cabruen@athena.mit.edu (Charles Alan Bruen) (04/21/91)
Hello, I was just sitting here reading about the price of Excel going from $395 to $495 for the new release. Now I am not one to complain very much, I try to purchase all of the software I use, but not prices like this encourage software piracy. A clasic costs approximately 1000, so how many people can afford to pay 1/2 of the price of their compuetr for one software package. Solution: Software companies should lower prices, to increase their total sales. Just like government taxes. Increasing taxes does not always increase revenue. Just a thought -Charles Bruen Aero/Astro MIT cabruen@athena.mit.edu
chai@hawk.cs.ukans.edu (Ian Chai) (04/22/91)
>Solution: Software companies should lower prices, to increase their >total sales. Just like government taxes. Increasing taxes does not >always increase revenue. I second that! Yes, these prices sorely tempt me to piracy. -- Ian Chai | "God loves you just the way you are, but Internet: chai@cs.ukans.edu | He loves you too much to let you stay that Bitnet: 2fntnougat@ukanvax | way." - Harry Poindexter
omh@cs.brown.edu (Owen M. Hartnett) (04/24/91)
In article <1991Apr22.055054.7976@hawk.cs.ukans.edu> chai@hawk.cs.ukans.edu (Ian Chai) writes: >>Solution: Software companies should lower prices, to increase their >>total sales. Just like government taxes. Increasing taxes does not >>always increase revenue. > >I second that! Yes, these prices sorely tempt me to piracy. Well, first you have to get the magazines to lower their advertising rates, because people don't buy software unless it has big ads in the very best glossy computer magazines (check out the top ten list). Then we'll have to get the programmers to take a pay cut. The landlord won't mind if we shave the rent a little. Maybe you won't mind getting your software in a plastic bag instead of a fancy printed box? We'll even throw in a zip-loc bag instead of a sandwich bag. Next we'll ask users to take a cut in pay, so everyone gets in the spirit. Sure, there is overpriced software, so DON'T BUY IT! It's only people who are willing to pay the bucks that set the value of software. If nobody bought, it wouldn't sell. If you feel that the feature set of the software doesn't justify the price, it doesn't make it OK to steal. I could make a program and charge $12 and it would barely sell, but if I charge $795, they'll write magazine articles about the program and compare it to 1-2-3. Pricing computer software is a black art and it's the buying public who'll determine if you made the right choice or not. And, no, the old supply and demand lower the price and increase sales doesn't always work in software. People seem to equate the quality of the software with its price. -Owen Owen Hartnett omh@cs.brown.edu.CSNET Brown University Computer Science omh@cs.brown.edu uunet!brunix!omh "Don't wait up for me tonight because I won't be home for a month."
kovar@eclectic.COM (David C. Kovar) (04/25/91)
In article <1991Apr22.055054.7976@hawk.cs.ukans.edu> chai@hawk.cs.ukans.edu (Ian Chai) writes: >>Solution: Software companies should lower prices, to increase their >>total sales. Just like government taxes. Increasing taxes does not >>always increase revenue. > >I second that! Yes, these prices sorely tempt me to piracy. Pricing is a really difficult thing. I don't know much about pricing large products like Microsoft Word, but I've learned a bit about pricing "utility" applications, and the smaller stuff. If you set your price low, like more than 20% lower than your competition, many people will believe that your product is inferior simply due to the fact that it costs significantly less than other products. "If it's that cheap, there must be something wrong with it." So you'd pick up a few more sales from people who can't afford any product in the price range, but you'd lose a lot more sales from those people who can afford the going prices. One solution to the problem is to set your price up with everyone else's and then offer deep discounts to bring the price down. For example, we offer 20% discounts to academic institutions and 10% discounts to anyone, academic or otherwise, who orders 10 or more. This way, people say "Ok, it's priced like the others, so it should be good, but it's also got a nice discount so I can get a real bargain on it." If someone calls me up and says "Hey, I'd like to buy 100 copies but your price is too high." I promise you I'll do my best to bring the price down to something reasonable. I can afford to do that sort of thing, since we're a small company, but Microsoft can't, so you're stuck. Anyhow, that's a quick outline on pricing strategies. There's a *lot* of written material out there on the subject if you're interested in it. -David -- -David C. Kovar Consultant ARPA: kovar@eclectic.com Eclectic Associates AppleLink: ECLECTIC Ma Bell: 617-643-3373 MacNET: DKovar "It is easier to get forgiveness than permission."
