The cynicism in this story is hilarious, but the author also brings up a good point. Why don’t sellers just keep it simple and cut prices instead? Yes it’s true that people are initially attracted by the lower price, only not to collect the rebate because it is too much of a hassle. I must say that I have figured out a long time ago not to be persuaded by such offers. Experience has taught me that companies always make things too difficult for me. I would rather search for a place where I actually get the discount right away. But there still are a lot of people that can be tricked with this pricing strategy. This article explains that such pricing strategies are partly driven by what is called the ‘prospect theory’. This theory is based on the idea that: ‘People judge the loss of any given amount as more painful than they judge the gain of an equal amount as pleasurable’. The rebate is viewed as a reduction in a loss, but after the deal is done the rebate all of a sudden starts looking like a gain, and therefore less important. That is why so many people don’t bother to collect. Furthermore rebate pricing is a form of price discrimination. The people that are more sensitive to money will put up with the hassle, whereas the less price sensitive consumers will not. In this way the seller can take away some of the consumer surplus. So apart from the vengeful types that become so annoyed that they will do anything to collect the rebate and might never do business with the seller again, in general this pricing strategy works. Or might the number of negative impacts outweigh the benefits?
I read an article in Red Herring about how Cingular Wireless (AT&T) made an agreement with several banks to allow bank customers "to manage their accounts and pay bills electronically by using an application on their cell phone." The article states that this new feature is taking "a step toward the long-promised notion of phones replacing credit cards, checks, and cash." As I read this, I couldn't help but think about what the future will hold. It seems that many products we use today are already a combination of older products. In many instances, the key to innovation is not to create a new idea, but to simplify or combine other tasks into one simple step. We have seen how cell phones have already begun to take on more uses as they are now used for phones, music, videos, internet, email, cameras, games, and many other features. By adding these extra features, do you think that it is taking away from other products? For example, I can play the game Monopoly on my cell phone. Because of this, I currently have no desire to go out and buy the board game. In conclusion, it seems to me that products today are enabling consumers to accomplish many tasks with a simple device. Again, we could consider video game systems and DVD players. If this trend keeps on going, we will have no need for many of the products we use today. They will be combined with other products. However, there may always be competition to see who can come out with the best or the fastest device. It will be interesting to see what the future has in store for us.
is scheduled to expire in 2030. Actually royalties are not required for private renditions of the song, however public performances of the song are technically illegal unless royalties are paid to the owner of the copyright. Who knew when Marilyn Monroe sung her lustily rendition to then President Kennedy that she was actually in violation of a federally protected intellectual piece of property. The company holding the copyright was purchased by Warner Chappell in 1990 for $15 million dollars. (It is merely a rumor that Michael Jackson or Paul McCartney own the copyright.)Restaurants such as Applebee’s must pay royalties when they sing the Happy Birthday song to their customers. Perhaps that is why they have come up with their own rendition:
Happy Happy Birthday
From Applebee’s to you
We wish it was our birthday
So we could party to, HEY!
I just hope I don't have to pay royalties for typing "Happy Birthday" in the title of this blog.
I recently read an article in Business Week about a strategy that the CEO of J.C. Penney hopes will bring life to the slowly declining image of the department store. According to the article, J.C. Penney has had the image of being, “your parents store.” The CEO has introduced a trendier line of clothing in an effort to attract younger crowds that are more fashionable. The new line of clothing has already caused a slight increase in the companies’ profits. I think that CEO has made a good move in introducing a new line of clothing. I do not know that the increase in profits will be sustainable however. According to the article, Kohl’s is J.C. Penney largest competitor. In reaction to J.C. Penney’s new product line, Kohl’s has introduced its own trendy product line that is back by celebrity endorsement. Do you think J.C. Penney has a chance at reviving its image? Do you think they have made a good move? If not, what would you suggest that a company do to change its image?
Even though this research did not include any financial performance data it seems obvious that the bigger the organization the harder it is to achieve the employee attitudes that drive success.
Best Buy did not want to hit a plateau like most companies. The article stated that most large companies fail to grow with inflation because their employees fail to work as hard as before. They see their success and basically stop performing. This experiment has really worked for Best Buy. Since starting the experiment, the employees have become more productive and happier with their jobs. In return, Best Buy is not hitting a plateau, but are finding themselves more effecient. This is why they are the nation's leading electronic retailer. However, the question I find myself asking is "Will Best Buy's employees be able to continue to self motivate and how can Best Buy help them stay motivated?". Other companies have tried this before and failed.
Sony Playstation has held market dominance since they introduced their first playstation. When they launched the PS3, it seemed as if they didn't account for what the XBox had done with on-line interaction or what the struggling Nintendo was doing with their new interactive controller. They seemed to think that just because they always have had market dominance by having better graphics that they would continue to hold their market strength.
Nintendo was considered dead in the water after the Nintendo Game Cube failed. They responded by NOT trying to keep pace with Sony's graphics. It could have been the perfect response. The Nintendo spokesman may have stated it best when he said, "people want fun not graphics" (Electronic Gaming Monthly, March 08).
The Nintendo Wii has made twice as much as the PS3 in the past few months. Has Nintendo taken the right approach with their new game controller or is it just a novelty? Will we start seeing Nintendo Wiis resold on ebay in a year? Is Sony's focus on technology more profitable in the long run?
I think that the Skywalk is a great idea. It does change the look of the Canyon where it stands, but allows many people to see a part of the Grand Canyon that was almost impossible to see before. I think that this is a wonderful thing! It should, in my opinion, increase the demand of that tourist site. I think that providing something like this increase the demand by providing better sight-seeing possibilities is a very smart economic move. Also, I think that no matter what venture one chooses to take, there will always be people who will want to take issue with what is being done. Often times environmentalists are more concerned about providing negative externalities than with trying to see the benefits of what is being done. I feel that this is the case with the Skywalk. It will only enhance peoples experience at the Grand Canyon--and that is a great thing.
Click HERE to learn more about the Hualapai and the Skywalk.
The article talks about how new technology is giving companies more of a competitive advantage. Technology today allows us to run a business from home, or on the road. It allows companies to hire across the country and their employees will never have to go into the office. Laptops, mobile internet, and cell phones make all the difference. Technology is changing the business world, and for the most part it is doing alot of good. Companies are catching on and are drastically increasing their profits by becoming more efficient. This is a good thing, but I see that there can be alot of disadvantages too. Does new technology make running a business easier or harder and in what ways?