Re: Pricing Strategies

RKenneth@aol.com
Sat, 10 Dec 1994 13:50:08 -0800

AOL has recently introduced an on-line catalog service, keyword 2Market. It
has 20-some catalogs from brand-name direct marketers such as Land's End,
Chef's Corner, et al. Easy to browse. Keyword searches. Shopping basket
ordering.

Nice implementation, with low res photos on-line and hi res photos available
for download.

Problem is, full-boat retail pricing. Manufacturer's list with a rare 10% or
20% discount on a loss leader. I expect that Prof. Wigand is right. In time,
competition will drive prices down. But for now, the explanation may be that
development costs (and fees to online service providers) balance savings on
order processing.

Ken Sethney
The Sethney Group
marketing communications
rkenneth@aol.com