Archives for the month of: November, 2013

Apparently Barnes & Noble has different online and in-store prices. I didn’t know this, since I haven’t shopped there in ages (nor on their website), but this recent thread on The Consumerist website makes the pricing discrepancy abundantly clear.

Bringing a business mindset to this issue, it is easy to understand why the prices are different: because the cost structures are different. But the resulting price discrepancy is somewhat unusual for consumers to deal with…apparently. That is something that B&N’s media and customer relations departments didn’t seem to grasp, as evidenced by their well-reasoned business-like response when confronted with customer dissatisfaction over this issue:

“Barnes & Noble.com is a subsidiary of Barnes & Noble, Inc., with its own management, operations and price structure.”

“The online and retail businesses each offer their own unique selection and competitive price structure.”

“Neither business advertises the other’s price structure.”

“Neither business matches the other’s advertised prices.”

And, as stated on BN.com:
Barnes & Noble.com usually is able to fill your order with less expense than our retail stores, and we pass those savings on to our online customers. This is why our prices online sometimes are lower than prices in your local Barnes & Noble store. Similarly, at times, your local store may offer exclusive promotions that are not offered at Barnes & Noble.com.

Fail!

The correct response would have been, “The two business units have different cost structures…[blah blah blah]. This is also because of differing labor costs across these two types of businesses. You see, we love our employees as much as we love our customers. And to attract and retain high-quality employees to give you the best possible service and in-store experience, we need to pay people well and also provide benefits. That’s why our in-store cost are higher—to create a win-win. Both of us need happy employees to make sure you are a satisfied customer.”

I’m not quite talking cause-marketing here, but according to a Nielsen study, consumers apparently are “…willing to pay more for goods and services from companies that have implemented programs to give back to society…”

B&N could have humanized the problem and made sure that customers understand that their hard-earned money goes to a good cause: making sure that other people can also earn a living wage in a service-oriented economy. That’s turning lemons into lemonade (and brought to you by the “duh” department).

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In the past I’ve read many a different explanation of what differentiates B2B and B2C marketing and purchase decision-making processes. I very much like Jerry Rackley’s take on this, which is that in B2B it is relationship-based, whereas in B2C it is brand-based.

I’ve finally come up with my own differentiation:

  • B2C: benefit-based
  • B2B: value-based

Both are versions of ROI, but I believe that for consumers most purchases are considered sunk costs, and that the emotional accounting is benefit-based, e.g., food needs to not just satiate an appetite, but also taste good. But on occasion we’ll just choose the functional solution so that we’re not hungry even though the food may not taste very good.

However, in B2B a prevalent mindset is that a solution wouldn’t even get considered for purchase if it didn’t provide a benefit (duh!), but it must also generate a measurable/tangible return. “Will this make me money, not just cost me money?” That’s value.

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