There is an old saying in sales, "When price is the only objection, price IS the objection."
Is advertising a low price point the best way to move your products/services in today's economy?
Marketing Consultant, Steve Tobak, has a few thoughts on the matter in this recent article:
"Tired of seeing his business evaporate every weekend, Stuart Frankel - the owner of two Subway franchises in Miami - came up with an idea. He decided to offer all foot-longs for $5, about a buck less than regular prices, on weekends.
Next thing he knew, Frankel had lines out the door and double-digit sales growth.
Next thing Subway knew, it had one of the biggest hits in fast-food history.
The $5 footlong promotion alone generated $3.8 billion over the past year - more than Arby’s and Domino’s entire U.S. business. At a time when everyone’s business is down, Subway’s sales grew 17 percent in 2008, making it the number two fast-food company, worldwide, behind behemoth McDonald’s. Actually, Subway should surpass McDonald’s in total number of franchises in 2010, an amazing feat.
The big question is this: Is the $5 footlong just a flash-in-the-pan, a round number that resonates with fast-food customers? Or is it a function of consumer price-points and price elasticity that affect virtually all markets?
It doesn’t surprise me one bit that Frankel came up with the $5 footlong seemingly at random. Finding the price-point where product flows readily, like water through a frictionless pipe, is often far less scientific than some marketers would like to think. Sometimes, it’s just trial and error. Other times it’s born of necessity or even desperation.
For example, at a microprocessor chip company (Cyrix) in 1996, a unique situation caused sales to stall and inventories to grow to dangerous levels. With our worldwide distributors sitting on almost a million units (the chips sold for $50 - $80 apiece) and our company close to bankruptcy, something drastic had to be done.
After a week or two of analysis, I became convinced that there were certain price-points that would cause product to flow readily and relieve our inventory bottleneck by enabling PC resellers to sell systems at certain lower price-points. I wasn’t exactly sure what those price-points were, but there was no time to test a theory, so I took a stab and presented my plan at a heated board meeting. Our CEO angrily exclaimed, “Is that all you marketing &#*$s know how to do, lower prices?!”
Nevertheless, he approved the plan. It worked, of course (or I wouldn’t be writing about it). Within two quarters, inventory levels were back to normal and we had a new strategy for driving low-cost PCs. The following February Compaq launched the world’s first $999 multimedia PC - with a Cyrix processor - and we were off to the races.
In a prior post, I extolled the virtues of product positioning as a means to gain market share, even chiding marketers who think of price as their only lever. But as you can see, there are times when price is still the best lever. And recognizing those times is often more a function of desperation than marketing wisdom.
Which still doesn’t answer the question: Is the $5 footlong phenomenon a fast-food prime number, or is it a function of “magic” price-points and price elasticity that affect virtually all markets? I think it’s the latter, but that’s just me. What do you think? Can it work in your business?"
(Source: BNET Insight, The Corner Office, November 11, 2009)
So what do you think? How are you choosing to advertise your products/services?
Sunday, November 15, 2009
Thursday, November 12, 2009
A Touching Way to Enhance Value
By Noah Goldstein, Ph.D. (Inside Influence Report, November 12, 2009)
As the Greek legend goes, the god Dionysus offered King Midas a reward of his choosing for acting kindly toward Dionysus’s friend. Midas requested that everything he touch turn to gold, a power that was immediately granted by Dionysus. Of course, we all know this is a fairytale—that objects can’t simply turn into gold just because they’re touched. Or can they?
According to consumer researchers Joann Peck and Suzanne Shu (2009), physically touching a product might not exactly turn it into gold, but it does increase its perceived value. In several experiments, they show that potential buyers who are asked to touch the products that are placed in front of them are willing to pay more for the products than are those who aren’t. Interestingly, Peck and Shu found this pattern of results not only with buyers, but with sellers as well—when selling items they had been given earlier, sellers demanded higher prices for those items they got to touch.
The researchers find that in addition to the positive emotional reaction that comes with touching a product, tactile contact leads to a greater sense of ownership of that product. The combination of the positive emotions and the enhanced sense of ownership lead to the increase in perceived value.
