Welcome to Rye Country Day's Economic Blog. Here you will find perspectives by students taking Economics at Rye Country Day School. It is meant to be a forum where students can openly express their ideas and take positions on relevant economic issues. I urge everyone to participate in presenting their own ideas in an open manner so that we can all learn from each other. Regardless of whether you are currently taking Economics, everyone is invited and encouraged to comment on articles and get involved. Feel free to e-mail me, Alex Osborne at alexander_osborne@rcds.rye.ny.us , with comments or suggestions.

Wednesday, January 17, 2007

Featured Entry - Cheap Sneakers


I lead a discussion on the release of the new Stephon Marbury sneakers and there effects on the sneaker market. These new sneaker are sold for ten to fifteen dollars without tax. The questions I wanted to answer during the discussion were: will they be successful? Will they lower the demand for more expensive products from major companies such as Nike? Can a company make a good profit off the selling of sneakers at a very low price?
After researching the topic I found that the cheap sneakers were in fact very successful within the first month of there release. However, I predict that like any other sneaker the demand will fizzle, maybe even more so for these sneakers because the popularity was due mainly to the price. This sneaker will not have an effect on bigger companies such as Nike, this is because consumers constantly worry about quality and most are fine with buying expensive shoes as long as good quality is ensured. Company profit will be small and there fore it will not match that of a regular priced shoe simply because low pricing limits marketability and makes it a lot harder for the consumer to obtain them due to the fact that the aren’t available in all of the major distributor stores such as Modells.


-Josh Anderson

5 comments:

Anonymous said...

With this sneaker, Mr. Marbury is marketing a bigger part of the population in the United States. With a low price, he is attracting more buyers because more people can afford the 10-15 dollar sneaker than the 200 dollar sneaker. Plus, people who can afford the 200 dollar sneaker will also buy these sneakers because Mr. Marbury is not only selling the sneaker he is selling his name. Meaning that even though a kid who can afford the 200 dollar sneaker he will buy the Marbury sneaker because Stephon Marbury might be his favorite player. I think Mr. Marbury should go international and sell his sneakers in Europe at the same price because I have noticed that prices for clothes are a lot higher in Europe even in countries who aren't very wealthy. In these poor countries, Stephon Marbury's sneaker at a low price will look like a very attractive offer to many people.

Alex Osborne said...

The only reason it would be a good idea to bring these sneakers would be for the price. Stephon Marbury is completely uknown in Europe and of the small number of followers of the NBA it would not be worth it to market there. However, if sneakers are able to be produced for $10-15, a good idea would be to get a European star to promote them there, just not Stephon.

Alex said...

It is about time someone thought of this. For so long, sneaker prices have been going up and up and it is about time the madness ended. This also appears to be a keen marketing technique. The thing I would be interested to see is whether or not these sneakers are sought after with everyone having the knowledge of how little one pays for them. But honestly, Marbury needs to keep his focus on the court for the time being...

joshua Miller-Frankel said...

I think these sneakers pose an interesting situation for the sneaker industry. Yes i realize they wont really affect companies like nike and adidas significantly but i do believe the consumer will think twice about laying out atleast a hundred dollars for the new kevin garnett sneakers. Let's be honest most people buy the shoes because their t-macs or someone else but for someone like me, i could care less as long as their comfortable. I think if Starbury can produce a new sneaker every few months to keep his consumers interested he could gain considerable profits although I dont think Nike will lower its prices to 15 dollars for a pair of shoes.

Marianna said...

I haven't heard much about this sneaker (probably because I don't really wear basketball type shoes) but how did he make the price so low? Is he accepting a small profit margin? I think it's awesome that someone finally made a shoe for the masses, something everyone can afford. It's good to see that they sold well and maybe this will encourage other companies to do the same thing. That particular model of sneaker probably will lose popularity some time soon because it's like a fad but if it does end up being substantially successful maybe another model will come out and maybe a major company like Nike will want in. I don't know about this sneaker making other prices go down though because there will always be people willing to pay 150$ for a (long-lasting) pair of sneakers so the companies will always charge the highest price they can.