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Price perceptions - shocks in store?


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#1 Black_Knight

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Posted 12 September 2002 - 12:49 AM

While competing on pricing has sometimes been said to be the weakest form of competition (since it can lead to price wars that harm your own profits as much as the competitors'), pricing is always an essential part of marketing.

I have written in the past about ways to alter the way that prospective customers will view your pricing, or rather, their perception of value for money. In this I showed that presenting goods (and your company) as quality rather than economy, is a method to seem lower-priced than expected.

However, a new study highlighted by Wharton, has shown that most people automatically assume that they are being gouged on prices any time they shop.

Read the full report at: http://knowledge.wha...4&articleid=622

The article makes for grim yet essential reading, and I think underlines my claims elsewhere previously that we all need to think a lot harder about value for money, and how we help our customers see it.

#2 markymark

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Posted 12 September 2002 - 06:03 AM

This is not really my field, to be honest, but I think companies in general need to be aware of what they are actually selling.

Saying, for example, 'we have the cheapest coffee mugs' on the web is not going to persuade me to buy, even if the designs are nice and the pictures clear. However, a site that said, 'Our coffee mugs are designed to keep your coffee hot for longer.' and then a quote like this :

'As a busy SEO who gets caught up in what he's doing, I often find that by the time I get to drink my coffee, it's already cold...these Acme coffee mugs really do keep the coffee hotter....so when I do find time to have a sip, the coffee is still nice and warm. '.

That would get my business every time.

The point is this: it is the features and how they are presented that sell products. Price is a secondary consideration to buying something that does exactly what you want it to do.

Companies need to clearly differentiate themselves from their competitors and sell these differences rather than the products themselves. It is these differences that make up perceived value for money, not the cost.

#3 glyn

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Posted 12 September 2002 - 07:08 AM

Agreed, but - for online marketing - the reality of getting your page content ranked, unless through a ppc route would be....


coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee,

:twisted:

#4 markymark

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Posted 12 September 2002 - 08:15 AM

Very helpful post that. Thanks. :roll:

#5 bragadocchio

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Posted 12 September 2002 - 08:47 AM

Thanks Ammon,

That was interesting. I hadn't been looking at the stuff coming from Wharton, but I will be. I have a friend in the MBA program there. Maybe I can get an advance copy of that white paper.

I don't know that I trust a test group comprised of 1,100 college students, even with the 3,500 phone surveys in Florida used to substantiate the findings.

But, the conclusion isn't unreasonable: Give thought to how you present value. (and try to do it without starting a price war.)

#6 SEO Guy

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Posted 12 September 2002 - 08:47 AM

Good Point, Marky Mark

I believe that people want to be sold to. They need/want to buy products, but the large majority of people want to be convinced that they are making the right decision. They want to be wooed.

I know that when I am on the verge of a large purchase, I do the research and compare product differences. However, if I go the store and the salesman just assumes that he doesn't have to sell me, I'm disappointed. I want to know that I am making the right decision.

We need to persuade and reinforce the needs and desires of our clients, and speak to the need in a language they understand.

#7 Farhan

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Posted 13 September 2002 - 01:14 AM

Yeah very true Markymark.

It's not the product but the features that people buy. You have to make those features fit their needs.

In your example of coffee mugs, you knew your target market very well. And that's the crux of the game. When you know who you are talking, it's a lot easier, which is however not the case all the time.

#8 Farhan

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Posted 13 September 2002 - 02:18 AM

Agreed, but - for online marketing - the reality of getting your page content ranked, unless through a ppc route would be....


coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, coffee, 

:twisted:


That much of caffeine is injurious to health :roll:

#9 cre8pc

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Posted 13 September 2002 - 08:13 AM

The point is this: it is the features and how they are presented that sell products. Price is a secondary consideration to buying something that does exactly what you want it to do.


Heh heh, which brings me one of my favorite usability stories! Sit back and listen now...

There was a usability study on web sites that sold shoes via online catalog shopping. Each site was tested for click thrus, sales, and other factors. Only one site seemed to be selling far more shoes than the others, particularly a certain expensive hiking boot that the others offered as well.

When they studied the UI (user interface) and spoke to users it became apparent that what was selling that shoe was the pictures! Turns out people who hike know what they want. The catalog pictures highlighted the tread, workmanship, etc. and the description backed up the picture with details hiking boot shoppers seek.

