Pricing Scavenger Hunt

Pricing as Positioning Strategy

The Pontiac G8

In 2008 Pontiac Introduced the G8 to the United States. The pricing strategy that Pontiac had in mind for the G8 when it arrived on are shores was that it would out perform its European rivals; the BMW 5 series and the Mercedes E class while costing half as much. I can remember advertisements in car magazines stating that the G8 was the only V8 powered sports sedan for under $30,000 dollars. Unfortunately here in the US the G8 did not sell very well and was discontinued just one year later, and soon after Pontiac its self was phased out as well.

New Product Pricing

The Nintendo Wii

In the summer of 2006 the Nintendo Wii was released world wide. It was an immediate success. According to the NPD group the Wii out sold both the X box 360 and Playstation 3 combined the first half of 2007. There are two major differences between the Wii and its competitors. The first major difference is the technology. The Wii is less advanced then its rivals but more innovative because of the unique motion sensitive controls. The second major difference is the price. When the Wii was released it cost $250 dollars. When the Playstation 3 was released in was over $600 dollars.

The Wii was designed with more casual gamers in mind and is a bargain when compared to its rival game counsels. From a marketing perspective the Wii does a unique thing in terms of pricing strategy. It is both priced to skim and also to penetrate. The Wii was priced to for profit for the first year on two of production and Nintendo heavily prompted it. But at its most expensive it was still much cheaper then any of its rivals and captured a great deal of the market.

Odd Pricing

Every time I walk into the Memorial Union grocery / convince store I see odd pricing. That can be said of most everything found in a convince store. Now that I think about it even gasoline's advertised price is usually an odd number. Odd pricing is the pricing strategy used to convince the consumer they are getting a bargain. Odd pricing is incredibly popular among retailers who do not sell specialty products and services.

Loss Leaders

Razor blade companies are a prime example of the loss leader marketing strategy. I just picked up the Hydro 5! The blade itself is as big as a frying pan. But I know that next year my Hydro 5 will be dwarfed my the Hydro 6 and 7. The strategy of selling the razor at a loss, but selling the razor blades at profit has worked successfully for companies such as Shick and Gillette for since the invention of the disposable razor.

Multiple Unit Pricing

Multiple unit pricing has been a common pricing strategy for low price merchandisers for years. This strategy is becoming more prominent in electronics these last few years. I first noticed it when Microsoft started to offer it's X box 360 in bundle packages. If you bought a certain bundle package your X box 360 would come equipped with a larger hard drive or a few video games. Lately I have noticed cable companies beginning to offer cable, Internet, and phone services in bundles as well.

Clicks vs Bricks

These days the Internet is a part of almost every facet of modern life. Nearly two billion people world wide use the internet according to Internet World Stats. Naturally, companies of all types recognized the value of interacting with customers online. I have chosen three companies that all have brick and mortar establishments, but all utilize the internet differently.

Barnes & Noble

According to the Barnes & Nobles website thereare 720 bookstores and 637 college bookstores in the united states as of May 10, 2010. Currently they have no plans to build bookstores internationally. Barnes & Noble.com will serve their international customers.

The website is a full online store offering everything the regular store offers. Barnes & Noble is entering new territory by offering the Nook e-reader to customers. The core benefit of the Nook will be the abilty to buy electronic copies of books for a low price and read on the go. This last quarter Barnes & Noble managed to sell more electronic books then paperbacks.

This, in the long run may not be a positive trend for publishers or the authors that write the books. My friend Chris recently bought a Kendall e-reader and was able to purchase The Complete Works of Plato for about $9 dollars online. This could be the end of the wealthy author.

Wells Fargo Bank

Financial institutions and the Internet were practically made for each other. Most major banks and credit unions offer online services to their customers. In 1995 Wells Fargo was the first bank to introduce access to banking accounts on the internet. Wells Fargo has thousands of retail branches in the United States that offer every thing from simple deposit / withdrawal transactions to home equity loans. As long we still use cash; Wells Fargo will always need brick and mortar

banks and ATM machines. Wells Fargo's online banking helps their customers be able to do simple transactions from home.

The beauty of Wells Fargo's online banking is how it gives its customers the tools to manage their own finances. Through their website Wells Fargo's customers can manage their credit cards, transfer money between accounts, and take care of their bills. One of my favorite things about online banking is the spending reports. These reports let you know what percentage of your income you are spending on things like entertainment and education. Having that knowledge in front of me helps me to budget my money a little better ( I just realized how boring this last paragraph must have been to read). In conclusion, the internet and banking work well together.

Pei Wei

The relationship between the internet and getting lunch never really crossed my mind until last week when a co-worker ordered Pei Wei for the office online. Obviously Pei Wei needs to have multiple locations to serve their patrons, and yes you can just get in your car and go to a Pei Wei to order your beef and broccoli yourself, but I really like how the website works. The Pei Wei website is like any other restaurant chains website. It has information on where new Pei Weis are opening up and the new dishes that they want you to try. Its when you actually order lunch does the website become impressive.

