Market Culture June 20, 2006
It is a well known fact, that in Third World countries, no price is ever final, and every advertised fare requires a bargaining process to bring it down. Israel, who in many ways should be considered culturally, though not technologically, as a Third World country, is no exception. The funny thing is, that here, contrary to the rest of the Western world, the haggling is taken out of the open-air markets, and mostly applied to the so called enterprise-level organizations.
Every Israeli is already accustomed with the need to call the cable or satellite provider, or their ISP every few months, requesting to disconnect the service and switch to the competition who is offering a better deal. Like magic, a better fare will immediately be applied, saving the cost and bother of switching providers and ensuring the continuation of a reasonable payment. However, these usually have a time limit, and a few months later the price is raised again, and the same process has to be repeated.
Worse than all are the insurance companies, like I experienced, sadly, in the past few days. With my car insurance due to be renewed, I checked the official sources at the Ministry of Finance web site (recommended to every car owner in Israel), and found out that the proposal I was getting was the highest available. Obviously, I called some of the companies on the lower price scale to check their offers, and was given a much better deal. When I called my current insurance company (it won’t hurt to shame them a bit), asking not to renew the service, I was given so many promises of a better service, in more and more phone calls, going as far high as the senior customer relationship personnel. Suddenly, the price was dropped by 50%, and they even threw in a voucher for a free breakfast at Lechem Erez. Once again, I had to call companies and change my decision, resulting in more promises and threats, and much discomfort (I was even given a lecture about being dishonest for not checking prices in advance!).
All this would have been saved if the insurance companies would have stated their true price from the start. Obviously, they would have not offered me a 50% reduction if they were not making a profit, so why not advertising the low price and saving us all the hassle? Do they really think customers are that stupid? As E. was saying, the fact that they could reduce the price that much only serves to prove that they are dishonest thieves.
I am sick of tired of such horrible marketing culture. I can assure you that this is NOT the reason I am still living in Israel.



