Apple users get pricier hotel options from Orbitz Online booking site Orbitz has run into PR problems with an experiment in differentiated selling between Apple and PC users. Analysis by the Wall Street Journal showed that on Orbitz's basic search Apple accounts were shown hotels at the pricier end of the market, costing an average of 30 per cent more than those offered to PC …
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Making things more expensive by default for some people is rarely seen as "good" by those people.
Customers nearly always hate differentiation. We like to think we are paying a fair rate, which is generally thought of as cost+reasonable profit.
Recently in Melbourne the "normal" tomatoes have looked rather unripe in the shops. However, next to them in the supermarket are some nice red mini-tomatoes at x4 the price/kg. I find it really unlikely that the cherry tomatoes actually cost x4 the normal ones. Given the massive pricing swings in goods in Oz, I suspect a bit of price manipulation or at least profiteering.
Sorry kids, we are having canned tomatoes, shipped around the world from Italy, which are organic and are still cheaper than the canned ones grown locally.
No-one likes to feel manipulated into paying more. I suspect that the big loser here will be orbitz, as iphone users stop using it.
That's what happens when you mine data - it suggests strategies you really shouldn't follow.
"Customers nearly always hate differentiation. We like to think we are paying a fair rate, which is generally thought of as cost+reasonable profit."
My reading of the article is that you ARE paying a fair rate. It's just that Apple users are shown the better class hotels first.
Look at it like this. You are a car salesman. A well groomed man with an expensive suit and gold watch comes in and says he is interested in buying a car but he isn't sure which kind. Are you going to entice him into liking the Audi, or the Dacia?
When I saw the title, I expected to read a story of Apple users being charged a lot more for the same hotel.
Instead, they're simply being shown more expensive (likely higher class) hotels. They can still sort the hotels to their preference if they prefer to see cheaper options.
I know I'll likely get blasted for this but as an Apple addict, even I agree that the prices are way over the top. Yes the products are amazing but unless I had a fair bit of cash floating around, I'd never stick with Apple. Other Apple users I know are generally quite well off too. So it would seem reasonable to assume that those users have more money to spend and are more likely to go for a higher class hotel in the first place.
This whole thing kinda DOES make sense!
I don't think that Mr Lee would make a good car (or anything else...) salesman, mainly because he fails to see that customers do not hate differentiation. Apple users specially love it and Apple promotes it: "Think Different" has been their motto for ages.
Apple's products are Veblen goods, they are used as status symbols and make the owner feel special.
The Orbitz website does them a favour by showing appropriate places first and the 'hoi polloi bunkers' last.
The only problem might be arising when you get to the hotel with your iPad and your iPhone and everyone there has one and you are not special any more; even worse if you arrive with your Subaru and the car park is full of Bentleys and Ferraris.
Veblen goods - nice concept, however... Studies have also found evidence suggesting people receive more pleasure from more expensive goods. ...I wonder if the RaspberryPi is going to stamp upon this concept?
[the cynical could also say that the pleasure lifespan of cheap knock-off crap will be rather less than something designed to a reasonable level of workmanship]
Customers hate differentiation and they also love differentiation.
Imagine a college kid trying to book a room. There's a 90% chance that all he wants is a place to "crash" and that it costs as little as possible, so you offer him a hostel or a two star hotel.
A 30 year old couple with no kids are in a totally different ballpark. Try not to differentiate and offer them the same room as to the previous guy and see the look they'll give you. They've got a lot more money that they are willing to spend and they also have much higher expectations. You'll want to offer them a 4 star all inclusive.
The search engine from the article follows the same logic. If an Apple user is more likely to want a four star hotel, that makes such results more relevant for those people, so it's a search engine's job to rank them higher.
Most websites know what browser or what device you are accessing the site with. How many times do you get a widget that asks it you want to download the iPad ap while you browse the site.
I wonder if this is also used to target advertising your way. I've always been suspicious of Easy Jet prices when booking flights. Once the cookie is installed the prices seem to alter on a page by page basis. If you log out clear the cache and start again lower flight prices appear!
