Thursday, January 14, 2010

Comparison Shopping

I was surprised to see the new marketing strategy unveiled by DirecTV. As I was watching Deal or No Deal while eating dinner tonight, I saw the new DirecTV commercial. It consisted of two identical flatscreen TVs set on a solid background. One TV was labeled DirecTV and the other was labeled Dish Network. The narrator proceeded to explain that despite the fact that Dish had been advertising a lower price for the same service, there were hidden costs to subscribing to Dish that you never need to worry about if you subscribed to DirecTV.

I really should not be surprised by this competitive strategy as Apple has been duking it out with PCs over whose product is really cheaper and more effective thereby having greater value. However, I thought of these two companies in a different light. Through very shallow research on both companies websites, I found that DirecTV offers cheaper coverage and more channels on every level of programming except for the "Family Package" which are of comparable size and are offered by Dish Network for $24.99 whereas DirecTV charges $29.99. The only feature I did not compare were the actual channels in each package. I compared the bulk number of channels offered, but admittedly I do not know how they compare.

The reason I mention all this is because it is very interesting that DirecTV has to advertise that Dish Network is more expensive because of added on fees. From all I can tell, DirecTV is cheaper, but Dish has become the brand that represents the value in satellite TV. DirecTV is forced to advertise this way because they have become a differentiated brand; therefore, it is very difficult for them to also appeal to consumers as a price leader. Dish has found a way to become a price leader in image without leading in price. That is good marketing and good use of cornering their opponents into one category of consumer perception.

If anyone wants to double check my information and tell me if I'm wrong, here are the sites I used to draw my pricing information from:

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