Pricing Strategies: Hewlett-Packard

According to Fortune 500, in 2008 Hewlett-Packard was ranked number 1 in the computer and office equipment industry compared to its competitors Dell and Apple. HP is a leading global provider of technologies, products and services to consumers and businesses. Over the past years HP has developed high performance technology with a diverse product portfolio, offered strong customer service, and has decreased its prices. HP uses both fixed and dynamic price strategies in order to offer its consumers the best customer service and products.

In terms of fixed pricing, HP utilizes the promotional and bundling pricing strategies. Used as an incentive for consumers to buy more than one product, promotional pricing is used by many computer companies. HP is currently offering several discounted, free, and bundled products and services to appeal to consumers by using both the bundling and promotional price strategies. One example of HP utilizing these strategies is the New HP Pavilion dvgz laptop. Priced at $599.99, if you buy this laptop you receive other services as well as several discounts which include: a free memory upgrade to 3GB memory as well as a 320GB hard drive, $100 rebate, free color customization (stated as a $25 value), $30 off Microsoft Office Small Businesses 2007, $50 off on Blu-ray drive, and free shipping. The second product HP offers is the HP Pavilion dv4t series, also priced at $599.99. If you buy this PC you will also can obtain several discounts and services for free, valued at $436, which includes: $150 instant rebate, free double memory upgrade from 1GB to 3GB (stated at $100 value), free double hard drive upgrade from 160 GB to 320 GB (stated as a $90 value), 50% off High-Definition LED display (stated as a $30 value), $30 off Microsoft Office Small Businesses 2007, and free shipping. Lastly, another product that can be categorized into both the bundling and promotional pricing strategies is the HP Touchsmart tx2z Series. Priced at $899.99, HP offers a $419 discount which includes: $200 instant savings, free double memory upgrade from 2GB to 4GB (stated as a $100 value), free double hard drive upgrade from 160BG to 320GB (which is stated as a $90 value), $30 off Microsoft Office Small Businesses 2007, and $40 off on 320GB Pocket Media Drive.

All of these products and services that cater to the promotional and bundling pricing strategies appear on HP’s homepage in flash reels, have customer reviews and ratings, and if you buy these products within a certain amount of time, you receive 90 days with no payments. Furthermore, right above the flash reels of these HP products is a promotional pricing strategy that offers free shipping for an order of ink, toner, and paper delivered the next business day and all qualifying offers over $49.99.

HP also uses the segmenting pricing strategy to offer its customers a variety of options to pay for its services or technology. According to Business Wire, One of the options HP is giving its consumers is pay-per-use utility pricing which charges consumers for actual usage on a monthly basis. This technology works by measuring the percentage of utilization on each Central Processing Unit. The advantage for HP customers is that they will only pay for processing they are utilizing. They also have the option to use additional processors, therefore processing is not limited.

HP was recently named one of the top 25 companies who do more to satisfy consumers according to BusinessWeek’s third annual Customer Service Champs Survey. Furthermore, HP’s net revenue has continued to increase in the last 4 years (from $79,905 million in 2004 to $118,364 million in 2008). Its year-over-year net revenue percentage increase was 13% in the fiscal year ending in 2008. In terms of assessing the effectiveness of HP’s pricing strategies, I would say that HP is highly successful because it has strong financials and consumers seem to respond positively to its pricing strategies. Strong brand image and marketing initiatives have helped to improve HP sales. In fact, by placing its pricing strategies along with the products and services it wants to sell in the center of the HP homepage, it is using marketing tactics and web design to draw the task-oriented consumers to these special offers. Moreover, HP makes the customer reviews and ratings easily accessible to other consumers when navigating through the web site. This shows the consumer that HP is a trustworthy company which truly cares about customer satisfaction and experience with its products.

Works Cited

“HP Introduces Next Generation of Utility Pricing for HP Superdome Servers; Offering Provides Always-available Capacity with Payments Based on Percentage of Each CPU’s Utilization.” Business Wire 13 Mar. 2003. Bnet. 14 Apr. 2009 .