Rick_McCormack@mindlink.bc.ca (Rick McCormack) (04/25/91)
If, as has been suggested in this thread, there is an optimum price for a software package, recent moves by publishers in both the Mac and the PC camp would indicate that a "really good" spreadsheet" SHOULD have a price somewhere between $100 and $200 -- as evidenced by Borland and Computer Associates (Quattro and SuperCalc). But seriously, folks, who uses a spreadsheet anyway? (Duck, Ma! Incoming! :-) -- _________________________________________________________ | IMAGISTICS Business Theatre Technology | Rick McCormack | | Interactive Effective Compelling | Vancouver, BC | |________________________________________|________________| | UseNet: Rick_McCormack@mindlink.uucp | A O-L: Rique | |_________________________________________________________| .
chai@hawk.cs.ukans.edu (Ian Chai) (04/25/91)
In article <73263@brunix.UUCP> omh@cs.brown.edu (Owen M. Hartnett) writes: >In article <1991Apr22.055054.7976@hawk.cs.ukans.edu> chai@hawk.cs.ukans.edu (Ian Chai) writes: >>I second that! Yes, these prices sorely tempt me to piracy. [stuff deleted] >shave the rent a little. Maybe you won't mind getting your software in >a plastic bag instead of a fancy printed box? We'll even throw in a >zip-loc bag instead of a sandwich bag. Actually, I wouldn't mind getting my software in a sandwitch bag if it would reduce its price 50%... actually, the folks who make MacCheese *use* this concept! [stuff deleted] >bought, it wouldn't sell. If you feel that the feature set of the software >doesn't justify the price, it doesn't make it OK to steal. I could make No, I wasn't condoning stealing. Note I said *tempt* me to piracy. A few years ago, I had to evaluate my piracy in view of my moral beliefs, and it was very hard, but I had to give it up. It made my conscience feel good but it doesn't make my pocketbook feel any better <grin>. [stuff deleted] >And, no, the old supply and demand lower the price and increase sales >doesn't always work in software. People seem to equate the quality of >the software with its price. That's too bad... personally, I go by recommendations & reviews. That's one of the reasons I value comp.sys.mac. -- Ian Chai | "God loves you just the way you are, but Internet: chai@cs.ukans.edu | He loves you too much to let you stay that Bitnet: 2fntnougat@ukanvax | way." - Harry Poindexter I don't believe in flaming. If I appear to be flaming, either (a) it's an
wilde@tigger.Colorado.EDU (Nick Wilde) (04/26/91)
In article <110@eclectic.COM> kovar@eclectic.COM (David C. Kovar) writes: >> >>I second that! Yes, these prices sorely tempt me to piracy. > > Pricing is a really difficult thing. I don't know much about pricing large >products like Microsoft Word, but I've learned a bit about pricing >"utility" applications, and the smaller stuff. > > If you set your price low, like more than 20% lower than your competition, >many people will believe that your product is inferior simply due to the >fact that it costs significantly less than other products. "If it's that >cheap, there must be something wrong with it." So you'd pick up a few >more sales from people who can't afford any product in the price range, >but you'd lose a lot more sales from those people who can afford the >going prices. > I'm really not picking on David here (I don't even know the man so why should I pick on him ?) But this is an oft-repeated piece of wisdom for which I've seen suspiciousely little real data to back it up. I'd be really curious, Dave, (or any one else) could give us hard numbers/facts that show this to be true. I realize sales numbers are something that companies are traditionally tight-lipped about (unless you're NeXT - "we sold 8,000 machines, we sold 8,000 machines, Wuppie !" But that's off the subject), but a good case-in-point "we sold package XXX at yyy, then doubled the price (without fixing bugs, changing packaging, or anything else of course) and sold quadruple the number". Unless someone can actually point to a product history like this, I'm going to relegate this little tid-bit to the category of "oft repeated pieces of folk wisdom with little basis in fact that take on a life of their own simply by being repeated to many times on the net (and anywhere else). -Nick -- ------------------------------------------------------------------------------- Nick Wilde wilde@cs.colorado.edu
ewright@convex.com (Edward V. Wright) (04/26/91)
In article <110@eclectic.COM> kovar@eclectic.COM (David C. Kovar) writes: > One solution to the problem is to set your price up with everyone >else's and then offer deep discounts to bring the price down.... > If someone calls me up and says "Hey, I'd like to buy 100 copies but >your price is too high." I promise you I'll do my best to bring the >price down to something reasonable. I can afford to do that sort of >thing, since we're a small company, but Microsoft can't, so you're >stuck. Hun? I don't quite understand this. Surely Microsoft can afford to offer greater discounts than a samll startup company. Microsoft, moreover, is one of the companies that sets the standard by which products are judged. If Joe Smith Software markets Joe's Writer for $30, people may compare its price to MS Word and conclude that it's inferior. If Microsoft dropped the price of Word to $30... well, people wouldn't stop buying Word because it has an established reputation. But the pundits would comment on the "new trend in software pricing," and other companies would be forced to follow suit.
