Marketing Communications Blog

Pricing, for the fiftieth time!!!

Okay, so, a simple post this month - why are products priced at $19.94 or $99.95 or $299.95??? Even cars and trucks are priced at $49,995.

Why?

The other day, was speaking with a client about setting up pricing on her new products that she was going to put on the web.  She stated that she would sell them for $30, $35, and $40.

I corrected her and said sell them for $29.95, $34.95, and $39.95.

She asked me why?

All I could say was "When you were a kid, when you saw a toy, and it said $.95 or $9.95, what happened? You went up to a parent and said, can I have a dollar or ten dollars? Or, if that didn't happen, what about now, when you go into a store, and you see your favorite shampoo - instead of it saying "$10", it starts - because we read left to right - with "$9", right? Doesn't that make it easier on our mind and wallet to pull out the money?" 

Now, some of you will say, but, if it was sold at the round number ($1.00 or $10.00), you would still ask.  And you are right.  But, did any of you either a) go and give the change back to your parent, or b) you KNEW about taxes and needed that extra couple of cents so you could make the purchase.

So, back to my client.  It is easier for a consumer to "think" that they are saving money by knocking off the price by a nickel.  It is back to my mantra (and the name of my book) - PERCEPTION IS REALITY.

Posted by blaine at 07:05 PM | Permalink | Comments (0) | TrackBacks (0)

Product timing?

Was reading another business magazine and saw an article about new products coming to market and it reminded me again of when to "go to market" with a product (which I also discussed in a previous post).

Do you go to market when the product is 100% viable? When the rate-of-return analysis says it is time to go to market? Or when your Product Manager says "we need to go to market now"?

It is all of this, and none of it (and I know, I am repeating myself from a few months ago - but, I have too).

You will NEVER know when the right time is to launch a product. If you wait for all the above to occur, then, you will be to late. If you don't consider all of the above, then, you may be too early.

If you are ANY kind of successful marketer, then, you will KNOW when to go to market AND you will hear the appropriate people in your organization saying that you need to launch now. Both must occur to some degree - you will not go to market if the product manager says the product isn't finished. (And, please note, there is a BIG difference between the product "not ready yet" compared to the product "is not finished". One completes the MRD (marketing requirements document), the other doesn't.)

So, again, if your instinct says go to market and others in your organization say it also, then, GO TO MARKET!!!

Posted by blaine at 02:42 PM | Permalink | Comments (0) | TrackBacks (0)

How to damage your image

Had surgery the other day. Nothing serious, just a walk-in/walk-out of a few hours.

Came into the hospital, filled out all the paperwork, and was escorted to the waiting room by an administrator who was professional and enjoyable.

In the waiting room, had a great conversation with the nurse and receptionist there (this is a hospital - you go nowhere without someone from the hospital being in front of you).

Was called in to the surgery room, met a great nurse and had a great conversation with her as we went through the procedure (as well as the doctor - but, he was not part of the hospital, he was my doctor who came in to do the procedure).

My doctor left after the procedure and the nurse and I continued to talk - I had to wait about 10 minutes to make sure that I was okay after the surgery.

The nurse filled out all the paperwork for me, telling me what and what not to do, what I can and cannot eat, how much medicine I should take, etc. This was all written on a piece of paper, with the top area for signatures and the bottom with all the instructions. 

Then, the unbelievable happened, the nurse took out a pair of scissors and cut the bottom half of the paper off and handed it to me.

No, the paper wasn't a tear sheet.  No, it wasn't a separate piece of paper. It was the second half of paper and cut.

An experience that was nerve wracking and stressful, ending with a nurse cutting a piece of paper in half with all the instructions on it. What a reminder that hospitals are run by people who don't care about their patients.

Terrible marketing as well as bad operations. In fact, the nurse apologized for cutting the paper in half.

Does your business do something like this? Have you gone down the lowest level of your business and seen how it interacts with the customer?

I was so embarrassed for them - especially for the nurse having to apologize.