I found this too with Easyjet. Each time you re-visit the site, the price of the flight goes up. Use a different browser, and it starts at the base price again. The other one they do is "this flight is no longer available, please choose another flight" when you get to the checkout. Go back and the flight is still there, just not at the price you originally added it to the cart. I guess they figure that if you are actually ready to pay, there's no harm in sniping an extra quid or two out of you at the last minute.
Hmmm, I wonder what sort of cookie declaration Easyjet should be making here...
Actually, Easyjet is AFAIK breaking the Data Protection act with their enforced answer to "why are you going there" question. It's none of their business.
I've stopped using them now, for the places I have to go it's actually cheaper and more efficient to use a decent carrier as it saves me having to travel back from the a**e end of nowhere to where I actually wanteto go - which consumes any alleged savings..
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Perhaps put a bit harshly, but iPeeps are a marketing dream. A self-identified group of consumers with an easily predictable set of values and responses. It's shooting fish in a barrel for the marketing guys.
This particular story isn't negative, though. iPeeps aren't being ripped off, just being presented with offers more likely to meet their expectations / aspirations. Although thinking about it, they should also offer these specially selected rooms at a slightly lower price but perhaps with the bedsheets not changed and dirty bathrooms for the growing army of 'second users' so they can keep up too.
Clearly, over time the mode average profile of iPeeps is changing from 'iHave' to 'iWannahave'. Eventually the cycle will eat itself and the iHaves will turn away from the brand. Take BMW cars as a perfect example.
Oh do piss off Jeebus.
The evidence is against you. In the article 'Apple users are likelier to be wealthier' would suggest that they have enough wits not to be poor, and to avoid being ripped off at every turn. There is a good chance they own their own business, or otherwise have a good job- not necessarily a technical job. They don't buy their machines purely on how many Ghz they get for their buck, but are prepared to pay a little extra for features that cost money to design and implement.
My company has recently introduced a new promotion for new customers and we give you a different deal depending on your OS....
Linux - discounted real ale
Apple - a free mirror (its shiny)
Windows - free stress balls (this one really pulls the punters in)
Android (or anyone using Chrome browser on any OS) - we don't do a deal but instead up the level of tracking and targeted spam
It's all true I promise I aint making it all up for a cheap (barely funny) gag!
hehe a Linux guy called Chemist who makes home brew! I'd expect nothing less with those credentials!
And @the anon coward - it was a joke dude - It sucks and I knew some people would downvote it (probably apple guys or people who are not as childish as me!) I'm just making fun of a few cliches for cheap laughs - I don't know if you noticed but that happens a lot on this website! It's kinda their thing!
Gimmick and likely to alienate your customers - but I guess your boss knows best (cough). If someone offered me that sh*t as an 'incentive' I'd be out of the door. You would be better just giving them money off or an Amazon voucher or anything - or how about just good ol' fashioned fair price and good service?
because once they are in their room they will be waking their next door neighbours every five minutes telling them how much better their room is, so they'll have to be compensated, and with spamming the world about their quality product, well, bandwidth ain’t free...
Show those retarded fanbois that their choice of product and support for Apple costs them money.
At our office, I do something similar: When I'm quoting jobs for customers, if I see the customer has a iPhone, iPod or iPad, I quietly apply my secret "Apple tax" to the quote, increasing it by anywhere between 10% - 30% over and above what a non-Apple user would pay. So far I've made our company more than 20 grand by ripping off Apple-using customers this way. It's just one more way we can strike back at the idiots that fund Apple's war on innovation by buying their products.
So I'm pleased to see others engaging in this kind of price differentiation. The more widespread the practice, the more people will get the message and start looking at alternatives to Apple.
"At our office, I do something similar: When I'm quoting jobs for customers, if I see the customer has a iPhone, iPod or iPad, I quietly apply my secret "Apple tax" to the quote, increasing it by anywhere between 10% - 30% over and above what a non-Apple user would pay"
Do you just do that for the burger or the whole extra value meal?
It's not price differentiation - that would be charging a different price for the same thing. Here they are just offering higher class rooms / hotels to Apple users 'first' - not charging them more.
