Aaron Bae (Seongyun Bae)

Promotion strategy for Logitech’ s Triple Fi 10 Pro earphones

Response to: http://reviews.cnet.com/headphones/ultimate-ears-triple-fi/4505-7877_7-32492509.html?tag=mncol;lst;1

After reading CNet’s review about Logitech’s Triple Fi 10 Pro earphones, I figured it used a different promotion strategy than typical low-priced earphone producers do. Logitech sells one of the top quality earphones.

Its high quality product comes with an extremely higher price than typical on-shelf earphones in electronics stores, so it targets a segment of people who are into sound quality. When it comes to promoting, instead of advertising to attract the mass, the company tends to heavily rely on public relations because the company knows mass advertising would generate more cost than profit since not everyone is targeted, but a small segment. Logitech provides web pages where users can write reviews about the product. For example, users may read or write reviews on its own website, or amazon.com page making people with interest in earphones demand it. (Although Amazon is not what Logitech provided, the selling page was created by its distributor) Therefore, the company uses pull strategy making people demand it after reading the reviews, rather than using push strategy like cheap earphone producers do.

Logitech also uses sales promotion just like on Black Friday last week. I also believe it uses price skimming to extract the consumer surplus of the people who highly demand. I think so because its initial price was close to $500 in the first year, and it slowly dropped.

Every Black Friday, Logitech does a sales promotion. This year, its original price of $399 dropped to $90.

Positing itself differently than typical earphones, I believe the company’s reputation for performance earphones will last for a while.

This is a response to Claudia Troncoso’s 3^rd post which was a response to the following URL.

What everybody ought to know about free offers

Claudia agreed that companies should make a distinction between giving a real free good or service and giving a promotion, expecting something in return. I also agree with her as many companies try to draw people’s attention to their products. This happens everywhere around us. In UBC, I received a free 10-day gym use coupon by providing a promoter with my name and my phone number. I went to the gym and realized I needed to pay money for something. So it wasn’t exactly free.

This deception affects consumer behaviour afterwards. Those who have experienced this will learn that gym free use coupons are not free. Therefore, they will be irresponsive to promotions by fitness clubs. In the long run as many companies do not differentiate the promotion and free service, it leads consumers to build attitude that most promotions are not exactly free. So promotion events will take less effect, wasting companies marketing costs and changing society’s perception on promotions. Free is not “Do something for me.” Free is free. If companies don’t intend to spread goodwill, they should call it an offer.

How has Apple been so successful for the last 4 years?
– It is all about marketing.

First iPhone in 2007

Apple has successfully penetrated into the smartphone industry in 2007. Its relative share in the industry still remains somewhat stable.

Today, I explain why it has been so successful for the last 4 years.

There was a number of smartphones already in the market before the first iPhone came out, but their market share in the mobile industry was significantly low. However, Apple successfully stroked the industry by knowing what customers wanted at that time. Apple knew what they wanted was not just touch screen phones with the Internet. They knew another revolution like GUI was in need to make phones easier to use. With the icons in the screen that directly took the users into the functions they wanted to use, Apple created a simple and intuitive device.
Their strategies also made it successful.
They focused on the product concept to have quality devices, yet knew about marketing myopia so did not go too far away from the demand. They also built strong customer relationships by encouraging two-way conversations from Apple stores and on the Internet. Apple regularly issued firmware with the functions in constant demand in turn.
Market targeting is another factor. They initially targeted young male consumers with income and some interest in the technology. As you can see from the picture below, most people waiting in line were young male.

June 29, 2007

Using the Boston consulting group approach, the iPhone will soon be a cash cow or dog. Their relative market share has been gone down. For one year, their share went down by 8% while Android’s market share doubled. iOS is now only occupying 20% of the OS while Android is occupying near 50%.
The smartphone market growth rate is also not growing as fast as before. It seems the only two dominant OS will rule for a while.

When considering microeconomics, another strong competitor, Microsoft will soon release Windows 8 incorporating tablets, desktops, and phones altogether. The Apple’s market share will continually go down.

Windows 7 Phone vs. iPhone

Soon to be released Windows 8 tablet

Sources from:

http://www.slashgear.com/comscore-android-nears-44-of-us-smartphone-market-share-05185688/
http://www.theinquirer.net/inquirer/news/2106625/android-market-share-doubles-apple-ios-falls-cent

Aaron Bae (Seongyun Bae)

COMM 296 – 104