"Price and Prejudice"Pricing is your product’s most important statement. Michael Hurwich - Managing Partner SPMG
Full Brochure:
To register:
http://www.pricing2win.com/Register.htm & pay on line or email Sally at sbrodie@youneedpricing.com to register and use other means of payment
Paris, March 26th 2012
The „French Pricing Club‟, the „Pricing & Value Strategies Club‟ (on LinkedIn), the Club
„Pricing & Valeur Client‟ (on Viadeo) and Strategic Pricing Management Group are
organising a conference on the theme "Price and Prejudice" in Paris on March 26th 2012.
The Conference "Price & Prejudice" aims to focus on the organizational prejudices that prevent
effective pricing practices in many organizations, but also on the psychological dimensions of
Pricing & value strategies. It will provide real life experience from professionals from the
business world but also frameworks, tools and theories developed by researchers and
consultants.
This event aims to uncover practical experience as well as the latest breakthroughs in research
& impact modeling under three major headings, which are: Pricing Image Management , Price
organization development and Pricing Psychology . This conference will look at how to overcome
pricing prejudices to develop an effective pricing organization, how to utilize pricing psychology
to your advantage and on how to manage your pricing image for competitive advantage.
Includes presentations from
Conference presided by:
- Gérard Fauconnet (ex-Manager Global Pricing, Schneider Electric + Passionate Pricer)
- Loïc Le Corre (Managing Director, SPMG + President Pricing Clubs)
Pricing Club ConferenceProgram Overview 9h00-9h30: Welcome coffee and registration
9h30-9h45: Opening address: Gérard Fauconnet (ex Schneider Electric & President
Pricing Club)
9h45–10h20: Keynote address: Bernard Demeure – Vice President + Head Retail Practice – Oliver
Wyman - "Managing your pricing image .. and the impact of Pricing on your image"
10h20-10h45 : Coffee Break
10h45 – 12h15: Plenary session: "Developing a Pricing culture – influences and prejudices"
- Theory + Practice Stéphane Liozu (Président & CEO of ARDEX Ame ricas)
- Pricing Image Management - Loïc Le Corre - Managing Director SPMG + Pricing Club
- Pricing Practices in Europe - Pol Vanaerde – President European Pricing Platform
12h15-13h45: Lunch
14h00-15h30 : Parallel Session 1 "Price Perception & Positioning"
- Practitioner; Sophie Heller - Director Marketing ING Direct
- Practitioner + Consultant: Vernon Lennon President – The Pricing Cloud
14h00-15h30 : Parallel Session 2 "Optimizing New Product Launch"
- Practitioner: Michel van den Berge - Director Innovation Agilent
- Tools: Alex Smith - Director PROS Pricing Solutions
14h00-15h30 : Parallel Session 3 "Brand Pricing & Image"
- Practitioner: Elizabeth Laisne –Former Global Pricing Director Lenovo
- Consultant: Alain Meloche – Managing Director SPMG:
15h30-15h55 : Coffee Break
15h55-17h25 : Parallel Session 1 "Selling a dream & Pricing it"
- Theory/Practice : Gilles Laurent , Professeur HEC: "Pricing Luxury Goods"
- Practitioner: Michael Hurwich – Managing Director SPMG:
15h55-17h25 : Parallel Session 2 "Pricing the priceless: Health"
- Practitioner: Enrique Dodero - Pricing Manager at GE Healthcare
- Consultant : Loïc Le Corre – Managing Director SPMG
15h55-17h25 : Parallel Session 3 "Creating a Pricing Culture & organization"
- Practitioner - Govert Spit - Global Pricing Director at Castrol - BP
- Tools/Practice: Daniel Rueda – President Open Pricer
17h25-17h40: Final wrap-up and concluding remarks:
Join the clubs (free membership):
„Pricing et Valeur Client‟ : http://www.viadeo.com/groups/?containerId=00227v6uwz4vbyhj
„Pricing & Value Strategies‟: http://www.linkedin.com/groups?mostPopular=&gid=127106
Pricing Club Conference
Registration for the conference Registration includes material, coffee breaks and lunch.
To register: http://www.pricing2win.com/Register.htm & pay on line or email Sally at sbrodie@youneedpricing.com to register and use other means of payment
Regular rate: 349 Euros (399 € after 28th February 2012)
Pricing Club Members: 249 Euros (299 € after 28th February 2012) (LinkedIn & Viadeo)
VenueThe Conference will be hosted at "La Maison des Polytechniciens", 12 rue de Poitiers, 75007
Paris.
