Content area
Full text
In a world of low-cost imports and a high dollar, we can no longer ride the coattails of R&D or count on protectionism BY KEN WONG
A recent ad from IBM proclaims "Premium prices-everyone's Holy Grail" and shows a traveller struggling with that decision faced by all late-arriving, starving business travellers: How much is that jar of nuts in the mini-bar really worth? It ends with him giving in to his desire while the voiceover notes that premium pricing requires knowing the right time and place to offer whatever we sell.
It's great creative and a compelling reminder that price can be an objective and not just a tactic, deployed to build share in the face of a purify offering. It's an especially noteworthy message in a time of competition against lower-cost offshore suppliers and a strong loonie.
But the ad also worries me. At the risk of being too literal, it suggests the way we secure premium prices is by holding customers ransom at times when they are most needy. Where I come from, that breeds resentment, not a relationship. In fact, it is part of the reason why grey markets arise in response to tariffs...