisers to study the demographics of the viewers, and target particular demographics by buying advertising on the shows they watched. Eventually, as data science evolved, advertisers got to know their customers better and better, so the companies could spend their advertising dollars more wisely.
As technology has evolved, we as a society have continued to monetize our exposure by insisting on content funded by advertising, rather than pay for that content ourselves. Fortunately, we’re being given a choice in the matter on some platforms, such as Hulu, where you can subscribe to a commercial-free plan or a cheaper plan that includes commercials, but in the case of Google and Car Talk, our choices are to use the free version or not use it at all.
I feel as though it’s still a choice though. You can watch live television, or you can pay for a DVR that allows you to record shows and fast forward through the commercials. It’s completely just that the commercial-free plan comes with an additional cost though, because it costs money to produce the content. Of course, you also have the option of using an old fashioned VHS recorder to record your favorite shows and fast forward through the commercials. I think you can still find VHS tapes and VHS recorders if you look hard enough. You might also have the option of connecting a PC to your cable and building your own DVR by installing a tuner and buying the software.
I agree with you, though, that it can be kind of creepy how advertisers seem to be inside our heads. Not too long ago, I was thinking about something I needed to pick up at the hardware store. I didn’t search for it online or talk to anyone about it, but sure enough, it was in an online advertisement the very next day.
I guess, if this bothered me enough, I could stop using Google Chrome, and use Firefox with an ad blocker installed, and stop taking advantage of all the free things on the internet like this forum, Facebook, YouTube, NPR, Outlook, Gmail, Dilbert cartoons, Doonesbury, dictionary.com, wunderground.com, etc., but I’m pretty satisfied with this model, where I’m not the paying customer. In this model, you and I are the products being sold to the paying customers. More specifically, exposure to our attention is being sold to advertisers, just like it was when I Love Lucy and The Andy Griffith Show first aired on television.
Coincidentally, I’ve really been enjoying Andy Griffith commercial-free on Netflix. That show was way ahead of its time in some ways.
That show was about rural hicks, and meant to be viewed by them. The folks I grew up with in Brooklyn did not identify with the characters in Mayberry.
Well, call me a rural hick then, in spite of the fact that I’ve grown up and lived in cities my entire life.
I contend that the show couldn’t have possibly sustained its popularity without also appealing to city dwellers who are sophisticated enough to appreciate things with which they don’t personally identify.
I’ve never served on a star ship, but I love Star Trek anyway. 
I’ve never worked as a mechanic, but I love me some Car Talk!
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Whitey, as always, you make some very good points.
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I grew up in a small semi rural town. Elementary school (grades 1-6). My first year of junior high school (grades 7-9) we were bussed to a school in the capitol city. I compare it as going from ‘Green Acres’ or ‘Mayberry’ to ‘The Blackboard Jungle’! Which is set in ‘The South Bronx’.
You can get a free ad blocker for chrome I have been using it for quite a while now it work’s very well.