Organising committee:
Gérard Fauconnet – Former „
Marketing Vice-President / Chief Pricing Officer Schneider Electric’
Loïc Le Corre – Managing Director SPMG Europe
Michael Hurwich –President SPMG
:
Tuesday, January 24, 2012
Tuesday, January 17, 2012
How to Make Sure You Get the Price Your New Product Deserves
Written for The Toronto Product Management Association
Your
company’s President has approached you directly, saying that a new product is
being introduced and that it represents the future of the company as he expects
great growth potential from this initiative. As the Product Manager, he wants
you to find the right price that’s going to capture the value but provide an
incentive for the company to capture market quickly, as competitors are very
aggressive.
New
product pricing, given its sensitivity, highlights overall pricing issues and
so is valuable as an example of the issues that need to be considered in the
pricing of products. But overall, it is
also becoming a more significant issue for a growing number of firms as product
lifecycles shorten and the level of competition increases. As for all products,
but especially so for new products, the pricing of these products is especially
difficult as there are a number of different and sometimes conflicting, factors
at play. Internally, the finance department may want to ensure that development
and implementation costs are at least covered and ROI targets met while the
marketing group may want to maximize market acceptance and share. Externally,
customers may want the benefits that a product provides but may hold back if
they perceive risk associated, especially with a new product’s purchase.
How
do you balance these various factors and set a price for new products? Our
experience has led us to believe that resolving some basic questions provides a
roadmap to setting those prices.
1)
What
strategic objectives should those prices support?
2)
How
does the new product fit within the context of the existing product portfolio?
3)
What
benefits would customers receive from the product, actual and perceived?
4)
How
could the price level and structure be set to capture all the value offered
while taking into account customers’ costs and risks associated with new
product adoption and the competitive environment?
1) Strategic Objectives in Setting
Price
Whatever
the chief strategic concern for a new service or product, price should help
address it. This is true no matter what that concern is—whether to achieve
rapid penetration of the market, retain customers, or protect margins despite
uncertain costs. In each case, the strategy should be reflected in the price.
For
example, new long distance providers, with high fixed costs but low variable
costs and believing that customers were price sensitive, undercut prices of
existing suppliers in order to rapidly gain market share. Everyone is familiar
with regular price changes for gasoline based in part on gas companies passing
on their feedstock cost uncertainties into the marketplace. “Whole life”
insurance is priced highest for wage earners with young families and declines
as needs and ability to pay declines- retirees and those on fixed incomes-
thereby helping to retain customers for life.
The
product lifecycle is a useful framework for thinking about how corporate
objectives may change over time and these are shown in Figure 1. below.
Figure 1. Product Lifecycle and
Objectives for the product
Companies
using pricing strategies in support of those objectives, either explicitly or
implicitly balance price with the value provided by their offering as shown in
Figure 2.
Figure 2. Price/ Value and Pricing
Strategies
There are two basic strategies
available for new product release prices.
Premium
·
Demand is likely to be price
inelastic
·
There are buyers that have a
wide range of acceptable prices
·
Little is known about
production and/or marketing prices
Penetration
·
Demand is price elastic
·
Entry barriers are low
·
No separate price-market
segments that could accept a wide range of prices
·
Large sales volumes lead to
economies of scale
In turn, there are three key
elements that determine whether premium or penetration pricing should be used:
·
Nature of the product
o
Revolutionary
o
Evolutionary
o
Me-too
·
The potential competitive
response
·
The potential competitive
response
·
The existing product
portfolio and the resulting company position
The
value of new products typically increases directly proportionally to whether
the product is me-too, evolutionary, or revolutionary. This in turn, provides
guidance relative to the extent that penetration or premium pricing strategy
should be pursued. The newer or more revolutionary is the product, with the
fewer the comparables, the greater is the opportunity to seek premium pricing.
On the other hand, for products that may simply be new to your own company, but
not to the market, the opportunity for premium pricing is limited. Penetration
pricing is more realistic, but, given existing competitors and their
competitive responses, realistically, pricing should occur closer to the
price/value equivalency line. Opportunities for penetration pricing occur again
at the lower end, with low price/value where the competitive threat presented
may not warrant strong competitor response.
2) New product fit within the context of the existing
product portfolio
While
a new product may represent an entirely new niche or position for your company,
its position, to some extent will still be judged in terms of your existing
portfolio. Think of the Volkswagen
Phaeton. While it represented a completely different product from the
existing Golf, Jetta, and Passat lines,
the market still judged the new product in light of that existing product line.
