today's AMAZING TV AD : honda's "cog" 2 minute tv spot

for more on this, go to this post : http://the-wawam-file.blogspot.com/2008/04/cog-honda-tv-spot-another-amazing-ad.html; april 14 post.
the inspiration is mount pinatubo when some years ago, all of a sudden, after decades of being dormant, it decided to erupt, spewing debris and ash several kilometers high, blowing ashes to float everywhere, far and wide, turning the skies gloomy gray as far away as metro manila, hundreds of kilometers away, covering metro manila streets and rooftops with thick ash. the pinatubo eruption was so powerful that its ashes changed the color of sunsets not only in the philippines but also worldwide.

that's what happens when clients and advertising agencies decide to run ads not worthy to be called advertising. its dark, its huge and very irritating and unfortunately, everywhere!


all they are doing is wawam! what a waste of advertising money!


here is a first row view of Philippine Advertising and Philippine Marketing.

mount pinatubo erupts shooting ashes several kilometers high, then floating to blanket many other towns hundreds of kilometers away

World Clocks

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Thursday, August 28, 2008

globe iphone 3G - over-pricing caused a "not-for-me" brand image

the globe marketing people must be grumbling , the long lines and excitement did not materialize on the launch of the iphone. smart telecom marketing people on the other hand must be happy. the smart telecom people are happy because by pricing the iphone at the current levels, it meant globe decided not to use the iphone as the tool to take market leadership away from smart.

why did globe iphone 3G's sales disappoint? i don't think it's lack advertising or lack of promotion. the iphone 3G has been widely expected in this market. people were already waiting for it.

i think it's the pricing.

globe already gave us a hint that the pricing was the killer for their launch. many weeks ago, globe already announced their prices on the iphone. then weeks after that initial launch and around 3 days before the actual launch, they announced a "price roll-back". it's not actually a roll-back since they have not launched it yet, but that back pedalling on the prices told the iphone's pricing strategy was the biggest weakness in their launch plans. in fact we can say with the roll-back, globe admitted they made a mistake on the pricing of the iphone.

"value" or the perception of "good value" or "sulit" is always an issue among filipino consumers on almost everything. fail at communicating good value or fair value and the brand is dead in the market. it does not matter if this brand is the true superior product in the market place. if a brand is seen as inferior in good value, superior product performance will not matter.

and i think this is what happened to globe's iphone launch in the philippines. globe failed on their pricing strategy. i think globe committed this blunder on pricing for several reasons :

  • they forgot that their target market, most likely AB, upper C already own a cellphone. they need to be given very strong reasons for them to buy a 2nd handset. they will already be "wasting" the money they invested on their current cellphone, they need a really smart reason to buy the iphone. pricing the iphone at the current levels made them feel it's not worth the investment.
  • globe also forgot that their target market most likely own a computer and has access to the internet and read newspapers and magazines. that means they most likely know the iphone has been launched in other markets ahead of the philippines. and they most likely know the iphone is being sold at $199 in the US. looking at globe's announced iphone handset pricing, all notions and hopes of "good value" disappeared.

the instinct of the globe brand manager who "rolled-back" the iphone's price was right. it was just that the price action was too little.

i'm also wondering - did globe forgot to read the newspapers in the last few months? this country has been punished by inflation, the highest in 17 years, gas prices in certain times were being increased on a weekly basis, there is a rice and food crisis and growth has slowed. given that scenario, good value, if not prices have become increasingly very important to consumers. and in that most important criteria, globe's iphone launch failed.

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read WAWAM! posts on globe's iphone launch : http://the-wawam-file.blogspot.com/search/label/globe

read WAWAM! posts on the iphone here :http://the-wawam-file.blogspot.com/search/label/iphone

27 comments:

  1. i was shocked at the prices of the iphone. i was planning on buying an iphone but changed my mind when i saw the price. feeling ko niloloko ako ng globe.

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  2. hindi naman ganon kaganda yung iphone.

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  3. you're crazy if you buy the iphone. yun lang.

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  4. nilangaw ang iphone sa globe! walang bumibili!

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  5. nobody is buying the iphone talaga. now here is a scary thought --- maybe they will rectify their errors and what if globe reduces its price by december? pano na yung mga bumili ngayon?

