Interesting move by Honda buying all the online and mobile advertising space from Sony for a week. The intent is to break through all of the marketing clutter to get customers to focus exclusively (and repeatedly) on Honda's campaign. The move is bold, one that Sony hopes to replicate for other firms.
The one potential pitfall is that people will tune out this advertising as it is happening so many times and it becomes an annoyance.
I am sure other vendors will be looking at the results as marketers not only look for unique ways to be noticed but also look for ROI in this economy.
Thursday, October 9, 2008
Tuesday, October 7, 2008
Promotions in a down economy. What works and what does not
Adage has a list of promotions that are being launched by various retail and food chains to drive purchases in this tough economy. The one that I like best is Campbell/Kraft because it ties in 2 products and it promotes cost saving without sounding desperate. All the other promos seem like "me too" (esp. the food chains) and do not do anything to cross promote their portfolio like the Campbell ad does.
Thursday, October 2, 2008
Pricing in a recessionary economy
I had an interesting discussion yesterday about pricing strategies in this economy. The discussion involved mergers and pricing power.
We have seen several large scale mergers that have eliminated accounts for many firms. What do you do if you have 2 firms as clients and they merge? You went from 2 clients to now only one client. Let's say Company A and B merge. Both were clients and had similar contracts and populations, around $100k and 2,000 users. They merge and you now have one client paying $100k but potentially servicing 4,000 people. You have now gone from $50/seat to $25/seat. A substantial hit. How do you gain some of that revenue back? Not an easy answer but one that a lot of marketers are faced with today.
Can you raise prices in this environment, especially if a competitor is lowering them? I think you can always raise prices, but you need to market the value first. If you have not proved the value proposition of your product or service you will never have pricing power regardless of the economy.
I believe that both speak to knowing your customers and knowing what their pain points are and how you can relieve this pain. If anyone is looking for a good book on pricing I suggest buying "The Strategy and Tactics of Pricing: A Guide to Growing More Profitably."
We have seen several large scale mergers that have eliminated accounts for many firms. What do you do if you have 2 firms as clients and they merge? You went from 2 clients to now only one client. Let's say Company A and B merge. Both were clients and had similar contracts and populations, around $100k and 2,000 users. They merge and you now have one client paying $100k but potentially servicing 4,000 people. You have now gone from $50/seat to $25/seat. A substantial hit. How do you gain some of that revenue back? Not an easy answer but one that a lot of marketers are faced with today.
Can you raise prices in this environment, especially if a competitor is lowering them? I think you can always raise prices, but you need to market the value first. If you have not proved the value proposition of your product or service you will never have pricing power regardless of the economy.
I believe that both speak to knowing your customers and knowing what their pain points are and how you can relieve this pain. If anyone is looking for a good book on pricing I suggest buying "The Strategy and Tactics of Pricing: A Guide to Growing More Profitably."
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