gwangung@milton.u.washington.edu (Just another theatre geek.....) (04/26/91)
In article <1991Apr25.174251.4967@colorado.edu> wilde@tigger.Colorado.EDU (Nick Wilde) writes: >In article <110@eclectic.COM> kovar@eclectic.COM (David C. Kovar) writes: >> If you set your price low, like more than 20% lower than your competition, >>many people will believe that your product is inferior simply due to the >>fact that it costs significantly less than other products. "If it's that >>cheap, there must be something wrong with it." >I'm really not picking on David here (I don't even know the man >so why should I pick on him ?) But this is an oft-repeated piece of >wisdom for which I've seen suspiciousely little real data to back it >up. >Unless someone can actually point to a product history like this, >I'm going to relegate this little tid-bit to the category of "oft >repeated pieces of folk wisdom with little basis in fact that take >on a life of their own simply by being repeated to many times on the >net (and anywhere else). Not software, but in local theatre pricing, we didn't experience a pickup in ticket sales until we priced our shows upward into something in line with other theatres of our class. It happens. -- ----- Roger Tang, gwangung@milton.u.washington.edu Middle-class weenie, art nerd and all-around evil nasty spermchucker
oleary@ux.acs.umn.edu (Doc O'Leary) (04/26/91)
In article <1991Apr25.174251.4967@colorado.edu> wilde@tigger.Colorado.EDU (Nick Wilde) writes: >In article <110@eclectic.COM> kovar@eclectic.COM (David C. Kovar) writes: >> If you set your price low, like more than 20% lower than your competition, >>many people will believe that your product is inferior simply due to the >>fact that it costs significantly less than other products. "If it's that >>cheap, there must be something wrong with it." So you'd pick up a few >>more sales from people who can't afford any product in the price range, >>but you'd lose a lot more sales from those people who can afford the >>going prices. >I'd be really curious, Dave, (or any one else) could give us hard >numbers/facts that show this to be true. I realize sales numbers are >something that companies are traditionally tight-lipped about (unless >you're NeXT - "we sold 8,000 machines, we sold 8,000 machines, Wuppie !" >But that's off the subject), but a good case-in-point "we sold >package XXX at yyy, then doubled the price (without fixing bugs, >changing packaging, or anything else of course) and sold quadruple the >number". > >Unless someone can actually point to a product history like this, >I'm going to relegate this little tid-bit to the category of "oft >repeated pieces of folk wisdom with little basis in fact that take >on a life of their own simply by being repeated to many times on the >net (and anywhere else). Actually, I think you gave a pretty good example yourself. Computers like the NeXT and Amiga are wonderful machines, but the way they are marketed leaves one to think that they aren't as nice as they really are. I've seen the NeXT ads, "15 MIPS only $3,xxx!!!" I know people around here that look at that and then look at an SE/30 or IIsi and say, "Gee, there must be something wrong with the NeXT. I mean, you can barely get off the ground in the Mac world with that kind of money." Myself, I would seriously consider the NeXT if I could afford a IIsi. When it comes to neophytes, though, the fact that an Amiga with AMAX will have more bang-for-the-buck than a comparably priced Mac just doesn't enter their mind. I own an SE, so don't flame me for being a NeXTer or an Amiga-head. I won't go into details on why I prefer the Mac (I'm not a big fan of flame wars and I hope this doesn't turn into one), let's just say I like Apple's style. I'm no marketing whiz, but I think that the best thing NeXT could do for itself is to double (at least) its prices. Of course, they'd probably have to come out with some "feature" that justifies the increase. If they had just *barely* undercut the Mac IIci (which might be pushing it, since it is a IIfx level machine), I think they would be doing much better than they are now. Yeah they'd have a huge profit margin like Apple and their customers would whine, but at least they'd have customers . . . As Spike Lee might say, "Money, it's gotta be the suits." :-) --------- Doc ********************** Signature Block : Version 2.4 ********************* * | "Please put litter in its place" * * "Was it love, or was it the idea | ---McDonald's packaging * * of being in love?" -- PF | Wouldn't that be on the ground? * * (BTW, which one *is* Pink?) | * * | --->oleary@ux.acs.umn.edu<--- * ****************** Copyright (c) 1991 by Doc O'Leary ********************
cabruen@athena.mit.edu (Charles Alan Bruen) (04/26/91)
What really bothers me is $495 for the new Excel 3.0. Even if it is the best spreadsheet program on the market (debatable!) why on earth should I have to pay 1/2 the cost of my computer for it. As another example Framemaker. I use it in on our lab's computer at it is fantastic in my opinion. So now I am faced with a problem. I could slip a couple of disks in and put it on my computer at home, for free. But No! I want to be an honest person and actually buy it, to allow the company to make a profit on its hard earned work. The result, and $800 debit. Give me a break. -Charles Bruen Aero/Astro MIT cabruen@athena.mit.edu