Of course, with the increasing use of the internet to sell products, customers won’t always have the opportunity to touch your offerings before they arrive at their door. However, Peck and Shu found that when a product was unavailable to touch, simply asking consumers to imagine touching it was enough to increase perceived ownership and value of the product.
This research is important for several reasons. First, since we’re all consumers in one form or another, it’s important for us to understand the factors that affect our judgments and decisions. When retailers ask us to touch or hold items in our hands, its value will automatically increase after doing so. And, if you or your business partners are selling tangible items, you can help potential buyers feel more of a connection to the goods you sell by asking them to imagine touching the items, or when possible, giving them a chance to physically touch those goods. For example, the packing for many of PaperMate’s pens has a section of the package cut out, which allows prospective consumers to touch the pen (Peck & Childers, 2003); this not only enables potential customers to see how the pen feels on their hands, but also enhances the value of the product.
However, it’s important to note one important exception to this research: According to Peck and Shu’s research, asking consumers to touch products is only beneficial if the products are either neutral or pleasant to touch. Porcupine salesmen beware!
Sources:
Peck, J., & Childers, T. L. (2003). “To have and to hold: The influence of haptic information on product judgments.” Journal of Marketing, 67, 35-48.
Peck, J., & Shu, S. B. (2009). The effect of mere touch on perceived ownership. Journal of Consumer Research, 36, 434-447.
As the Greek legend goes, the god Dionysus offered King Midas a reward of his choosing for acting kindly toward Dionysus’s friend. Midas requested that everything he touch turn to gold, a power that was immediately granted by Dionysus. Of course, we all know this is a fairytale—that objects can’t simply turn into gold just because they’re touched. Or can they?
According to consumer researchers Joann Peck and Suzanne Shu (2009), physically touching a product might not exactly turn it into gold, but it does increase its perceived value. In several experiments, they show that potential buyers who are asked to touch the products that are placed in front of them are willing to pay more for the products than are those who aren’t. Interestingly, Peck and Shu found this pattern of results not only with buyers, but with sellers as well—when selling items they had been given earlier, sellers demanded higher prices for those items they got to touch.
The researchers find that in addition to the positive emotional reaction that comes with touching a product, tactile contact leads to a greater sense of ownership of that product. The combination of the positive emotions and the enhanced sense of ownership lead to the increase in perceived value.
Of course, with the increasing use of the internet to sell products, customers won’t always have the opportunity to touch your offerings before they arrive at their door. However, Peck and Shu found that when a product was unavailable to touch, simply asking consumers to imagine touching it was enough to increase perceived ownership and value of the product.
This research is important for several reasons. First, since we’re all consumers in one form or another, it’s important for us to understand the factors that affect our judgments and decisions. When retailers ask us to touch or hold items in our hands, its value will automatically increase after doing so. And, if you or your business partners are selling tangible items, you can help potential buyers feel more of a connection to the goods you sell by asking them to imagine touching the items, or when possible, giving them a chance to physically touch those goods. For example, the packing for many of PaperMate’s pens has a section of the package cut out, which allows prospective consumers to touch the pen (Peck & Childers, 2003); this not only enables potential customers to see how the pen feels on their hands, but also enhances the value of the product.
However, it’s important to note one important exception to this research: According to Peck and Shu’s research, asking consumers to touch products is only beneficial if the products are either neutral or pleasant to touch. Porcupine salesmen beware!
Sources:
Peck, J., & Childers, T. L. (2003). “To have and to hold: The influence of haptic information on product judgments.” Journal of Marketing, 67, 35-48.
Peck, J., & Shu, S. B. (2009). The effect of mere touch on perceived ownership. Journal of Consumer Research, 36, 434-447.
Sunday, November 8, 2009
Very Funny Ads
Veryfunnyads, as the name suggests, is a site which brings you some of the funniest video adverts of different products. There are different categories you can choose from, like animals, cars, gadgets, kids and more. You could also pick specific brands or watch ads by countries in which they appeared...
(Source: DumbLittleMan.com, November 8, 2009)
(Source: DumbLittleMan.com, November 8, 2009)
Friday, November 6, 2009
7 Simple Time Management Rules for the Super Busy
"Time is money. Money is time." How many times have you heard that one? Unfortunately it's true, especially in today's economy where businesses of all sizes are fighting for every dollar they can add to their bottom lines. Here are a few tips from "DumbLittleMan.com," about how to maximize your days...
