Pricing in the Marketing Mix

The book Strategy and Tactics of Pricing contains a great quote by Raymond Corey who taught at Harvard Business School in the 60s.

“All of marketing comes to focus in the pricing decision.”

The main purpose of marketing is to attract a customer to your product and influence the buyer’s perception of its value. A customer may love your product, but if the perceived value and the price don’t line up, you’ve got a problem. If you have a good product, you can probably survive lousy advertising and bad positioning, but if you screw up the pricing issue you’re not going to get everywhere.

The Algorithm Loves the PR

Valleywag, among many others, has been critical of Ask.com’s “algorithm” marketing campaign. A typically scathing post references the product placement that Ask is getting in the new Lindsey Lohan movie:

Expect a surge in usage of the also-ran search engine, at least from coked-up drunk-driving slappers who model themselves on the troubled celebrity. I believe IAC’s site, which has struggled to rise from fifth place in the search wars, has finally found its target demographic.

If Don Dodge’s math is right, and each 1% of market share is worth $1b in market cap, being fifth doesn’t seem all that bad.

Google Reader

Google Reader is a absolutely fantastic tool for aggregating information from a wide variety of sources. It is even better if you are able to master the keyboard shortcuts.

Google has also included the ability to easily email posts right from the Reader interface which could be very powerful. But, it only works with Gmail. Obviously, Google wants to keep users on its various platforms, but it would be better if the user could choose which address they wanted the mail to come from. This is certainly possible as many other sites allow just that.

Most people wouldn’t want to send an interesting post to their boss, colleagues or customers using a Gmail address.

Jangl: What’s the Point?

Om Malik has a a post on Jangl which has been getting lots of coverage over the past few days.

Lets’ say if you meet someone and the only information you have about them, is their email address. You can go to Jangl website, and enter their email address. The Jangl system assigns them a temporary phone number, and allows you to leave them a voice mail message, which is then forwarded to their email inbox.

I can’t for the life of me figure out what problem this solves for a user. If the only information I have on someone is their email address, I’d sent them an email. If I wanted to talk to them, that email would say, “what’s your phone number?” This seems to me like a solution without a problem.

Jangl is almost the mirror image of SimulScribe, and SpinVox which are reviewed in today’s WSJ (subscription). These services transcribe the audio from your voicemail and email the text to you. This is of great value if you live by email and spend a lot of time in meetings.

Writting from a Point of View

I’m learning that the hardest part about keeping a blog (aside from finding the time) is deciding what point of view to write from.

This is especially hard because I don’t have any audience.

Presumably a technical writer focuses on technology and assume his / her readers have some base level of knowledge. Business writers likewise assume some knowledge of relevant issues.

In this way, writing is a lot like marketing; you need to know your customers or you can’t give them what they want.

The Toughest Part

In today’s Wall Street Journal, Cynthia Crossen states (subscription required):

The toughest part of inventing isn’t solving problems. It’s figuring out which problems to solve.

To me, this is the fundamental role of a Product Manager. When you’re building software products (managed services included) most things are possible. A talented engineering team can probably write code to solve most of the problems that customers face. The question becomes “is it worth it?”

A Product Manager looks for the intersection between technical possibility and market opportunity and guides the allocation of scarce problem solving resources (usually developers) towards the problems that solve the biggest customer problems.

Feature Creep in Firefox

Firefox has become my default browser, so much so that when I recently had to use Internet Explorer, I felt slightly lost.

The tabbed browsing initially drew me to Firefox but I would have say Foxmarks has become best reason to use it. I use two machines fairly heavily, one at home and one at work. In the past, synchronizing favorites was a pain; if I bookmarked something at work, I typically wouldn’t have it at home. Now, Firefox seamlessly synchs bookmarks so I don’t have to worry about it.

Foxmarks is a plug-in that needs to be downloaded and installed separately from Firefox itself. The next version of Firefox will incorporated more of the functionality that used to be provided by a plug-in with the initial installation. There is some concern about this type of feature creep and its effect on performance:

Anecdotal reports of problems, from sluggishness to slow page loads and frequent crashes, have begun circulating in web forums, along with increasingly loud calls for Firefox to return to its roots. The alleged culprit: bloat, the same problem that once plagued Mozilla, the slow, overstuffed open-source browser spawned by Netscape that Firefox was originally meant to replace.

