Pricing and Apple

With our recent lectures and readings on pricing, and the launch of the new iPad, I began thinking about what has made Apple so successful.  Yes, they clearly have superior products and technology, but they are doing a tremendous job at marketing these products.  I'm sure there are plenty of products out there that are superior to the popular product in their industry, but no one might ever hear of them and they might never get to the market.  Apple has great ads and marketing campaigns, however they have nailed it when it comes to pricing.

I believe Apple always uses a price skimming strategy with their new products.  And they have every reason to.  Their new products are almost always completely new technology to the industry and they usually have no real direct competition.  So what they do is price the product high to start because they know that people will over pay to get their hands on the newest technology behind the newest Apple product.

The high prices signal quality, and people are willing to pay for high quality.  They also have limited number of supply when they first launch and profit by having large margins on every sale.  This is price skimming at its best.  Then once the product has been out for a while and the buzz starts to calm down, they simply begin to slowly bring down the price.  Its usually not because another competitor has caused this though, its because they have another new product to launch to take the spot of their current product.  And once again, they turn to the skimming strategy with the new launch.

It really is fascinating when you think about everything that goes into giving an Apple product that untouchable feel.  I truly believe that their pricing strategy is a major reason for all of their products' successes.

Why Major Marketers are Moving to Google+

I read an interesting interview with Guy Kawasaki today about why marketers should be moving most of their efforts toward Google+.  In the interview he mentions that he spends 99% of his efforts on Google+.  One of his major reasons is that there is less clutter on Google+ right now.  Other social media sites like Twitter and Facebook are extremely saturated and companies are fighting for consumers to notice them.  His argument is why waste time fighting for a small piece of that pie when you can be an early adopter of Google+ and eventually hold an advantage over your competitors.  I however, still question if I fully trust that Google+ will eventually take off and be valuable to businesses.

I understand that it takes time for social media sites to catch on.  There won't be hundreds of millions of users on Google+ overnight, but there could eventually be more users there than on Facebook.  There also seems to be extremely positive aspects of Google+ such as the circles features which would allow you to group your customers into segments and gather extremely valuable data from this aspect.  My major argument here is that why would you focus 99% of your time on a social media platform that no one is even using yet?  How could you tell a company to dedicate time and money to something that is no guarantee to take off ever.  Yes, having Google as a basis for a company in any industry seems like a safe bet on success, but the numbers so far have shown that internet users barely spend any time on Google+.

To me, this interview seems like a lousy attempt to sell his new ebook, than a genuine recommendation.  People will recommend a lot of things if there are financial benefits linked to the recommendation.  I will wait to see what happens with Google+, but for now I believe it is erroneous to place 99% of your marketing efforts into an unproven social media platform.

Coca-Cola: Papertweetos

I came across another interesting viral campaign today.  It was done by Coca-Cola, a company who has what seems like an unlimited marketing budget, however reverted back to using their own customers to create a buzz.  Coca-Cola noticed that at Argentinean soccer games fans through tiny pieces of paper into the air and cheered as their players entered the field.  Coca-Cola also recognized that during these games there were sometimes hundreds of thousand tweets.  So what Coke did next was kind of genius.

They decided to launch a campaign called Papertweetos. They asked fans to tweet their words of encouragement for their team and to use a specific hashtag.  Coca-Cola then compiled over 2 million tweets and placed them on tiny pieces of paper and launched them at a major Argentinean national team game.  They recorded the paper flying into the air with their Coca-Cola brand name on them as the team took the field and placed the video on their website and YouTube.

 This again is a clear example of a company getting the consumer involved in order to create a marketing campaign for a much smaller cost than the traditional advertising methods.