Posted by blaine at 05:47 AM | Permalink | Comments (0) | TrackBacks (0)

Packaging - is it worth the price

Was helping a start-up client put together the copy for the packaging of a new product of theirs.  They sent me pictures of the packaging, as well as their first draft.

It was beautiful packaging, a full four colors, glossy, that folded out (like a book) so when opened, the product was stareing the buyer right in the face, beautiful.

I had to ask them how much the packaging was costing compared to the product (percentage). I had to ask, because throughout my career, as well as your own I'm sure, you have to constantly measure your cost of goods vs. your margin vs. product retail price.  How much more money could you make if you can continuously lower your cost of goods (like packaging), thus increasing your margin, and thus making the retail price acceptable to the world.

The beautiful packaging would certainly impress the retail buyer. I am no so sure about the end consumer, since they won't fully see it's "beauty" until after they buy it (and packaging is one of the first AND last lines in purchase intent).

I'm sure that they are going to go ahead and use the impressive heavy beautiful packaging (as they are a start-up and this is how start-ups think). But, I bet, within a year, they will either have an alternative or outright different package - one that is simple and cheap.

Apple computer is the only one who can afford to have expensive packaging and that's because the consumer pays for it.

I will keep you advise.

Posted by blaine at 07:47 AM | Permalink | Comments (0) | TrackBacks (0)

Packaging for the new business

Meeting with a client the other day - a start-up - about their packaging.

The client has produced a product - from mock-up, to prototype, to actually having it manufactured, and now was ready to start selling it locally on store shelves.

He and I both had confidence that it would be picked up and sold, and that he would be profitable. He could have put it in plastic zip-lock bags and sold a million of these items.

But, thank god, he came into contact with me, and we started discussing long-term aspirations; from where does he want the company in a year (over $800K in sales), to where he wants it in 10 years (Fortune 500); what kind of a company/brand does he want to found (U.S. famous) and if he wants to sell the company (no). And so forth and so on.

We eventually got to the nitty-gritty of the product. From licensing to future employee's.

And that is when we both discovered a serious flaw in his product line. He hadn't thought about the packaging (he had a local design firm doing mock-ups, designs, etc.) and didn't consider it to be that important. He already had orders for the product, so, he had money in the bank (he thought) - amy old packaging would do.

I wasn't concerned (too much) about the design and lay-out, but, I did start to ask him some questions that he needed to have answers to that related to the packaging (as well as his overall business model).

1. Returns? How was he going to handle these.
2. Warranty? Was he going to offer one (even though, by law, he had too), but, for how long.
3. UPC tracking (every product in the U.S. needs a UPC if they are hoping to have it scanned and charged to the consumer - most stores have scanners and tellers at the check-out line don't/can't enter the products number by hand).
4. Extension of the product (for various other uses) - each one needed a different UPC.
5. Software to track the product numbers.
6. Packaging of the product - in bulk (how will they be shipped, etc.).
7. How easily can the product be used on the store shelf - does it fit a typical store shelf? Can it be hung? What if a client wants some to be hung and some to be sitting on a shelf?
8. Trademark, patent, and copyright claims on the packaging.
9. Users guide.
10. etc.

When we came to the Users Guide, he stated the product was self-explanatory.

I brought up the old thermometer issue - when you buy one, do you use it orally or rectally - and most thermometers are used one way or the other, but not both. He understood that this may be an issue, as ALL customers must be assumed to be "not the brightest" and build the product packaging and internal components with that thought in mind.

 I just want to mention that when you are going to market with a product, make sure that you hire a firm that knows packaging, knows how to build all the components, will ask all the right questions needed to make sure that your product meets all the local and federal laws, AND appeals to the mass audience. I'm not just talking about the design of the packaging (how it looks on the shelf), but, all the other items inside and on the packaging that a) appeals to your market, and b) protects you from lawsuits and misunderstandings.

Posted by blaine at 10:51 AM | Permalink | Comments (0) | TrackBacks (0)