How did they know to provide this specific info? The web site owner got a shoe salesman to advise them on their catalog! This is how they knew what shoppers are looking for.

It's more than price. It's knowing the product really well and sharing that knowledge.

Amazon tapped into that theory with it's reader reviews of books. Download sites that allow user feedback, pro or con, is another one. I always read what users say about a freeware/shareware download before I try it.

Kim - in her rocking chair, telling stories :)

#10 Black_Knight

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Posted 13 September 2002 - 09:15 AM

It's more than price. It's knowing the product really well and sharing that knowledge.

Amazon tapped into that theory with it's reader reviews of books. Download sites that allow user feedback, pro or con, is another one. I always read what users say about a freeware/shareware download before I try it.


I fully agree Kim, which is why I became so interested in Epinions.com and later went to work with dooyoo for a year. Peer review is a powerful thing. I think it strengthens our ability to associate ourselves with the idea of owning and using a product in ways that average sales copy rarely attains.

I particularly like the quality of the consumer reviews on dooyoo, and I often study user opinions on sites owned by my clients, or their rivals. We all need to be aware of sites like these, because it could just as easily be one of us that gets reviewed, as happened with AIM-pro or to a less positive end withSearch Engineers. :shock:

Most importantly, these sites provide a huge insight into both usability issues and personal tastes of surfers, that you can target to very specific groups (all without paying for extensive market research). Many of these users write reviews of products, services or websites that go into thousands of words, and never once mention the price in most cases.

#11 Aaron

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Posted 16 April 2003 - 10:49 AM

Yeah very true Markymark. 

It's not the product but the features that people buy. You have to make those features fit their needs.


I contend that it's not the features that make people buy, it's the company telling the buy how they will benefit from the product/service.


"Our product can do this this and oh yeah, this too."

or

"Our product saves you time!"

Knowing that something will save me time I will read further to understand HOW it can do that, not because it has bells and whistles (features) telling me what it does.

I want the company to identify a need or problem I have and then present information on how to solve it.

Just my thoughts.

Aaron

#12 bragadocchio

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Posted 16 April 2003 - 04:42 PM

I'm not that sure that your point is all that different from what is being made, Aaron. But it could be and I may be misunderstanding what you're saying.

If you could paraphrase it for me, I might get it (I can be dense sometimes -- but I've found that if you don't ask, you never learn.)

Here's what I think that you're saying in the context of this thread:

The "features" that compel people to buy -- aren't those the aspects of a service or product that fulfill a need? If we can get people to focus upon the need and its solution, the price becomes less of a consideration.

Thanks.

#13 Aaron

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Posted 16 April 2003 - 04:51 PM

Here's what I think that you're saying in the context of this thread:

The "features" that compel people to buy --  aren't those the aspects of a service or product that fulfill a need?  If we can get people to focus upon the need and its solution, the price becomes less of a consideration.

Thanks.


You got it!

I was simply responding to the comment on features versus being sold on a solution to a problem.

I find in our industry (web development and SEO services) we can't tell a client or potential client about the features, we need to hit them where it counts - either in the pocket book or solving a problem.

Example...

Optimizing your site for the Search Engines give your business more opprotunity to rank well because it.. blah.. blah blah...

or...

Learn how propoer web site development can mean a 35% increase in sales with a ROI of over 15%.


Which sounds better? I know the latter one isn't as good as it could be :)

Aaron

#14 bragadocchio

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Posted 16 April 2003 - 05:12 PM

Thanks!

I agree with you. The focus shouldn't be upon features, and trying to find which features fit the needs of the buyer.

The focus should be primarily upon the needs of the buyer. Here's the problem, and here's the solution.

Let the browser know why something might matter to them, and you stand a greater likelihood of changing them from a surfer into customer.


I know the latter one isn't as good as it could be


But, it's still better because it focuses upon what the visitor wants.

#15 Peter

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Posted 17 April 2003 - 01:10 AM

All really good points - translate features to benefits, make the customer feel special or sold, information (product knowledge) rich communication and so on.

I can only add testing to the mix. markymark nailed my buying pattern (value pricing), but that's not everyone's.

"Fits securly in your drink holder", "Easy grip handle for arthritic hands", "Non-skid bottom", "Optional lid with sipping spout to avoid spills around sensitive electronic equipment - computers" "Rubberized drinking spout on the optional lid for denture wearers with sensitive gums" (ok, I'm reaching).

