This is one ingenious company

by Volker Weber

grooveus.jpg

First I could not believe my eyes when I read this at Jeroen's site but Groove Networks has found an interesting new way to piss off potential customers. When you enter their store they will ask you what your country is. Once they know that they will set a cookie which you have to delete if you want to try what I just tried. The product prices you see above are for US customers. If you select Germany as your country of origin, then you get the prices below. Remember that is a downloadable product so you pay for the "shipping" anyway.

groovede.jpg

Comments

I as a german will gladly pay more than other for the same product because I am proud to be a german ;-)

Markus Nolte, 2003-02-28

[spoken with an italian accent]

Mr. Nolte, you are my friend, so I charge you double.

Volker Weber, 2003-02-28

Actually I have been thinking about this very possibility for a long long time. And every time this idea crossed my mind I came to the conclusion that no company could be so blatantly dumb to actually do it. Because this will not only piss of potential customers. This will also piss of existing customers (did I pay too much as well?) and possibly damage the company's reputation beyond repair.

Would be interesting to know if any other companies are using the same "trick". And of course, what country you have to specify to get the lowest price :-)

Stefan Rubner, 2003-02-28

This reminds me of car prices e.g. for US-made Jeeps and the like: They are actually more expensive in Germany because they would not be taken seriously otherwise. Perhaps the people at Groove think the same? ;-)

Stefan Tilkov, 2003-02-28

As an afterthought: Maybe they just switched providers and the new one has different rates for national and international internet transfers ...

Stefan Rubner, 2003-02-28

Didn't Amazon try something like this - I seem to remember they were caught charging customers different prices depending on the customer profile, but that it was switched off after a massive outcry shortly afterwards?

Incidently, if you want to raise your blood pressure, try figuring out the logic behind what VAT you pay on Internet purchases in the European Union. If I buy books from amazon.co.uk, I pay full German VAT on the UK price, if I buy software from a company operating out of Irland, I pay a whopping 25% (Irish VAT) on the price.

I don't have all the details any more, but I did check when I got hit for the Irish VAT and it seemed it was correct - the VAT payable is the source-country for downloads and the receiving-country for goods.

John Keys, 2003-02-28

i was considering buying a standard version of Groove yesterday-evening....

rob roef, 2003-03-01

The dotcom I worked for (one involved in italian fashion and luxury) charged the same prices of the shops (very different from one country to country).

It folded very fast.

Massimo Morelli, 2003-03-01

Being from the UK, when I have to renew my license, does this mean that I can sneak in as being an American, and get the lower price?

Do I have to swear the pledge of allegiance first, though?

Richard Parrott, 2003-03-01

Uh, why are you worried about that? It's not an exception. Look at this:

http://www.spiegel.de/auto/aktuell/0,1518,238349,00.html

Oliver Tunnat, 2003-03-02

There is a huge difference. The german car market has a very strange behaviuor. People expect discounts in the 10% margin across the board in order to make them confident to have cut a good deal. Accordingly prices have to be 10% higher to account for that. Then the decisions which car to get, how many cylinders, which "class" and so forth follows a strange caste system. Finally the market is completely controlled. Oliver Tunnat could not just start selling Porsches or Audis. That all accounts for higher prices in this market.

In contrast, Groove Networks is selling a downloadable product. They are the sole source for the program. There are no distributors or any other channel. If they choose to discriminate their customers by country, age, gender they can do so at will. That is one easy way to make sure you are only selling to the people you want to sell to.

I think it was IBM who brought value based pricing into the IT market. Pricing was no longer based on cost but on perceived value. And that was hardware then. With software prices are even more arbitrary.

We are not assuming that customers from Argentina or India can afford to pay higher prices than US customers, are we? If we don't then prices for Groove just went through the roof. The minimal client went from 49 to 69. That is a 40% increase for the same perceived value.


Volker Weber, 2003-03-02

Kelly Ford from Groove Networks has alerted me to a clarification on their position about the different prices in the discussion forum.

Volker Weber, 2003-03-03

Well - I don't mind paying 40 bucks more for a workspace as I feel that it is worth it for a secondary level tool such as this that I use daily. But I am not sure what more I will get in support outside the US. My question is how long before I have to pay again to keep up to date - I know this is a Microsoft (owned and controlled) company and getting people hooked is their main focus. Any info on when they will come at a user for more (higher priced) blood ?

Raven Sati, 2003-03-05

Please note Groove no longer has a markup price... Our pricing since Sept 1st 2004 is the same globally.

William Aboujaoude, 2005-01-11

One more thing the price list which you list above are no longer correct...

The current pricing for Individual Software Licenses:
Groove Virtual Office Project Edition. Priced per user $229
Groove Virtual Office Professional Edition: Priced per user. $179
Groove Virtual Office File Sharing Edition: Priced per user. $69

William Aboujaoude, 2005-01-11

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