Notebook Pricing and Segmentation

<br/><a href="" target="_new" title="Laptop Hunters $1700 - Lauren and Sue get a Dell XPS 13">Video: Laptop Hunters $1700 - Lauren and Sue get a Dell XPS 13</a>

According to a recent NPD study found that Macs accounted for over 90% of computers sold in retail channels for over $1000.  PC manufacturers really need to learn to segment the market better.  This research underscores that there are customers with high willingness-to-pay (WTP) looking for a premium product.  Even Microsoft's own "Laptop Hunters" ads make this point.  In the video above, "Lauren and Sue" are looking to buy a notebook for under $1700 and they find exactly what they want for under $1000.  Which is great for Lauren and Sue, but should also make PC manufacturers wonder if they couldn't have charged more for that same product

Giampaulo and the Perils of Shopping for a Notebook from a Big Box Store

The recent "Laptop Hunter" ad by Microsoft featuring "Giampaolo" inadvertently makes a great case for buying a notebook direct.  Giampaolo is looking for a notebook with (in the following order) "portability, battery life" and "power."  He chooses a HP HDX, which is a cool machine, but it just isn't a great fit given what he was looking for.  At 7.3lbs and 16" display, the HP HDX isn't that portable.  It does have ample power with a 2.4GHz processor, 4GB RAM, 512MB graphics card, and fast 500GB HD.  But given those specs the included 6-cell battery probably won't last that long on a charge.  In the end, he ended up with a notebook that really only met 1 out of his 3 criteria.

Assuming Giampaolo really wanted an HP, had he looked on, he would have done much better.  For instance, the HP dv6t is about 1lbs lighter than the HDX and can be customized with a 12 cell battery and almost the same performance specs as the HDX (just a slightly different 512MB graphics card).  That configuration runs about $1,300, still way under his budget of $1500.  Also the EliteBook 6930p (KS085UT) for $1,429 might be the best fit of all.  The EliteBook is much more portable at only about 5 lbs and a 14" screen (with higher resolution than the 16" HDX).  It's also sports a 2.4GHz processor, 4GB RAM, a respectable 256MB graphics card, and 7200RPM 160GB HD.  Overall, it strikes an excellent balance between portability and performance.

Over the years I've helped a lot of people buy computers, and usually buying direct is the best way to go.  But golly, buying direct is not without it's own perils and frustrations.  And it's hard to resist the instant gratification of shopping at big box stores.

The Perfect Pasta Sauces versus Product Spam

I have to admit that while I love that video Malcolm Gladwell discussing the origins of the endless varieties of products in our supermarket shelves, I'm extremely uneasy about the overall thesis: i.e. that lots of product options are a good thing and make us happy.  Maybe in the supermarket product variations really are a good thing.  I personally have never bought Prego or Ragu, and the brands of pasta sauces I prefer don't come in dozens of varieties.  To me the bigger question is at what point do product variations become product spam?  Read on for more on this...

this entry continues

Pasta Sauce and Product Development

I'm sort of hooked on TED Talks, which can be easily downloaded via iTunes.  This video of Malcolm Gladwell had me grinning from ear to ear.  In it Gladwell talks about the career of Howard Moskowitz, the man who is directly responsible for the endless varieties of products on our supermarket shelves, particularly Pasta Sauce.  It sounds obscure but this video touches on an amazing number of aspects of product development; aspirational buying, the fact the customers can't tell you what they want, products don't exist on a hierarchy, and my favorite, "the platonic dish".

GPS Navigator Product Spam


I recently mentioned product spam in digital cameras, but check out all these GPS navigators from Garmin.  It wasn't difficult for me to find two that are incredibly redundant: the nuvi 260W and nuvi 660.   Both retail for about $399 (see their Amazon product pages here and here), both have a 4.3" touchscreen, both can say the names of streets and both have the same preloaded maps.  However, the 660 has Bluetooth, a longer lasting battery, an FM transmitter, an MP3 player and a few other features the 260W lacks.  So given that they're both the same price why would anyone logically choose the 260W over the 660?  The really crazy thing is the 260W is newer.  Why would Garmin introduce a new product with fewer features than an older product at the same retail price. head hurts...  By comparison, TomTom's product line is much more streamlined and user-friendly, also the listed prices are much closer to the actual street prices.

Wal-Mart Embraces Solar Power


It's official Wal-Mart will install solar panel systems on 22 sites in California and Hawaii.  The solar panels will be provided by BP Solar, SunEdison LLC, and PowerLight, a subsidiary of SunPower Corporation.  Here are some highlights from the press release:

The solar power pilot project is a major step toward Wal-Mart’s goal of being supplied by 100 percent renewable energy.  Each solar power generating system installed can provide up to 30 percent of the power for the store on which it is installed.  By Wal-Mart’s estimates, installing the solar power systems will help reduce greenhouse gas emissions by 6,500-10,000 metric tons per year.

Also, as the recent CNET article points out:

Because of Wal-Mart's size, its investments in solar power could have a significant financial impact for solar providers.

