I think we marketing bloggers can get caught-up in the marketing buzz of the day. While we need to be interested in taking it to the next level, we also need to stay strong on the basics, albeit at the 600 level. So I’m going to put up a few posts this week to get us thinking about the basics and how to apply them strategically.
Here is good article to get us started, pointed at by Wired Head, about product tiering:
Tier Today, Gone Tomorrow: Navigating the aftermath of the customer revolution
The basic 101 lesson:
“Traditionally consumers’ tastes and behavior were somewhat layered, tiered. Those with disposable income spent it on products that matched their buying power and budgets Â?almost always.”
The strategic 600 lesson:
“Indeed those tiering mechanisms alone are no longer sufficient to influence the purchasing decision. If customers care, they are willing to pay; if not, they will choose the cheapest available product, bragging about the bargain they hunted at, say, eBay, or on the internet in general. Sales decisions have become extremely bi-polar as well: very emotional, impulsive or very rational.”
The article goes on to talk about tiering and the other marketing and product-development issues that connect to it. The article is really the lesson here, not my commentary, although I will tell you a story I was told early in my career:
Tiering turned upside-down:
A direct-marketing company came out with a line of high quality (and expensive) pots and pans. Their plan was to target the high-income tier that would align with quality/expensive goods, but they failed. Turns out that the most receptive prospects were working-poor immigrant families. Doesn’t make sense does it?
The rich didn’t care much about cooking and found pots weredisposableble item that counted more as a fashion accessory. The immigrants, however, cooked every day and saw the value in quality cookware.
To sum up, product tiering is a smart strategy, if you are smart about how the customer is tiering your type of products.