Price skimming is a term that Mike used earlier in the class to talk about a company’s pricing strategy when a new product first comes into the market. The definition of the term price skimming means when a new product comes out the company sets the price of the product high to “skim” the market, and then they lower the price as the popularity of the product goes down. This made me think of phone companies such as apple or Samsung who come out with a popular new smartphone. When the smartphone is first released there is a lot of hype about it and the phone companies can start the price very high. After about a month or two a different company has come out with a better, faster, and higher definition phone then the price of the first one will go down. Price skimming is very closely related to the product life cycle. When the product is first being introduced the price is high as the item hits the maturity stage the price starts to decrease. Once it is in the decline stage the price is significantly lowered. Price skimming is really just a way to maximize profits by using supply and demand projections.
I know that mike often stresses the term differentiation with us marketing students, so I wanted to learn more about creative ways companies have differentiated themselves from the competition. I looked up on google some of the ways that popular companies differentiated themselves from their competition and found a great article. This article tell us about how companies such as Walmart differentiated themselves by their odd cent pricing strategy and how Nike differentiated themselves by only selling athletic apparel. A company that comes to mind when I think about differentiating themselves is a company called Hu Hot up in Green Bay, WI. Instead of a sit down Chinese restaurant or a Chinese buffet they created a restaurant where you take whatever frozen ingredients you want, including choice of noodles, meat, veggies, and sauce, and the chefs cook your stir fry right in front of you. This is unique and has attracted a large amount of loyal customers including me.
One thing that really interested my was when Paul brought up Google Analytics in class. I currently own my own eBay business and plan to possibly expand and turn it into my own site online. Currently eBay does do something where I can view traffic reports to my website and I can figure out how many people are viewing my items and which items they are viewing. I would like to learn more about Google Analytics because I would like to know more about my customers such as where they are viewing from and where they are buying from. Also I would like to know what types of items I am selling to each region. It would make it easier for me to figure out why one month my total revenue is $500.00 and the next month is close to $2000.00. I found a short video that explains the basics of Google Analytics and why you should use it.