Magazine article Information Today

Have I Got a Deal for You: The State of the Art in CD-ROM Marketing and Pricing

Magazine article Information Today

Have I Got a Deal for You: The State of the Art in CD-ROM Marketing and Pricing

Article excerpt

We heard for years that this is the year of the CD-ROM. So far this hasn't been the case. But I believe that 1993 will deliver this promise. Why now? Because (a) there are many new databases of potentially wide interest, (b) there is an avalanche of enlightening articles on CD-ROMs, appetite-whetting reviews in mainstream magazines read by hundreds of thousands of people, and (c) most importantly, customers will not be able to resist the very aggressive marketing and pricing policy of CD-ROM marketers.

All this is launched with the same fierce competition as the airfare wars of the airlines in the summer of 1992. Those who never thought of visiting their ex-classmates, ex-flames, or the San Francisco Exploratorium because of the travel costs found themselves boarding a plane. Those who thought that CD-ROMs are only for librarians and computer nerds now skip a rip-off dinner in a posh restaurant to spend the money on a CD-ROM player bundled with a six-pack of reference and entertainment databases (free pizza is not yet included).

The most visible change is in the mail-order market. CD-ROM publishers still sell direct at list price (aka manufacturer's recommended price), just as airlines still sell full-fare tickets. However, the travel agents and consolidators of the CD-ROM industry - i.e., the street shop dealers, mail-order companies, and liquidators - went full swing into selling CD-ROM products at rock bottom prices. Often, these are the same mail-order companies that even a few months ago did not know and could not care less what a CD-ROM even was. Today, their catalogs are full of CD-ROM drives and databases at prices I dare not mention lest I break the spell. Suffice it to say that it is more insane to buy a database or a CD-ROM drive at list price, or a CD-ROM drive without some database bundled in, than it is to fly at prices listed in the Sabre and Travelshopper databases on CompuServe and pass up the free car rental opportunity.

Mouthwatering are the hardware and database bundles offered in nationwide computer stores (Software, Etc., Egghead) and mostly by mail-order hypermarkets (USAFlex), large stores with CD-ROM departments (Tiger-Software, PC/Mac Zone, PC/Mac Warehouse, PC/Mac Connection), mom-and-pop shops (Phethean), and Chapter 11 mavericks (Electronic Liquidators and DAK - itself being in Chapter 11 but reliably delivering).

The deals are many and sweet. In the rest of the column I will attempt to classify the types of deals. I will use examples for illustrations, but the prices and deals change sooner (and always for the better) than the ink dries on this piece.

Discounted Manufacturer Price - CD-ROM

Drives

This is the most prevalent type of discount. One would be hard-pressed to buy a CD-ROM drive without some discount. The list price has been established only to let dealers cross it out on price tags for more dramatic effects. Well-known brands, like NEC, Sony, Hitachi, Toshiba, and Philips, are sold by all types of outlets at 20-30% discounts even without asking. Lesser known brands, like Texel, Procom, Smart, and Friendly, are sold through mail order only. More often than not these brands are the same as their brethren with name recognition, only the label and the price are different. Low and behold, as of spring '93 Texel seems to have the best price/performance figure.

Discounted Manufacturer Price - CD-ROM

Databases

The majority of the databases which are sold outright (as opposed to offered on subscription) are offered at a 15-30% discount by most computer stores, mail-order superstores, and CD-ROM boutiques. Some are willing even to knock off some extra bucks to match or undercut the price of the competition. CUE card owners get an extra 5% off the discounted price at Egghead. Exceptional (85% off) deals for current titles are also available. Softec Plus asks $60 for the 1992 edition of Grolier Multimedia Encyclopedia (often sold under the Toolworks Encyclopedia label at even better prices when buying a CD-ROM drive). …

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