stories filed under: "marketing"
Online Gaming Store Lowers Prices 75%, Sees Sales Shoot Up 5500%
from the price-elasticity dept
We were just talking about how some in the recording industry are realizing that raising prices on downloadable songs may have been a mistake (just as the book publishing world is pushing to raise ebook prices -- despite a fair bit of evidence that people actually are expecting prices to go in the other direction). It's as if they don't understand price elasticity and how you can quite often maximize revenue by lowering price.In the video game world, at least, they seem more open to this concept. Last year we wrote about Valve reporting on some numbers that showed the more they reduced the price, the greater the money they brought in. In the case of reducing the price by 75%, Valve found sales increased 1470%. Not bad! But apparently an online video gaming store in Sweden has them beat.
Rasmus Larsson points us to a report from an online gaming store that also reduced prices by 75% and saw sales increase by an astounding 5500% (Google translation from the original). A similar test, with a price decrease of 50% saw sales increase 533%. Interestingly, after each price decrease, the company put the price back up again and saw a (slight) sales increase at the higher price too. As the article notes "the price is marketing."
Filed Under: digital goods, marketing, price, price elasticity, video games
Retail Giant Tesco Gets Into The Movie Business
from the alternative-means dept
Even as the movie business has had yet another record breaking year at the box office, we still hear claims from Hollywood that online downloading of unauthorized movies is going to kill the movie business. And yet, where there's demand, new business models will be created. ethorad points us to the news that UK retail giant Tesco is getting into the business of producing movies itself based on the books of some very famous authors. The movies will be direct-to-DVD and direct-to-the-internet, but the idea is for Tesco to use these movies to generate more traffic to their stores (both online and off). In fact, if you look at the retail business, music and movies have long been used as a loss leader of sorts, to drive traffic to get them to buy other, much higher margin, goods. This is really an extension of that, but all the way to the point of helping to fund the production of the movie itself. Also, while it will have a window of exclusivity at the beginning, it sounds like Tesco is quite open to other stores selling the movie as well. Either way, it's interesting to see other third parties recognize that they benefit from having movies made, and thus are willing to partially fund the production of those movies.Filed Under: funding, loss leader, marketing, movies, promotion
Companies: tesco
Publishers Beginning To Recognize The Value Of Free... Even As They Fight $10 eBooks
from the different-worlds dept
We've seen how various book publishers have freaked out about the growing popularity of ebooks, often with a price capped at $10 -- arguing that it's cannibalizing the higher margins found on hardcover books. And yet, at the same time, some of those very same publishers are perfectly happy to offer up free ebooks as promotional items. While some publishers are complaining that this is "devaluing" ebooks, others are recognizing that free can be quite useful in helping an author get past the obscurity barrier. We've already seen how many "top selling" Kindle books are actually free, and it's good to see publishers looking to take advantage of that, even if they haven't quite figured out that similar economic logic can apply to cheap ebooks as well. However, given the success of free ebooks, it seems likely that those publishers who are fighting against the tide will eventually come around to recognize the benefits of such things.Filed Under: ebooks, free, marketing, publishers
The Value Of Free As Analyzed By The Pizza Industry
from the is-there-a-pizzster? dept
When discussing "free" and its use as a promotional marketing tool, we often point to the fact that it's hardly a new concept at all -- and the idea of "buy one, get one free" or "free coupons" has been used successfully in the restaurant business for ages. Yet, it appears that some in the food business are going through the same debates that we find ourselves in around here concerning the use of "free" within a business model for the sake of promotion. I would imagine this has become an even bigger issue as many restaurants and restaurant chains experimented this year with big time "free" promotions.A few weeks back, reader Josh sent in this analysis from someone in the pizza industry about why "free" makes a lot of sense as a piece of a larger marketing strategy. What struck me is how similar the discussion is to the discussions we have here. There are people who complain that giving away free food "devalues" the food. You have people complaining that the "cost" of free food is too high. But, in the end, the guy makes a good case for why free is a great system, for bringing in new customers, who can turn into loyal paying customers:
Many times I hear, "Giving away free food diminishes the value of my brand." My response is usually laughter, followed by a question: "Are you kidding me?" The goal with free food is to drive qualified prospective customers into your establishment to try your food, service and experience.Of course, the economics with food is quite a bit different than with content. With food, each "free sample" has a direct cost in that the same items cannot be sold. With content, the argument in favor of using "free" is even stronger, because you are just giving away copies -- and each copy is free to make and distribute, even if the original copy cost money.