Alrighty, seems like we've got a pretty complete design here. We phone the consumer and they say: "Don't like 'em", "I want happy colors". Whatever that means or a glazed finish or traction bumps so they can hold it more securely. I suppose if we threw an Elvis picture on it, that might fly too. Some might just say "cheap", I want "cheap".

Ask consumers. They'll tell you. Wordtracker, Overture and the google popularity tool will give some indication, but if you really want to know what's on a customer's mind; ask.


Peter

#16 manager

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Posted 28 November 2006 - 07:54 AM

Howdy,

translate features to benefits, make the customer feel special or sold, information (product knowledge) rich communication and so on.


Ok, I hear what you and others are saying, :D but that’s probably more relevant to services than physical goods. My slightly ranty contribution focuses on goods not services.

I always feel compelled to point out when all else is equal, ie your competitors are also offering excellent customer care – as a consumer I will go for the lowest price – simply because I’m not crazy enough to pay more for something because of any subjective spiel I read on a website.

I’m not gonna buy coffee from A simply because B doesn’t have a blog about coffee, and A appears more knowledgeable and nicer, if they are selling the same product. As a matter of fact I would research the product on A's website and buy from B.

Many online product sellers simply “paste in” the manufactures sales orientated description of the product complete with features.

If there are any online merchants out there who think using automated “personalised” emails is gonna impress me, or make me feel special - think again, it’s not gonna happen.

Dearest <? Echo “addressby_name_preference”; ?>
I love you so much for buying <? Echo “productname”; ?>

Should I become a repeat customer the hollowness of automation becomes apparent.

If I want to feel special I will buy in a "bricks and mortar" shop, were I have the advantage of having my questions answered immediately,and don’t have to wonder how long the delivery will take, or if the product is as described.

TreV

#17 bwelford

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Posted 28 November 2006 - 08:34 AM

Hi TreV

I'm not sure why you brought up this old thread (perhaps there's a story there) but it seems particularly appropriate just before what is unfortunately one of the biggest commercial periods of the year.

I'm sure there are others who think like you. However some others are influenced by the 'pretty box'. What a seller has to figure out is whether the 'pretty box' persuades enough people to buy that the sales targets will be achieved. It's all a question of percentages. :D

#18 travis

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Posted 28 November 2006 - 09:21 AM

We use a similar approach called FAB. This English client taught it to me once.

Features...Advantages...Benefits

Customers dont mind listening to features, and they may even read about the advantages, but they are mostly interested in their own greedy little world where they benefit.

It all comes down to psychology, and the fact that in mass retail, you can count on humans ultimately being totally selfish and oriented towards their own little world where they will dwell endlessly about purshasing something for their own glorification.

Getting your product or service into that selfish little world is the key.

Sometimes the benefit of a product feature will be self-explanatory, or the customer is educated enough to know what they want, but for salespeople with a sales on the line, they need to get to the benefits quickly.

So for a V8 car, the features might be something technical like

(i) a dual exhaust
(ii) bonnet scoops
(iii) 8 cylinders

The advantage might be:

40% more power than a standard V6;

But the benefit would be:

You can drag people off at the lights 9 times out of 10.
You can really flog it on the freeway and think you are Peter Brock.

Getting into the customers world and understanding their greedy little perspective is most important.

Depending on the product, the marketing would have a mix of all three, but the end result in the customers mind should always be the "benefit" to their world.

#19 manager

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Posted 28 November 2006 - 09:53 AM

Hi Barry,

I'm not sure why you brought up this old thread (perhaps there's a story there)

He he……….. I must have observed someone else reading this thread and thought – that looks interesting; maybe I should have checked the date.

All I expect from online product vendors is that:
1. They stock what I require.
3. Their prices are the lowest.
4. They facilitate a secure transaction.
5. They deliver my goods very quickly

Open Question: Tell me how you can get my business if you are £30.00 dearer than your competitors when they also fulfil the above criteria?

For many people price is the main reason they buy online, I don’t think I’m in a minority here. It’s the “trade off” for not getting to touch, feel, or try the product before parting with cash, or the relative inconvenience caused when problems arise, when compared to bricks and mortar stores.

Travis, I just noticed your post after I posted

TreV

Edited by manager, 28 November 2006 - 09:55 AM.