It was difficult for customers to make the leap from the $15,000- $30,000 price
band into products that started at twice that level.
The
issue of cannibalization also affects release price. Let’s suppose that
Volkswagen had released the Phaeton
in the $35,000-$40,000 price range. While it would have been more consistent
with Volkswagen’s existing position,
the incremental $5,000-$10,000 price over the top end of the Passat may well
have led to significant cannibalization of Passat sales. After all, for that
relatively minor amount of money, buyers at that range, with somewhat less price sensitivity may have chosen a
clearly superior product. The question then became: would a buyer of a brand
such as Mercedes or BMW have been willing to switch given the value ascribed to
the Mercedes and BMW brands?
The
fatal error in VW’s perception was
its belief that only performance and other “hard” quality criteria were used by
customers to judge the value of the product. The result was a market that
perceived an overpriced product while VW was marketing based on the assumption
that market was prepared to accept a product in a substantially different
position from the rest of its portfolio due to a price/value offering better
than its competitors. The approach may have been valid had the market judged
value purely on the basis of engineering factors.
Conversely, BMW could choose
to launch a cheaper vehicle at a lower price point. While BMW internally, may
believe that by pricing to penetrate into a new market segment as shown in Figure 5, the market may perceive that BMW
market strategy is one of pricing generally above the value line so that the
quality of the new product may be suspect. The connotation in the market’s mind
may then bring the overall perception of BMW market position down the
value/price chart. So, it’s important to recognize that price makes a statement
about your product. While VW had wanted to make a statement about its”new” product quality, the market
viewed that statement as significantly inconsistent with the current position.
3) Actual and perceived benefits from a product
To understand how much of a
premium can be charged at the upper limit of the price line requires some
understanding of the benefits of the product. Again, this depends on several
factors, the most important of which are:
1)
The customer’s industry ( i.e. consumer, business,..)
2)
The product’s life stage: me-too, evolutionary, revolutionary
The degree to which these
can be measured with some degree of precision and the extent to which actual to
perceived benefits are balanced are represented in Figure 3. As can be seen
from that chart, the most readily measured benefits are related to those products
that are well established in the marketplace and sold on a B2B basis.
Revolutionary products sold to consumers are those the most likely to be sold
on the basis of perceived benefits.
Figure
3: Impact of the Nature of the product and the Customer’s market on Benefits
Focus
In the case of a B2B sale,
incremental benefits, however, can more easily be quantified through a value
chain analysis where the seller can make estimates as to benefits such as
supplies, H.R. resources that may be saved through purchase of the new product.
For B2C estimates of
the value added, perceptions of the benefits are more likely to lead decision
making.
4)
Setting Prices
There are two key elements in pricing be it for new or
existing products: level and structure.
Level
Release price sends an
important message to the market as seen in the automotive case discussed above.
Two approaches were highlighted in the automotive case and discussed
subsequently;
- Premium
- Penetration
For premium pricing,
the question is : what’s the upper limit? Three factors, in turn, are involved
in that answer:
1)
Incremental benefits (actual and perceived)
2)
Existing perceptions of the company in the marketpalce
3)
Actual and perceived costs and risks of the purchase by the
customer
For penetration pricing, the
question is: how low should you go?
1)
At the lower limit, consider cost-plus
2)
Competitive response is a critical factor since too low a
price will likely elicit strong competitor response.
3)
Market uptake (volume) needs to be balanced with the
potential margins that could be obtained by pricing closer to the benfits
actually provided by the product
Structure
Again, it’s critical that
the structure be designed so that corporate and customer objectives be
supported by the price structure. For example, 25 years ago, few vehicles were
leased while today, approximately 20% of vehicles are leased. Through this
pricing structure, price was effectively deconstructed, allowing for easier
purchases with less money upfront. Also, through the nature of that structure,
those leasing cars continue to outlay money to the manufacturers on an ongoing
bais as leases expire and consumers typically lease another vehicle.
Key Learnings
The
importance of new product pricing lies in its highlighting of issues that are
common to pricing generally. In this case, three key points stand out:
1)
Understand what customers will
be using to measure value (unlike the engineers at VW)
2)
Understand where your
product lies in the spectrum of new products:
a.
If it’s entirely new, with
no comparables then more pricing flexibility is possible
b.
For a product with better
performance characteristics than existing comparables, the magnitude of
incremental pricing can be more easily quantified as the measures/ metrics for
the benefits are clearer.
c.
