??? for business/marketing folks re: RE pricing, etc.

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JNeffLind
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Post 18 Mar 2015

(EDIT: Changed thread title to invite more feedback. Anyone besides Selig or others care to chime in?)

SO if you haven't noticed there are some huge savings in the RE store now in bundle form.

Something that's come up before is the issue of developers sale behaviors making some consumers feel "betrayed" by having previously paid full price.

I thought this might be a good time to ask about this since one of our resident Uber-Menschs Selig who went a longtime without sales, recently did a sale, which was then piggy-backed onto a bigger bundle. As a full paying customer for Selig's REs, I have no beef because of their quality and the fact that I've been enjoying them pre-sale. Still I feel the little kid in me throwing a tantrum at not having gotten the absolute best deal EVER. 

I'm curious to hear from a developer (or others who have had analogous experiences in other fields) as to how this affects decision making, etc.

Obviously I wouldn't be so crass as to ask for financial info, but I'm curious if there are discernible sale patterns surrounding price reductions, like long droughts afterwards, or if the proximity of a past sale might affect a new product's launch, suggesting consumers should wait for the discount, etc. Or maybe even that a sale would cause more full priced purchases after the fact as well due to positive buzz amongst those who bought on sale. Is there any temptation to simply price something above it's deserved price point just to allow for future discounts? Is there anything cut and dry about this?

I know economics and sales are complicated. Just trying to get a view from the inside since Props would never respond to this question.

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selig
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Post 18 Mar 2015

JNeffLind wrote:SO if you haven't noticed there are some huge savings in the RE store now in bundle form.

Something that's come up before is the issue of developers sale behaviors making some consumers feel "betrayed" by having previously paid full price.

I thought this might be a good time to ask about this since one of our resident Uber-Menschs Selig who went a longtime without sales, recently did a sale, which was then piggy-backed onto a bigger bundle. As a full paying customer for Selig's REs, I have no beef because of their quality and the fact that I've been enjoying them pre-sale. Still I feel the little kid in me throwing a tantrum at not having gotten the absolute best deal EVER. 

I'm curious to hear from a developer (or others who have had analogous experiences in other fields) as to how this affects decision making, etc.

Obviously I wouldn't be so crass as to ask for financial info, but I'm curious if there are discernible sale patterns surrounding price reductions, like long droughts afterwards, or if the proximity of a past sale might affect a new product's launch, suggesting consumers should wait for the discount, etc. Or maybe even that a sale would cause more full priced purchases after the fact as well due to positive buzz amongst those who bought on sale. Is there any temptation to simply price something above it's deserved price point just to allow for future discounts? Is there anything cut and dry about this?

I know economics and sales are complicated. Just trying to get a view from the inside since Props would never respond to this question. 
My first question would be this:

How do you calculate the "deserved price point", and how would you know if you were priced above or below it?

:)
Selig Audio, LLC

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JNeffLind
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Post 18 Mar 2015

selig wrote:
My first question would be this:

How do you calculate the "deserved price point", and how would you know if you were priced above or below it?

:)
I guess your first question would be in response to my final question.

So should I just write it all up to the fog of war and stifle my curiosity? Wouldn't be the first time.

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selig
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Post 18 Mar 2015

selig wrote:
My first question would be this:

How do you calculate the "deserved price point", and how would you know if you were priced above or below it?

:)
JNeffLind wrote:
I guess your first question would be in response to my final question.

So should I just write it all up to the fog of war and stifle my curiosity? Wouldn't be the first time.
I ask that as an example of how confusing the whole topic is. IF there was an indisputable answer to that question, the rest would be child's play IMO.

That's the question that comes first and where the best you can do is make the most educated guess you can. It's different for every product in every market at every point in time, so even in hindsight it's hard to know if you guessed "right" or not!

Maybe someone with a business background can provide more insights or some common guidelines?
:)
Selig Audio, LLC

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JNeffLind
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Post 18 Mar 2015

selig wrote:
I ask that as an example of how confusing the whole topic is. IF there was an indisputable answer to that question, the rest would be child's play IMO.

That's the question that comes first and where the best you can do is make the most educated guess you can. It's different for every product in every market at every point in time, so even in hindsight it's hard to know if you guessed "right" or not!

