Bundle Pricing Why is it so Appealing.

When people think of buying multiple things in a package for one price they think of some associated discount. I believe its more then that. I think there is a huge element of convenience with this type of pricing.

Think about gift baskets it would be a pain to construct your own. There are plenty of people that would find this enjoyable but a great deal of people would rather not spend the time. Another example would be tool sets its much easier to buy a set then go out and hand pick tools and construct your own set.

Part of the value of bundle pricing is in the time it saves the consumer. This type of pricing has a great deal of value in convenience.

Here is an article on Price bundling:

http://www.wiglafjournal.com/pricing/2008/01/price-bundling-to-profit/

Prestige Pricing a Way to Sell to Snobs

Do people really buy things because most others cant afford them or wont waste the money. According to prestige pricing they do. To me if there was anyone I would want to market to it would be this group of people. That seems unreal that you could make artificially high prices that would sell because they are artificially high. Not only that but this method of pricing appeals to the wealthiest people.

I have heard before that I.V. league schools weren't worth the money in terms of the value of education compared to other institutions. Could this be a form of prestige pricing? The extra money is just to get a degree that has a prestigious name. Another example to me would be food. There are certain types of food like caviar or expensive wine that seem to possess prestige prices. What extra value or sustenance is in these products, in the end your stomach is full or you are intoxicated to the same degree. In fairness I'm not a wine connoisseur but please some bottles of wine are almost cost half a million dollars. There is caviar that's more expensive because it comes from a rare fish, to me fish eggs are fish eggs.

The crazy part about this kind of pricing is that some things that are prodigiously priced used to be peasant food and now because some awesome marketer raised the price and created demand for that product people will pay top dollar for it.

This is a link to some expensive Wines:

http://www.huffingtonpost.com/2011/11/10/most-expensive-wine_n_1084988.html

Caviar link:

http://most-expensive.net/caviar-world

Everyday Low Prices

I have one major problem with this type of pricing is it real? The whole idea is that products are continually priced very low on a consistent basis. Leaving not much margin for profit. OK that seems like a good way to get value for a customer but, why then do stores that use this method put things on significant sales.

If they were really putting things at bottom line prices how could large price reductions be possible. I understand things may need to be put on sale for clearing inventory but still they cant be loosing much money. Or else it seems these sales would catch up to them.

This strategy has helped many large stores become successful in recent years it is apparent this may be the wave of the future.Many companies are now switching to this strategy to stay competitive.

Here is an article on J.C. Penney moving to (EDLP)

http://www.dailyfinance.com/2012/02/02/why-j-c-penney-will-never-be-great-again/

Public Relations a Necessity?

Does every company need PR. To me it seems like if a company were already ethical PR wouldn't be needed, actions speak louder then words. It seems like the only reason for PR is when the company screws up.

 The fact is companies need PR to communicate in a non-selling way. Its not just there for handling crisis in the public eye it also represents the company in good times. If a company is very ethical it is unlikely the general public will ever know. Without PR a highly ethical company is basically neutral in the public eye That is why PR is still important even to companies that don't have problems in the public eye. In addition if they ever did mess up they would be able to handle it.

Public relations will always be present for a company. Even if the company's doesn't organize public relations there still will be PR. Therefore might as well take the effort to organize it.

This is some information on PR:

http://www.futuresimple.com/blog/pr-without-breaking-your-budget/

Price Anticipateing inflation

The book doesn't really make light of this but when someone gives out a loan inflation has to significantly determine that price.

When you give out a loan you not only charge interest to make money on lending money, but also to get the total value back on your investment.

I believe anything that is financed has its price determined by inflation after costs are covered.

Anticipated inflation:


http://www.clevelandfed.org/research/data/inflation_expectations/index.cfm

Ad agencies

Many companies use ad agencies. Along with the company's own marketing department they help companies prepare and use advertising in order to have effective promotion. This is interesting because why would a company with its own marketing department risk valuable sales information and other valuable competitive information to an Ad agency that could be used by any other business. I believe its because these Ad agencies not only specialize in advertisements but, they have information the company doesn't. Through their effort they have compiled enormous databases on customers along with other information the company doesn't have.

Here is a list of big ad agencies
http://www.adbrands.net/us/top_us_advertising_agencies.htm

Product Placement with no Negotiation

Product placement seems to be the wave of the future when it comes to advertising on T.V. Many of these placements are done through negotiation and payment for the advertisement. This got me thinking though part of this placement is due to T.V. shows needing props. Some realistic props are not made by many companies.

Like an apple laptop, there are not very many companies that make laptops therefore apple could be in a position to not have to pay for this. Just by putting a big old apple logo on all their laptops natural non negotiated product placement could happen with no effort by the company. If the show is nationally broadcast this could be a huge expense less promotion. Talk about a deal.This more importantly infers a good strong obvious brand with that one could get this free promotion with no effort.

Here is an example of what I'm writing about

http://money.howstuffworks.com/product-placement.htm