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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: Drew Williams who wrote (5516)	7/2/1999 8:19:00 PM
From: John Stichnoth	Read Replies (1) \| Respond to of 29987

1. You said: "Every book on sales or marketing that I have ever read lists price as about the seventh or eighth most important reason someone makes a purchase." But, how high on the priority list is price to the people who don't buy? I believe that in making a purchase decision between competing products, price is a low priority--as you state. But, when the decision is to buy or not to buy, price can be (is frequently?) the determining factor. We are faced, in the G* situation with this latter decision. 2. I like your point 2. "Announce that the first 10,000 handsets would be sold for $499.00 with 500 free minutes per month for the first six months." One variation of this might be to distribute a very restricted number of $1,000 rebate coupons, targeted very specifically. You get the purchasers of cheap handsets where they might do the most good, either in terms of visibility or minutes. They might distribute mor than the target number of coupons. Lots of people might try to redeem them. That creates excess demand, reports going back through channels, eventually to the phone makers. They hear that they can safely ramp up production faster because their phones will be sold. And we get more phones out there churning out minutes. (I also like a lot of other stuff you said. You're right that we are moving into the stage where marketing takes center stage in importance. And it's great to have a marketing man on the thread.)

To: Drew Williams who wrote (5516)	7/2/1999 8:23:00 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 29987

Drew, having spent a lot of years at the sharp end of getting customers, I know you are quite right that price is not why people buy stuff. They buy stuff mostly because of the benefits they expect to get from the product. There is an infinite, yes, literally, infinite array of variables which determine whether they buy or not. We lump these variables into manageable bundles because unit costs zoom to the sky if we try to cover every variable, which is impossible anyway. But there is another subtle variable, but most important, which is never mentioned [other than obliquely by use of ideas such as status]. People buy things most basically for social integration. A sense of belonging. A sense of identity. Even for what seems fully functional things like a tank of gas, they are buying something to fulfill their sense of identity. They might deny it and say they just want a tank of gas, but they don't. But getting away from that, which is just to acknowledge that I'm well aware that price is not the be-all and end-all, people use price as the measuring stick. They size up the product, apply the measuring stick and see if it fits. If the price is low enough, kaching, it's a sale and the person goes grinning out of the shop with their sense of identity boosted and if the product does what they expect, they'll get more boosts while the product lasts or until a new boost is needed. The reason I have written p-----g is that price is considered unmentionable in marketing circles because "Price is what you talk about when you have nothing else to sell". A glib slogan of far less use than my favourite slogan "Don't let a slogan do your thinking for you". Hang that one on the wall everyone! Most marketing people try to pretend that price doesn't matter and they end up adding marketing bells and whistles, advertising, product positioning, market segmentation, focused features, differentiation and it all ends up costing an arm and a leg. Sure, a good marketing package is more than just stacking it high and selling it cheap. But check out WalMart for some successful price-based selling. Shops in towns with a WalMart coming get petitions to keep out the competition because they know that price DOES matter. If the other stuff is also right. As you say, number one is to blow Iridium out of the water. Closing them is possible. Number two is that we have 10 bn rotting minutes as our main marketing power. Number three is we have limited handsets so these need to go to the right people, not those at the top of a list of those who want to buy one. They need to be priced right, which means high!!! NOT low. HIGH!!! The minutes are what can be sold cheaply and what will be the bait to generate a sales frenzy. And frenzy is the right word. There are $$$billions flying around in space, and minute billions too. We don't want the Iridium model of slow subscriber growth. Sure, the handsets can be leased at $100 per month rather than sold, if people are sticker scared. Those books on marketing which put price down low should all be in the bin. Price is not a benefit or reason people buy. It is just a measuring stick. Anyway, they put it down the list because it is like sex - vital to everyone, but you can't stick it naked out in front. It's embarrassing. The problem with your option 2 is that there would be a big rush for the handsets. They would go to the lucky ones who might provide little money to Globalstar or the Service Providers. They MUST go to people who will use minutes or at least pay the market rate for a handset. The handsets MUST be sold at market prices. The minutes can go cheap or free for the first 10,000 for two years [we'll still be far from capacity by then]. We need maximum handset production and maximum minutes used. Not lots of handsets sitting quietly in gloveboxes for a rainy day. There have been few handsets ordered. That shows how little confidence the Service Providers have that they'll move a lot of minutes into handsets. They are all sitting on their hands waiting to see what happens. AirTouch is going to snooze until December if the SATPHONE advice is correct. What about Xmas presents for the Man Who Has Everything? Need to get those sales early. Maurice