Maybe someone with a business background can provide more insights or some common guidelines?
:)
Thanks for the response. The stuff gives me a headache and I'm sure I'd struggle with it if I was a seller. I was mainly curious as to your personal experience as a sort of pinata for opinions from all sides, as opposed to your opinion as an expert seller since I know your expertise is elsewhere. Maybe it'd be wiser to ask in six months when the dust has settled and there is some actual data to interpret, even in broad strokes. 

(I did just change the thread title and OP to invite others to contribute as well.)

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Benedict
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Post 18 Mar 2015

I think maybe it is better for you to read some micro-economic theory as (while not being as dull as you think) the bits on Supply & Demand pretty well explain all your core questions. Bottom line is there is no set price for anything and any attempt to set it externally does more damage than good.

Take for example rocks:

Most rocks are worth nothing - so much so you have to pay someone to cart them away. Some rocks are worth a bit and some rocks are worth a fortune. One rock in particular will make a woman love you.

So what sets one rock apart from another? Supply and demand. People perceive a demand for a certain type of rock so they will pay more to get that type of rock. So much so that they will pay to have other types of rock cleared away. Now not all rocks are equal.

Then it becomes complex:

People who don't have as much valuable rock will become desirous of more. People who have more valuable rock will become important. Some people will trade things they have like their labor to get more valuable rock. Others will decide that having to work to get the valuable rock is silly. Of those a few will decide valuable rock is not important after all and go live in the hills. Most though will dream of some system where all rocks are distributed equally. Of course no rock distribution system is equal either in the ground or above so there are endless conflicts and power struggles as everyone tries to become the most important rock holder (generally whilst claiming to be an equal to all so as to slip into power un-noticed).

As a consumer of rock we have to power to buy or not buy. If you don't want to buy every rock everyone is peddling then develop discretion. If you do all that quietly then the market will become the best it can be and conflict will abate.

So as you see there is no set price for an RE and suppliers will adjust as demand comes and goes. All the sales suggest that either demand is drying up or someone desires a greater demand in the market and is trying to make their REs seem shinier with a value add game.

:)

ochenk
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Post 18 Mar 2015

I do a fair amount of pricing analysis in my day job, so I've thought a bit about pricing, both in general, and when it comes to pricing my REs.* There's of course lots to read and think about on the topic, but in terms of whether Propellerhead's mega bundles are a good deal or not, consider the concept of "value proposition" - that is, what is the value gained by each customer position. New users obviously gain, since they'll be able to get certain REs at a significant discount. But how about users that previously purchased some of those REs?

Correct me if I'm wrong, but as far as I can tell, none of the bundles have any REs that were initially released within the last year or so. All of the included REs are older REs. So what that means is that if you purchased a RE shortly after it was released, you paid a premium for getting immediate access to it. This isn't that uncommon. Right now, you can buy three different generations of the iPhone. If you want the latest and greatest, it'll cost you full price, whereas older generations are discounted. Same thing with cars. The latest model is always more expensive than older models, even when depreciation is accounted for.

So going forward, if there's a RE that comes out that looks interesting to you, you'll have to consider whether immediate access to the RE is worth the premium of paying full price. Or, would you rather wait at least a year or more to see if it is included in some future version of a mega bundle. 

Maybe another way of thinking about it would be this: If there was a "complete my bundle" option, where you only paid for the REs that you don't already own, but in exchange, you wouldn't be able to use those REs that you already owned for one year following the purchase of the bundle, would you take that option? If not, then the price that you paid for the RE when you first purchased it was worth the premium to you.

It's human nature to be pissed when you see someone else paying less for something than what you paid for it. Just remember that 1) you've been able to use it longer than they have, and 2) it's probably more meaningful to you, since it was a good value proposition at the time you purchased it.


* - (For what it's worth, my conclusion was to price all my products low and never put anything on sale and never bundle any of my products. That way, users, both new and old, will never feel like they overpaid for a product, nor will anyone ever think that they should wait until my next sale.)