I hope the Apple users that are getting quotes from your toilet cleaning business go elsewhere. Charging more for the same thing is discrimination and most likely you will lose the business to someone else.
Except you are not counting the LOSS of business by being 10-30% more expensive than the next company that are not applying an Apple tax. Bet your boss would be happy to know you are losing business for your own personal views.
Maybe you need a better job so you can afford the Apple stuff you clearly wish you could afford - jealousy gets you no where.
Mr Roper
-did you read the article? You saying their choice of Apple costs them money, but they are still likely to be richer. And in this case, they are getting a better room for their money. Apparently these 'retarded fanbois' are good at making and holding on to money. Something in your reasoning doesn't add up. I suspect that it is that 'fanbois' mainly exist in your head, and that the reality is that most Apple users are older and richer.
Your business sounds like a garage that charges a young lady in Nissan Micra more than it would a middle aged bloke in a VW, on the assumption she is probably easier to fleece. The only difference is that the garage wouldn't make up some idealogical bullshit about ever-charging the Micra owner as part of a holy war against slow motorists.
Oh, by the way, what difference does it make to you what OS other people use? It's not like the range of software on PCs is limited because Windows doesn't have enough users to make developers' time worthwhile...
>They're all baristas rich, successful, desirable people aren't they?
Er, often they are rich, successful, grumpy old gits who don't have much patience for faffing around with awkward computers. Part of the same group who might drop £10k on a fast motorcycle on hitting middle age, or regularly spend a couple of hundred quid dining out each week. I do know blokes like this who use PCs, and when inevitably Windows goes all slow, they just curse at it and go buy a new one. Oh, they are also the same group who will buy computers and printers from small local PC retailers, and not begrudge them their mark-up over internet prices. They probably won't scrimp when it comes to hotel rooms, either.
Are you getting any sense of how readily they will spend a little extra on a computer that doesn't piss them off? Don't base your opinions on marketing, g e, look at the world around you.
The logic you're espousing, Dave 126, is that Apple computers don't piss those people off because Apple has convinced them that buying a new shiny computer every 2 years is normal and to be expected. I'm pretty sure if you spend equivalent cash on non-Apple hardware with eg Windows 7 pro or whatever installed, it wouldn't piss you off much either...
Wanting devices that work well doesn't have to equate to spunking a load of chase for $Brand_name. Apple's gear is very good in some respects, but their marketing would have you believe that buying an iDevice cures cancer and comes with complementary head from Scarlett Johansson and a few of her bestest friends...
Captain, that is not the logic that I am espousing, so I won't defend it. I will admit that I could have written my comment less ambiguously; I was describing a more mature and wealthy demographic, some of whom buy Macs (not because they are 'Fanbois') and some who buy PCs. And I wasn't saying all the PC buyers were unhappy - or that all the Mac users were content, I was just trying to get across this demographic group's attitude to things. First of all, even before buying anything, learning about the technology is something they have limited patience for.
My point was merely that there are people who place a different dollar value on their time than you or I might. If they have more money, it is unlikely that they are 'morons', as one commantard put it. Identifying the cause of BSOD by getting acquainted by Symbols and crash logs and then hunting down and installing a better driver for their laptop's built in SD card reader just to stop the bloody thing crashing is not something I would expect members of this crudely-defined group to do. (Thanks, Dell, all your customer support did was to sell my name and telephone number). I use PCs, but I do like little tossers blindly insulting the people I share my streets and pubs with.
- "Wanting devices that work well doesn't have to equate to spunking a load of chase for $Brand_name." You're right, it does not necessarily meaning spending loads of cash. However, it means spending some- otherwise all the manufacturers are just going to cram as many Ghz and GBs into a box and whack their sticker on it - if the customer is merely comparing two lists of numerical data, the manufacturer would be a fool to spend time improving other aspects of the machine. Things such as: the feel of the keyboard, quality of the sound*, responsiveness of the track pad, does the power cable yank your laptop to the floor... these and many other considerations that can't be expressed in a list need to be signalled to the buyer, in order to get a return on the cost of developing them. How to do that? ONE way is to establish a reputation and then use your brand name. Take ThinkPads, for example. If you have always had a good experience with them, and found them comfortable to use and durable, would that make you a fool for spending an extra 10% on getting one when you next need to upgrade?
