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Mon, 05 Jun 2006 UK consumers prop up Quark costs

Karen Haslam

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Quark UK admits that there is a "black and white" difference between the pricing of QuarkXPress in the UK and Europe when compared to the US, but claims there are a number of good reasons for this discrepancy.

There are significant discrepancies between the pricing of QuarkXPress 7 in the US, UK and Europe, with UK customers paying almost double what US customers pay, and European customers paying more than double for a standard version of the software. It is a similar state of affairs with Adobe's Creative Suite. See Quark pricing RIPs of Britain for more information.

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Quark head of sales Matthew Wallis explained: "We’re actually being congratulated on the price, it has come down. Yes, we do have differential pricing, but we have priced to the market. We price to the market to be very competitive and we think the price in Europe and in the UK is extremely competitive. But if we found we didn’t sell a bean tomorrow we’d change it."

The Quark team also emphasised that the issue of pricing had been thoroughly researched by a team at the University of Columbia. "According to their findings we could have priced it a lot higher," noted Wallis. However, what the findings did show was that in the UK and Europe consumers are prepared to pay more for a product like QuarkXPress 7 than consumers in the USA. "They are very different markets," explained Wyatt.

One of the justifications for the price, according to Gavin Drake, Quark UK’s director of marketing, is the investment in bringing it to market, and Quark claims the associated costs in Europe and the UK are particularly high. Another justification, according to Drake, is the perceived value of the product. "You have to price the product to reflect the value that customers are expecting to get. Pricing decides where you operate from a marketing perspective, if you are priced at £79 you’re seen to be a £79 product."

Quark’s price is almost in line with the price of Adobe’s Creative Suite in both the UK and Europe. CS2 is price similarly to QuarkXPress 7 in the US.

Misconceptions

One misconception, according to Wallis, is that software doesn’t cost as much to manufacture as hardware. "People think that from a manufacturing point of view a CD takes less money to produce, but from an R&D point of view it’s a huge cost," Wyatt explained.

Drake added that another justification for the cost "is the investment in bringing it to market. The customer could say I don’t want to foot the bill for the sales and marketing, but you have to look at what gives the customer satisfaction and it’s actually having a relationship with the company. Quark didn’t spend any money on marketing for years and the customer hated the company".

Some of this money goes into support that the customer gains from directly. Wyatt noted: "We offer free support - you could take £250 of the cost of the product for that. We think that’s really important."

The money also gets ploughed back in to research for the development of the next version of the program. "What if we said to customers, we’re dropping the price but you won’t get a version 8?" joked Wallis.

While it isn’t immediately obvious why these justifications for the price point explain why European and UK customers pay almost double the price paid by US customers, the company is at least acknowledging the problem.

Update easy

The key reason why the £750 price point will not be an issue, according to Drake, is the fact that many people will not need to pay the full price. "Ultimately you can upgrade for £249," Drake explained. "Even if you’ve switched to InDesign, you’re still in our database, you still have a serial number, and you can still upgrade to a brand new version."

Wallis agreed, stating: "For a huge amount of our customers it’s just £249. If people see it as too expensive they aren’t going to buy it. If people feel they are being ripped of they won’t buy it."

Drake concluded by highlighting the fact that it tends to be the case that many things, such as cars, are priced higher in the UK: "I think that the issue will change over the next ten years, and not just the software industry; the market is changing, we’re globalising, communication is different due to the internet, and over time things change, and that is absolutely the market dynamic not just for us but across many industries."

Adobe also has differential pricing for its Creative Suite, with UK European customers paying a similar premium, however that company has not yet provided comment on the matter.

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