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  6. For someone who claims marketing expertise with sharp thinking, I am dismayed by your lack of research and understanding in your argument about the pricing of the iPhone.

    You argue that the iphone is only $199 in the US. But you do not point out that that $199 can only come with a 2-year contract with AT&T. Factor in the cost of the iPhone, the 2-year contract and the additional charge for texting (AT&T charges separately for this) and you should find that Globe's pricing is at par if not better than what AT&T's. The information is in the Apple website if you bothered to read through it and not jump to a conclusion.

    Oh and I don't work for Globe. I'm just irritated by all these people who say that the iPhone is too expensive and that it should only cost P10,000. They, like you, have obviously not done their research.

    ReplyDelete
  7. the facts are : in the US, the iphone is being sold at $199 or equivalent P9,032.61.

    globe is selling it at P15,000 or +67% versus the US price. if pre-paid, globe is selling it at P37,599 or +316%.

    that means globe is over pricing the iphone in very concrete terms. glove even knew they screwed up in it's pricing strategy, that is why they reduced it from the previously announced price a few days before it was officially launched.

    apple purposely took a pricing strategy of reducing the price of the iphone to make it more affordable to more people to generate more market share.

    with globe's pricing, they obviously did not adapt the same thinking and decided instead to make a huge profiy on iphone handset sales.

    apple does not control subscription or monthly fees of cellphone companies, but it has a say on the prices of their iphones.

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  8. with that pricing, obviously, globe has intended to target the AB upper C segment. and this consumer segment are very knowledgeable and most probably has read in the internet and newpapers that it is being sold in the US only for US199.

    after seeing globe's ridiculous prices and camparing that to the US price, most of them probably got turned off by it.

    my guess is IF these consumers did not know the price in the US, then they woundn't think its over-priced. unfrotunately for globe, they do know.

    result? there were no long lines in globe hubs to buy the iphone.

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  9. i can't get myself to buy the iphone. i feel globe is cheating me.

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  10. Geez, your attempt at a rebuttal makes me further question your marketing expertise.

    You can't argue based on the cost of the phone alone because you can't buy the phone without a plan. That's been the practice in telco for longer than you were in marketing probably, so stop arguing based on the price of the phone alone. It's just not right.

    You say that Globe is over pricing in "very concrete terms" and even screwed up their pricing strategy and reduced it. Now, I don't know why they reduced it but I certainly welcomed it. Anyway, let me show you in "very concrete terms" why Globe is NOT overpricing.

    The iPhone, as you said, costs $199 in the US, but you need to commit to 2 years with AT&T as you need to with Globe here. The cheapest plan for the iPhone with AT&T is $69.99/month and that doesn't include text messaging so I'll include the cheapest at $5/month. That's $74.99/month for 24 months or $1,799.76. Add $199 for the iPhone and you spend $1,998.76 total or, at today's rate of P45.8=$1, P91,540.16

    Globe's cheapest plan is P1,599/month again for 24 months. That's P38,376 add the iPhone at P15,100 (67% more according to you) and you end up with P53,476 (or 58% less).

    Let's take it further and compare it with the plan that's closest to $199 which is P10,100 at P3,299/month. That's P79,176 for 24 month, add the iPhone at P10,100 and you end up with P89,276.

    Either way Globe's offers are cheaper contrary to your claims.

    I am not going to get into your pre-paid pricing comparison because you further show your lack of marketing prowess in comparing apples to oranges.

    Perhaps, it would be in the best interests of everyone if you did some preliminary research before writing your columns. Then maybe you would present a more believable and better understanding of marketing.

    Oh and I'm not asking you to, but I think it would be very responsible of you to correct the misinformation that you are spreading.

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  11. globe has over priced the iPhone. only idiots will think otherwise

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  12. globe made a monumental error when it priced the iphone too high. they are suffering for their errors now - nobody is buying the iphone.

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  13. looks like someone who works for globe's PR agency is desperately trying to defend globe's idiotic pricing.

    I agree globe has over priced the iPhone. I know at least 3 people who changed their minds bec of the pricing.

    may over time maya yan? working after hours e.

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  14. baka siya mismo yung brand manager ng iphone sa globe. grabe maka depensa.

    over-pricing is the most common complaint of many. maski sa internet that seems to be the collective thinking. google it and you will get a lot of blogs and comments on the iphone's pricing.

