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My old Economics teacher told me this tale.
He was formidable, and dedicated.
I suspect he's long since passed away.
His teaching continues.
There was a small petrol station, on the main dusty road that ran through the centre of a very small, very dusty township.
It was at the very northern tip of a farming peninsula.
It was a local family run affair, having once been the general store.
It had been that way for over 100 years.
Petrol sold for a dollar a gallon.
( He said gallon, so I'm going with it)
One day several trucks pulled up on the other side of the road.
They commenced to level the land and build a similarly sized store and pump court.
When that new store opened up, it sold petrol for 99C per gallon.
And most other items were also a cent off.
Loyalty meant the locals kept coming to their old familiar place.
The new store across the road dropped its prices to 3/4 that of the old store.
Business dropped off for the old store.
But, cleverly, they too cut their profit margins and matched the new store price.
Most customers returned to the old store.
The new store cut the prices down to half, now attracting customers like a magnet.
The old store did the same, but they were now making no profit, and living on savings.
The new store dropped prices to one third.
The old store closed.
The cost of buying the petrol and goods was higher than the price the new store was selling them at.
After the old store had well and truly shut its doors, the trick became apparent.
The new store changed it's branding and signage to reveal itself to be a very small branch of a very big petrol consortium.
The prices were then set to twenty percent higher than the original old store price.
Some say the locals got what they deserved for their treachery.
Some said that you can't stop progress.
I wondered if one big country would ever do it to a small country.
One store at a time.
He was formidable, and dedicated.
I suspect he's long since passed away.
His teaching continues.
There was a small petrol station, on the main dusty road that ran through the centre of a very small, very dusty township.
It was at the very northern tip of a farming peninsula.
It was a local family run affair, having once been the general store.
It had been that way for over 100 years.
Petrol sold for a dollar a gallon.
( He said gallon, so I'm going with it)
One day several trucks pulled up on the other side of the road.
They commenced to level the land and build a similarly sized store and pump court.
When that new store opened up, it sold petrol for 99C per gallon.
And most other items were also a cent off.
Loyalty meant the locals kept coming to their old familiar place.
The new store across the road dropped its prices to 3/4 that of the old store.
Business dropped off for the old store.
But, cleverly, they too cut their profit margins and matched the new store price.
Most customers returned to the old store.
The new store cut the prices down to half, now attracting customers like a magnet.
The old store did the same, but they were now making no profit, and living on savings.
The new store dropped prices to one third.
The old store closed.
The cost of buying the petrol and goods was higher than the price the new store was selling them at.
After the old store had well and truly shut its doors, the trick became apparent.
The new store changed it's branding and signage to reveal itself to be a very small branch of a very big petrol consortium.
The prices were then set to twenty percent higher than the original old store price.
Some say the locals got what they deserved for their treachery.
Some said that you can't stop progress.
I wondered if one big country would ever do it to a small country.
One store at a time.
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