#20 manager

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Posted 28 November 2006 - 10:26 AM

I don’t see it as anything to do with the greed or selfishness of customers. When all things are equal including the product, it's not greed or selfishness that makes the customer go for the cheapest price is just common sense.

#21 bwelford

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Posted 28 November 2006 - 10:36 AM

It’s the “trade off” for not getting to touch, feel, or try the product before parting with cash, or the relative inconvenience caused when problems arise, when compared to bricks and mortar stores.

.. aye and there's the rub, as Shakespeare said, I believe.

Different people may need different assurances that the product 'when they receive it' will be identical from the several online suppliers. So some may rely on other cues and decide it's worth paying a little extra for piece of mind. After all, you often get what you pay for. :D

#22 TCSM

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Posted 28 November 2006 - 11:38 AM

But how often are all things equal? Generally, two products will not be exactly as good as each other. And the one that makes the person feel better about themselves will win 9 times out of 10.

#23 manager

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Posted 28 November 2006 - 03:52 PM

Generally, two products will not be exactly as good as each other.

That's a good point, what if I played devil's advocate and enquired about products that share the exact same brand name and model number ?

And the one that makes the person feel better about themselves will win 9 times out of 10.

Are you saying that you can write, or do something else within the confines of a website that would encourage potential customers to give you more money for the exact same product, when your competitors have beat you on price and..............
4. They facilitate a secure transaction.
5. They deliver my goods very quickly. ??

Can someone tell me how to achieve this feat, that's the question I’m putting?

I suppose that if I don't accept the premise that "all can be equal" eg my competitors are matching me on “customer service” and beating me on price, it saves me having to come up with anything creative. I could always use the old, "you get what you pay for line", and hope that nobody challenges me to justify my prices in detail. :)

#24 A.N.Onym

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Posted 28 November 2006 - 08:45 PM

Benefits is not about greed. It is about the needs of a customer. I don't care how many material layers are between me and the car engine - I just want to enjoy the purring of the engine, instead of it shouting at me.

Though sometimes one may seek a particular feature (a knife to cut fish, for example), the benefits will still apply. How comfy is the knife handle? Does it slip when wet/in fat? How good is the steel? Is the knife well balanced?

You see, the above questions talk about the benefits I may get from using a knife and a knife seller may sell more knives (that other competitors offer), if he addresses all the worries, questions and needs I have, when looking for a simple fish knife.

P.S. Not sure why bring this topic up. I was under impression that the benefits-oriented approach has long been discussed and approved over the feature-oriented approach.

Edited by A.N.Onym, 28 November 2006 - 08:46 PM.


#25 manager

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Posted 29 November 2006 - 01:24 PM

Not sure why bring this topic up

LOL that’s funny :)
Barry asked the same thing,

I'm not sure why you brought up this old thread (perhaps there's a story there)


Though sometimes one may seek a particular feature (a knife to cut fish, for example), the benefits will still apply. How comfy is the knife handle? Does it slip when wet/in fat? How good is the steel? Is the knife well balanced?
You see, the above questions talk about the benefits I may get from using a knife and a knife seller may sell more knives (that other competitors offer), if he addresses all the worries, questions and needs I have, when looking for a simple fish knife.

Thanks for that, my question is very specific - if you want to “talk knives” fine, :) but lets talk about two identical knives same brand, same spec, and manufacturers model number. With reference to the scenario I have outlined – what are your suggestions. Further augmentation of the offering would result in lower profit margins so that isn’t a “real runner” imho. I’m obviously keeping an open mind or I wouldn’t be posing the question.

TreV

#26 A.N.Onym

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Posted 29 November 2006 - 11:32 PM

Well, you can decipher the answer you want from the passage you quoted.

If you are selling what everyone else is selling, have unique product description and multiple related pages, offering information and insight on why the product is valuable to the customer.

For instance, there may be whole pages about knife material, how the knives are manufactured, etc, coupled with customer reviews, saying those exact things (the proof).

You can also seek what are the motives (the needs) for anyone, buying the product (the knife) and address them on the introduction and product pages. Better yet, have whole pages, describing each need of the customer and the benefit of the product.

Have enough content to explain how the product has been manufactured, what makes it useful for the customer, how it is more valuable than others (find more benefits than your competitors, you may not use direct comparison, though this is good content, too), what else may motivate the customer to buy from you (fast or free or packaged shipping - or all of those, if you can afford that).