    ReplyDelete
  15. Wow, you guys are really something. Again, I am not an employee of Globe and neither do I have anything to do with Globe other than being a subscriber and now an iPhone owner. I do have a passion for everything Apple though and you can call me a fanboi for that if you want.

    The bottomline is, none of you can refute the obvious fact that you have misunderstood the marketing behind the iPhone 3G. Steve Jobs said that it would cost $199 in the US "...and in ALMOST every one of these countries, the price is a maximum of $199..." (watch his keynote again, if you don't believe me). And even at that, Globe offers a more affordable package than what AT&T does, as I have proven without a doubt.

    Now, everyone is entitled to their own opinion and you may find it expensive. I don't (though I wouldn't mind if it was cheaper as I have said). Expensive is relative. Those who complain that it is too expensive may either be not the target market or may have been misled by the $199 claim.

    Which brings me to the point you guys can't seem to grasp. As I have said earlier, the author of this blog claims marketing expertise, but if he/she did not see through the $199 pricing of Steve Jobs and uses that as his/her basis for claiming that Globe is over-pricing, then maybe he/she should not claim such expertise.

    At least this other blogger went through the effort to study the plans and at the same time discovered to his surprise that the Nokia E90 even turns out to be more expensive than the iPhone 3G. http://www.yugatech.com/blog/mobile/globe-pricing-plans-nokia-e90-vs-iphone-3g/

    And in the same way that you claim to know people who changed their mind because of the pricing. Here's another guy who also found the iPhone expensive http://www.appletell.com/apple/comment/the-iphone-3g-to-cost-1000k-plus-in-the-philippines/ but bought one anyway http://www.appletell.com/apple/comment/up-close-and-personal-with-the-853-iphone-3g/

    I will stand by my premise that the iPhone here is reasonably priced in Globe's plans. Maybe you guys are just too caught up into the image of carrying iPhone when it's really not a fit for you. I don't see you guys raising a ruckus over the E90 being too expensive when, in my opinion, it's not even half as good as the iPhone.

    Oh and antenna, madaling mag depensa kung may kaalaman sa pinaguusapan. Again, it's wrong to jump to an uninformed conclusion. My understanding of the complaints I've read about the pricing really seem to be based on them being misinformed. That's why I suggested that the author of this blog do the right thing and point out the iPhone is competitively priced as compared to the US pricing and that those who still find it too expensive may not be the target market after all.

    ReplyDelete
  16. "Now, everyone is entitled to their own opinion and you may find it expensive. I don't (though I wouldn't mind if it was cheaper as I have said). Expensive is relative." --- if thats the case let WAWAM and everyone else who find the iphone as over-priced say what they want.

    what is there not to understand? the iphone is priced at around P10,000 in the US, globe is selling it at P16,000. there's a huge difference of P6,000. there is only one conclucion - globe overpriced the iphone!

    the pre-paid iphone, they are selling it at P38,000. its higher by P28,000 with globe vs the US. it is over-priced!

    the conclucion is plain and simple - it is over-priced!

    ReplyDelete
  17. how could anyone call globe's iphone resonably priced when its P6,000 or P28,000 more than what it is being sold in the US?

    ReplyDelete
  18. globe KNEW they screwed up in their pricing for the iphone.

    as mentioned in this post by WAWAM - globe initially announced a much higher pricing but changed it to the current, lower pricing weeks after the initial announcement and just a few days before the launch date.

    maybe globe did some research and read all the comments in the internet on how many found its pricing as over-priced and forced them to change the pricing.

    just by that incident alone, you already can tell one of globe's marketing error is on pricing.

    tama nga - over-priced ang iphone.

    ReplyDelete
  19. "those who still find it too expensive may not be the target market after all"

    hahaha that's ridiculous!

    something is wrong with your understanding of what "target market" means.

    target market is typically defined by, among other things, socio-eco class, lifestyle and ability to pay. (there are others, but those are most relevant here.)

    the task of marketing, advertising and yes even pricing is to convince the target market to buy the product or service.

    if the target market find the product over-priced and do not buy the product, it does not mean these people are not the target market, it means the marketing efforts failed.

    in this case, its the pricing that failed globe. the iphone is a superior product, superior brand image (as also stated by wawam)but why are people not lining up to buy it? one reason -- it is over-priced!