After choosing the location of the closest Pei Wei you are then taken to the the menu page where you choose your food. Once you have chosen your lunch your are able to customize it. If you don't want rice and would rather have noodles your can order that way. Or if you don't want your noodles spicy you can request that as well. I thought this was very clever, especially if your are ordering for more then one finicky eater. Then you go pick it up. I know that the ability to customize your order online is not exactly earth shaking but it is a good example of how physical shops and the internet are working together.

Bibliography

Internetworldstats.com

Barnesandnoble.com/faq

Global Marketing

I really enjoyed doing the research for this project. It reminded me that the world is becoming smaller all the time. The three global marketers I chose to research are Ford, Red Bull, and Apple. Each of these companies have different methods of appealing to their customers in different parts of the world.

Ford Motor Company

Did you know that you could pick up a brand new Ford Mustang in Abu Dhabi? Neither did I. Did you know that you can get the Harley Davidson-themed F-350 in Israel? If you check out http://www.ford.com/ you can pull up a map that will show all the countries in the seven continents in which Ford operates. When you click on a country on the map it will take you to that country's Ford website. Each website is in that country's language and unique to that country's tastes.

I was really impressed to see the amount of work that went into each country's website. I am a car guy so it was also very interesting to see all the different Fords that are sold all over the world. Ford, however, was not my favorite of the three websites .

Red Bull

Red Bull's advertising confuses me sometimes. One day there is a Red Bull commercial of a guy jumping a motorcycle on the Great Wall of China. The next day there are bizarre cartoon characters with wings. But their website is fantastic!

Red Bull's marketing campaign takes aim at a young, high energy crowd. So Red Bull sponsors a lot of international extreme sports and motor sports teams and events.

Visit http://www.redbull.com/ and the homepage has videos and articles on what is going on globally in Red Bull's different events. Don't miss the button in the bottom right hand corner that says "international". Click on this button and a list of the different countries Red Bull operates in comes up. Choose the country you want and not only does the text change to that country's language, but the content dramatically changes. The website's content focuses totally on the chosen country's specific sponsored events, music, and culture. That is brilliant to me! Red Bull's website differs from those of Ford and Apple because of the level of detail that goes into including each country's young customer interests.

Apple

Apple sells many of their products right off of their website. Like Ford and Red Bull's websites, it is easy to access the different international sites through Apple's website. But each county's version of the Apple site does not vary that much in theme or content. The only big difference besides language are the products offered in each country. Most other countries, for example, do not have access to the iPad or iPhone 4. The attention to detail that Red Bull and Ford puts into their advertising is not really there for Apple's international customers. Apple may have the global marketing mentality that Apple products just sell themselves

Assignment 1: Ethically Irresponsible

There are some pretty bad products and services out there. Some were blatantly bad and others that we think we need. At first it was a challenge finding information about failed products until I found Walletpop.com. And then I was reminded a of a jewel from the 90's called Web TV.

Unneeded product that failed:

Web TV was not dangerous or really unethical, but since the company could not seem to reach the million subscriber mark the bill for the Internet service became massive. I remember some of my more spoiled friends' parents got Web TV for them. It was dreadfully slow and not quite as easy as just using a computer.

Unneeded product that were successful:

Women's fashion magazines sell incredibly well. Doctored images of impossibly thin women can be seen in almost every gas station, grocery store, and bookstore in the country. The benefit of these magazines is to keep the reader informed of the latest trends in clothing and make up. But these magazines also show the reader the new trends in weight loss and unaffordable beauty products. The marketing strategy is unethical to me because fashion magazines play on women's insecurities, but also pretend to be there to help.

Planned Obsolescence:

There are two products that I believe fit this category well. The first is the cell phone. Cell phones are expensive enough to be a big ticket purchase, but flimsy enough to be replaced more often than your shoes. I can't really complain because my phone from 2006 won't seem to die. However most of my friends' cell phones seem to disintegrate in their hands twice a year. The unethical part of this scenario is that something expensive should be quality enough to last. The second product is the Amercian made car between the 70's and 80's. Hence, the negativity about American cars that my parents and their generation may always cling to.

Demand Side Market Failure :

I found a great list of products like this on Walletpop.com. WebTV is a good example of a service that just could not really attract new customers. Colgate TV dinners and Ben-Gay aspirin are two of my favorite demand side market failures. Because TV dinners made by the people who make your toothpaste just doesn't sound appealing. Ironically Kirkland, (Costco brand), does very well and they make lots of frozen food and shampoo. I think Ben-Gay aspirin speaks for itself.