“Laptops and Tablet PCs.” HP United States-Computers, Laptops, Servers, Printers, and more. 2009. 14 Apr. 2009
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An Exciting Web Application

An exciting Web application I recently scrolled upon was Mint.com. After having several problems with overdrawing money from one of my accounts I decided I needed help to manage my spending and my money. Mint.com is a free credit management website that helps you to find the right credit card for your lifestyle by calculating the APR, managing your spending trends, and organizing and categorizing all your transactions (groceries, parking, rent, gas, DVD rentals, etc.) to see where you can possibly improve as well as where you might want to cut back on your spending. The unique thing about this website is that once you enter your bank, credit card, and investment accounts, it keeps track of your spending habits automatically so you don’t have to do the bookkeeping, sends you email alerts on any unusual activity, low balances and upcoming bills, and sets a realistic budget.

It also has a variety of features such as financial goals you might want to achieve and how to go about achieving them. This includes: spending less eating out, paying off student loans, buying a car, paying off credit card debt and more.

This Web application allows the user to gain their own personal accountant that not only shows them their transactions but teaches them how to manage their money in a clear, comprehensive, and organized way.

Travelocity: You Never Roam Alone

Founded in 2003 Travelocity is a pure play business on the Internet that acts as a travel agent and provides consumers with airline, cruise, hotel, car/rail and vacation package rates. It is the world’s most popular online travel service for leisure and business travelers. When navigating through the website, the online user can easily search through a variety of destinations and means of travel as well as book their vacation. In addition to the regular features of a travel agent site, Travelocity also has a “travel blog.” Here consumers can search travel deals, travel news, travel tips, how to plan a trip by their interest, and read the “Window Seat” section, which is a community where Travelocity consumers can share their experiences traveling, as well as Travelocity’s own bloggers. In addition it provides consumers with podcasts of the topics discussed in the blog, and links to other travel blogs.Travelocity uses several business models to generate revenue. Those business models include the brokerage model and the community model.

Travelocity uses the brokerage business model by bringing the buyers (consumers) and sellers (airlines, hotels, cars/rails, cruises) together. In this case, Travelocity is the broker, facilitating transactions between the buyers and the sellers. They offer consumers the options of choosing the best deals in terms of transportation for their trip, exploring destinations, as well as the option of booking a packaged vacation or just a flight, car, cruise, hotel, etc. By offering an array of vacation destinations, packages, and amenities, Travelocity is able to provide the buyers with easy access to what they were searching for, and sellers profitable results.

Travelocity uses the community business model by providing its consumers with common interests and engaging blogs. Blogs, a form a social networking, provides Travelocity consumers a place to share ideas and opinions about their travels, learn useful tips, and interact with each other. The travel blog also contains an advertisement, in the form of a banner ad, such as Sea World. This is one way Travelocity earns revenue.

According to E-Marketing, the only way to know whether a company has reached its objectives is to measure its results. You may ask yourselves if Travelocity is successful in the mist of several other pure play travel service providers. Travelocity has great brand awareness and is a company that both the consumer and businesses trust because it provides reliable services that have proven to be successful. But there is always room for improvement. Two performance metrics that Travelocity can use to measure the effectiveness of the company is customer satisfaction, and differentiation. Customer satisfaction involves building better customer relationships with affordable prices, the quality of the site, and the value of the service they are receiving. A way to measure this could be through Web analytics (the study of user behavior on web pages). By doing this Travelocity can observe the activity and the number of visits to the site, the number of purchases per customer on the site as well as if new or old features of the site are working well with the consumer. This will tell them if the site is engaging and offers an experience and services that appeal to the consumer.

In order to differentiate themselves against the competitor, Travelocity must maintain its competitive advantage. There are several ways to going about measuring brand differentiation but they may have different levels of efficiency. Some ways are to conduct a target market survey or measure sales and revenue.

Furthermore, Travelocity abides by their own performance metrics to guarantee customer satisfaction and differentiate themselves from the competitor. This is known as the Travelocity Customer Bill of Rights and can be found on their website:
Travelocity Customer Bill of Rights

1. You have the right to book with a travel company that looks out for you, all trip.
2. You have the right to the best overall value in travel.
3. You have the right to unbiased information upfront
4. You have the right to a straightforward presentation of your options
5. You have the right to find what you’re looking for quickly and easily.
6. You have the right to speak with someone and get help at any time.
7. You have the right to be inspired by your travel company.

