Advanced Models in High-Tech Marketing Day 5- Lock_in Pricing and Bundling modelos avançados em marketing de alta tecnologia.

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Presentation transcript:

Advanced Models in High-Tech Marketing Day 5- Lock_in Pricing and Bundling modelos avançados em marketing de alta tecnologia

Course Objectives Review of advanced models in high-tech marketing Implementation of these models by the participants in a unique project Implementação Único Projeto Copyrights reserved to Ronen Arbel 20122

Course Rational Innovation Diffusion of Innovation Positioning/ Branding Revenues Copyrights reserved to Ronen Arbel 20123

Course Rational inovação difusão da inovação Posicionamento/ Gestão de Marcas receita Copyrights reserved to Ronen Arbel 20124

Day 5 Objectives Lock_In Pricing and Bundling Summary Case Study Copyrights reserved to Ronen Arbel 20125

Customer Satisfaction – Is it enough? In many cases, higher customer satisfaction does not lead to higher customer loyalty The opposite is also true – customer loyalty can be retained with low customer satisfaction – For Example- MicroSoft Copyrights reserved to Ronen Arbel 20126

Limitations of Customer Satisfaction Why, then, do even highly satisfied consumers defect? Why is CS a bad predictor of a buyer’s intention to allocate business to a certain supplier? Why do so many customer-relationship management (CRM) projects fail? Copyrights reserved to Ronen Arbel 20127

What is Lock in? a customer dependent on vendor for products and services unable to use another vendor without substantial switching costs Copyrights reserved to Ronen Arbel 20128

Customer Loyalty Customer loyalty in industries with significant switching costs is much higher. In extreme cases, customers become the economic hostage of original brand selection. Copyrights reserved to Ronen Arbel 20129

Examples of Lock-in Copyrights reserved to Ronen Arbel SatisfactionLock-inLoyaltyExample High Gmail LowHigh Microsoft HighLowMedCell Phones

What is the problem? If product elements relevant to customer satisfaction can easily be copied by competitors, their long- term competitive advantage is zero. Copyrights reserved to Ronen Arbel

Example - Hotels 50% of Hilton’s revenues are from 3% of their customers Copyrights reserved to Ronen Arbel

Example - Airlines Copyrights reserved to Ronen Arbel What happens if you switch to another airline?

Example - HP Copyrights reserved to Ronen Arbel What happens if we switch Printer?

Why Are we Locked In? Copyrights reserved to Ronen Arbel

Why Are we locked-in to Gmail? Copyrights reserved to Ronen Arbel

Pricing

Pricing Strategy First question – What are you selling ?  A product ? The Printer  A consumable – the ink  A service – printed material Second Question – From which of the above will you gain the most profits?

Price of Printer vs. Ink Copyrights reserved to Ronen Arbel

Price of Ink Copyrights reserved to Ronen Arbel

Value Based Pricing Copyrights reserved to Ronen Arbel

Pricing Strategies Cost + Premium pricing Demand-based pricing Price Discrimination Copyrights reserved to Ronen Arbel

Price vs. Value/Quality Copyrights reserved to Ronen Arbel

Selling different products in a single package – Content Subscriptions to cable TV, to magazines CDs (bundle of songs) Software: ‘office suite’ – Infrastructure Computer systems Audio equipment (mixed bundling) Photocopier (machine + maintenance) Introduction Bundling - Introduction

CheckPoint Case Study Copyrights reserved to Ronen Arbel

CheckPoint Mission Copyrights reserved to Ronen Arbel worldwide leader in securing the Internet.

CheckPoint Blue Ocean Copyrights reserved to Ronen Arbel Internet very new at 1993 Built the first firewall

CheckPoint Global Brain Copyrights reserved to Ronen Arbel

CheckPoint Innovator’s Dilemma Copyrights reserved to Ronen Arbel

CheckPoint Early Adopters Copyrights reserved to Ronen Arbel

CheckPoint Chasm Copyrights reserved to Ronen Arbel

Mainstream Adopters - SMBs Copyrights reserved to Ronen Arbel

CheckPoint Positioning Copyrights reserved to Ronen Arbel worldwide leader in securing the Internet

CheckPoint Branding Copyrights reserved to Ronen Arbel

CheckPoint Network Effect Copyrights reserved to Ronen Arbel Has achieved a critical mass of users : – 100% of Fortune 100 companies – 98% of Fortune 500 companies Pre-Critical mass -

CheckPoint Lock-In Copyrights reserved to Ronen Arbel Exit Barriers for checkpoint customers

Checkpoint – Pricing and Bundling Copyrights reserved to Ronen Arbel