The issue of what should and shouldn’t be included in a product is core to role of a Product Manager. It will be interesting to follow how an open source community like Mozilla makes these difficult decisions.

Pro-sumer Unifed Messaging

Heavy email users with a number of addresses struggle to integrate all these addresses into a single webmail client. If I have a Gmail address and a Yahoo address, one for business and one for personal, I have to log into each account and check them separately. Most desktop clients allow you pull mail from multiple accounts into a single store, but if you work from multiple machines, it helps if you have similar functionality in a web tool.

Techcrunch has an announcement of Orgoo that is working on a web based solution that also offers Meebo-style IM aggregation:

Not only does it emulate Outlook-style desktop mail applications extremely well, it also integrates instant messaging from all of the major IM providers directly into the interface. If you are looking for a service-independent webmail/IM service, you’ll want to check this out.

Comcast’s SmartZone using the Zimbra platform is more compelling because of the potential to access VoIP voice mail in the same interface as email. But Orgoo has the benefit of being network independent. Comcast’s offering will only be available to their subscribers.

There is a lot going on in consumer space for unified messaging tools like these and it should be an interesting space to watch. Orgoo’s beta is closed and I’m not in Comcast territory, so I’m not yet able to play with either of these tools.

Partnering Gone Bad

Businesses use partnerships for number of reasons; wider market reach, lower cost of sale, lower cost to service, access to new technology, and etc. But partner relationships introduce risks as vendors lose control of the customer relationship and information exchange between multiple organizations affects customer service.

As a consumer, I am currently caught in a perfect storm of a poorly integrated partner ecosystem that is illustrative of these risks.

In December, I bought a Reebok exercise bike for my wife. We went to a nearby Sports Authority and demoed several models. We narrowed the options to three models that appeared roughly equal and ultimately choose one from Reebok because it was a brand we trusted.

After using the bike for about 30 days, it suddenly stopped working. My first call was to Sports Authority because I had allowed the sales clerk to sell me the extended warranty. I learned that extended warranties don’t include the time the equipment is covered by the manufactures warranty and I would have to call “Reebok” directly.

It turns out that the bike is actually manufactured by Icon Fitness and Reebok allows them to distribute the equipment under their brand. The representative I spoke to at Icon tried to trouble-shoot the problem over the phone and agreed that a technician would need to come to my home to fix the bike.

Icon sent my information off to a local service partner but I had to call the technician myself to setup the appointment. The first organization they referred me to lost my appointment. The second send an unqualified technician who was able to unassemble the bike, but unable to fix it and left it in pieces. After several days where there was no further contact from anyone regarding next steps, I called Icon for the fifth time. The rep I spoke to agreed to take the bike back but that was close to a month ago and they have failed to follow up as agreed.

So, here is the scorecard of the players:
– Reebok provides the brand
– Icon Fitness manufactures product
– Sports Authority sells the product
– Local companies provide the break / fix support

Licensing arrangements like this are not uncommon and this could be another story of the miracle of modern business where every participant in the value chain performs their own specialized task resulting in a surplus of economic profit. Instead, my basement houses a $500 exercise bike in a hundred pieces and I am seemingly helpless to get it fixed because none of these participants feel ownership of my problem.

I haven’t attempted to contact Reebok directly yet, but I can’t image that they’d be pleased with the way their brand is being used in this partnership. I wouldn’t say I’d never buy something from Reebok again, but the brand is certainly diminished in my eyes.

Add One New Thing

Someone once gave me a book called “How to Become CEO: The Rules for Rising to the Top of Any Organization” by Jeffery Fox. It contained a list of suggestions that any professional should follow to become a senior manager. It is a pretty light read but some of the rules really stuck with me including:

– Make one more call
– Don’t hide the elephant
– Avoid staff jobs, seek line jobs

There are 75 suggestions and while I can’t pretend to follow most of them, one item struck me as particularly good advice. Fox suggests you should “Add one big new thing to your life each year.” The rational is that as you progress in your career and gain responsibility, you will need to add to your understanding of business areas that you previously had no exposure to. For example, a marketer may become General Manager of a division and need to get intimately familiar with its finances.

The point of adding one new thing is to develop a proficiency in learning new skills.

That is my reason for creating this blog. I aim to write about things that interest me in technology, business, and my career. In the process, I hope to hone my writing skills, gain familiarity with the technologies that exist for web publishing, and hopefully sharpen my thought process as it relates to these topics. If anyone reads any of this, then that’s just gravy.