Thursday, August 17, 2017

Product Price Drops on Amazon Often Cause Customer Disatisfaction

E-commerce has come to rule the marketing world and understanding how product price changes impact perceived customer value is helpful for strategic planning. A study of a popular e-book reading device found that dropping product pricing has a negative impact on customer perception (Lee, et. al 2016). Before adjusting price you might want to think of how consumers are going to react prior to making major adjustments.

The study found that star rating, review depth, positive & negative emotions are impacted by price decreases product reviews on popular products. When companies lowered their prices there was an immediate reaction to product reviews by customers. Two price drops showed concurrent drops in satisfaction even though the second one was more muted.

Why are product reviews important and why do companies not want to mess with them often? Product reviews changes your ranking in Amazon and can impact what products show up on the first page. It can also change the perception of potential customers who are reviewing these products and evaluating the perceived value. If reviews and star ratings are low there is likely to be fewer purchases.

It probably doesn't matter much if you are a small company selling something that doesn't have a large following. However, it will matter a lot when large companies that sell "hot" items change their prices.  Customers product reviews move downward and seem to be more negative in the process.

This doesn't mean that companies should not drop their price if an adjustment in optimal pricing is needed. If your not making sales then it is necessary to change the price to keep your product competitive among alternatives products. It does mean that price and perceived value are somewhat associated.

Some of these reviews likely come from customers who purchased the product at one price point and then found that it has been lowered. There may be a level of discontent of "overpaying" for the product. It is difficult to provide a review if you haven't actually paid for the product. You may consider providing coupons or discounts to those who recently purchased products to ensure they feel satisfied and less likely to write something negative.

Lee, et. al. (2016). Online consumer's reactions to price decreases: Amazon Kindle 2 Case. Internet Research 26 (4).

Tuesday, August 15, 2017

Early Morning Kickboxing and Muay Thai

The mornings are the times when people scramble to jump in the shower, put on their business clothing and drag their tired bodies to work. This is a natural part of working life in today's era. There are also those rare times when you wake up a few hours earlier than needed and head to the gym for some crack of dawn kickboxing and Muay Thai. Nothing says "motivation" more than going to bed early and rising before the sun has its chance to illuminate the landscape.

Coffee in hand I walk into a new gym in a state somewhere between sleeping and partially awake. Having never been at that particular gym before I didn't know what to expect. More importantly, I have only limited experience with Muay Thai and a little fearful that I was going to run into 25 year-olds who have been competing since they were 5 years of age.

Sounds like I'm going to get a beating in addition to a work out!

Once I caught a glimpse of the class I realized my fears were unfounded. While I was older than the average, I wasn't the "oldest" in the group, I was still within the range for some a good butt whooping workout. Its nice to know I'm don't have the most wrinkles there. Fear dissipates and I regain some courage to enter. No one noticed I was there and slipped in the back anonymous in the crowd!

The class was tough and demanding. Constant contact with the bags and work with partners practicing kicking and punching left little room for recovery. Combination punches, multiple types of kicks at different speeds and angles with plenty of movement around the floor. Sweat beaded on brows and dripped onto the floor mats.  A few times some negativity crept in such as  "OMG...I am not sure I am going to make it to the end!" but it disappeared after I caught my breath.

After the muscle burn, and feeling the rush of maximum cardio activity, a deep calm sets in. It brings with it a sense of satisfaction and living in the present. For a first class I realized I wasn't that bad, perhaps even a little on the good side when compared to my classmates. Ignoring the 3 or 4 hardcore Muay Thai competitive fighters that were present, I received a few "good jobs" from people walking out.

Lessons Learned:

-Pushing yourself leads to growth.
-Have confidence in the process of learning.
-Social support leads to greater motivation and effort
-Anything you want to do well must take an elevated position in your life. That includes fitness.
-Mornings are the best time to get the cardio out of the way.



Monday, August 14, 2017

Applying the 4 Ps of Marketing to Amazon and Ebay

EBay and Amazon are powerful online e-commerce sites that offer small businesses opportunities to reach out into bigger international markets. As much as 60% of all online sales originate from these two mammoth marketplaces and those business that are not online are most likely to flounder. Price, Product,  Promotion and  Place can be applied to these electronic realms.

As you work on creating your business model you will want to consider how these Ps apply to the online world. Evaluate your business to ensure you are working on each of these P's until you can find improvement. When all four are in the best possible place you have a viable business.

Price: Markespaces are highly competitive because people compare prices quickly. Many customers will instinctively pick the lower price 90% of the time but this isn't always the case. Balancing your price with quality and service to the optimal selling position is helpful.

Product: Because Amazon and Ebay have lots of sharks selling all types of things it can be difficult to find products to sell. Either sell something everyone wants or move into unique and niche products no one else offers.

Promotion: Promoting your product through sales, auctions, descriptions, pictures, and great titles can go a long way in converting people to purchasing your product. As your conversion rate goes up you will notice that accuracy in your information leads to higher customer satisfaction.

Place: Place refers to the place the product places on the marketspace site. If it has the "buy box" or it is ranked on the first page it has a great place. If it is ranked low one will need to improve on customer reviews, price, and overall sales volume.



Tuesday, July 25, 2017

Narrowing the Skills Gap For American Businesses

American jobs are partially filled by domestic hands as employers increasingly rely on immigrant labor and foreign operations to patch shortfalls and maintain  profit margins. The skills gap at U.S. businesses may become a hefty problem if not tackled prudently. Experts predict that by 2018 there will be an expected 46.8 million open jobs with 30 million of these jobs requiring post secondary education. The problem has become so pervasive there is a projected 3 million person deficit whereby 60% of employees won't have the necessary skills to function fully in those positions (Achieve, 2012).

Not having the proper skills limits the capacity of U.S. businesses to keep up with production and technological advancement. Markets that have excess capital of labor are more appealing for investment and growth. Importing these skills can help fill this gap but doesn't solve the problem developing homegrown skills through more robust higher education and training programs.

A study of available literature argues that three things must happen to improve the skills issue  (Elkins, Bell & Hartgrove, 2016):

-Easy access to education and training.

-Investments in science and technology.

-Spur investments in American industries.

A larger group of students must reach into the halls of higher education and this will be difficult under our current system. Online education and certificates will help keep working professionals in the labor market as new skills are developed. Students without the capital to stay in dorms or enter elitist schools can find affordable education opportunities that make a dent in this gap.

Further investments in science and technology requires a solid commitment to creating a business environment through thoughtful legislation and tax reform as well as better partnerships between universities and industry. As intellectual capital grows the opportunities for new start-ups and industry cluster development also rises.

Broad investments into national growth are based on the international competitiveness of our cities and hubs.  Large fund money comes through long-term stability of the market and the projected value of companies within a larger network of competitive companies that indicate the market will need those products and services in the future. Macro-economic solutions to cluster functioning encourages attraction of profit seeking ventures.

The development of the labor force relies heavily on national policies. Industry and labor grow together and separating them is acceptance of a limited perspective. Workforce development is only possible when jobs are available and jobs are only available when companies invest in markets with educated employees willing to meet the challenges of modern society. They must rise together in a way that leap frog over each other. Filling serious educational gaps moves beyond political arguments and into the actual activities that raise brighter minds for better tomorrows.

Achieve, Inc. (2012, September). The future of the U.S. workforce: Middle skills jobs and the growing impor- tance of postsecondary education, 1(28). Retrieved from: http://www.achieve.org/files/MiddleSkillsJobs.pdf \

Elkins, S. et. al. (2016). Industry cluster pathways: a focused approach to regional workforce development. SAM Advanced Management Journal, 81 (1).



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