Archive for February, 2009

Even Pro Baseball is Marketing in the Recession

February 26, 2009

If my last blog post is any indication, the March 2 issue of Fortune magazine is a goldmine of stories about the importance of marketing during this recession. Another article from this issue, “Baseball Battles The Slump”, caught my eye, about how the Arizona Diamondbacks keeps its fans loyal during these hard times.

According to the article, when a longtime season ticket holder e-mailed D-Back CEO Derrick Hall, informing him she’d fallen on hard times and asked his help in helping her hold on to her season tickets, Hall personally phoned her and arranged for her to share her season tickets.

In addition, with Phoenix having the lowest per-capita income of any Major League Baseball city, Hall wanted to insure the Diamondbacks retained the loyalty of their lower-and middle-income fans, instituting “kid’s pricing” for hot dogs and other concessions, and having pro shops where fans can buy D-Backs merchandise for about one-third of what other MLB teams charge.

What really impressed me was that when dining out, Hall picks up the tab of family whose youngster is wearing a D-Back’s hat; how Hall gives away free tickets to local schools; and that he praises players who mingle with fans before games and sign as many autographs as possible.

Hall demonstrates five valuable marketing principles we must never forget:

  • Know your customers;
  • Listen to your customers;
  • Appreciate your customers;
  • Instill a customer appreciation orientation in your employees; and
  • Give your customers a great experience along with a great product or service.

These principles work in any economy, but companies who continue to practice them during the recession will really score a home run!

Advertisements

Raise prices in a recession? That’s Crazy! Or is it?

February 23, 2009

In the most recent issue of Fortune magazine, columnist Geoff Colvin wrote in his column, “Yes, You Can Raise Prices”, that some companies, including DuPont, McDonald’s, and Colgate-Palmolive, are actually increasing their prices in these difficult economic times.

Colvin uses the Purchasing Power Matrix to demonstrate that companies currently in the best position to raise prices are those whose brands are perceived as both unique and necessary.  Brands considered to be both commodities and discretionary are in the worst position to raise prices; brands that are either unique and discretionary or commodities and necessary are grey areas that must be analyzed further.

Colvin’s article reiterates some important principles about pricing.  First, your price can speak volumes about the strength of your brand.  If you attempt to cut prices in order to increase revenue, you may see a short-term increase in sales, but a long-term deterioration in customer perceptions of your brand.

Secondly, product differentiation – in the eye of your customers –  can greatly influence your pricing power.  If you can make your product or service stand out from others and it offers benefits your customers believe no competing product has, you will be in a greater position to increase prices.

How do you know whether your brand is a strong candidate for a price increase?  Here’s where marketing research comes in.  Know your customer.  Even if you sell only one product, your customer base may be very diverse.  How does each customer segment perceive your product?

You may find that Segment A perceives your product as unique and necessary, but Segment B perceives it as a necessary commodity.  With that information, you might consider charging Segment A a higher price, and test a higher price with Segment B’s customers in selected markets.

Using the Pricing Power Matrix as a starting point and combining it with  commonly used pricing research methods (e.g., discrete choice modeling, conjoint analysis, Van Westendorp, or Gabor-Granger) can provide valuable information about the optimal price you can charge for your product, and yield clues as to how unique and/or necessary it appears to your customers.

Welcome to Insight Central!

February 21, 2009

Welcome to Insight Central!  Our blog is designed to show companies like yours how they can use marketing research to develop effective marketing strategies that maximize their sales, profits, and market share.  In these difficult economic times, many companies will fail to prosper because they do not make the correct marketing decisions. Our blog promises to remove the marketing research mystique for small and midsized companies, so that they can harness marketing research’s many benefits to their bottom lines.

When you visit the Insight Central blog, you can expect to find posts that will:

  • Keep you informed of the various marketing research techniques out there;
  • Help you determine the most appropriate research method for your marketing needs;
  • Give you tips for best practices and ideal application of marketing research approaches; and
  • Simplify the marketing research process and make it fun and interesting!

May your frequent visits here lead you and your company to years of marketing success.

Thank you for visiting!