Facebook Requires McAfee Scan If There's A Security Breach? Is This Security Or A Marketing Program?
from the marketing-as-security?-security-as-marketing dept
sinsi was the first of a few to send in the news that Facebook has new rules if your account is suspended due to a security breach. You will now be required to use McAfee's security software to scan your computer. Have perfectly good security software from Symantec? Too bad. Use Linux? Not sure what you do. While McAfee is offering a free tool for scanning, it's only free for six months and then you have to pay -- meaning that this is really an upsell plan. Facebook claims it chose McAfee after a "competitive review process," but that makes no sense. Why not offer up a list of ways that you can prove your computer is safe that is vendor neutral?Filed Under: marketing, security, social networks
Companies: facebook, mcafee
Folks Can Digg Shoes For Needy Kids
from the looooots-of-shoes dept
With an offer that reminds me of the OLPC "give 1, get 1" promotion (but hopefully without the delivery complaints), Digg is selling a Digg-branded shoe, made by TOMS Shoes. For those who haven't seen its commercials, TOMS Shoes has the catchy promise (called One for One) that for every pair of shoes it sells, it gives away a pair of new shoes to needy kids in developing countries.This bit of marketing is brilliant because it ties together a nice "reason to buy" story with a physical good (the shoes), and the whole story promotes both Digg and TOMS Shoes. Eventually, I assume Digg and TOMS could also easily create a Threadless-like store for more custom shoes (instead of T-shirt designs). The current shoe design was created by a Digg employee, but it seems possible that Digg users could submit shoe designs of their own. And apparently, TOMS shoes sells T-shirts, too, so Digg users may get to Digg/Bury some T-Shirt designs someday as well.
Filed Under: branding, marketing, reason to buy, shoes
Companies: digg, toms
Musicians Are Never Just About The Music
from the welcome-to-the-modern-world dept
Recently, I wrote about how musicians need both good music and marketing to be successful. That was in response to Bob Lefsetz' recent complaints that too many musicians with neat business models these days seem too focused on the marketing side, rather than promoting the music. But I think it's unfair to play down the importance of the marketing side. While not specifically jumping into that discussion, Hypebot's Bruce Houghton is making a very similar point by debunking the myth that there was some era when musicians could just focus on being musicians:I'm sorry if this comes as a surprise, but it has never been enough to just make great music. Every generation of musicians has had to face their own challenges which forced them to go beyond creation and recording.
Frank Sinatra made movies to reach a bigger fan base. Elvis's hips and haircut were as much a part of his success as his recordings were. David Bowie learned that image and imagery could propel him to greater heights. After Saturday Night Fever, dance steps helped propel many live shows and for a time MTV made being visual an important component of success.
Whether it's getting in a van and giving an endless string of memorable performances or sitting on the phone for hours talking to journalists, there have always been skills beyond just making music that, if not required, certainly made success more likely
50 Cent: Piracy Is A Part Of The Marketing
from the they-end-up-at-the-concert dept
Famed rapper 50 Cent (Curtis Jackson) was apparently on CNBC recently talking about his "business acumen." I have to admit that having three different people all trying to interview him at once is rather annoying -- as they almost never let him complete a thought. However, when they ask him about piracy, and whether or not it makes him angry (around 2 minutes), he responds that: he sees it as a part of the marketing of a musician, because "the people who didn't purchase the material, they end up at the concert." He says that people can fall in love with the music either way, and then they'll go to concerts. He notes that you can't stop piracy either way, so why try to fight it? He also talks about other business opportunities for musicians.Filed Under: 50 cent, curtis jackson, marketing, music industry, piracy
Music And Marketing -- You Need Them Both
from the it's-not-just-one dept
A couple people have sent over Bob Lefsetz' recent post, where he bashes some of the "extreme marketing" efforts from musicians lately. In fact, he picks on quite a few of the examples that we've set out as good examples, including Josh Freese, Jill Sobule and Moldover -- complaining that these are all gimmicks that outshine the music. He asks how many people who have heard about these gimmicks actually heard the music from these artists.I think he's both right and wrong on this. First, you have to say "compared to what." If Freese, Sobule and Moldover had just come out with an album in the traditional way, how many of the same group of people would likely have heard the album? I'd say a lot fewer. I doubt I would have heard any of them, and now I'm quite familiar with the music of all three.
But... his larger point is definitely dead on. At the core of all of this, it is the music that is key. But putting out good music and being a good marketer are not mutually exclusive. If you do something cool -- something fun or valuable or neat beyond just the music -- it's not going to matter as much if the music itself isn't good. This is why, I have to admit, the one area where I think all three of these artists could have done a better job is actually making the music itself free. All three offered really compelling reasons to buy, but they still hid away the actual music. Why not free up the MP3s, continue the cool "reasons to buy" and get the best of both worlds. Then you get everything: you get people listening to the music and feeling a connection there. You get people paying attention for the "marketing" part, and you still make money thanks to the "reasons to buy."
But that doesn't mean that doing a smart marketing promotion is a bad thing. It just needs to tie in well with the music. The existing "true fans" will already want to hear the music, but if part of the goal is to attract new fans, you have to go beyond just the marketing to give them more access to the core music -- and focus on selling them on real reasons to buy something above and beyond the content.
Filed Under: jill sobule, josh freese, marketing, moldover, music