If a product is only new to
your company, then pricing needs to be based on competitive factors.
3)
Quantify, quantify,
quantify- to the maximum extent possible: BUT, always take into account
the broader context and common sense!
Thursday, January 12, 2012
Wednesday, January 11, 2012
Webinar - (Pricing for Pharmaceuticals, Diagnostics and Devices - January 20th, 2012. 11:30am - 1:30pm EST)
Symposium Course Description:
The symposium will address the following topics:
1. Trends and the Changing Health Care Environment and their Impact on Pricing
2. Pricing Basics (including cost plus, competitor-based, value-based, benefit sharing)
3. The 2 sides of value-based pricing
4. Examples and Best Practices for pharmaceuticals, diagnostics, and medical devices
Learning Objective Bullet Points:
• Exposure to and/or deepen knowledge of pricing principles
• Understand how those principles can be applied to a broad range of issues in pricing in the medical products environment
• Understand some practical and easy-to-apply pricing tools and frameworks that should allow participants to frame their pricing issues using a more rigorous approachWho Should Attend:
Directors and Vice Presidents in pharmaceutical, diagnostics, and medical devices companies responsible for marketing, the establishment of marketing and/or pricing strategies and the implementation of pricing strategies and tactics.
Instructor Information:
Alain Meloche, B.Sc., M.Sc., M.B.A., Managing Partner, Strategic Pricing Management Group
Instructor Biography:
Alain has over twenty years of experience advising executives on strategic pricing issues. He began his consulting career at Larson & Company, a strategic consulting boutique that was an offshoot of McKinsey, later acquired by Mercer Consulting, where he also worked. He has worked extensively in the development of pricing strategies for companies in the medical/health products industry including pharmaceutical, diagnostics, devices, logistics/distribution companies, reference labs and OTC medical products providers. Other pricing engagements have covered a broad range of other industries including high technology, software applications, financial services, telecommunications, and transportation. In addition to an M.B.A. from the Harvard Business School, Alain also has an M.Sc. In Nuclear Engineering and an Honors B.S. in theoretical physics.
click here to register; http://www.healthtech.com/zpri/
The symposium will address the following topics:
1. Trends and the Changing Health Care Environment and their Impact on Pricing
2. Pricing Basics (including cost plus, competitor-based, value-based, benefit sharing)
3. The 2 sides of value-based pricing
4. Examples and Best Practices for pharmaceuticals, diagnostics, and medical devices
Learning Objective Bullet Points:
• Exposure to and/or deepen knowledge of pricing principles
• Understand how those principles can be applied to a broad range of issues in pricing in the medical products environment
• Understand some practical and easy-to-apply pricing tools and frameworks that should allow participants to frame their pricing issues using a more rigorous approachWho Should Attend:
Directors and Vice Presidents in pharmaceutical, diagnostics, and medical devices companies responsible for marketing, the establishment of marketing and/or pricing strategies and the implementation of pricing strategies and tactics.
Instructor Information:
Alain Meloche, B.Sc., M.Sc., M.B.A., Managing Partner, Strategic Pricing Management Group
Instructor Biography:
Alain has over twenty years of experience advising executives on strategic pricing issues. He began his consulting career at Larson & Company, a strategic consulting boutique that was an offshoot of McKinsey, later acquired by Mercer Consulting, where he also worked. He has worked extensively in the development of pricing strategies for companies in the medical/health products industry including pharmaceutical, diagnostics, devices, logistics/distribution companies, reference labs and OTC medical products providers. Other pricing engagements have covered a broad range of other industries including high technology, software applications, financial services, telecommunications, and transportation. In addition to an M.B.A. from the Harvard Business School, Alain also has an M.Sc. In Nuclear Engineering and an Honors B.S. in theoretical physics.
click here to register; http://www.healthtech.com/zpri/
Monday, January 9, 2012
Pricing Strategy – Your Essential To Organization Longevity
publisher
In some cases providers consider without any consideration the demands of their audience, and being a consequence have an affect on business enterprise sustainability in the future. We really don’t have to search far for proof, when every single news stories are highlighting some sort of consumer discontent. A effectively well-known online video business recently bore the brunt of loosing former buyers simply because they disregarded consumer sentiments and elevated their prices. Pricing strategies should initially make sense to the persons that you just are finally focusing on as part of your promoting campaigns. Really do not neglect what brought them to you personally within the very first spot, particularly when you might be pondering of raising your profit margin.
Does your cost strategy mirror the current market place?
