Low prices can lead to sad customers
There are many things in the household that you use every day that are important but not critical. This story is about one of these things. A product that is important but not critical, means that if you forget to buy it, you will not take that extra trip to the store to replenish your supply; you will simply wait until you get to the store next time. (And then chances are you will forget to buy...
Read MoreCommodity Segmentation
I often hear company executives react with befuddlement when we at Atenga talk about product segmentation. They say “how can we segment our products when we sell a commodity?” This topic struck me when I was grocery store shopping the other day. I was buying sweet corn to boil and add to a salad. And there, in the produce aisle, right in front of my eyes, I saw an example of how the lowly...
Read MoreCustomer loyalty can be soooo simple
Something I share with many, mostly men, is my aversion for shopping. The result is that just about everything I can buy online, I buy online. It rarely has anything to do with the price, or with price comparison but everything to do with convenience, selection, and availability. Also, I like to make my decision based on reviews – like Consumer Reports. So I can select products like...
Read MoreToo much success can also be an issue
Apple, as we all know, has been incredibly successful with its iPad products. They have sold millions upon millions of the products. The low end of the iPad 1 was set at $499, and so was the low end of the iPad 2, and $829 for the highest end version. In fact, so successful was Apple that this generated a “reference price”. They had educated the market that this is THE price for an...
Read MoreThe Ethics of Pricing
Today’s Washington Post has an interesting article about the cost of medical services. It compares the cost of certain procedures in the US, and some OECD and non-OECD countries and it conclusively shows that the cost of medical service is far higher in the US. It also says that the number of doctor and hospital visits in the US is not greater – in fact, US patients stay a shorter time in...
Read MoreThe Death of Steve Jobs
Will Tim Cook lead Apple into the same sales volume trap that almost killed Nokia and Motorola? I frequently blog about how Apple is a true price champion. They have after all built a company based on quality products sold at high prices. I admire how they simply say “no” to potential customers who buy on low price alone. It is that bold decision that has awarded them superior profits....
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