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MarkTarlton
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Post 18 Mar 2015

I wished I'd have waited 24 hours before buying the leveler, deesser, and gain plug ins yesterday cuz they are all in the outboard rig bundle today and it looks tempting! I still have some of the other RE's included..  had I not bought the Re's yesterday I would definitely be buying the bundle! bummer on my timing.

edit - I just sent propellerheads a message on their FB page asking if there was anyway to get the money I just spent and apply it to the bundle so i can get all those goodies...I figured it was worth a shot since it's only been 24 hours :)

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CharlyCharlzz
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Post 18 Mar 2015


I know that sales for digital product's have for only purpose to make things more popular , a new user buying reason plus the bundle  last black friday that now buy this bundles show and expose to everybody around him that bundle and new funky RE's and reason 8 , he is going to also get his marks wiith those developers product's wich is a great investement for these devs to be part of such bundles .
there is a down side for the brands in term of money making but these days rather you pay the clients to come rather you get Inside there house directly :D
It does not die , it multiplies !

 7.101 and I will upgrade maybe this summer .

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JNeffLind
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Post 18 Mar 2015

ochenk wrote:

* - (For what it's worth, my conclusion was to price all my products low and never put anything on sale and never bundle any of my products. That way, users, both new and old, will never feel like they overpaid for a product, nor will anyone ever think that they should wait until my next sale.)
Thanks for contributing to this. I think your strategy is a sound one, even if you might end up getting a tiny bit neglected around holiday time when everyone is distracted from your consistently low prices by flashing temporary low prices. I'm curiously if you might actually see a dip in sales around holiday times for this reason. 

Believe it or not, I was actually remarking to myself recently that all the Ochen K. stuff seemed very reasonably priced and I was a bit surprised that Carve was so affordable on release considering the amount of buzz it had around it. That's not me encouraging you to raise prices though. I think you'd sell less volume and end up making less anyways. Especially with something like software where pretty much all the cost has already been put in and there's no more materials, no shipping, and each unit is guaranteed profit, there's a lot to be said for selling tons at low cost. (I do know there's continual tinkering and updates by devs, but you basically have infinite units in stock ready to ship and be turned to currency).

You tease me with the "complete the bundle" option. I wish.

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JNeffLind
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Post 18 Mar 2015

Benedict wrote:I think maybe it is better for you to read some micro-economic theory as (while not being as dull as you think) the bits on Supply & Demand pretty well explain all your core questions. Bottom line is there is no set price for anything and any attempt to set it externally does more damage than good.

Take for example rocks:

Most rocks are worth nothing - so much so you have to pay someone to cart them away. Some rocks are worth a bit and some rocks are worth a fortune. One rock in particular will make a woman love you.

So what sets one rock apart from another? Supply and demand. People perceive a demand for a certain type of rock so they will pay more to get that type of rock. So much so that they will pay to have other types of rock cleared away. Now not all rocks are equal.

Then it becomes complex:

People who don't have as much valuable rock will become desirous of more. People who have more valuable rock will become important. Some people will trade things they have like their labor to get more valuable rock. Others will decide that having to work to get the valuable rock is silly. Of those a few will decide valuable rock is not important after all and go live in the hills. Most though will dream of some system where all rocks are distributed equally. Of course no rock distribution system is equal either in the ground or above so there are endless conflicts and power struggles as everyone tries to become the most important rock holder (generally whilst claiming to be an equal to all so as to slip into power un-noticed).

As a consumer of rock we have to power to buy or not buy. If you don't want to buy every rock everyone is peddling then develop discretion. If you do all that quietly then the market will become the best it can be and conflict will abate.

So as you see there is no set price for an RE and suppliers will adjust as demand comes and goes. All the sales suggest that either demand is drying up or someone desires a greater demand in the market and is trying to make their REs seem shinier with a value add game.

:)
I think maybe you are being a bit of a smart-ass Mr. Benedict. I understand supply and demand pretty well. If our society ever becomes one were REs are the main currency, that would be an interesting problem to have. Props would have to reconsider their license transfers eh? :s0221:

The question was more about consumer behavior as manipulated by the various tentacles of capitalism. I.e. if you manufacture rocks, how do people behave when your rocks go on sale. Do you consider the possible adverse effects those discounts could have long term, etc. Do you consider manipulating the semantic labels of how we buy (ideas like "retail" and "sale." Some things never actually sell for retail. The listed "sale" price is the actual always price with a crossed out price to make you feel like you're getting a deal. Sometimes they're discounted even more, like a mutant SUPER-SALE!)

