Australia is a victim of international marketers that have established a tradition of charging higher prices to our isolated market. But as globalisation continues apace, broader methods of importation are changing the game.
In this BRW article, Mark Ritson addresses the burning question: Why are prices in Australia so much higher than elsewhere?
I have had this conversation many times and people usually try to justify it by pointing to our geographic isolation or arguing that wages are so high in Australia that it costs more to get products to us.
My view is that in most cases this is frog shit. As Ritson points out, the root of the problem lies in our willingness to pay higher prices. There has been a lack of real foreign competition in Australia that cosy oligopolies have grown accustomed to fleecing us on everything from books to sneakers to downloads. Australian consumers got used to this and now we don’t bat an eyelid at paying 70% more than Americans or Europeans pay for the same products.
Fortunately for us, there is hope on the horizon (but only if we get off our collective arse and do something about it). The combination of strong demand for brands in Australia and the huge disparities in the prices we pay versus other markets that Aussies are increasingly searching our grey market goods.
A grey market is the trade of something through a distribution channel that, while legal, is unauthorised or unintended by the original manufacturer. Whilst the goods are legit, you’re buying them from a source that the manufacturer did not intend. For example, I recently bought myself a Bally duffle bag through a Japanese online marketplace called Rakuten. David Jones in Melbourne was charging $1,500 for it. I paid $700. I did this again at Christmas time and saved almost $1,500 on a Celine handbag for my wife.
This gap will only close if more Australian consumers cotton on to the fact that they are being royally shafted and seek out lower prices through alternative channels.
I was channel surfing late at night and I caught this keynote address from DNA://13 on ABC’s Big Ideas.
Andrew Bleeker was a digital media strategist with both of the Obama campaigns. He discusses tactics used, lessons learned and how these can be applied to marketing brands and products.
Some of the key things I took away from this:
Carmen Nobel, HBS
Many companies choose either the sequential naming approach (Sony’s successive PlayStation, PlayStation 2, and PlayStation 3 video game consoles, for example) or the complete name change approach (Nintendo’s Nintendo 64, GameCube, Wii). Professors from Harvard and London Business Schools conducted a series of experiments to determine when and why each approach made the most sense:
1. Brand name continuation vs name change
"With a name change, participants tended to expect features that were distinctly different or new," Ofek says. "With a name continuation, they just expected improved performance on existing features."
2. Risk vs reward
"The perception is that if it’s a brand name continuation, it’ll be somewhat better than the previous model, but it won’t be buggy and there won’t be a learning curve," Gourville says. "With a brand name change, you infer that there may be a steep learning curve, and it may work differently from your previous camera."
3. Creative sequences
A brand name change also comes with the risk of disappointing consumers who expect more from the product than they otherwise would have.
"If you’re really just tweaking the previous generation of your product, it’s probably much better to use brand name continuation than brand name change," Gourville says. "Otherwise people will be led to believe that there are massively new features in there, and you’ll just lead them to disappointment."
Is it interesting because it happened…
or because it happened to you?
If George Clooney sits next to you at a restaurant, that’s interesting to you, no doubt, but only interesting to your friends because you’re so excited. I mean, he had to sit next to someone!
Should we read your press release or come to your gallery opening or take a sales meeting because it’s important, or because it’s important to you?
Marketing is the art of seeing (and then creating) what might be interesting to more than our friends.
There’s a circle of friends in our lives that care a lot about what we care about. The rest of the world? They mostly don’t.
The growing deluge of content marketing will inevitably result in consumers raising barriers against content marketing in the same way they now ignore traditional advertising.
Only those who can build great content brands will be in a position to protect themselves. A great content brand is a brand that’s famous for producing intelligent, useful and entertaining content that’s always worth consuming.