Month: November 2011

I just read a blog criticizing the the pricing strategy that Motorola used on a new product, Xoom, which is positioned as an ipad competitor. (Motorola Will Not Xoom past Apple and iPad  http://markrburton.wordpress.com/2011/02/14/motorola-will-not-xoom-past-apple-and-ipad/).

Motorola set the price for Xoom at a point of around $800,which was exactly around the same price the Apple used for its first generation ipad.  However, Motorola added few more advanced features which can enable them to outperform ipad to some extend.  However, this blogger think this pricing strategy although seems to make sense as Motorola offers more at the same price as its competitor, it failed to predict its competitors move in the recent future, which will have a huge impact on Xoom. The critique indicates that Motorola would definitely drop its price due to any significant changes on iPad later on, thus they shouldn’t be just reacting to it competitor’s change. What Motorola should do is to anticipate it and adopt a more reasonable price on Xoom.

In my opinion,  I think the pricing strategy that Motorola used on its new product makes sense in some certain ways. For the pricing strategy on a new product, companies or manufacturers usually adopt two ways. one is called “market-skimming pricing” and another one is called ” market-penetrating pricing”. Obviously, for a high-end electronic product, the market-skimming  makes more sense which sets the price at a relatively high price in order to have enough space to cut it down in the near future. Meanwhile, high price at the beginning also generate more profit as there are still a fair amount of customers who are loyalty with Android system.

The current Xoom price is extremely low today which is around $300~$400 according to different versions. However, at least this pricing strategy sets a good base at the beginning and have being adjusting the price position catering to the market needs.

Today I read a blog from my classmate William Wajaya which describing a commercial show of Adidas and through which a brand concept was delivered https://blogs.ubc.ca/williamwijaya/2011/10/10/adidas-impossible-is-nothing/. Personally, I am not sport-type person and barely know anything about sports brand. However, the message at the end this commercial show, “impossible is nothing”, is quite well-know around the world and I have been deeply inspired by it.

The brand name, Adidas, along with its logo ” impossible is nothing”, always come to people’s mind at the same time and has become a integrity. As far as I am concerned, Adidas has built up a very strong brand concept for its customers and even to its potential customers. William commented on the lady in that commercial show, ” She doesn’t look like an athlete, but that doesn’t matter, because she has the spirit of one, and with that she becomes an athlete”, which encourages me a lot. The spirit matters the most, as long as you believe and have the dream, nothing is impossible. Adidas is more than simply a athletic products producer, it possess a distinctive personality that is “positive, brave, undefeated and confident” and through which it has owned a huge brand equity.

I have to say, Adidas customers are loyalty and they love not only the material products but also the value the Adi created for them. In this case, a lot of Adidas fans are willing to pay more for only the brand name. It reminds me of a question from our textbook, “what is the buyer really buying”? He is not only buying features, he is buying benefits, ideas and beliefs. Adidas’ personality is exactly what those customers are pursuing!

At the end, I just want to share another video of Adidas, the same spirit but more imaginative, creative and inspiring.