There is an almighty shift in how people use the Internet occurring right now. With a plethora of widgets, Apps and customizable homepages; the Internet (and the information we want) is coming to us, not the other way around. It would be foolhardy to not appreciate the implications of such a seismic shift for the Search Engines, but that will come at a later date.
This post discusses the effects this change will have on how businesses: market, price and sell their products. It is important to note from the offset the state of the online market – online ad spend has surpassed TV in the UK this year, the iPhone App store has racked up over 2 billion downloads and businesses are now releasing their first ever digital download only products – online media and information is big business.
Are discounts good?
One of the foremost reasons these factors are affecting prices is the changes to the product supply chain. Take for example the PSPGo from Sony: this portable video game / music / photo / video player is the first of its kind to be entirely dependent upon online offerings. The games played on the system are only available for access from the online ‘Playstation Store’ and as such; the product cannot be supplemented with traditional, tangible offerings. With games being released in both physical format (for the benefit of legacy iterations of the PSP) and as a digital download, one would expect the prices for the digital version to be smaller – no delivery or shipping fees, no middleman slice, etc. Although this is not the case, the pricing itself is not the point here, the point is whether retailers would be diminishing the perceived value in their product by offering it at the lower price point?
Extreme media intake
The same is apparent when considering the substantial variety of Apps available to the iPhone via its ‘App Store’. Within this digital marketplace; the user can find products and brands from all industries, whether they are familiar desktop names or products you use in day to day life, there are undoubtedly names you will recognise. The interesting thing about these apps is their price point, more specifically how much lower they are than their physical counterparts. It is easy to argue that the TomTom iPhone App differs wildly from the physical offering, but the point here is that TomTom is associating its brand with this lower price point (£59.99), and with it: connotations about quality and brand values.
Or at least, so a traditional marketer would have you believe. In the modern day world where broadband usage is increasing exponentially, where people are becoming more “tech savvy” and where users are accustomed to digital media – does this become not so much an act of devaluation; but something which is necessary? Are consumers now so aware of the benefits of digital media that they have come to demand lower prices when purchasing it? Does adhearing to this expectation still apply your brand to the marketing rules of old?
I for one think that the tangible effect (lack thereof) of digital media will create an expectation of lower prices, but I also think that this demand causes issues for those producing the ‘media readers’… Until everyone has internet access and is not only able but comfortable with downloading media online, creating digital-download-only products is cutting off a massive target audience. Consumer attitude towards media is changing, I think it may be time for marketing thesis to do the same.