Docking Bay 94

Mac vs PC - A Costly Perspective

I'm a Mac. Sorry to the haters, I just prefer the OS.

For years I’ve put up with people going on and on about how expensive Macs are. “Yes, they are,” agrees I, “because it’s a marketing decision. Make them cheap and people won’t see them as quality products / status symbols.”

As an Australian, the other whinge I’ve always had to put up with is “Macs are so much cheaper overseas.” But pretty much everything is cheaper overseas.

We happen to live on an island - on the other side of the planet and isolated from humanity. Well, that’s what the rest of the world saw us as before the information revolution began.

Now we’re part of a global network, one that will be breaking down financial barriers in Australia (and other countries) over the coming decade. Which leads me to how we got in this mess anyway (and what’s got my goat this evening) …

There is a basic formula for marketing: understand your 4P’s and you can really make it big.

• Product
• Price
• Place
• Promotion

Take Apple for example. They won’t let anyone make their hardware, unlike the IBM PC, which anyone can produce. Heck, you can assemble one yourself. Ergo, there’s no quality control (although it’d be pretty rough to get a bad one these days), and competition pushes price down - thereby removing any status. So Apple’s product is pretty much unique (like it or hate it).

Their price is set high - whatever the market deems “value for money for a high end product”. You’ll notice over the past few years as new models are released, they’ve stayed at the same price, or have been cheaper than the preceding model. Apple have seen the future, and realise they have to become more competitive. But they’re still making squillions.

Promotion. They don’t need to do a lot here. Just glossy ads here and there to remind you they exist. Because the “faithful” do all their work for them. The best promotion anyone can have is word of mouth - because you trust your friends more than external sources. If people love your product, they sell it for you. A simple lesson Microsoft has failed to understand.

Place. Now this is the shit. Obviously there are two ways of looking at this - the first is the online / store structure, which again Apple have excelled at.  No need to discuss this.

But more importantly, Place also refers to geography. Lines on a map. Bodies of land girt by sea.

Like all other “high end” products, Apple is priced not only high, but higher in Australia than in the USA. This comes from two centuries of Ozzie commoners being fed the bullshit that “it costs a lot to transport”.

Thanks to globalisation, we now know better.

For years, decades even, we’ve asked “why are Audi, Mercedes Benz and other European cars so expensive?”. Well, it’s not the shipping. It’s the perceived value of the brand.

It all comes down to how much the marketers believe you will pay for the privilege to drive a Merc while listening to music streamed through your iPhone.

Everyone knows that Apple is just skimming profit from us Aussies by ramping up their prices.  But hold on - what about PC price skimming?  Why haven’t we heard such a ruckus about that?

Because Mac users are a vocal minority, and PC users are a vocal majority. And possibly because the focus on Apple draws attention away from Microsoft and the PC cloners. I really hadn’t thought about it too much.  But the other day my attention was drawn away from the Apple mark-ups thanks to an interesting article in The Courier Mail (I can’t believe I just typed that).

Yes, iPads are 12% higher here in Oz. But here comes the nasty work: Sony Vaio PC laptop … 37% higher.  37%.  That’s a $1,400 mark-up.  Gross Profit, or just gross?

Microsoft’s Windows 7? 31% mark-up / $150 extra.  Sickening.  

But this is the one that really gets me: Adobe Creative Suite 34% higher.  34%?  $1,006 more than what the yanks have to pay?  It’s software! There’s NO TRANSPORTATION COST.  Oh, and our dollar is currently WORTH MORE THAN THE $US.

So, marketing departments for international products sold here in Australia… put your thinking caps on and start thinking pretty damn quickly.

Otherwise when the revolution comes, you will be first against the wall.

As they say at Coles, “When they discover your scam is well and truly a sham, you’d better drop your price, down down.”

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