If your cost isn’t a reflection on the market place or your buyers, then you certainly are not maintaining tempo. Good providers are starting to appreciate they might not find a way to impact consumer preference as before, with out spending mindful attention to pricing through the buyer’s standpoint. Gone are the times when a dollar may be added to the cost of an active product or service and hardly be recognized from the customer. Pricing strategies at the moment are collaborative – a decision between business enterprise operator and consumer – supplying some strength and autonomy to the consumer.
The prevalence of smaller corporations in the US has also broadened the playing field across industries, building for the pretty competitive market place – all vying for the similar shoppers. One can barely stroll the span of a block with out viewing a different mother and pop retail outlet opening up; interestingly the vast majority of these corporations do thrive. Why? Savvy smaller business enterprise proprietors, who can’t compete with large conglomerates on merchandise collection and distribution, now pull a good share of your consumer market place with superb pricing strategies. They fully grasp their audience; commonly a up coming door neighbor or another person from their neighborhood likely by way of identical existence experiences. On account of this comprehending they cost products and companies using a firm grasp of what shoppers will pay.
Absolutely the emergence of social networking helped to fuel this alter and possesses brought control appropriate into the houses of shoppers. If buyers feel a different lender payment isn’t justified as an example, they can broadcast their emotions to thousands and thousands of other disgruntled shoppers, and pretty quickly a movement is commenced. Providers are pressured to pay attention and now, will modify prices rather than displease and drop their shoppers.
Days are modifying and when corporations would like to remain appropriate, their aged means of carrying out items will have to also alter. Begin by perusing the prosperity of knowledge on the web that talks about strategic pricing for corporations. Alternatively, your business can only take pleasure in the knowledge of professionals who aid business enterprise spur expansion, using a carefully thought out pricing strategies… contact a expert right now.
Does your cost strategy mirror the current market place?
If your cost isn’t a reflection on the market place or your buyers, then you certainly are not maintaining tempo. Good providers are starting to appreciate they might not find a way to impact consumer preference as before, with out spending mindful attention to pricing through the buyer’s standpoint. Gone are the times when a dollar may be added to the cost of an active product or service and hardly be recognized from the customer. Pricing strategies at the moment are collaborative – a decision between business enterprise operator and consumer – supplying some strength and autonomy to the consumer.
The prevalence of smaller corporations in the US has also broadened the playing field across industries, building for the pretty competitive market place – all vying for the similar shoppers. One can barely stroll the span of a block with out viewing a different mother and pop retail outlet opening up; interestingly the vast majority of these corporations do thrive. Why? Savvy smaller business enterprise proprietors, who can’t compete with large conglomerates on merchandise collection and distribution, now pull a good share of your consumer market place with superb pricing strategies. They fully grasp their audience; commonly a up coming door neighbor or another person from their neighborhood likely by way of identical existence experiences. On account of this comprehending they cost products and companies using a firm grasp of what shoppers will pay.
Absolutely the emergence of social networking helped to fuel this alter and possesses brought control appropriate into the houses of shoppers. If buyers feel a different lender payment isn’t justified as an example, they can broadcast their emotions to thousands and thousands of other disgruntled shoppers, and pretty quickly a movement is commenced. Providers are pressured to pay attention and now, will modify prices rather than displease and drop their shoppers.
Days are modifying and when corporations would like to remain appropriate, their aged means of carrying out items will have to also alter. Begin by perusing the prosperity of knowledge on the web that talks about strategic pricing for corporations. Alternatively, your business can only take pleasure in the knowledge of professionals who aid business enterprise spur expansion, using a carefully thought out pricing strategies… contact a expert right now.
Wednesday, January 4, 2012
RIM alters PlayBook pricing strategy as U.S. marketing blitz begins
Jan 3, 2012 – 2:53 PM ET
By Zara McAlister and Matt Hartley
In an effort to breathe new life into sales of its BlackBerry PlayBook, Research In Motion Ltd. is slapping new price tags on its beleaguered touchscreen tablet.On its United States Website, the Waterloo, Ont.-based company is now offering all three models of the BlackBerry PlayBook — 16 gigabyte (GB), 32 GB and 64 GB — for US$299, until Feb. 4, 2012.
However, in Canada, RIM is offering the 16 GB PlayBook for $199, the 32 GB model for $249 and the 64 GB model for $399. While the U.S. price change represents a drop for the 32 GB and 64 GB models — which were initially sold for US$599 and US$699 respectively — the US$299 price tag on the 16 GB model is actually slightly more expensive than what some retailers were charging for the seven-inch tablet during the holiday shopping season.
