Major Industry Change re: Online Scuba Sales....

[Midnight Star]

That's an interesting point about being to sell a product at a higher cost than the other simply because they could, but as I think about it, it brings to mind that there's a difference between ego wanting to own something expensive (a really expensive time piece ... it tells time ... just like my $10 Walmart watch), and seeking those that make the product they NEED because they want to be a diver, and a local shop sets rediculous pricing simply because they can; you want to dive and there's no where else to get diving equipment from (I cant make my own, and Walmart doesnt sell $10 regulators - thank goodness too!!!). In that, I dont think the watch example really compares to diving equipment.

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Mike.

 

[RJP]

In that, I dont think the watch example really compares to diving equipment.

Analogy; n a form of reasoning or illustrative example in which one specific similarity is inferred between two things that are otherwise dissimilar.

Imagine the analogy "When you really boil it down, softball is really a lot like baseball."

Gee, ya think so?

Again, don't get caught up in the DISSIMILARITIES between diving equipment and watches. To be an apt analogy the things being compared MUST be different in order for the analogy to have any instructive value. Otherwise you won't be able to understand the certain universal truths that exist across products, and categories, and markets, and customers. That's what marketing is about.

 

[ReefHound]

That's the biggest fallacy out there. It's a faulty premise. The industry has decided that the defining characteristic of the audience is that they dive.

That would be as if Rolex and Timex both said "our customers are people that need to know what time it is" or Mercedes and Subaru both said "our customers are people that need to drive to work."

The only fallacy here is viewing the LDS versus eLDS (most of them are a LDS, but with an ecommerce emphasis) as analogous to Rolex versus Timex.

Both the LDS and eLDS sell the same product. A Mares Abyss regulator bought online is identical to one bought in a store. The LDS may try to package it with alleged "service" and call it another product but the customer is having none of it.

The target audience is the same, as evidenced by the fact that there are few LDS-only customers or eLDS-only customers. They are the same customer, making a choice of where to shop. There may be minor differences. The LDS focuses on the new diver (selling gear in conjunction with classes) and the eLDS aims for the more experienced diver who knows what he wants. I'm speaking of equipment customers.

A marketing genius you may be, but I don't see the consumer as fickle on price as you do. They just don't want to get reamed. They won't leave their favorite eLDS or Walmart for minor price differences because familiarity is a powerful drive. Look how people just assume Walmart is cheapest and head straight there. Often Walmart isn't the lowest price but their customers don't even bother to price shop anymore. In that sense, Walmart has some of the most loyal customers out there.

Divers aren't leaving the LDS because their LDS isn't the absolute lowest price but because they aren't even close to being competitive. Almost every online customer would tell you they would buy from their LDS if the difference was 10% or less.

It strikes me as odd that you keep suggesting that the eLDS folks are heading down the wrong path when it's the LDS folks that are heading south. At least that's how I see it based on whose businesses are expanding and whose are shutting down.

 

[RJP]

A great starting point for any business is learning the needs and expectations of the proposed cust. base and meeting them or the truly innovative actually come up with something new that creates a need in the target cust., regardless you still need to know and understand your consumer.

Agreed, but as always I'll try to take it a step further:

If you merely "meet" expectations, you had better be cheaper or you're dead. Expectations are the minimum criteria by which the customer judges the product. You don't meet expectations you're not even in the consideration set. If you DO meet expectation, you're merely in the game. You gotta work from there.

Ok, so you decide to come up with something new. Great. But cheaper prices, a different channel of sale, or alternate terms of order/delivery are not innovative. They are simply incremental, but minor improvements of features that are already "merely expectations."

If Starbucks offered "better coffee than Dunkin Donuts" they would have failed.
If Starbucks offered "faster coffee than McDonalds" they would have failed.
If Starbucks offered "larger coffee cups than the local deli" they would have failed.

Starbucks decided instead to NOT sell coffee, which was a great idea because their customer was NOT people who buy coffee.

Now the fact of the matter is, Starbucks swerved into the idea. It didn't become a big success until a marketing guy came along and said "you guys have no idea what you have here."

