Thursday, December 13, 2007

Unethical marketing

Quoted from GMSV,

"It will chew up bandwidth and sell a ton of racks."

-- Cisco CEO John Chambers concisely explains with a smile the business reasoning behind the company's interest in bringing TelePresence to the home.
An offering like home Telepresence doesn't just make life easier for geographically separated families, of course. It also drives network usage and related router purchases by the carriers, Chambers added.
Not unlike what Intel did here
........Intel Corporation's online "Intel Inside" campaign. Intel has offered for sometime a commission to Web sites that feature its "Intel Inside" logo, with a clickable link back to the Intel Web site. In a scenario only possible online, Intel has asked Web sites to intentionally slow down their Web sites by adding three dimensional graphics and animations, and adding a message that says if you'd upgrade to an Intel Pentium II processor, this site would run faster (i.e., be "optimized"). In return, the sites receive an even larger larger commission from Intel.......
Not to mention the recent European ruling that gave a painful knuckle-sandwich to Microsoft.

For a remarkable example of indirect price discrimination, go to the Dell website. The first thing you are asked is what type of customer you are. It gives you four choices: You can be a medium to large business, a home, a small business, or a government agency. If you search for the price of a 512-megabyte memory module (remember to clear your cookies in between your choices) you will be quoted $334.99 for medium and large businesses and government and $267.99 for home and small business.

Conniving, isn't it? Using information on customers against them! By the way, MBAs might recognise this as value based pricing.
Then there's the case of IBM which had developed a fully functional 10-page-a-minute laser. They added extra 7 chips to the high speed printer to slow it down so that they could charge just slightly more than half the price for it.
That's an example of a clever manufacturer, spending more money to 'damage' his product, so that he could sell the undamaged product at a premium!
The Intel 486SX processor was just the regular 486 processor with the math co-processor disabled, and was sold for about two-thirds the price.
The Sony MiniDisc comes in two sizes, a 60-minute version and a 74-minute version. They’re exactly the same except that the 60-minute version has a software instruction that prevents writing on a portion of the disc, cutting its length by 14 minutes.
If you buy an inexpensive DVD player from a company that also makes expensive ones, such as Sony, and pop off the top of the remote, you’ll often find hidden buttons that provide functionality not accessible on your unit because you didn’t pay enough for it. The DVD player and remote possess the functionality, but the company has hidden it from you, so they can sell the player for less.
If you want to read more on how big companies are fooling you, read this. John Chambers' comment doesn't sound too bad now, does it?

It's an evil world out there and there are not many on the good side.

13 comments:

dinu said...

Isn't Chambers' statement open and fair ? Although Cisco ran into some trouble in Brazil in the recent past, it stays in the ethical region pretty much.. :-)

On the telepresence front, we have been using it for remote meetings for sometime and it has been wonderful. A nextgen version was showcased during the inauguration of Cisco's of Bangalore Campus. http://youtube.com/watch?v=rcfNC_x0VvE

I'm sure almost everyone of us would have done this. http://youtube.com/watch?v=R0_WhSdsgBo

Girl With Big Eyes said...

'Pretty much' sums it all.

:)

I can't even start to imagine the bandwidth required to get real time footage on those big screens.

Girl With Big Eyes said...

Yes, have to agree that Chambers' statement is open unlike the not-so-well-kept-secret of others in the list.

dinu said...

The bw requirement for telepresence is 5-6 Mbps per screen. I am waiting for the day it becomes affordable for home users.. It is $200K-$300K for one installation.

Did you go through the youtube videos.. ?

Girl With Big Eyes said...

Yup, went through them. Thanks for sharing.

VKM said...

what about that proposed plan of coke to come up with a vending machine which would measure the outside temperature and charge more when it is hot?
coke received a lot of flak for it, but surprise, there were lot of respectable press which supported it too? after all it is a public organization trying to maximise its profit to increase shareholder value(When airlines can do this, why cant coke?)

for me the DELL model doest sound as bad as the others. after all, we live in the world of subsidies to sme's dont we? havent we used our student concession in the private buses in kerala? :)

Girl With Big Eyes said...

That's a great example to understand value based pricing, I guess!

It is interesting to what levels or marketing companies go to increase their coppers. And well, what the consumers don't know will never hurt them. Isn't that what all these pricing tricks rely on?

Aby Chacko said...

Hello Priya,

Long long time no hear !
I happend to read your blog and was a pleasently surprise to see the way life has turned out for you.
Just to refresh your failing RAM-
We know each other from your REC days.
At a time you were sitting at home, WIPRO was not calling and your were relly Frustu !

All the best and keep blogging, really enjoyed reading about your childhood !

Aby Chacko

Girl With Big Eyes said...

Hi Aby,

It's really great to hear from you after such a long time.

I don't seem to have your email, if you happen to return back, could you please drop me a line so that we can catch-up?

Aby Chacko said...

Hello Priya,

I cant find yours email id either .

My email is : abychacko78@yahoo.com

OK. We can start playing catch up !

Mo said...

What about the Government damaging stuff so as to sell it at a lower price. Alcohol is an example, which as found in nature or distilled, is Ethyl Alcohol and quite a feast to drink. Then those blokes kill it with Methanol to make Methyl Alcohol, which is fatal to consume, and price it lower for sale as an industrial requirement. This allows for over pricing of Ethyl Alcohol. It is not about Morality - it's all about Economics!!!

Check my Blog at
www.mo-freesoul.blogspot.com if you are free, and if you so desire.

Girl With Big Eyes said...

There's a perfectly sane argument behind that - don't you see?

Govt wants to encourage industries, so would subsidise their raw materials.

But alcohol like tobacoo is considered a social evil and the high price is mainly because the tax put on it to discourage people from using it more.

That's the Economics behind it.

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