Monthly Archives: May 2013

Pricing Pugilism

Posted on by

I once raised the price of a product as more competitors entered our market and they were lowering their prices. My boss looked at me as if something were growing out of my head. The COO publicly second-guessed my decision for a year. Our competitors made it a selling point. Yet our top-line revenues rose, unit sales increased, and we drove two top competitors out of our market segments and one into bankruptcy. Pricing is mainly science, but it requires a bit of black art. Measuring the market and triangulating the three major pricing perspectives is essential to ballparking product pricing. But in ever shifting markets and especially in those where there are both young and mature players, pricing also requires thinking beyond mechanical elements and entering the mind of the market itself. While composing a customer satisfaction survey, I decided to add a pricing measurement. I did so mainly … Continue reading →

Neglectful Listening

Posted on by

I got a great surprise after a poor response to a bad surprise. After updating Android on my cell phone, Google Maps began aborting. Being a reformed tech guru, I naturally wasted a lot of hours combing through message boards to determine if I could fix it myself instead of throwing the phone at my carrier and demanding that their technically suspect store clerks do the repairs. After a while it became clear that the bug was in a new graphics driver, and thus was caused not by my carrier, Google or even the handset maker. I penned a letter to the president of the carrier company, politely explaining that as the vendor and integrator of record, they needed to fix their products, regardless of who broke it. Realizing that the solution lay somewhere between Google, the chipset vendor, the handset maker and my carrier, I was not expecting quick … Continue reading →

Muddy Models

Posted on by

To dominate or not to dominate. That is the non-rhetorical question. Being a former IT guru, I hang-out virtually with some of my former peers in forums where we argue about everything from driver code to global warming. Many years ago I announced to that cabal that Android would dominate the smart phone market due to its business model. iPhone fanbois who littered this clan insinuated I had lost my mind – that Apple’s elegance, simplicity and market lead would forever overwhelm Android’s then 3% market share. This week Gartner announced Android makes up 75% of all new smart phone sales. My prognostication was based on market mechanics while my techie chums were enamored by Apples early technology differentiation. But like Microsoft before them on the desktop, Google decided to use the ecosystem to spread an operating system, which is a good way to get a lot of companies to … Continue reading →

Brand Bonuses

Posted on by

“You can get better quality than we offer, but you can’t find a higher price than ours.” Oddly, that pitch works when not stated so bluntly. Known in marketing circles as the Mercedes Effect, it shows that people are willing to pay money for no added value aside from perception. Mercedes, Coach handbags, Apple computers and many other products have remarkably higher prices and margins than competing products of equal functional value. The difference is almost entirely because people want to own the brand and enhance their sense of self-worth by proxy. There are other reasons for cultivating cult brands aside from getting obscenely rich. Great brands, well-crafted and relentlessly enforced can: Create buyer/market/investor faith in the product/company/cause. Bias purchase decisions, thereby increasing the number of conversions per promotional dollar. Create a sense of mystic relevance (or as the authority on propaganda calls it, perceived hidden underground knowledge). Allow you … Continue reading →