Product crimping is a pricing
strategy that allows a company to sell essentially the same product at two different
price points (one higher priced and one lower priced for the
bargain shopper). To prevent the consumer from simply purchasing the lower cost model, the company actually adds some additional hardware or coding to make the model at the cheaper price point slightly "crippled" compared to the more expensive item.
The classic example of product crimping is the Intel 486 chip. Intel released a cheaper
486SX chip at a lower price point. The chip was the same chip that rolled off the
486DX line except an additional step in the manufacturing processes was added to turn off the 486SX's
math coprocessor.
An older example from computer history goes back to the classic days of the
floppy disk. Floppy disks (5 1/4" and 3 1/2") were sold as either single sided or double sided. Double sided were noticeably more expensive. The difference between single- and double-sided disks was the double-sided product had another hole punched on the other edge. People quickly realized if you punched your own hole in a single-sided floppy, you made it a double-sided floppy. Manufacturers tried to claim this was a bad idea as the reason single sided were sold as such was because the integrity of the media was only tested on one side. Computer journalists quickly countered this notion by pointing out that on single-sided floppies,
PC drives read the top and Macs read the bottom (or maybe it was the other way around.... but you get the point). Since manufacturers didn't market disks for PC or Mac only, they had to be testing both sides regardless.
Sony did something similar in the '90s with its minidisks (albeit there was no cheap simple work around this time like drilling a hole or buying a "
double sider" punching device). It sold 60-minute and 74-minute
minidiscs. The 74-minute disks were $1.50 more. However, the media was exactly the same, save for some special coding on the 60-minute disk that told a recorder not to write to a portion of the disk. Assholes.
One of the most
notorious examples of product crimping was IBM's printer division. It released a crimped E-model version of its popular 10-page-per-minute
laser printer. The E model printed at half the speed. However, to create a 5-page-per minute E model, IBM had to
add 5 additional chips to the printer to actually slow it down.
Designer clothing manufactures likewise release crimped versions of their clothing for sale at their so-called factory
outlet mall shops. These crimped clothing lines are purposely made to lesser standards (e.g., lower
thread counts) than versions released in traditional stores. So if you think you're getting the same
Banana Republic skirt at the outlet mall but for $30 cheaper than the look-a-like at the Banana Republic at the Galleria Mall, forget it.
Although product crimping is much more common these days as consumers have become extremely price conscious, another classic example of product crimping goes all the way back to the '70s (or earlier). Back in the day when one had a choice between
leaded and
unleaded gas, leaded was several cents cheaper than unleaded. The consumer perception was unleaded gas had to have the lead removed from it, hence making it more expensive to refine. However, all gas is unleaded. Lead has to be added (it was used as a lubricant), at additional cost, to make leaded gas. Petro marketers likely preyed on the publics poor understanding of the difference between "un-" and "de-" (as in
decaffeinated). Fortunate for the oil companies, as consumers became aware of this odd pricing strategy, leaded gas was ultimately legislated out of existence, saving the oil companies of having to face a massive
class action lawsuit.