In essense, you need to make a good presentation of the product for the customer, because, most likely, everyone else selling the product will be just copying the text from the manufacturer's website. If there's a daring competitor, such as you, it may be more interesting to find more benefits and write better text, than he.

#27 TCSM

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Posted 30 November 2006 - 12:16 PM

That's a good point, what if I played devil's advocate and enquired about products that share the exact same brand name and model number ?


If people have to choose, then I'll bet you that you'll see people pick the same one time and time again. It's just human nature. Something in the psychology of the viewer will make them pick one over the other. It's just a case of testing, tracking and then optimising...

Are you saying that you can write, or do something else within the confines of a website that would encourage potential customers to give you more money for the exact same product, when your competitors have beat you on price and..............
4. They facilitate a secure transaction.
5. They deliver my goods very quickly. ??

Can someone tell me how to achieve this feat, that's the question I’m putting?


Simple. Someone might go out to Pizza Hut for dinner, and spend £40. Now, why would they do that when they *could* have eaten pizza at home, had the same things to drink, and not had to drive anywhere, wait around etc...?

Because they think it'll give them more pleasure to go out. People will pay more, if they feel that it's worth their while - ie it makes them feel better/gives better ROI.

What you need to do is sell them that you get what you pay for (more is better) and that you're charging more because you give more. Even if it's something intangible like customer service, sell them that you're a better quality, and they will be happier and have a more pleasant experience choosing you.

#28 manager

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Posted 30 November 2006 - 01:07 PM

Yes thanks for the Pizza example, :D it's a bit like:
Q: Why would I pay £2.60 for a pint of beer in my local pub when I could slurp a can at home for £1.00?
A: I’m prepared to pay for all the intangible benefits bundled with the pint at my local Pub.

Can you give me an example that’s more relevant to the question I’m asking ? eg selling the exact same products, as your competitors in a mature market, were further meaningful augmentations can only be achieved at the expense of profit.

TreV

#29 ladesignz

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Posted 30 November 2006 - 04:12 PM

This is a great thread -

We do alot of benefit focused marketing because our price is not as competitive. Sometimes it really difficult to get the message across in product copy on what makes you different but with a ratings and reviews system in place your customers are telling each other why this product is special and what makes your different.

Thanks

Tina D

#30 bragadocchio

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Posted 30 November 2006 - 05:01 PM

Can you give me an example that’s more relevant to the question I’m asking ? eg selling the exact same products, as your competitors in a mature market, were further meaningful augmentations can only be achieved at the expense of profit.


Some meaningful augmentations may increase the potential for profit instead of reducing it. It's great topic though, and worth discussing some ideas through examples.

Since this thread is partially about perceptions, let's briefly run down some perceptions that a visitor might have about a site based upon an intelligent display of information:

1. Perception of credibility and reliability:

One site may appear to be more credible and reliable than others based upon the information that they share about themselves, and how prominently they display things like a logo for secured transactions, links to privacy policies and security policies, testimonials from others.

2. Perception of responsiveness

Are all the pieces in place to make this a good experience with the seller? Is there easy to find information about shipping, taxes, currencies and payment methods accepted, returns procedures in case something goes wrong, reasonable guarantees and warranties?

3. Perception of value

Is it easy to shop, to compare the benefits of like products, to search by price, by brand, by feature, to find information provided by other shoppers? If a decision to buy a product is benefitted by showing multiple images, are multiple images displayed? If zooming in on a product helps, are there larger images? If knowing what materials (for clothing perhaps) were used in the manufacture, are those there? If size is an issue, are those clear and easy to understand, and find? If a product is offered in multiple colors, are those shown? If the goods are books, can you read inside? If music, can you listen to snippets of songs?

4. Perception of added value

Can a buyer get items gift-wrapped, with a nice customized note of their choice, and sent to someone other than the purchaser? Are there wish-lists, or gift registries, or other items that make it easier for a shopper to buy something for someone that they may actually like or want? Can items be personalized, customized, with uploaded images or messages of the buyer's choice? Can shoppers share their thoughts, criticisms, praises of goods on the site itself? Is it easy to find accessories or related items that go with something being purchased?

There are many things that I could buy online, but are more likely to buy at a local store that I can walk in, given the same price. So yes, other things need to be happening on the pages of those sites to get me to buy from them instead.

#31 bwelford

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Posted 30 November 2006 - 06:15 PM

You pretty well said what I was going to say, Bill. Let me try to just package it a little differently.