So if Wal-Mart eventually goes all out with solar installations across all their stores, they could drive the price of solar panels way down.  Gotta love those economies of scale...

The Slow Death of Built-to-order PCs:
Part Two - No one wants to Configure

There's another huge cost to these highly configurable systems: customers have to actually configure them, and then wait for their computer to be built. Most people I know, don't understand the difference between hard drive capacity and memory capacity. And while people might enjoy selecting all the most expensive options to build that $9,000 system, when it comes to actually configuring a computer with the right balance of power and affordability, most people don't have a clue. To anyone smart enough to realize they don't know the first thing about computer components, a built-to-order PCs is hugely unattractive (which is why lots of people go to the nearest electronics big box store and buy whatever they're talked into). Instead most customers would rather just buy a computer with the specs they need and that day or the next. Before long most consumers will feel that configuring a new computer is something they just shouldn't have to do, and they're right.

The Slow Death of Built-to-order PCs: Part One - The High Cost of Customization

Dell's recent financial trouble may signal a shift in how consumers buy computers.  Dell pioneered the built-to-order PC, the idea being that customer ordered exactly what they wanted and Dell would never be sitting on unpopular systems.  They streamlined the process out the ying-yang and beat everyone's prices.  But now it's becoming harder and harder for Dell to turn a profit on the PCs they sell.  While I'm sure there are tons of theories as to why this is the case, I'm going to offer up my own: after a certain point offering too many options causes more harm than good, and Dell is well beyond that point...

this entry continues

The Blue Pages: How to Vote with your Wallet


My amazing sister turned me on to this amazing book: The Blue Pages is a Zagat style directory of companies' political contributions, business behavior and policies.  I just ordered one for myself and am already obsessed with it.  Each entry has a nifty little chart that shows what percentage of political contributions went to the Democratic or Republican party, it also lists the exact dollar amount given to each party.  After browsing through it just quickly, it's a little disappointing (for Democrats at least), it seems that in general most companies contributed more to the Republicans and those that do contribute to the Democrats, contributed less.  It was printed in January 2006, and it would be interesting to know if that trend has shifted at all in the past year.  Anyways, I can't withhold my excitement about this book, without making just one tiny recommendation: They should totally make an online version of the book with data for a lot more companies, update the data annually, and provide graphs of historical data to show how a company's contributions changes over time.  This book is great, but they're going to need to update it every year or so, and an online could not only display a lot more data, but would also reduce the environmental cost of producing books year after year.

The Blue Pages - $9.99

Thanks Gen!

Shopping Greener, Buying Used and Refurbished

So this entry isn’t really a “They should do that” as it is a “You should do that.” Like most people, I love getting new stuff. But it’s crossed my mind a few too many times that buying stuff has an environmental cost. After all, everything has to be manufactured, consuming raw materials and energy, and then shipped, consuming more energy. However, there’s a simple way to make shopping a little greener that also saves you money: buy used or refurbished. In particular buying used or refurbished electronics, books, CDs, and DVDs, is a great option. Apple and Dell sell refurbished products directly to customers. And buying used stuff on Amazon couldn’t be easier. Read on for tips about buying refurbished stuff.

this entry continues

Restaurant Gift Card that Saves your Favorites, every Regular's Dream...


For anyone who's a regular at a coffee shop or quick-serve restaurant, this is sure to hit home. These days, most restaurants offer gift cards (or rewards cards), but they should really make that card able to save the customer's favorite orders. This would allow the customer to simply tell the cashier which favorite he'd like that day, without having to recite all the details. Such a system would prevent orders from being made wrong, and speed up the whole ordering process (i.e. shorter lines). Something like this would be perfect at Starbucks, that not only has regulars, but has tired, irritable, rushed regulars who expect their overcomplicated coffee to be perfect each and every time. Read on to see something like this could work.

this entry continues

New from Whole Foods, Smaller Stores!


Even though supermarket chains have mostly eliminated small grocers from neighborhoods, they can’t eliminate the need for them. Whole Foods should really borrow a page from Apple’s playbook and open Whole Foods mini-stores in neighborhoods and dense urban areas. A small neighborhood Whole Foods could be the perfect place for basics (milk and soy milk, eggs, O.J.), a pre-made sandwich, some produce, cheese, wine, perhaps a small meat or fish counter, and, of course, fresh bread and pastries.

this entry continues

Uncrate Stores - You Know, For Shopping

uncrateStore.gif is a funny thing: it’s like a stunning showroom of awesome products, but nothing is for sale. They feature the coolest stuff for an oft-ignored consumer: the materialistic man seeking not just good stuff but good-looking stuff. It really is amazing how many stores cater to essentially the same group of women customers (think of all the quirky boutiques selling unique jewelry, purses, clothes, home accessories, etc), but almost nothing exists for me(n). Which got me thinking, should open stores. Read on to see how it could work…

this entry continues
Powered by
Movable Type 3.2