Many readers of Learn the 4 Ps may not be old enough to have purchased vinyl records. But even in the possibly 20 years many of you have been around, the product-market for music has changed dramatically. Two big drivers of change have been technology and consumer behavior. A couple of recent articles from CNN.com “ Young listeners opting to stream, not own music ,” (June 16, 2012) and “ Teens’ first choice for music listening? YouTube ” provide some insights into the latest trends. These changes have forced musicians to find new ways to make money. A recent NPR series highlighted some of the new models, see: “ How Musicians Make Money (By The Fraction Of A Cent) On Spotify (September 26, 2012), “ Crowd Funding For Musicians Isn’t The Future; It’s The Present ” (Sepember [Continue Reading …]
Sometimes the most creative business ideas are “stolen” from one industry and applied in another. In some ways this can be safer — at least you know the creative idea works somewhere. So can you rent/sell neckties the same way Netflix rents videos? You can read more at “ TieTry lets subscribers rent ties by mail, like Netflix ,” (USAToday, July 19, 2012). What other industries might utilize the Netflix business model?
Danish Chocolatier Anthon Berg created a special pop-up store in Copenhagen, Denmark. At this store, customers couldn’t pay for their boxes of chocolate with cash, they paid instead with good deeds. Each product was labeled with a deed the customer had to perform – like “Serve breakfast in bed to your loved one” or “Help clean a friend’s house.” Customers posted their promised “payment” on their Facebook page right in the store — helped by staff carrying around iPads. Think about all the promotion operating here: the store served as a billboard, the Facebook posts as advertising, and the positive [Continue Reading …]
It has always been difficult for retailers to set prices. Two factors make it even more difficult today. First, customers are better informed — the internet and smartphone apps let them easily check the prices of products they see on retail store shelves. Second, consumers have been conditioned to wait for steep discounts — in department stores very few sales are made at full retail. Retail giants J.C. Penney and Macy’s are trying new strategies to try to maintain profits. Read more at “ Knowing Cost, the Customer Sets the Price ,” New York Times, March 27, 2012. What do you think of J.C. Penney’s new pricing? [Continue Reading …]
Apple used to be known for high priced, but elegant, hardware. That is no longer the case. This article provides a nice example of two concepts that you will cover when you get to Price. A skim price policy is offering high prices on products to a smaller market before moving later to more price sensitive customers. A penetration price policy tries to sell the whole market at one low price. In the old days Apple was a niche player known for high prices. Now it owns some markets (tablet computers, smartphones, portable music players) and benefits from economies [Continue Reading …]
It seems that it will only be a matter of time before our cell phones also act as our wallets. They can already act as our phone, videophone, e-mailbox, newspaper, handheld gaming device, music player, GPS, camera, video recorder… Will it change a baby’s diaper some day? That’s an app I haven’t seen yet. Sorry, I digressed. Katie Boehret wrote a Wall Street Journal review of a new Android smartphone app, “ Google Mobile App Aims to Turn Phones Into Wallets ” (September 21, 2011, non-subscribers may need to click here ). Read the article and share whether and how you think this app might change consumer shopping behavior? I know [Continue Reading …]
Wal-Mart has long been positioned as the low-price leader. Leveraging its supply chain and logistics system, competitors couldn’t match Wal-Mart’s cost structure. Now at least some consumers perceptions are changing. In this Wall Street Journal article, “ Wal-Mart Loses Edge ” (August 16, 2011, non-subscribers may need to click here ) we read about recent consumer surveys that show the retailer losing its “lowest price” positioning. In one survey of 1500 Wal-Mart shoppers, “86% no longer thought it had the lowest prices” while in another survey the number was 60%. Whichever the number, this is a big problem for a retailer that has long enjoyed a well-deserved reputation for [Continue Reading …]
Amazon sells two variations of its Kindle e-book reader. For a $25 discount, you can get a model that includes advertising — “special offers and sponsored screensavers.” Right now, that’s a popular option. The ad-supported model outsells the ad-free model. This could be the beginning of a new business model. Read more about it at “ Discounted Kindle points to future of ad-supported electronics, ” (CNN, July 1, 2011) Which Kindle would you buy? What if you could save $50 on a cell phone but had to listen to a 10 second advertisement every fifth time you made a call? Or if you opted to receive one text [Continue Reading …]