South-Westerns' Economic News Summaries
Who wouldn't want a fridge that can hold a pony keg?
Subject Appliance makers try to woo males into purchasing high-end appliances.
Topic Supply and Demand; Utility and Consumer Choice
Key Words

appliance sales, men

News Story

The "Freezerator" refrigerator/freezer from Whirlpool, which sells for just over $1,000, has a tread pattern on its front. A Ten50 fridge has Harley-Davidson flames and handles that look like motorcycle handles. It costs about $6,000. Who buys these things? Why, men, of course.

Other companies are following suit. Electrolux's Frigidaire unit is coming out with the "Beverage Center," which has space to hold a 16-gallon keg of beer through a tap in the door. Hannispree California, a Taiwanese firm, sells televisions shaped like baseballs or golf balls. Marvel Industries is producing a humidor designed to fit in its wine refrigerator.

Why the sudden change? Sales of appliances are beginning to level off: The industry expects only a 1% increase this year, compared to five percent in recent years. As a result, manufacturers are trying to get men to think beyond purchasing grills and related items. Decisions to buy household kitchen items have traditionally been made by women, so manufacturers are appealing to men who want to create "their own space," in the garage or entertainment room. Many new homes feature "media rooms," and garages are getting bigger every year. This year, garages are expected to measure 22 feet by 22 feet, up from the typical 20 by 20 feet. For that reason, appliance makers want to convince men that they can purchase their own appliance items to fill their new spaces.

Questions
1.

What is happening in the refrigerator market that would cause manufacturers to produce these new items? Illustrate your answer with a graph of supply and demand.

2. What are manufacturers trying to do to the perceived marginal utility of such appliances by directing them at men? Why?
3. Why do manufacturers think they can charge premium priced for such items?
Source Cheryl Lu-Lien Tan. "The push to turn men into appliance shoppers." The Wall Street Journal, 14 July 2005. D3.

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