hoepfner@heawk1.gsfc.nasa.gov (Patrick Hoepfner) (04/26/91)
wilde@tigger.Colorado.EDU (Nick Wilde) writes: >In article <110@eclectic.COM> kovar@eclectic.COM (David C. Kovar) writes: >>> >>>I second that! Yes, these prices sorely tempt me to piracy. >> If you set your price low, like more than 20% lower than your competition, >>many people will believe that your product is inferior simply due to the >>fact that it costs significantly less than other products. "If it's that >>cheap, there must be something wrong with it." So you'd pick up a few >>more sales from people who can't afford any product in the price range, >>but you'd lose a lot more sales from those people who can afford the >>going prices. >I'm really not picking on David here (I don't even know the man >so why should I pick on him ?) But this is an oft-repeated piece of >wisdom for which I've seen suspiciousely little real data to back it >up. The one piece of software that doubled in price without much additions to it was Director. MacroMind said (in MacWEEK I think) that people were not taking it seriously because it was only about $100. So when it was renamed to Director (from whatever its former name was) it either doubled or tripled in price because that is what people "expected" to pay for a package like it. Another popular myth going around is that "piracy" only occurs in homes because people can't afford the product. I have read of many institutions where piracy is strictly forbidden by the upper management but the middle managers say we can't afford this or it takes to long to get, so get a copy and get the job done. At NASA we opened a blanket purchase agreement with several mail order houses and a couple of local dealers so that when things are needed, the scientists or engineers can get the software over night. I think that in many cases it isn't even the cost. If you have to wait 3-4 months to get an application (or even an upgrade to one) who is going to bother! As always, just my thoughts... hoepfner@heasfs.gsfc.nasa.gov NASA/Goddard Space Flight Center
cy@dbase.A-T.COM (Cy Shuster) (04/27/91)
In article <1991Apr22.055054.7976@hawk.cs.ukans.edu> chai@hawk.cs.ukans.edu (Ian Chai) writes: >>Solution: Software companies should lower prices, to increase their >>total sales. Just like government taxes. Increasing taxes does not >>always increase revenue. > >I second that! Yes, these prices sorely tempt me to piracy. It's really the ease of theft, and the improbability of detection, not as much as the prices, I think. The price of a Mercedes doesn't tempt me to piracy, but if you could drive one into your two-car garage and hit command-D "Duplicate" and put the original back, I'd think about it over the weekend. It would still be wrong. --Cy-- cy@dbase.a-t.com
chai@hawk.cs.ukans.edu (Ian Chai) (04/29/91)
In article <1991Apr26.171224.10880@dbase.A-T.COM> cy@dbase.UUCP (Cy Shuster) writes: >In article <1991Apr22.055054.7976@hawk.cs.ukans.edu> chai@hawk.cs.ukans.edu (Ian Chai) writes: >>I second that! Yes, these prices sorely tempt me to piracy. > >It's really the ease of theft, and the improbability of detection, >not as much as the prices, I think. The price of a Mercedes doesn't >tempt me to piracy, but if you could drive one into your two-car >garage and hit command-D "Duplicate" and put the original back, >I'd think about it over the weekend. > >It would still be wrong. *sigh* I should have known to put a disclaimer on that original message... note I said, "tempt". I am not advocating piracy, ok? -- Ian Chai Internet: chai@cs.ukans.edu Bitnet: 2fntnougat@ukanvax I don't believe in flaming. If I appear to be flaming, either (a) it's an illusion due to the lack of nonverbal cues or (b) my sprinkler system has suffered a momentary glitch, so just ignore me until it's fixed.
dave@PRC.Unisys.COM (David Lee Matuszek) (04/29/91)
In article <hoepfner.672628672@heawk1> hoepfner@heawk1.gsfc.nasa.gov (Patrick Hoepfner) writes: > At NASA we opened a blanket purchase agreement with several mail order >houses and a couple of local dealers so that when things are needed, the >scientists or engineers can get the software over night. I think that in >many cases it isn't even the cost. If you have to wait 3-4 months to get >an application (or even an upgrade to one) who is going to bother! Right on, it's the paperwork. Not only does paperwork cost absurd delays, but I'm all but certain that the actual cost of doing the paperwork, should anybody ever really measure it, typically exceeds the cost of the software itself. It's a cost-saving measure, you see, to make sure that we don't make unnecessary purchases.... Oh, yeah--disclaimer. Nothing I say should be construed as the opinion of my employer. -- Dave Matuszek (dave@prc.unisys.com) I don't speak for my employer. -- ------------------------------------------------------------------------- | When I was young, my family bought a color TV. Our neigbors, who | | were poorer, had only a black-and-white set. They bought a piece of | | cellophane, red on top, yellow in the middle, and blue on the bottom, | | and taped it over their screen, so they could claim that they had a | | color TV, too. | | Now there's Windows 3.0. | -------------------------------------------------------------------------