As a marketingologist with the Brand Autopsy Marketing Practice, I give companies “Second Opinions” about the business and marketing activities they are currently doing or considering doing.
i recently revisited an early 90's HBR article about different value disciplines companies use to create competitive advantage -- operational efficiency, product leadership, customer intimacy. if a company is focused on operational efficiency, as amazon does, it indeed works to lower prices -- but if a company is focused on product leadership or customer intimacy, raising prices seems a worthy goal -- no? -- denise lee yohn
Posted by: denise lee yohn | June 04, 2011 at 08:39 PM
Denise ... that Discipline of Market Leaders article (and book) is golden. I agree with ya. To focus on being great at product leadership means investing money into R&D and the higher the margin a company commands dictates how much they can invest in R&D.
Also, being great at customer intimacy means spending money to ensure customers are happy. Which means employees need to be trained and customer-advantageous policies need to be in place. All that takes money and higher margins provide that.
Being great at operational efficiency means streamlining processes to reduce expenses which always a company to thrive on lower margins like Wal-Mart.
BTW ... that Treacey and Wiersema book was the turning point in this marketer's life. It changed how I viewed business and ignited a passion for business that I never knew I had in me.
Posted by: john moore (from Brand Autopsy) | June 04, 2011 at 08:54 PM
Jeff really walks the walk. You can really see that with the recent dramatic price reduction for the Kindle. Amazon is focused on the long term at the consumers' benefit.
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Posted by: tony | June 09, 2011 at 02:33 AM