"Most people are busy these days -- from the start of their day to the end, there are endless tasks to be done, projects to be moved along, meetings to attend, errands to run, chores and cooking to be done, email and phone calls to handle, paperwork and other routine things to be done.
It can be overwhelming. And typical time-management systems don't help much -- writing all tasks and appointments and errands in a planner or task or project-management software just makes you feel more overwhelmed, and you feel guilty when nothing goes as planned and you end the day with a to-do list even longer than when you started.
So what's a busy person to do? Throw out the traditional systems and learn a more focused, yet free-flowing system that changes with the situation and doesn't make you feel obligated to do everything on your list.
Throw out your schedule and you'll never feel guilty about not keeping it again.
Does that mean you won't get things done? Not at all -- in fact, if you learn to work effectively, you can simplify your time-management system, reduce stress, and yet accomplish more.
Here's how:
Stop scheduling everything -- packing your day with things to-do just leaves you with too little time to do everything, and allows everything to fall apart when unexpected things come up and the schedule gets messed up.
Instead, schedule as little as possible. Sure, there will always be some appointments that need to be plugged into a calendar, but everything else should be open. What do you do with that open time? Go with the flow, focus on important things, and take one thing at a time. See the following items for more.
There's no way to plan for the unexpected, so don't try. Just learn to deal with them as they come up, and figure out what's most important to deal with right now, and take everything in stride. Nothing is an emergency -- except for actual emergencies like heart and terrorist attacks. Everything else -- you can deal with it calmly and appropriately.
If you could only do three things today, and you wanted to really feel like you accomplished something, what would you do? Write those down each day and focus on them -- you'll do other things but try to ensure that at the very least, you get those three things done. If you could only accomplish one thing today and feel happy with your day, what would it be? Do that first, before anything else, including email.
Try to reduce the number of tasks you do each day, but make each one count for more. Think of it as concentrating your productivity -- instead of spreading yourself out thin with lots of little, unimportant tasks, make the most of your time by just focusing on fewer but higher-impact tasks. Your time is valuable, after all.
So how do I do all this? Easy: one thing at a time. It's easy to get caught up trying to do everything at once, making phone calls and sending emails while checking emails and writing and doing Instant Messaging, all at the same time. And yet, it's hard to actually accomplish anything in this mode. I've found that it's much more effective, and much less stressful, if you focus on just one thing at a time, get it done, and move on to the next thing. You'll be amazed at how much you get done this way.
Instead, get out of commitments by telling people, honestly, that you don't have the time to do this right now. People might not be happy about it, but you have to be realistic with them and with yourself. Cutting back on commitments will open up your schedule and free up time for the more important things.
• Simplify your to-do list
Similarly, take a look at everything on your to-do list. Now, first of all, realize that this list will never be completely done, as you're constantly adding things to the list even as you're checking others off. So don't worry about getting it done. But do think about whether you really have time to do all of this -- if not, think of each task as a mini-commitment, and get out of it if possible, if it's not important. You'll feel relieved if you do. Simplify your to-do list just down to the important things."
"Most people are busy these days -- from the start of their day to the end, there are endless tasks to be done, projects to be moved along, meetings to attend, errands to run, chores and cooking to be done, email and phone calls to handle, paperwork and other routine things to be done.
It can be overwhelming. And typical time-management systems don't help much -- writing all tasks and appointments and errands in a planner or task or project-management software just makes you feel more overwhelmed, and you feel guilty when nothing goes as planned and you end the day with a to-do list even longer than when you started.
So what's a busy person to do? Throw out the traditional systems and learn a more focused, yet free-flowing system that changes with the situation and doesn't make you feel obligated to do everything on your list.
Throw out your schedule and you'll never feel guilty about not keeping it again.
Does that mean you won't get things done? Not at all -- in fact, if you learn to work effectively, you can simplify your time-management system, reduce stress, and yet accomplish more.
Here's how:
- Keep your schedule open
Stop scheduling everything -- packing your day with things to-do just leaves you with too little time to do everything, and allows everything to fall apart when unexpected things come up and the schedule gets messed up.
