Key questions pricers everywhere are looking to answer -
Recently, I had the pleasure of visiting the 'American Girl' store. Wait, don't jump to any conclusions....yet, it was with my wife and 7 year old daughter. Leading up to the visit, there was much hype and hoopla about the American Girl dolls and the store itself by my daughter. As responsible parents do, we established an incentive program (a.k.a parental bribe) for her to earn a trip to the store. My expectations were along the lines of Toys r Us and Barbie and I was in for a surprise.
At $140 for a doll, paperback book and accessories I started to feel a little light headed. Thankfully, that was a bundle 'special' and $5 less than buying them individually. Well, I am exaggerating, it is $129 + taxes for a total of about $138. The doll was taller than the typical Barbie and the accessories fit in a box slightly larger than a pack of cigarettes.
Pehaps induced by the light headedness, my mind began wondering about pricing as we wandered around the store soaking in the experience. The place was jam packed with excited girls (and light headed parents?). The service was extraordinary. The store itself was setup to be a world of fantasy and giddy experience - there is a bistro with seating for the dolls, furniture for the dolls, clothing for the girls to match the dolls' clothes and, accessories galore for the dolls and, a spa for the dolls! There is also a library full of books. The books, however, were not for the dolls, understandable since the books are kinda big for the dolls unlike a brunch table seating, custom furniture, clothese or a teeny salon chair. They should think about really small paperback and hardbound books. Dolls reading books would set a great example for the girls. Anyways, the books are about the dolls. All in all, this is an ecosystem centered around the dolls that girls in America must have. It dawned on me that it is the quality, value and the overall experience that establishes the price. While it is hard to quantify the value of a 7 year old's joy and thrill, I imagine it is really, really high. Our dear daughter was of course thrilled to bits and did not spare any superlatives - best day of her life, best present ever, best parents in the world and so on. So, for $140, it was money well spent.
I could see that that the marketing machinery was working well also. At checkout, with the slightest prompting for how we heard about the store, my daughter was quick to say 'at school, from her friends...', my wife added that we already get the 'magazine' (a.k.a. the catalog). For my part, I gave out my email, address and phone (for any doll emergencies, you never know) along with the credit card. I get the feeling that, while this is indeed a one stop shop it is also the beginning of a long term relationship. I was certainly relieved with the assurance that the information will not be given out to anyone else. I wonder how that works with their future stores in the making - American Teenager, American Lady, American Woman, American Mom and American Grandma. They know where I live, so I am sure they will keep me posted.
The upsells offered courteously at checkout were not really upsells but must-haves like a $8 hair brush for the doll. Surely, we wouldn't want Saige (the doll of the year!) or Josefina to go unkempt. It made my head hurt trying to compute the benefit of getting the $8 brush now versus - the probability of a future trip with much, much higher basket value and how much of the doll's hair will a human hair brush really pull out. I couldn't do the computation mentally and in a bit of a daze I declined the upsell. Stay tuned for how well that worked out for me. While I could not detect any disappointment on the sales person's face or a hard sell, I wondered if there incentivized on upsell or annual store revenue or both? Either way, I am confident they can expect great bonuses and a merry Christmas.
At this point, I should mention that I have committed a sacrilege of sorts with multiple references to 'dolls' above instead of their given names. These are more than dolls. They are playmates, friends, confidantes and constant companions for 6+ year olds on their journey of discovery and growing. They are a bargain at $129 or $140 or whatever the price is.
Your thoughts and comments are welcome!
- How much will my prospective buyers pay?
- Is this price too high? Is this price too low?
- How can I market to reach the buyers? Especially those who think the price is too low?
- How often should I change the price?
- Should is everyday low price or should I price and then discount? Or both?
- How should I bundle? What is the bundle discount?
Recently, I had the pleasure of visiting the 'American Girl' store. Wait, don't jump to any conclusions....yet, it was with my wife and 7 year old daughter. Leading up to the visit, there was much hype and hoopla about the American Girl dolls and the store itself by my daughter. As responsible parents do, we established an incentive program (a.k.a parental bribe) for her to earn a trip to the store. My expectations were along the lines of Toys r Us and Barbie and I was in for a surprise. At $140 for a doll, paperback book and accessories I started to feel a little light headed. Thankfully, that was a bundle 'special' and $5 less than buying them individually. Well, I am exaggerating, it is $129 + taxes for a total of about $138. The doll was taller than the typical Barbie and the accessories fit in a box slightly larger than a pack of cigarettes.
Pehaps induced by the light headedness, my mind began wondering about pricing as we wandered around the store soaking in the experience. The place was jam packed with excited girls (and light headed parents?). The service was extraordinary. The store itself was setup to be a world of fantasy and giddy experience - there is a bistro with seating for the dolls, furniture for the dolls, clothing for the girls to match the dolls' clothes and, accessories galore for the dolls and, a spa for the dolls! There is also a library full of books. The books, however, were not for the dolls, understandable since the books are kinda big for the dolls unlike a brunch table seating, custom furniture, clothese or a teeny salon chair. They should think about really small paperback and hardbound books. Dolls reading books would set a great example for the girls. Anyways, the books are about the dolls. All in all, this is an ecosystem centered around the dolls that girls in America must have. It dawned on me that it is the quality, value and the overall experience that establishes the price. While it is hard to quantify the value of a 7 year old's joy and thrill, I imagine it is really, really high. Our dear daughter was of course thrilled to bits and did not spare any superlatives - best day of her life, best present ever, best parents in the world and so on. So, for $140, it was money well spent.
I could see that that the marketing machinery was working well also. At checkout, with the slightest prompting for how we heard about the store, my daughter was quick to say 'at school, from her friends...', my wife added that we already get the 'magazine' (a.k.a. the catalog). For my part, I gave out my email, address and phone (for any doll emergencies, you never know) along with the credit card. I get the feeling that, while this is indeed a one stop shop it is also the beginning of a long term relationship. I was certainly relieved with the assurance that the information will not be given out to anyone else. I wonder how that works with their future stores in the making - American Teenager, American Lady, American Woman, American Mom and American Grandma. They know where I live, so I am sure they will keep me posted.
The upsells offered courteously at checkout were not really upsells but must-haves like a $8 hair brush for the doll. Surely, we wouldn't want Saige (the doll of the year!) or Josefina to go unkempt. It made my head hurt trying to compute the benefit of getting the $8 brush now versus - the probability of a future trip with much, much higher basket value and how much of the doll's hair will a human hair brush really pull out. I couldn't do the computation mentally and in a bit of a daze I declined the upsell. Stay tuned for how well that worked out for me. While I could not detect any disappointment on the sales person's face or a hard sell, I wondered if there incentivized on upsell or annual store revenue or both? Either way, I am confident they can expect great bonuses and a merry Christmas.
At this point, I should mention that I have committed a sacrilege of sorts with multiple references to 'dolls' above instead of their given names. These are more than dolls. They are playmates, friends, confidantes and constant companions for 6+ year olds on their journey of discovery and growing. They are a bargain at $129 or $140 or whatever the price is.
Your thoughts and comments are welcome!
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