In the run up to Christmas, the 16 GB model was available through certain retailers for US$199. The new US$299 price tag for the three PlayBook models applies not just on
RIM’s own retail site, but also through the company’s retailer partners.
During its December conference call, RIM co-chief executive Jim Balsillie said the company planned to go on an aggressive marketing blitz South of the border, one that would have an impact on the company’s bottom line, in an effort to regain mind share in a market where RIM’s smartphones are falling out of favour with users.“We are not satisfied with the performance of the business in the United States,” Mr. Balsillie said at the time.
RIM officials did not immediately respond to requests for comment on Tuesday.
The move comes amid reports that RIM handed out thousands of free PlayBook tablets to employees at the company’s Waterloo, Ont. headquarters prior to the holidays.
The timing of the PlayBook promotion may also offer some insight into when the company plans to launch the delayed PlayBook 2.0 software update, which is slated for a February release.
This decision hasn’t been limited to North America. PlayBook prices on all models were recently halved in India, a country with a large population and a growing appetite for Web-connected mobile devices. RIM’s competitors have employed similar strategies in the past. Last summer, Hewlett-Packard Co. slashed the price of its disappointing TouchPad tablet to US$99, a move which resulted in increased demand and line ups outside electronics stores.
At the time of its launch in April, some analysts expected RIM could sell as many as six million PlayBooks in the device’s first year on the market. However, RIM has sold fewer than a million units, and now has a stockpile of inventory. RIM has sold just 850,000 PlayBooks over three quarters, or about 1% of the global tablet market, as it struggles to compete with Apple Inc.’s iPad and a slew of devices running Google Inc.’s Android software.
In December, RIM announced it would be taking a US$485-million pre-tax writedown on its third quarter earnings caused by a surplus inventory of unsold BlackBerry PlayBook tablets
By Zara McAlister and Matt Hartley
In an effort to breathe new life into sales of its BlackBerry PlayBook, Research In Motion Ltd. is slapping new price tags on its beleaguered touchscreen tablet.On its United States Website, the Waterloo, Ont.-based company is now offering all three models of the BlackBerry PlayBook — 16 gigabyte (GB), 32 GB and 64 GB — for US$299, until Feb. 4, 2012.
However, in Canada, RIM is offering the 16 GB PlayBook for $199, the 32 GB model for $249 and the 64 GB model for $399. While the U.S. price change represents a drop for the 32 GB and 64 GB models — which were initially sold for US$599 and US$699 respectively — the US$299 price tag on the 16 GB model is actually slightly more expensive than what some retailers were charging for the seven-inch tablet during the holiday shopping season.
In the run up to Christmas, the 16 GB model was available through certain retailers for US$199. The new US$299 price tag for the three PlayBook models applies not just on
RIM’s own retail site, but also through the company’s retailer partners.
During its December conference call, RIM co-chief executive Jim Balsillie said the company planned to go on an aggressive marketing blitz South of the border, one that would have an impact on the company’s bottom line, in an effort to regain mind share in a market where RIM’s smartphones are falling out of favour with users.“We are not satisfied with the performance of the business in the United States,” Mr. Balsillie said at the time.
RIM officials did not immediately respond to requests for comment on Tuesday.
The move comes amid reports that RIM handed out thousands of free PlayBook tablets to employees at the company’s Waterloo, Ont. headquarters prior to the holidays.
The timing of the PlayBook promotion may also offer some insight into when the company plans to launch the delayed PlayBook 2.0 software update, which is slated for a February release.
This decision hasn’t been limited to North America. PlayBook prices on all models were recently halved in India, a country with a large population and a growing appetite for Web-connected mobile devices. RIM’s competitors have employed similar strategies in the past. Last summer, Hewlett-Packard Co. slashed the price of its disappointing TouchPad tablet to US$99, a move which resulted in increased demand and line ups outside electronics stores.
At the time of its launch in April, some analysts expected RIM could sell as many as six million PlayBooks in the device’s first year on the market. However, RIM has sold fewer than a million units, and now has a stockpile of inventory. RIM has sold just 850,000 PlayBooks over three quarters, or about 1% of the global tablet market, as it struggles to compete with Apple Inc.’s iPad and a slew of devices running Google Inc.’s Android software.
In December, RIM announced it would be taking a US$485-million pre-tax writedown on its third quarter earnings caused by a surplus inventory of unsold BlackBerry PlayBook tablets
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