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Apr 28
2009
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Are You Selling iPods or MP3 Players
Posted by: Mark Juleen on Apr 28, 2009 01:00 Tagged in: Untagged
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Apparently our country is in, what experts call, "a recession." "Times are tough out there," is the message I continue to hear over and over. Whether it's a $5 footlong, a coupon frenzy, a "sale," or, God forbid, a going out a business closeout, we're constantly reminded, as consumers, that people are hurting. The conversation seems very price heavy out there. My question is, is that the message companies should be communicating?I recently had a conversation with an associate I work with about our prices. This person brought up the recession, people losing jobs, the competition offering discounts, etc., etc. as reasons we were unable to achieve more sales. As I reflected on the comments, I admitted that our product needed to have a "competitive" price. That was the only thing I conceded when it came to discussing price. However, what does competitive really mean anyway? Is the price of a Toyota Camry competitive to a Ford Taurus? Is the price of an Apple iPod competitive to a Sansa? I believe we could make an argument that the prices are relatively competitive. Many understand why a premium is associated with Toyota or Apple, but they still may compare their products to other brands. When I was in the car business people would compare all sorts of brands to Lexus. One time a guy compared a Hyundai Santa Fe to a Lexus RX 300. Seriously.
My point is, your price is competitive or relevant to the individual customer. They will buy at a price they can justify a value for. If your product or service is not achieving the price you or your sales team believes it should, then is it a price issue or a product and experience value issue in the customer's eyes? That's where I'm going with this. I don't see Apple reducing the prices of iPods, and I still see Toyota getting a premium over Ford. Why is this, and why don't more businesses choose to differentiate themselves enough from their competition to achieve this? Even small businesses like dry cleaners and restaurants have opportunities to differentiate and really stand out from their competition. And having a better coupon or price is rarely that differentiator.
The next time your marketing team sits down to discuss the next big coupon or discount program, I encourage you to ask yourself why. Why must you feel compelled to offer a coupon or discount? Are you selling iPods or MP3 Players? Are you just a box with a price, or do you offer something more? Coupons and discounts are knee jerk reactions in an attempt to increase sales, do it enough and those knees might just give out.
Just another one of my opinion rants. Enjoy your day.
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Comments (5)
Mark - This post hits home with me because I'm convinced people are using the sale concept instead of the improving value concept because a sale is EASIER. If a product is good, then people will buy it. Simple math.
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@Heather I think you're right on it as each individual determines what is of value to them. It's sexy to own an iPod, and you pay the premium for it. What I question is if a company gains more customers being the sexy option vs. the cost effective option. It's a tough debate as companies like WalMart have had success being the low cost option. One thing they have going for them is volume. With volume, low price can be a competitive advantage. However, last time I checked an apartment community is limited on volume. Putting apartments on sale doesn't make much sense to me unless it creates a significant volume increase, and even then a community maxes out at some point. I say create a sexier product people are more willing to buy vs. trying to compete as the lower price option.
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@Tara Thanks for the comment. The only Mac product that decreased in price recently is the iPhone, and you know they are still coming out the winners even with the price reduction. They did not take a cut in their profits with that decision.
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mark - i think sex is sex. strippers working out of a double wide are still going to get some action. it's why the shuffle continues to sell even though there are better options. but hey, i can get it in lime green...
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What Do You Think?
You know, I happen to own a Sansa. Here's why I bought it:
1. I don't like being locked in to iTunes. Limiting my software options drives me CRAZY.
2. iPods were way crazy expensive for essentially the same product
3. I could play anything of mine on it that I had before Napster was ... monitored.
4. The size was perfect to fit my needs at the time
5. It came in black, which was the color i wanted
6. My SO would go in to convulsions over a "Mac Thingie" in our house.
Mostly, it was numbers 1 & 2. I saved over $100 on my player. And here's the thing: It's not an iPod, but I tell people about it. I tell them about the good buy through newegg.com, I tell them how great it works, how it doesn't break when I look at it crosseyed, and I tell them how nice it is to not be locked in to iTunes. The price isn't what makes it special to me. It's that I got a good price WITH the other stuff, which was much more important.
It's not about What it is, but it's about Why it's special. Some people, that iPod is special for because of the brand behind it. Push them for a little more info and they can't tell you anything else. You do a good job at making your product stand out and be special for the residents and you will win the lease. It's pretty basic, but sometimes going back to the basics is what we should do.
Nice Post Mark!