Real-Time Updates

Business in Action, 4th Edition
with Real-Time Updates
by Bovèe and Thill

Chapter 10

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An important part of the Apple’s iPhone pricing strategy has always been a tight control over the retail handset price. Wireless carriers were not allowed to subsidize the iPhone in order keep the perceived value of the product at a high level. This strategy may have played well in the U.S., but it backfired in Europe where customers are used to getting the latest and even most expensive smartphones at heavily subsidized prices from their carriers.

A media report now suggests Apple may adjust its pricing strategy in North America, enabling AT&T to subsidize the 3G iPhone by as much as $200 – and bringing itself a bit closer to that 10-million-units-per-year goal.
 

Shoppers are discovering an upside to the down economy. They are getting price breaks by reviving an age-old retail strategy: haggling.

A bargaining culture once confined largely to car showrooms and jewelry stores is taking root in major stores like Best Buy, Circuit City and Home Depot, as well as mom-and-pop operations.

Earlier today, one of my blogging brethren Don Reisinger laid into eBay, dismissing it as "no more than an outdated, bloated company that lost its way years ago.

Once a Internet company gets a rap for being "uncool" you know the corporate marketing team has taken its eye off the ball. But in this Web 2.0-to-Web 2.5 world of ours, the temptation is to shoot first–and then shoot again and again without asking whether you’re even aiming at the right target.

So it is that the piece finishes with the suggestive admonishment that:

 

 

 

Lisa Pierce sets her company’s prices using a technique best described as advanced back-of-the-envelope. The founder of eight-employee Alpha & Omega Delivery, a courier service in Springfield, Ill., simply adds up her costs and estimates how much she needs to charge to cover that amount.

But her $500,000 company has seen the edge of bankruptcy in five of its eight years, and Pierce’s pricing strategy—or lack thereof—isn’t helping. "That’s gonna change," she says.

School’s back in session and that means good times for George Benedict. No, Benedict isn’t president of a hard-partying fraternity; he’s a fourth-generation flower store owner in Salisbury, Md.

You don’t need an MBA to start a business, but you do need to get a few things right if you want to succeed. Whether you’re opening a restaurant, starting a tech venture, or producing a Hollywood film, the fundamentals are the same. You need a product that meets market needs.

Not so long ago, no conversation about innovation would be complete without the story of 3M inventor Art Fry’s eureka moment that led to the Post-it Note. Today, that tale, which verges on cliche, has been almost universally replaced by the story of the iPod, Apple’s omnipresent icon of design.

It should come as little surprise, then, that Apple tops the BusinessWeek-Boston Consulting Group’s list of the World’s Most Innovative Companies for the third year in a row. That sort of staying power speaks volumes about the sort of innovation that matters today. Unlike the Post-it Note, which proves the value of lone inventors, the iPod epitomizes today’s innovation sensibilities.