And while I was not there at the time, I can assure you that to help the original Starbucks people understand it, the marketing guy didn't use the analogy "Ya know, coffee is a lot like tea!"

 

[ReefHound]

Analogy; n a form of reasoning or illustrative example in which one specific similarity is inferred between two things that are otherwise dissimilar.

What is this one specific similarity?

 

[RJP]

What is this one specific similarity?

I know this is gonna sound horrible, but I have to ask this question:

Do you REALLY not see the similarity here?

I'm perfectly willing to accept that I may be too close to the topic and/or that I'm putting too fine a point on the argument.

 

[ReefHound]

I know this is gonna sound horrible, but I have to ask this question:

Do you REALLY not see the similarity here?

Enough of the condescending lecture, I want to know what similarity *you* see.

 

[RJP]

Enough of the condescending lecture, I want to know what similarity *you* see.

Sorry for the condescending part, I recognized that and was editing my original post as you were replying...

I'm perfectly willing to accept that I may be too close to the topic and/or that I'm putting too fine a point on the argument.

By way of background, I'm a "marketer" by both profession and by academic training. I've spent twenty years doing research in the areas of positioning, human decision theory, price elasticity, promotional response modeling, and other more or less esoteric minutiae all targeted at getting people to buy stuff.

I'm not suggesting that I'm "smarter" than people who don't "get it" it's more that I'm wired to think this way.

The specific similarity in the "Rolex/Timex" vs "LDS/e-tailer" analogy is that Rolex and Timex both deliver the exact same functional benefit, much as an LDS and an e-tailer both deliver the exact same functional benefit.

You can't beat the competition by offering a better/faster/cheaper/smaller/bigger/shinier/whatever-er version of the same functional benefit. Rolex figured that out. Starbucks figured that out.

I've never come across a marketing challenge where the solution was not "figure-outable."

 

[ReefHound]

By way of background, I'm a "marketer" by both profession and by academic training. I've spent twenty years doing research in the areas of positioning, human decision theory, price elasticity, promotional response modeling, and other more or less esoteric minutiae all targeted at getting people to buy stuff.

I've gathered that and you've spent much of this thread lecturing down to us rather than conversing with us. While I have great respect for such academic expertise, I also have great respect for guys like Phil who are out there with their own money on the line putting these theories to work. It's one thing to play with other people's money, it's quite another thing to play with your own.

The specific similarity in the "Rolex/Timex" vs "LDS/e-tailer" analogy is that Rolex and Timex both deliver the exact same functional benefit, much as an LDS and an e-tailer both deliver the exact same functional benefit.

I don't see where that is applicable. Nobody is buying a Rolex for it's functionality. They aren't buying a watch from Rolex anymore than they are buying coffee from Starbucks. Rolex/Timex might be analogous to Starbucks/McDonald's but not to the LDS/eLDS issue.

Both LDS and eLDS customers buy regulators purely for their functionality. They need to breathe air underwater. You are comparing *retailers* selling the exact same merchandise to the same set of consumers, with *manufacturers* selling vastly different products to vastly different audiences.

You can't beat the competition by offering a better/faster/cheaper/smaller/bigger/shinier/whatever-er version of the same functional benefit. Rolex figured that out. Starbucks figured that out.

Sure you can. Walmart figured that out. McDonald's figured that out. There have been high end models that have had great success and dramatic failures. There have been low end models that have had great success and dramatic failures. I doubt you could show statistically that high end models have any greater track record as a whole than low end models.

I've never come across a marketing challenge where the solution was not "figure-outable."

It's always easy to figure out on paper, isn't it?

 

[RJP]

I've gathered that and you've spent much of this thread lecturing down to us rather than conversing with us. While I have great respect for such academic expertise, I also have great respect for guys like Phil who are out there with their own money on the line putting these theories to work. It's one thing to play with other people's money, it's quite another thing to play with your own.

Ok, ok! No mas!

You've convinced me. I don't know what I'm talking about.