Instead, schedule as little as possible. Sure, there will always be some appointments that need to be plugged into a calendar, but everything else should be open. What do you do with that open time? Go with the flow, focus on important things, and take one thing at a time. See the following items for more.
- Go with the flow
There's no way to plan for the unexpected, so don't try. Just learn to deal with them as they come up, and figure out what's most important to deal with right now, and take everything in stride. Nothing is an emergency -- except for actual emergencies like heart and terrorist attacks. Everything else -- you can deal with it calmly and appropriately.
- Fewer, high-impact tasks
If you could only do three things today, and you wanted to really feel like you accomplished something, what would you do? Write those down each day and focus on them -- you'll do other things but try to ensure that at the very least, you get those three things done. If you could only accomplish one thing today and feel happy with your day, what would it be? Do that first, before anything else, including email.
Try to reduce the number of tasks you do each day, but make each one count for more. Think of it as concentrating your productivity -- instead of spreading yourself out thin with lots of little, unimportant tasks, make the most of your time by just focusing on fewer but higher-impact tasks. Your time is valuable, after all.
- One task at a time
So how do I do all this? Easy: one thing at a time. It's easy to get caught up trying to do everything at once, making phone calls and sending emails while checking emails and writing and doing Instant Messaging, all at the same time. And yet, it's hard to actually accomplish anything in this mode. I've found that it's much more effective, and much less stressful, if you focus on just one thing at a time, get it done, and move on to the next thing. You'll be amazed at how much you get done this way.
- Limit distractions
- Reduce commitments
Instead, get out of commitments by telling people, honestly, that you don't have the time to do this right now. People might not be happy about it, but you have to be realistic with them and with yourself. Cutting back on commitments will open up your schedule and free up time for the more important things.
• Simplify your to-do list
Similarly, take a look at everything on your to-do list. Now, first of all, realize that this list will never be completely done, as you're constantly adding things to the list even as you're checking others off. So don't worry about getting it done. But do think about whether you really have time to do all of this -- if not, think of each task as a mini-commitment, and get out of it if possible, if it's not important. You'll feel relieved if you do. Simplify your to-do list just down to the important things."
10 Skills You Must Develop To Succeed In Any Business
Everyone who runs a business knows there are keys to success, no matter how large or small the business.
In his article, "10 Skills You Must Develop To Succeed In Any Business," author Abhijeet Mukherjee discusses ten skills it helps to have to make your business successful:
"It is said that every year only three to four percent of the total population on earth are courageous enough to start on their own. Out of that, I think only one percent successfully establish their business while the rest join the ever growing list of failed entrepreneurs.
Although every business requires a specific skill set and related domain knowledge, there are some general qualities which you must develop if you want to get going in any business. I say 'develop' and not 'have' because I don't think these skills are rocket science and if you've got the willingness, you can easily develop them and carry on your business in a better manner.
Be A Visionary
Yeah, I know what you are thinking. Here comes the first cliche; I'll agree. But when I say be a visionary, I don't mean you should have grand visions right from the start. There should be a definite goal in your mind and you should work towards achieving that goal. You could always start with small goals initially and every time you achieve them, set yourself new challenges. And soon you'll find that you've got a vision, a vision which you never thought you could achieve and now, it suddenly seems possible.
Be Adaptable
Now here's the thing - you develop a strategy and start working towards your goal. But the world's changing everyday and soon you realize that the strategy isn't working. In this case, you should immediately adapt to the changes and adopt new methods of working while keeping your vision intact.
Mix Passion With Planning
If you aren't passionate enough, chances of your succeeding in your business are slim. But if you get carried away by passion, that's equally harmful for your work. Hence the idea is to mix passion and enthusiasm with planning and execution.
Communicate Like A Pro
It's not only about talking to the other person or to your client. It's about every form of communication, be it on phone, through email, through a letter or any other way of sending your thoughts across. Effective communication is one of the must have leadership skills and if you think you aren't very good at this, prepare to learn how to communicate in the most effective manner, convince others and get more business.
Network Like A Pro
Another essential ingredient for success in business. Identify the right people and establish relationships which are long lasting. Apart from helping you in your business, these relationships can also help in your personal life.