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JNeffLind
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Post 18 Mar 2015

MarkTarlton wrote:I wished I'd have waited 24 hours before buying the leveler, deesser, and gain plug ins yesterday cuz they are all in the outboard rig bundle today and it looks tempting! I still have some of the other RE's included..  had I not bought the Re's yesterday I would definitely be buying the bundle! bummer on my timing.

edit - I just sent propellerheads a message on their FB page asking if there was anyway to get the money I just spent and apply it to the bundle so i can get all those goodies...I figured it was worth a shot since it's only been 24 hours :)
This is the kind of bad luck I'm talking about. Argh!

Good luck with your appeal.

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JNeffLind
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Post 18 Mar 2015

CharlyCharlzz wrote: I know that sales for digital product's have for only purpose to make things more popular , a new user buying reason plus the bundle  last black friday that now buy this bundles show and expose to everybody around him that bundle and new funky RE's and reason 8 , he is going to also get his marks wiith those developers product's wich is a great investement for these devs to be part of such bundles .
there is a down side for the brands in term of money making but these days rather you pay the clients to come rather you get Inside there house directly :D
If I understand you correctly, it seems you're saying that the devs are trading some profits for some publicity which I can see the logic of.

I wouldn't be surprised though if sales on software boosted profits though, since there's no manufacturing cost after the fact and infinite units are available for sale and the market is far from exhausted. At least I think it's far from exhausted. 

KEVMOVE02
Posts: 238
Joined: 26 Jan 2015

Post 18 Mar 2015

Ochenk - that was a pretty good response. Kudos! i could make some fancy analytic chart that shows the relationship between product demand, market saturation and price points, but its probably simpler to say that Propellerhead realized that everyone who was willing to pay full price for certain Rack Extensions and Refills have already purchased it. This realization prompted them to begin "bundling" certain Rack Extensions and Refills, in the hopes of attracting some fence sitters to make a purchase, based on the great value. This is a fairly common practice with video gaming systems (interestingly enough, video game system owners very rarely complain that new customers get a huge discount on the system and free games; to the contrary, they buy the system again). Now it should be noted that the previous new customer deal is no longer available, so serendipity was limited to a blessed few. 

For those who already own a significant number of REs, and are hoping for some sort of "mercy deal",you may see a "roll your own bundle" in the future. I'm just glad that I delayed gratification until I had a real need for a particular RE or a deal that was too good to pass up came along. Now if they would do a deal for Recycle...

Philup
Posts: 11
Joined: 21 Feb 2015

Post 18 Mar 2015

Maybe they are about to update the SDK in a way that many RE devs. will plan to bump their RE's to a 2.0 version charging for the upgrade. This deal could be a grab for upgrade market share.

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CharlyCharlzz
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Post 19 Mar 2015

CharlyCharlzz wrote: I know that sales for digital product's have for only purpose to make things more popular , a new user buying reason plus the bundle  last black friday that now buy this bundles show and expose to everybody around him that bundle and new funky RE's and reason 8 , he is going to also get his marks wiith those developers product's wich is a great investement for these devs to be part of such bundles .
there is a down side for the brands in term of money making but these days rather you pay the clients to come rather you get Inside there house directly :D
JNeffLind wrote:
If I understand you correctly, it seems you're saying that the devs are trading some profits for some publicity which I can see the logic of.

I wouldn't be surprised though if sales on software boosted profits though, since there's no manufacturing cost after the fact and infinite units are available for sale and the market is far from exhausted. At least I think it's far from exhausted. 
indeed , they make a bit less now but since they know most users will like there products they will have loyal customers in the futur IMO .
it's working for me , I have no credit cards and fallow the simple (no buy on internet rule) but this is game changer for me !
I have spend 50 bucks to order a prepayed credit card today so I hope the bundle will still be available in 30 days :D otherwise I burn the card and leave internet shoping for life .
It does not die , it multiplies !

 7.101 and I will upgrade maybe this summer .

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