    ReplyDelete
  20. antenna,

    I think you should read and understand my comments before you try and argue them out. You can't compare apples to oranges. I have made a fair comparison (two actually) that show that Globe is selling the phone cheaper than AT&T.

    The simple conclusion you make is one made by a simpleton. And as much as you'd hate to admit it, it's wrong.

    I agree that the author of the blog has the right to express his opinion. But as I tried to explain, which you obviously did not get, there is an error in the way it was presented. And to be fair and responsible to everyone (and to educate them in the process) I suggested that this be pointed out to correct the misinformation that the iPhone is only $199 when it really is not because you can only get it with a plan.

    As I said earlier, I do not know why they lowered their prices but I welcomed it. Maybe they got a better deal because of their tieup with SingTel, maybe Steve Jobs was in a good mood and decided to give them a discount. It really doesn't matter. What's important is that they lowered their pricing and it turned out cheaper than AT&T's which I have already pointed out. Twice.

    You are correct in your basic understanding of marketing but perhaps you are missing the most important point. Did you consider that maybe, just maybe, you are assuming that you are the target market because you are enamored by the allure of the iPhone and want to be seen carrying one? Unfortunately, it's not just all about you. And the fact that you (and others) are complaining proves that you (and they) are not the target market.

    If no one bought the iPhone, then maybe your premise could be right, but the truth of the matter is I, along with about 600 people (from what I read in the newspaper) lined up and bought the iPhone during the launch event as did hundreds more in the days after. So there is an existing market for it at price points which consumers respond to. Unfortunately, it seems that you are not a part of that. So again, can you in your infinite wisdom accept and understand that you are probably not the target market?

    ReplyDelete
  21. I waited for the launch of the iPhone but after reading about it, including this blog and talking to their CSR, decided not to buy it. impression I got was their 3G network is not that widespread. I also felt the handset was over priced. I can't get over the fact that the iPhone is being sold at a much higher price in a 3rd world country than in a 1st world country like the US.

    instead of the over priced iPhone, I decided to buy an iPod touch. I am one of the target market and I find the iPhone over priced.

    ReplyDelete
  22. i found this very funny - initially, you are the target market, but if you find the iphone too expensive and you don't buy it, all of a sudden hindi ka na target market. hahahaha

    so, ang target market pala ay yun lang mga bumibili! hahahaha

    ReplyDelete
  23. "it turned out cheaper than AT&T's which I have already pointed out. Twice"

    yes and you are wrong TWICE.

    globe sells the iphone handset at P16,000 and P38,000.

    in the US, AT&T it is being sold at P10,000 only.

    ReplyDelete
  24. Gad you're dense.

    Ganito lang yun. Puntahan mo ang website ng AT&T at basahin mo ang nakasulat dun. "Two year contract required." Sa makatuwid, maski $199 ang iPhone, may kasamang 2 -year plan. Tulad ng sinabi ko, ikumpara mo ang plan ng AT&T at plan ng Globe, mas mura lumalabas ang plan ng Globe.

    Wari maintindihan mo na ito.

    ReplyDelete
  25. iphone handset nga kasi ang punto! OVER-PRICED ANG IPHONE HANDSET!

    ReplyDelete
  26. Hindi nga nakakabili ng handset lang. $199 nga sa AT&T pero nakatali sa plan. Hindi mo ba gets yun?

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  27. "Hindi nga nakakabili ng handset lang. $199 nga sa AT&T pero nakatali sa plan. Hindi mo ba gets yun?"

    you obviously do not know much about marketing. so it's good you are go to this blog, you will learn a lot.

    basahin mo to, post ni WAWAM:
    http://the-wawam-file.blogspot.com/2008/09/globe-iphone-3gs-pricing-blunder.html

    globe is selling the iphone handset. naturally, thats what consumers will be looking at - handset features and handset prices.

    consumers will compare globe's handset pricing to what they know is the price it is being sold in the US. and when they do that, they will conclude, globe over-priced the handset.

    sabi nga don sa post ni wawam -- yung subscription price ay wala talagang relevance sa consumers because they are at present already spending for it now. what globe is asking consumers is to shell out money for the handset, so doon ang labanan ng presyo. at sa presyon ng handset, maraming na turn off gawa nang nag over price and globe.

    ReplyDelete

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