I just finished the reading and the test for chapter 18, Setting the Right Price. These were all new concepts to me, I had never heard of price skimming before, and it makes sense to differentiate between the benefits and circumstances of that vs. penetration pricing, or status quo pricing. Each one has its place. I can't help but think about the introduction of the iphone and the high prices we were paying then - and gladly. My daughter and I stood in line for 2 hours to get one of the limited number that was shipped to Logan for that product launch. We gladly paid the $800 approx. for it - and today my friend was able to buy one for $199. A perceived shortage driving the price up, or was it that the manufacture of them during start up was more costly and that evened out over the last several years? I can see the flow on both scenarios though. And it makes sense to me now. I really related to the example of Parker Hannifen and former pricing at cost plus, vs their new strategy of segmenting products based on demand and pricing for affordability on some, while pricing higher on others due to market demand and perceived higher value. Very smart. This is something I will use when pricing conference management services. Base price vs. value added services. Thanks for this.
I really appreciated the glimse into unfair or illegal practices too and the laws that govern that. I had heard of price fixing but I had never heard of predatory pricing or price discrimination. I can see how these regulations are needed to protect the public and also smaller retailers from unfair practices. I find that I was actually pretty naive when it comes to what is legal vs. illegal in pricing. And I really liked the info on odd-even pricing (psychological pricing). I had not considered that putting something at a whole even value could give it the perception of higher quality. I'll use that too.
Sunday, April 24, 2011
BUS 3500 April 21
Sales Promotion and Personal Selling were the topics of this week's class - I had some experience in this sort of thing, promoting with point of purchase advertising, coupons, online - so I was probably more confident and less open minded than I should have been. What can I say - I had room to learn and grow. I had never heard of push money, for example. And personal selling took on a negative tone for me, with images of used car and vacuum cleaner salesmen. I can see now that it's a crucial element in the high involvement products and can be used to counsel and guide the buying decision, providing information, advice, meeting objections with knowledge and awareness. It's a rather complicated process and maybe even an art - hard work and very strategic - definitely a system to be respected.
The concept of premiums always makes me think of the free dishes my grandmother and my mom used to get in boxes of laundry detergent. And I can remember the times of dumping out an entire box of Cap'n Crunch cereal to get the toy buried inside. We talked about coupons vs. rebates - and I do see more consumers preferring the instant rebates or coupons over the mail in kind. They are more difficult to do and can see why a percentage of consumers never follow through on them. I was driving home through Brigham City yesterday and at the Sprint store there was a huge sign: "No Mail-In Rebates: All rebates are instant this weekend!" That sign probably brought some people in who otherwise would have waited.
The concept of premiums always makes me think of the free dishes my grandmother and my mom used to get in boxes of laundry detergent. And I can remember the times of dumping out an entire box of Cap'n Crunch cereal to get the toy buried inside. We talked about coupons vs. rebates - and I do see more consumers preferring the instant rebates or coupons over the mail in kind. They are more difficult to do and can see why a percentage of consumers never follow through on them. I was driving home through Brigham City yesterday and at the Sprint store there was a huge sign: "No Mail-In Rebates: All rebates are instant this weekend!" That sign probably brought some people in who otherwise would have waited.
BUS 3500 April 14
There was no class on April 7, but I got to meet our instructor Daniel Allen at the USU Conference Center where I work. That was nice. Also had breakfast with Lisa from the class. We've become Facebook friends now too, thanks to this class, and I'm going to help her girl scout group with some social networking pointers.
Advertising and Public Relations is the topic of this week's class, and it's pretty special to me because I am a journalism and PR major with business marketing as part of my interdisciplinary degree. I had not really considered the difference needed in PR when looking at the stages of the product life cycle though. I'd be inclined to keep hitting that introductory stage over and over and I really should be considering the growth, maturity and decline stages. All PR strategies are not created equal - or they shouldn't be, anyway. I like the AIDA model - and it's a good concept to follow and keep in the forefront of campaign planning. Attention - okay, get their attention - but next, you have to keep them interested... then create a desire in them for the product, and finally, importantly - call them to action. This is something that I will use as I move forward in this field. It's good to look at National trends too, but also we have to look at local influences. Here in Logan we have a newspaper that is still widely read, unlike some larger cities. Newspaper advertising and PSA's may be more effective here than magazine ads would be. And now that the Valley Channel has moved to a less accessible station, the local TV ads there are not as effective as they used to be. But local radio is still a good vehicle here, if you choose the right station to advertise on, and the right time to place those ads. Local festivals too, like Summerfest and Cruise In, that involve the whole community are good sources for sponsorship exposure - the point is that there is no one "right" formula and each product and campaign takes some evaluation and selection before deciding on the advertising to use.
Advertising and Public Relations is the topic of this week's class, and it's pretty special to me because I am a journalism and PR major with business marketing as part of my interdisciplinary degree. I had not really considered the difference needed in PR when looking at the stages of the product life cycle though. I'd be inclined to keep hitting that introductory stage over and over and I really should be considering the growth, maturity and decline stages. All PR strategies are not created equal - or they shouldn't be, anyway. I like the AIDA model - and it's a good concept to follow and keep in the forefront of campaign planning. Attention - okay, get their attention - but next, you have to keep them interested... then create a desire in them for the product, and finally, importantly - call them to action. This is something that I will use as I move forward in this field. It's good to look at National trends too, but also we have to look at local influences. Here in Logan we have a newspaper that is still widely read, unlike some larger cities. Newspaper advertising and PSA's may be more effective here than magazine ads would be. And now that the Valley Channel has moved to a less accessible station, the local TV ads there are not as effective as they used to be. But local radio is still a good vehicle here, if you choose the right station to advertise on, and the right time to place those ads. Local festivals too, like Summerfest and Cruise In, that involve the whole community are good sources for sponsorship exposure - the point is that there is no one "right" formula and each product and campaign takes some evaluation and selection before deciding on the advertising to use.
BUS 3500 March 31
This week's topic was Integrated Marketing Communications: The elements of the promotional mix, and the role of promotion in the marketing mix. It's probably a key point that we have the power and maybe the responsibility to inform consumers while we are trying to persuade them, and the fact that consumers need to be reminded about a product in order to keep them buying, keep them responding. It's coming down to communications, and the LO3 explains that if you have a message you want to convey to a target audience, you need to use language and symbols that target audience will relate to. I was thinking that sometimes companies try to "sell at" people rather than "sell to" them - and that they are missing the point of reception - that the target will receive the message and relate to it, hopefully act on it. The integrated marketing concept comes from combining approaches and getting a stronger result because of that synergy. I remember when I worked at Eagle Direct in Denver, my boss made me read a book called Integrated Direct Marketing. It was the first time I really considered the impact of using several promotional and advertising approaches to work together, and planning it that way, timing it that way. A print ad followed closely by a radio ad, and then a direct mail piece hitting immediately afterward - I guess this is probably what is meant by a promotional mix. It's about planning and strategy and really thinking about the receiver, rather than just throwing spaghetti against the wall and seeing how much of it sticks.
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