Everything is perceptions. People are not making a choice between products but rather are making a choice between the following:
  • their perception of what it would be like to buy the product from online Company A
  • their perception of what it would be like to buy the product from online Company B or,
  • their perception of what it would be like to buy the product from the hardware store down the street.
As Bill said a lot of things get rolled into those perceptions, so it's very unlikely that the purchaser will have the perception that the whole transaction will really be exactly the same with the various suppliers. If you're one of the suppliers, then you've got to consider every element that makes up that perception and make sure you're creating the best perception versus the perceptions of the competitive offerings.

#32 manager

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Posted 01 December 2006 - 08:14 AM

Hello,

I’d humbly suggest that the situation I have spent time outlining can, and does exist. :)
I take onboard some consumers are impressed by fancy packaging, gimmicks, or by range physiological factors.

I’m not arguing "the case" for price-cutting. Equally; I’m pretty sure that online traders are aware that their competitors can easily clone their “augmentations” and USPs.

Consider this “offline” real world example (it's probably over simplified ) :D
Small independent petrol/gas stations have been all but “wiped of the face of the earth” in the UK. The market is now totally dominated by supermarkets and major players like BP. With the benefit of hindsight, reliance on customer loyalty or tinkering with/enhancing their service delivery simply didn’t work.

The "painful truth" imho, is that a proactive market-orientated business would never be in the situation I’ve described. Successful businesses are constantly seeking out new and more profitable markets, and just as importantly, identifying and reacting to external threats way before it’s too late.

In short: I believe, if the marketing strategy is flawed or non-existent, no amount of tinkering with promotional tactics is really going to help in the longer term.

I get to listen to small business owners all the time, I’ve found that many small businesses don’t seek advice, or even see the importance of marketing activities until there’s a problem.
Simple example of a typical problem - declining turnover.

The problem for some in the “marketing game” is that that there is little earning potential in
telling people the truth. Sadly, less scrupulous “marketing consultants” know that with a little psychobabble and some jargon they can walk away from a “sinking ship” with a nice cheque :D .

Why did I include the last paragraph ? - just for fun ! :D

TreV

#33 Ruud

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Posted 01 December 2006 - 10:11 AM

I’m not gonna buy coffee from A simply because B doesn’t have a blog about coffee, and A appears more knowledgeable and nicer, if they are selling the same product. As a matter of fact I would research the product on A's website and buy from B. View Post


Ah, but maybe you would buy coffee brand A because you get that solid, competent, professional feel when you think of yourself holding a cup of their coffee. Maybe you consider brand B "just another white label" or you associate it with relaxing at home in the evening?

Shoppers' Brains Under Brand-Name Control:

To understand how different product brands affect the human brain, a team of German researchers used a functional MRI machine, or fMRI, to test 20 adult men and women.

The volunteers were shown logos of well-known car manufacturers and insurance companies followed by other, lesser-known logos.

The resulting fMRI images showed that well-known brands activated an area of the brain involved in positive emotions -- such as emotions associated with a reward.

The lesser-known brands elicited brain activity reflective of a negative emotional response

Surprisingly, the brain's reactions had nothing to do with what product or service the logo was selling.

The response depended on how strong -- or familiar -- the brand was.


To make the case for branding, take your example which mentions:

The market is now totally dominated by supermarkets and major players like BP.
View Post


BP is a perfect branding example, reinventing itself as it goes along. Its $200 million campaign to position itself as "green" (green as in environmentally responsible) has certainly paid off. In North America only Chevron comes closer in the green feel.

Packaging the Beast: A Public Relations Lesson in Type Casting:

One intermediate position, he suggested, is the role of "reformed sinner," which "works quite well if you can sell it. . . . 'Reformed sinner,' by the way, is what John Brown of BP has successfully done for his organization. It is arguably what Shell has done with respect to Brent Spar. Those are two huge oil companies that have done a very good job of saying to themselves, 'Everyone thinks we are bad guys. . . . We can't just start out announcing we are good guys, so what we have to announce is we have finally realised we were bad guys and we are going to be better.' . . . It makes it much easier for critics and the public to buy into the image of the industry as good guys after you have spent awhile in purgatory."