As for marketing... marketing is marketing. See Bill Hicks. But basically, any advert is going to talk up its product, you expect that, you don't worry about it. The Ridley Scott one was fun, the Jeff Golblum ones with tanks were confusing... many of the current ones appear to show an Apple product being used to do something like video-calling. Maybe there are some weirder ones - I don't watch much TV - but Scarlett Johansson and her mates seems more like a Lynx deodorant advert aimed at PFYs. And curing cancer? Surely that's the PS3? (see Folding @Home)
*Sound... we see a few laptops with 3rd party stickers... Harmon Kardon, Beats by Monster, B&O etc all trying to use established brand names with perceived quality in order to distinguish THIS laptop's speakers from something tinny. The system kinda works because B&O would suffer 'brand dilution' if they stuck their sticker on shit speakers, so we trust any laptop featuring them will sound better than average.
I put a fairly high value on my time too, tbh - I just also accept that the state of play of technology *generally* is that some of it, especially for some of the more interesting stuff, *doesn't always work*.
My issue with the people you describe is that the ones I've met have mostly tended to be the sort of bellend who doesn't accept "Yep, it's knackered and will be until they fix it", and insists on a fix that they've just been told doesn't exist. Which is fine, unless they've already bought Toy A for Function B which relies on Poorly Written Software C, and no actual roadmap for delivery of Better Written/Tested Version Of Software D. Then they become a massive arseache, all because some self-important twit refuses to accept that technology, generally, just ain't as bloody shiny as the adverts claim.
And before anyone thinks of saying this doesn't happen with Macs, my workplace is an increasingly Fruitmachine-laden one where Mac users alternate between being normal human beings, smug tossers a la Apple adverts, and complaining about whatever's not working properly, like Time Machine (falling over non-trivially for no apparent reason for a number of people) or iCal (won't work with our organisational calendaring system sometimes, for no discernible reason) or Apple's crap turnaround on hardware support (1 week CAR if you're lucky, 2 weeks CAR if not, compared to NBD onsite from every other vendor we use). Or complaining that their onboard SSD is too small and how Apple have the audacity to not let them replace it with a third party one without losing warranty cover. Or complaining about the state of our network when what they mean to complain about is Apple's senseless option to provide wired ethernet for the MBA only via a USB dongle. (Even when I make them buy 2, one for travel and one for office, so that the office one always stays put...)
To put it another way - in the context of the original article, Apple have for the last decade positioned themselves as a premium consumer electronics vendor. It's hardly surprising that other retailers or middlemen will, when realising their customer is an Apple customer (and therefore evidently willing to spend extra for premium products), also highlight their premium offerings to them rather than start out offering them the cheap crap stuff.
There's a problem here?
The article suggests that the only problem here is the average site user's intrinsic unwillingness to spend more than a few seconds looking for a suitable option. And, well, if that's the case then tough, really. Assuming that a business is automatically looking after your interests to its own detriment is a pretty stupid approach to take.
I'm not the biggest fan of profiling by platform or user agent, but given the incessant carping from certain subsets of the Apple userbase about how anyone who doesn't spunk cash on Apple gear just doesn't understand the concept of paying good money to get a worthwhile product, I don't see where the problem is in a company doing what Orbitz have done.
Perhaps someone could explain to me where the actual problem lies?
I watched recently as a friend of mine was bewildered by differential pricing. When he went to download a TV episode to his Apple TV he was offered one price, when he went to his iMac and then to iTunes he was offered exactly the same episode for a different price. After a little experimentation we found that invariably downloading directly to the Apple TV box was more expensive.
This is an example of Apple using the same "lazy" attitude to their advantage. People were most likely to pay extra to download to the Apple TV box rather than getting up and going to their Mac and downloading to iTunes then streaming it to the Apple TV box.
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