Ethical and Legal Issues: The Remix Culture

The 1976 Copyright Act states that the owner of copyright has exclusive rights to reproduction, prepare derivative works, perform work publicly and distribution. Musical works is a form of art and expression that is covered under the copyright act.

While interning at Warner Music Group last year in their Television and Film Licensing department, there were many times when a client would ask for a certain song for a television show or a film, and we could not distribute it because of sampling and/or copyright issues. This was a prevalent issue in a certain genre of music, rap/hip hop. Sampling is one of the manifestations of the remix culture. Many hip-hop activists have argued that sampling has always been a part of hip hop. Taking someone else’s art, and creatively transforming and rearranging the sounds into something else. In the late 1980’s sampling was common; often, MCs sampled a snare or a kick drum, which helped them to create new music. When hip hop began to emerge, it was simple, two turntables and a microphone was all that was needed. But new technology creates new ethical and legal questions. Over time, improved sampling technology allowed artists to develop the rap/hip hop genre, giving them the ability to rearrange various beats and melodies.

Tarik Bradford, an employee at Universal Music Group, and my former supervisor at Warner Music Group, commented on sampling and the hip hop culture. "Samples are probably the biggest problem that comes up when anyone is trying to license Hip Hop. Most early Hip Hop from about 1980-1990 is filled with uncleared samples. Most people didn't start legally clearing samples until the early 90's so usually whenever we would license Hip Hop from the 80's we would have to do it on a quitclaim basis which basically means we don't know if their are illegal samples in the song but if so the company that we are licensing the music to is responsible for any lawsuits that may occur. Since most film companies and ad agencies don't want to take that chance a lot of Hip Hop from that era goes unlicensed. Even now when songs have legal samples it's still a pain for music supervisors because it's time consuming to track down all of the songwriters that might be in one song with 2 or 3 samples. Even today it's still by far the most difficult music to clear for licensing."

In the early 1990s Biz Markie, a rap artist under the Warner Bros. label, sampled music without permission and was successfully sued. In 1992 Biz Markie released his album, "I Need A Haircut." While the album received great reviews, his song "Alone Again," went under scrutiny for sampling a substantial portion of music from Gilbert O’Sullivan’s 1972 hit "Alone Again (Naturally)." This case is known as Grand Upright Music, Ltd. v. Warner Bros. Records Inc. According to Benedict.com, Biz Markie initially tried to get a sample license from the copyright holder of "Alone Again (Naturally)," who was Gilbert O’Sullivan. O’Sullivan declined, but Biz Markie sampled his musical work anyway. As previously mentioned, sampling was common in the 1980s and early 1990s, and asking for permission to use someone else’s copyrighted work was rare. As a result, O’Sullivan sued Biz Markie for copyright infringement and their judge, Kevin Duffy, order an injunction against Biz Markie. This changed hip hop and the overall music industry because it was the one of the first cases to address the legality of the common practice of sampling. This case also required that any future music sampling was to be approved by the original copyright owners to avoid a lawsuit.

Click here to listen to "Alone Again" and "Alone Again (Naturally)"
Biz Markie and Gilbert O' Sullivan Sound Clips

Since Gilbert O’Sullivan was the copyright holder of "Alone Again (Naturally)," he had the distribution and reproduction rights to the song, as well as the right to prepare derivative works. Therefore, the sampling of his song by Biz Markie, without Gilbert O’ Sullivan’s permission, is illegal.

One of the few defenses against the penalization for sampling and copyright infringement is Fair Use, which is based on the idea that certain unlicensed uses of copyrighted work are justifiable. These used include: criticism, comment, news reporting, teaching, and research. In addition there is currently a non-profit organization, Creative Commons which provides alternative copyright licensing such as some rights reserved (allows you to keep your copyright while allowing certain uses of your work), and no rights reserved (allows you to share your work). Creative Commons also offers six different licenses to choose from when publishing your work that differentiates by the guidelines to which you are allowing others to copy, distribute, share, display, or perform your work.