I always feel compelled to point out when all else is equal, ie your competitors are also offering excellent customer care – as a consumer I will go for the lowest price – simply because I’m not crazy enough to pay more for something because of any subjective spiel I read on a website.
View Post


Unless you have had experience with the customer service of both companies, how would you judge it? Most probably by perception -- and that perception can be manipulated by marketing the brand.

I would say that especially when all things are equal, brand and branding will make the sale.

Are you saying that you can write, or do something else within the confines of a website that would encourage potential customers to give you more money for the exact same product, when your competitors have beat you on price and..............
4. They facilitate a secure transaction.
5. They deliver my goods very quickly. ??

Can someone tell me how to achieve this feat, that's the question I’m putting? [...]
View Post

[...] but lets talk about two identical knives same brand, same spec, and manufacturers model number. With reference to the scenario I have outlined – what are your suggestions.
View Post


Expand your scenario. Still two identical products but now...
  • Site A is a site you trust, site B is a cheapo site you distrust. You'll buy the knife for $2 more at site A because of perceived trust.
  • Site A gives you the feel of a solid, home-grown family business. Their smaller but personal, manual operation results in higher prices. Site B is a clean-cut, mass-selling, big company capitalism, small town destroying Wal-Mart rip off. You buy from site A and pay more for that feel-good/do-good feeling.
  • etc.
Every aspect of your decision to buy from site A or site B comes down to one form of branding and marketing or another. The way the site looks, feels. The way it operates. The words they use. Quality of the images, the way the images are displayed. The words used not ony to describe the product but everything else on the site, from welcome message to privacy policy.

The message that supercedes "everything is political" is "everything is branding".

#34 manager

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Posted 01 December 2006 - 11:06 AM

Expand your scenario. Still two identical products but now...
Site A is a site you trust, site B is a cheapo site you distrust. You'll buy the knife for $2 more at site A because of perceived trust.
Site A gives you the feel of a solid, home-grown family business. Their smaller but personal, manual operation results in higher prices. Site B is a clean-cut, mass-selling, big company capitalism, small town destroying Wal-Mart rip off. You buy from site A and pay more for that feel-good/do-good feeling.
etc.

LoL Ok expand my scenario by all means, but if you “warp it” you’ll be talking about something completely different. :D

If site A is a site that looks trustworthy and B is the opposite.
If site A is selling white label and B is selling a leading brand

Then “all is not equal” – Is it ?

Ruud
When I see BP "nicking" Flora margarine's old logo and spending silly amounts positioning themselves as “green” it makes me shudder. That's just my opinion. :)

Had BP invested that money into cleaning up some of the environmental messes they’ve caused in the developing world I’d be more impressed. Do you want me to provide examples of the environmental destruction and misery BP has caused around the world? I don't think this is the right place to do that.

The way the site looks, feels. The way it operates. The words they use. Quality of the images, the way the images are displayed. The words used not ony to describe the product but everything else on the site, from welcome message to privacy policy.

This can be legally "cloned" in hours.

Some businesses make their first major mistake before they begin trading – ie they enter saturated, unprofitable markets were the chances of success are minimal. I guess this is my core point.

TreV

#35 Ruud

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Posted 01 December 2006 - 11:48 AM

If site A is a site that looks trustworthy and B is the opposite.
If site A is selling white label and B is selling a leading brand

Then “all is not equal” – Is it ?


Nuh-uh. Both sites sell the 100% exact, totally identical product. Same brand, same product nr. The difference is in the site or rather the site-brand.

I, for example, rather buy my Tea Tree chewing sticks from Amazon than I would from "rippers.ru" ...

Some businesses make their first major mistake before they begin trading – ie they enter saturated, unprofitable markets were the chances of success are minimal. I guess this is my core point.


It depends on the branding :D

You could enter a pennies-per-produtc market, like the one for pens, and position your $100+ Montblanc as the life changing quality item that sets stylish people apart from the can't-afford-better Bic crowd...

Or as a latecomer you can dominate a techno-feature-rich market by making something simple and market it as user friendly (iPod, anyone?).

#36 manager

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Posted 01 December 2006 - 01:07 PM

You could enter a pennies-per-produtc market, like the one for pens, and position your $100+ Montblanc as the life changing quality item that sets stylish people apart from the can't-afford-better Bic crowd...

Could you explain what you mean, wouldn’t you be entering the “luxury pens” market? :D
Surely you’d be positioning yourself relative to other luxury pens?
Even within the luxury pens market there are further sub markets.

