Making Sense Of Prostitution

This is an interesting topic and I would restrict myself to discussing the marketing aspects of the situation rather than the lurid details of the escort service which the governor of New York used.

The Emperors Club VIP is a high end prostitution ring which it now seems that Eliot Spitzer had been using for as many as 10 years. The now defunct site rated its girls on a scale of 1 to 7 diamonds. Hourly rate for a girl with 7 or less diamond rating could be around $1000/hour and those for above 7 could be as much as $5000/hour. Now the interesting situation arising out of this tiered pricing is that the same girl could be Kirsten charging $1000/night and Tiffany charging $5000/night.

Now lets look at the marketing aspects of this situation and try to generalize it beyond the business of prostitution.This ability to sell the same product at different prices based on consumer's willingness to pay is a marketer's dream. In case of prostitution, the job is made comparatively easy because of lack of information through which you can compare product/service offered as well as the inherent esoteric nature of product/service. Compare this to trying to sell cars. Toyota for long has grappled with the problem that consumers think that Lexus is a beefed up Toyota and if they really have money to spend, they would buy a Merck or a BMW rather than Lexus. Obviously having Lexus as a different brand for luxury, more expensive cars helps and in some ways tries to do the kind of rating that happens in The Emperors Club but the problem is too obvious. There are tons of people who cover cars on specific aspects, come out with ratings and do a killer job on comparing one model with the other. The girls in the prostitution ring do not have to go through this gruelling free market scrutiny.

Now price has been historically used to communicate better quality. It seems obvious what better quality would mean in escort services. How about cars? Quality has traditionally meant power. European brands have been historically considered high on the power vector. Japanese companies have tried to push the envelope on the reliability scale but I have always believed that you cannot compensate for awesome power with awesome reliability. As Kate Walsh would say in the now famous Cadillac ad:" The real question is: When you turn the car on, does it return the favor?"
I want to draw a comparison with the escort situation but for the sake of sanity, I will leave it at that.

What could be other ways of doing an efficient tiered pricing? Place your product in more exclusive channels. In case of this service, the channel was Internet and not the run of the mill shady pimps on dark streets.In case of cars, you really cannot afford to push a Lexus and a Toyota from the same dealership and not end up doing damage to your ability to charge extra money for Lexus.
Cosmetic companies traditionally do a great job in creating different brands based on pricing and channel management....think about Garnier and L'Oreal. But frankly, it would be a marketer's dream to be able to generate the kind of information asymmetry which exists in case of escort services....not sure if this marketer would like to claim this fact on his resume but I am damn sure, he will be a hell of a proud man to be able to accomplish it.