Today, the remix culture is more popular than ever, especially in rap/hip hop music. There is still a grey area in terms of defining the amount of seconds, words, or musical notes you can sample from another song without it being classified as stealing or copyright infringement. Some artists believe that sampling any amount of the song is copyright infringement, and others believe that it can be considered a violation of an artists’ copyright depending on the portion of the sample taken from the song.

Click here to check out some more popular sampled songs!
8 Most Over-Used Samples In Hip Hop History

Mass Customization: Nike iD and Puma Mongolian Shoe BBQ

Nike iD’s main page has a simple look with bright colors, but it’s a bit difficult to navigate and understand because it’s clutter with a variety of options to choose from. The opening page has an athletic theme and refers to your shopping cart as my locker, and another feature known as the team locker. At the team locker you can design, share, rate, and customize your shoe based on your favorite sports team. Other features included on the homepage are two of the major shoes that Nike allows you to customize. The Zoom Kobe IV iD shoe and the Nike Air Morgan iD shoe. When you click on the Kobe IV iD shoe icon, it allows you to choose shoes previously customized to match certain sports teams colors, or you can start from scratch and create your own unique shoe. As you go through the proper steps, you can choose from an array of colors to customize each part of the shoe to your unique style. At the bottom of the page the website gives an overview of each part of the Kobe IV iD shoe, the technology used, and the inspiration for the shoe and its overall features. This gives the consumer insightful knowledge of the shoe they are personalizing. It also gives them the option to customize another type of shoe, the Nike Air Morgan iD. This has many of the same features as the Kobe IV iD shoe. While these features give you different ways to customize your shoe, it’s difficult to find out how exactly how to go about doing so and to also keep the consumer entertained. Also included on the homepage of the website are a variety of popular Nike shoes as well as athletic ones to select from and also customize. The most interactive feature of the website is the Studios icon. This is where consumers can make an appointment at either Niketown or Nike Sportswear 21 located in New York City to get a one-on-one session with studio design consultant and obtain the experience of creating their own shoe at a store. This also features a video of the rapper Ludacris at the Niketown NY studio discussing a Nike iD signature series contest. Overall the Nike iD website gives you several options to customize your shoe, but has parts that are easily ignorable and difficult to navigate through.


The opening page on the Puma Mongolian Shoe BBQ site it is aesthetically pleasing and inviting with a lot of vivid colors, pop-out icons, and a very excited chef! The idea of using the Mongolian BBQ and comparing that to customizing your own shoe is something that makes this site unique, distinctive, and interesting. They take this theme and use it throughout the site by calling your shopping cart a doggie bag, and describing their new shoes as the daily special. It also gives a description of the Mongolian BBQ and how this relates to creating your personal shoe. Some other options included are designing your own shoe in the store, subscribing to the website, and starting your own shoe on the website. When you click on the icon, start new shoe, it continues with the theme by using menus as options for shoe styles. It takes you through an easy step-by-step process to choose the style of your shoe, the size, and the option of customizing by either starting from a blank shoe or shoes that already have selected from previous styles, referred to as a customer recipe. When designing your custom shoe, the Puma Mongolian shoe BBQ site has detailed features you can use, but not a variety of colors. After creating the shoe you can email it to a friend, buy it online, or buy it in a puma store. Overall the Puma Mongolian Shoe BBQ site uses creativity, simple yet sophisticated navigation tools, and vivid and animated colors which make it more appealing to the eye and an enjoyable experience for the consumer when customizing their shoe.


Compared to the Puma Mongolian Shoe BBQ, Nike iD is a lot more complicated to navigate, a bit out of date in terms of the technology, and not nearly as interactive or attention grabbing. Although the Nike iD site gives the consumer detailed information about the shoes and offers more options of the types of shoes, as well as the selection of colors you can choose from, the homepage is too cluttered. The homepage is the most important part of a website. The Puma Mongolian Shoe BBQ site uses modern technology to generate the best consumer experience by creating a Mongolian BBQ themed website and relating it to the idea of customizing shoes, which is both innovative and original. It also creates a more personalized experience for the consumer by making the site aesthetically pleasing and easy and fun to navigate through.