Noah Won Chaminade High School 11th Grade
While visiting a supply store, have you ever asked yourself why the prices of paper and printer ink are so high? The answer to that question lies in an effective marketing ploy used by companies. A popular yet not widely-known-to-consumer business model, the “bait and hook” method is a concept not talked a lot but used prevalently. Razor blades, paper, printer ink, and mechanical lead are all great examples that fall under this business concept. So what is it?
The Bait and Hook Model involves offering a basic product/necessity/service at a very low price and then taking in profits from the recurrent sales of “refill” of the associated product. The best example of the model lies in its origins. Born in the razor blade industry of the early 20th century, the Bait and Hook Model is also known as the Razor Blade Model. Back then (and even now), razor blades were sold at a low price and served as the “bait” while the razors themselves were the “hook” as consumers were forced to keep buying razors for the razor blade to function at its best. The method became instantly successful because of the poor quality and durability of razor blades in the 1900‘s. Dull and exposed, the razor blades constantly wore out and forced consumers to buy in bulk. Come today in our internet-filled world and another subsect of the bait and hook model arises: freemium software.
The world of social gaming allows for plenty opportunities in the bait and hook business model. On the smartphone, computer, XBox, PS4, iPad, you name it, there is an infinite amount of free games that can be downloaded. These “free games” aren’t really free though, as the games are intentionally limited or made difficult in order for the consumer to be swept under by the company’s in-game advertisement. Thus, the Bait and Hook Model is utilized. The consumer/player sees the value in downloading the “free” game and ability to be entertained for no cost. This is the bait. The hook comes when that same player has trouble proceeding through an extremely difficult without purchasing an “upgrade”. Although these upgrades may cost even less than ＄1.99, these prices add up. For example, the trending game “Fortnite” on all ios devices, a free to play game, raked in around 1 million US dollars within 72 hours of release according to Forbes.com. The bait was the game itself while the hook was skins to enhance the quality of gameplay and status. Other examples are XBox gold passes and PS4 live passes, which give online multiplayer access but only for a limited amount of time.
In essence, the Bait and Hook model encompasses two fundamental elements. The first is a product/service that entices an intended audience for a cheap price. The second is a paid subscription that feeds off of the idea that the product/service is at a good price. All in all, this method is important for consumers to understand because it can allow them to see when they are taken advantage of.
<Noah Won Chaminade High School 11th Grade