Archive for November, 2010

Darn Interesting & Fascinating

November 4, 2010

With the two latest innovations, shall I say Micosoft is a shining star? Where this will take Microsoft is a darn good question but these two are going to become big. One is the Microsoft Kinect, this has wide ranging implications to the technology industry, even outside IT. If Wii revolutionized the gaming market, Microsoft has really taken it to the next level with Kinect technology. The fact that it can sense the human motion without having to hold anything has implications in so many areas. For example, there could be an iPhone app with this motion sensing technology that could decipher “Sign language” and convert it to voice on the other end and much more.

The second one that pretty much revolutionizes is second only to google digitizing books! Recently microsoft created something called datamarket, yes! a marketplace for data. One can store information in digitized form in the SQL Azure database, make that data or any portion of it as a regular webservice and publish in this market. Some are free, some are free upto a point and others are paid services. Thus its making the data available for computer programs, driving efficiency higher. Some examples of services are realestate data from zillow, carbon emissions information on EU countries, MLB statistics… This is a great opportunity and this will drive more and more sevices to be automated driving costs down and improvig efficiency.

These are two awesome innovations but How far Microsoft will benefit from the advent of these two remains to be seen.  But I’m sure the other players are going to innovate further, improvise resulting in increased adoption and applications of these two innovations. Whether Microsoft will again become a glowing star or a blowing up star is a topic for historians.  Truly these present a great opportunity for the next round of entrepreneurs.

Advertisements

Pricing quantity discounts

November 2, 2010

Have you been to a car dealer lately? The first question the car sales person would ask you is how much can you pay per month? This is exactly how pricing for “ad hoc products” are arrived at in SMBs. Pricing is the most tricky decision for any successful product launch. However in most scenarios, we notice that the price goes down with increased volume. We all know, Walmart doesn’t pay the same price as a convenience store around the corner to a supplier. So how does organizations come up with the prices for a product bundle?

Recently, read a great paper on how to arrive at pricing on volume discounts by two Wharton professors Raghuram Iyengar and Jeiddi.  This study published by Wharton professors have enriched the traditional conjoint analysis by adding the quantity aspect of a product or service. You can read the complete article here. Normally conjoint analysis is used to derive the perceived value of a product or service (by the consumer) based on its various attributes (features).

The authors devised a methodology to arrive at the various price points that the consumers would be willing to pay for the respective quantity of product or service. I think every business can utilize or build upon this study to determine the price for the various product bundles. This methodology factors in the  marginal willingness-to-pay per quantity to determine the “Willingness-to-pay” for the next higher product bundle. This study has been done for consumer products or service. It needs to be seen how this can be applied in a B2B scenario.