I

, for example, rather buy my Tea Tree chewing sticks from Amazon than I would from "rippers.ru" ..

Eh ?? I know what you mean, just curious to know why you mention it in this context?

TreV

Edited by manager, 01 December 2006 - 01:08 PM.


#37 Ruud

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Posted 01 December 2006 - 01:29 PM

Surely you’d be positioning yourself relative to other luxury pens?


That would be up to me and my marketers to decide :D I could stretch the market of disposal pens and position mine as the better alternative in the long run. Or my pen helps safe the black speckled ant worm...

[...] just curious to know why you mention it in this context?


I mention those sites in an attempt to show that even when two products are 100% identical, their points of sale, their delivery channels, aren't.

This is in relation to the point you made earlier View Post:

translate features to benefits, make the customer feel special or sold, information (product knowledge) rich communication and so on.


Ok, I hear what you and others are saying, :) but that’s probably more relevant to services than physical goods. My slightly ranty contribution focuses on goods not services.

I always feel compelled to point out when all else is equal, ie your competitors are also offering excellent customer care – as a consumer I will go for the lowest price – simply because I’m not crazy enough to pay more for something because of any subjective spiel I read on a website.

I’m not gonna buy coffee from A simply because B doesn’t have a blog about coffee, and A appears more knowledgeable and nicer, if they are selling the same product. As a matter of fact I would research the product on A's website and buy from B.


To which you further stipulate View Post:

[...] selling the exact same products, as your competitors in a mature market, were further meaningful augmentations can only be achieved at the expense of profit.


My alternative view on that is that in your two 100% identical products example it still remains possible that you prefer the richer site A product over the cheaper site B one simply based on your psyche, your emotions, and how those have been played through marketing and finally branding.

To make such an example painfully clear you could imaginge your 100% identical products available at exactly the same price. All service-related issues are identical as well. Same speed shipping. Both are at the same address, have the same telephone number -- you can reach both just as easily. Your choice of which site to go with is, in my opinion, most probably influenced by how those sites brand and position themselves.

Of course price can be the driving factor behind a consumer's decision. In which case too you still have to identify and communicate your strong points. Why buy your cheap coffee?

#38 Alex_

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Posted 01 December 2006 - 07:46 PM

Thank you for the welcome Bill.  

Through out my personal research I have noticed how many SEO and SEM companies alike decide to start working on their clients websites without any planning. Usually motivated by the clients anxiety.

For me SEO and SEM are only online promotion techniques and as part of a communication mix and they should be combined with online advertising, affiliate marketing, PR, and promotion management.

I believe that the problem is that usually clients are interested in immediate results; starting out with planning could delay even more the SEO results (which already take at least 30 to 60 days to pay off). But could you believe if clients treated architects the way they treat SEO agencies? Building a house without plans would make a mess.

That is the main problem with our industry.  I would love a client to come to me and tell me that he is thinking about having his business online in a year.

#39 Alex_

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Posted 01 December 2006 - 08:13 PM

Now regarding the second issue, the knifes, the branding and the beer at the pub...

I believe that we human beings respond to only two motivations: 1. Avoid pain and 2. Gain pleasure.  Our nervous systems are wired that way to protect us.  Our perception and anticipation (that others have already explained) of pain and pleasure will shape all of our decisions.

Perception and anticipation of pain and pleasure would move you and I to do almost anything. (i.e. for some people the fear of skydiving is just to much to bear because it would lead to pain, on the other hand, for other people the lack of excitement and adrenaline in their lives would lead to pain, so they love skydiving). It is the same experience but the desire is shaped by belief.

Michael Porter, the king of competitive advantage says that if you don't have a winning strategy for business, no matter how much you try, you will never be able to succeed. Research Porter's strategies for more on that topic.

Basically if you want to be able to sell the same product ( everything the same) for a higher price, then you would have to address the fears (anticipation of potential pain) from your clients.

That is why it is so important to listen to the clients first.

Edited by Alex_, 01 December 2006 - 08:14 PM.


#40 manager

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Posted 01 December 2006 - 08:19 PM

Some excellent points there Alex !

Ruud thanks for sharing; and showing your knowledge on this; I have a very clear understanding of what you wrote.

Not sure where you got that from though :D did you think I wrote that ?

Both are at the same address, have the same telephone number -- you can reach both just as easily.


I would like you wish you, and your marketers every success in any future ventures you decide to embark on. :)

TreV



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