The mystic concept behind Price Erosion!!

It just can't get any better than this:

Prices do not erode! What erodes is a company’s ability to be more successful than their competitors at satisfying customers. So called price erosion doesn’t happen to individual companies, it happens to entire industries. When an industry experiences price erosion it is really an expression of the fact the players in the industry are achieving less and less diversification between themselves. When everyone offers what appear to be more or less the same products and services prices fall. Price erosion is only a symptom or evidence of the lack of innovation within an industry. Managers will sometimes justify lower revenue and weaker margins by proclaiming that they are victims of price erosion. You never hear them say prices are down to due their lack of ability to outpace their competitors!

Continuous improvement in value creation is hard. Lowering prices is easy! Most companies find themselves in situations where they are compelled to lower prices in order to maintain their customer base from time to time. Short-term profit margins can be maintained by reducing costs but long-term, the only way to earn more money is by creating more value for your customers. At some point in time you will reach a level of efficiency where cost reductions erode the value of the customer offer and only lead to further price reductions without additional margin. Many companies discover that although their margins are the same as a percentage they have declined drastically in real money.

Excerpted from Kelley Odell's Blog

Best Marketing Tools for High Technology

I would not have given "white papers" a chance, but Marketing Serpa sure does rank it among the top 5 marketing tools. Here's the list:

• 1. Free Trials -- Business software marketers ranked free trials extremely highly, with 54% calling trials very effective.
• 2. Webcast -- At 41% this was another favorite for software marketers, however technology services and related hardware firms also ranked webinars at 33% and 31% respectively.
• 3. White paper -- All business technology marketers rated white papers fairly evenly, giving white paper offers ratings ranging from 31-36% 'very effective.'
• 4. Blog -- 35% of software and ASP marketers rated their blog as very effective, as did 33% of technology services firms. However, just 19% of hardware companies felt that a corporate blog was effective. This may be because general business executives are more likely to read a blog, while IT staffers may not.
• 5. Podcast -- Last year the concept of a podcast was barely on the technology marketing map. By June 2006, 22% of software marketers who'd given a podcast called them 'very effective' lead generation tools. Perhaps IT professionals are more likely to be in an early adopter community that might listen to a podcas

Click here for the full summary in pdf

YouTube: will it be the next ebay for clips?

Hmmmmmmmmm. Don't think so if they don't watch out for copy right violations(Link to the story). YouTube was recently dragged into a copyright violation by Robert Tur, a freelance photographer who had his "30 seconds "of fame courtesy 1992 Los Angles riots. An interesting bit:

Tur's lawsuit shows the fine line that YouTube is walking as it attempts to build its business model. Tur is suing because his videos of the riot and other events were uploaded without his permission. Although lawyers agree that YouTube should be protected by copyright law as long as it responds to content owners' requests to take down their works, it entered uncharted territory when it recently began adding ads next to search results. The law prohibits a site from benefiting financially from infringement, but the company argues that it's protected since it doesn't sell ads against individual videos. Still, the courts haven't set clear boundaries. "There has to be some way to make money with advertising that doesn't deprive you of the safe harbor. But where that line is, no one really knows,"

Will YouTubes's argument hold? Don't know that but these chaps are sure treading on thin ice!

Marketing Lessons: new 4Ps

Came across a pretty intense marketing blurb!!
.........and it comes from former HBS professor