The Price of Technology

What got me thinking about the price of technology was a coworker who bought her son an mp3 player from Walmart for $20. Two months later, she finally opened the box and began using it herself. This tiny little device that stores music and pictures, which I recall being all the rage not that long ago, can now be bought for next to nothing. A quick search on the Internet prices mp3 players anywhere between $18 and $300.

Technology evolves very fast. It is rare to see the economic life of a technology—the period of greatest profitability and of greatest value to consumers—exceeding 10 years. Think of the quick evolution of the television set within these past couple of years. It used to be a big clunky thing. Now it can be mounted on a wall like a picture frame, or it’s so large that it has the grandest presence in a room than ever before. The back-and-white television? What happened to that? I remember being given one several years back when my colour television had broken. There was nothing wrong with it. It just wasn’t colour. When I finally bought a new colour television, I enjoyed the added luxury of knowing the shade of an actor’s sweater and the hue of the leaves on the trees in the background.

Technology becomes obsolete due to market competition. There are so many companies out there today that watch what their competitors are doing, and either have the capability to improve and come out with their own versions, or simply copy what is available and offer it at a cheaper price. However, when you choose the cheaper price, you forgo the ‘extras’ which make a device exciting.

Higher prices on technological goods often last for a select period of time, and only as long as the technology is considered new with better computing capability; so the story of the mp3 player and the black-and-white television set. Just this morning the news was reporting that soon enough we will be able to plug our cellphones into our television sets, so we can see the images and screens larger. They’ve been saying this about the Internet, as well. These are the innovative luxuries that will cost much as soon as they become readily available.

But, do you really have to be the early adopter? If you wait awhile, a year or two or maybe three, something else newer, faster, sleeker, and better will come out, making prices come down. You can have the technology. It’s becoming common.

Making Connections

It is often noted that people like to buy from, and do business with, people they ‘like.’ It doesn’t necessarily have to be the most competent or knowledgeable (although these attributes would help) that have people coming back to them over-and-over again. Getting to know people, connecting with them, is important in life, in general—an emotional connection, whether we like to call it that or not.

On one episode of the television show Mad Men, the presenter, Don, believes using emotion is the key to selling Kodak’s Carousel. What’s that? A slide projector, believe it or not. It’s a machine intended to be used in meetings and classrooms to make ideas clearer to rooms full of people with graphics lit onto walls and screens. This device can also be used in homes to show friends and family photos of trips abroad and high school graduations. Don uses the Carousel and his love of his family to connect with his audience of Kodak executives. It’s a great example of how a technology, the Carousel, that has no emotion itself can evoke emotion. Don, the innovative thinker and genius. The clip can be seen at http://www.youtube.com/watch?v=R2bLNkCqpuY.

Why the Price of Tea in China is Important to Me

“What does that have to do with the price of tea in China?” is something I would need to know if I was looking to export my tea to that part of the world. It would also prove valuable for me to know if I was importing tea to North America, from China. If I knew what they charged there, how much they valued, in monetary terms, their Chinese tea, then it would give me an idea of what the Chinese population here would consider reasonable, or anyone else that loves Chinese teas.

All marketers, all businesses, should have an idea of what their competitors charge their clients for similar products. It will give you insight, first of all, of what your competitors are doing and what the marketplace will tolerate. If you’re in the situation where you have no competitors, then you’re going to have to look at comparable products or services to gauge what your offering should be priced at. For example, if I wanted to open a tea shop and there were no tea shops in my city, then I could look at what tea shops in other cities typically charge for Chinese tea. It would be beneficial to see what all the coffee shops in my city charge, as well – locally, they’d be my direct competitors. I’d also like to know what successful tea outlets charge even if they are not local – probably not too far away, within the same province and country would do. I’d also want to make sure that the price I charge offsets my costs of importing the Chinese tea, rent, and other expenses.

I’d have to look at other factors, too. If I’m going to start selling Chinese tea, I want to make sure I’d be successful – else, why give up my current livelihood? So, will people in my city be interested in buying Chinese tea? If yes, then what type of person? Where does this person work, and what areas does this person travel through? So that I know that I am where this person is. This person will pass and peak into my Chinese tea selling business.

And for the record, tea only accounts for 1% of China’s exports. Tea in China is in high demand by its citizens and its price depends greatly on how much is produced. According to www.xe.com, CAD$1 = ~5.57 China yuan renminbi, USD$ 1 = ~6.83 China yuan renminbi. Pu’er tea, distinguished for its red colour and its medicinal qualities, has jumped in monetary value in recent years. Many are collecting Pu’er tea since it gets better with age, it’s cheaper than investing in real estate, and when you sell it you do not have to pay taxes. In 2005, 500g of 64 year old Pu’er tea sold at auction for 1 000 000 yuan; that’s CAN$179 533. 21, or USD$146 412.88! Wow! One cake of 2 year old Ye Sheng Gucha tea, in 2007, cost 260 yuan, or CAD$46.68. A thirteen year old Ye Sheng Gucha tea cost 1 800 yuan, or CAD$323.16. So, it’s expensive.

Marketing During the Recession

As we all hear over-and-over again, that the world is in the midst of a recession, or an economic slowdown, I have been wondering if cutting back in the marketing division is really necessary. It is generally accepted that this is one of the first, if not the first, areas to see cutbacks during times of trouble. However, the marketing division is not just a cost centre. Marketing helps organizations generate revenue by making the brand / corporate name known. If everyone else is cutting back on their promotions, why should you? This is the time to let the public know that you are still there and thriving, and ready to serve them.

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