Be Aggressive
Being aggressive doesn't mean you are always pumped up and blindly grab every opportunity that comes in your way. It means you are ready to take risks, sometimes calculated and sometimes out of your gut-feeling. It means you aren't satisfied with an achievement and are hungry for more. It means you are available 24X7 for your work. And yes, it also means you are ready to make sacrifices when required.
Be Persistent
Without a doubt, persistence is a must-have trait for anyone who hopes to make it big in his business. So what exactly is persistence? Here's how Seth Godin defines it:
"Persistence isn't using the same tactics over and over. That's just annoying. Persistence is having the same goal over and over."
Do Things Differently
That's what winners do, isn't it? Apply new techniques and tricks to an already existing business model instead of trying to search for that new idea. You'll save time. ( And this is what I've been trying to do with this article too I guess :)
Learn Everyday
Really, the learning never stops when you are self employed. And you should never let it stop either. No matter how big your business grows, you should keep learning everyday and apply new techniques to make your business better.
Never Be Complacent
If organizations like Enron and WorldCom can bite the dust then anything can happen. No business, absolutely no business can be considered fool-proof. One mistake and the empire could crumble. Complacency is usually the first step towards this destruction. So better not be complacent.
In his article, "10 Skills You Must Develop To Succeed In Any Business," author Abhijeet Mukherjee discusses ten skills it helps to have to make your business successful:
"It is said that every year only three to four percent of the total population on earth are courageous enough to start on their own. Out of that, I think only one percent successfully establish their business while the rest join the ever growing list of failed entrepreneurs.
Although every business requires a specific skill set and related domain knowledge, there are some general qualities which you must develop if you want to get going in any business. I say 'develop' and not 'have' because I don't think these skills are rocket science and if you've got the willingness, you can easily develop them and carry on your business in a better manner.
Be A Visionary
Yeah, I know what you are thinking. Here comes the first cliche; I'll agree. But when I say be a visionary, I don't mean you should have grand visions right from the start. There should be a definite goal in your mind and you should work towards achieving that goal. You could always start with small goals initially and every time you achieve them, set yourself new challenges. And soon you'll find that you've got a vision, a vision which you never thought you could achieve and now, it suddenly seems possible.
Be Adaptable
Now here's the thing - you develop a strategy and start working towards your goal. But the world's changing everyday and soon you realize that the strategy isn't working. In this case, you should immediately adapt to the changes and adopt new methods of working while keeping your vision intact.
Mix Passion With Planning
If you aren't passionate enough, chances of your succeeding in your business are slim. But if you get carried away by passion, that's equally harmful for your work. Hence the idea is to mix passion and enthusiasm with planning and execution.
Communicate Like A Pro
It's not only about talking to the other person or to your client. It's about every form of communication, be it on phone, through email, through a letter or any other way of sending your thoughts across. Effective communication is one of the must have leadership skills and if you think you aren't very good at this, prepare to learn how to communicate in the most effective manner, convince others and get more business.
Network Like A Pro
Another essential ingredient for success in business. Identify the right people and establish relationships which are long lasting. Apart from helping you in your business, these relationships can also help in your personal life.
Be Aggressive
Being aggressive doesn't mean you are always pumped up and blindly grab every opportunity that comes in your way. It means you are ready to take risks, sometimes calculated and sometimes out of your gut-feeling. It means you aren't satisfied with an achievement and are hungry for more. It means you are available 24X7 for your work. And yes, it also means you are ready to make sacrifices when required.
Be Persistent
Without a doubt, persistence is a must-have trait for anyone who hopes to make it big in his business. So what exactly is persistence? Here's how Seth Godin defines it:
"Persistence isn't using the same tactics over and over. That's just annoying. Persistence is having the same goal over and over."
Do Things Differently
That's what winners do, isn't it? Apply new techniques and tricks to an already existing business model instead of trying to search for that new idea. You'll save time. ( And this is what I've been trying to do with this article too I guess :)
Learn Everyday
Really, the learning never stops when you are self employed. And you should never let it stop either. No matter how big your business grows, you should keep learning everyday and apply new techniques to make your business better.
Never Be Complacent
If organizations like Enron and WorldCom can bite the dust then anything can happen. No business, absolutely no business can be considered fool-proof. One mistake and the empire could crumble. Complacency is usually the first step towards this destruction. So better not be complacent.
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