In the narrowest sense, price is the amount of money charged for a product or service. More broadly, price is the sum of all the values that consumers exchange for the benefits of having or using the product or service. Price is the only element in the marketing mix that produces revenue; all other elements represent costs. Price is also one of the most flexible elements of the marketing mix. Unlike product features and channel commitments, price can be changed quickly. At the same time, pricing and price competition is the number one problem facing many marketing executive. Yet, many companies do not handle pricing well. Factors to Consider When Setting Prices A company’s pricing decisions are affected by both internal and external environmental factors. Internal Factors Affecting Pricing Decisions: Internal factors affecting pricing include the company’s marketing objectives, marketing strategy, costs and organizational considerations. 1. Marketing Objectives: Before setting Continue reading
Marketing Concepts
Target Markets in a Global Environment
The starting point in selecting the most effective channel arrangement is a clear determination of the target market for the company’s marketing effort and a determination of the needs and preferences of the target market. Where are the potential customers located? What are their information requirements? What are their preferences for service? How sensitive are they to price? These are some of the questions that the channel manager should answer. Customer preference must be carefully determined because there is as much danger to the success of a marketing program in creating too much utility as there is in creating too little. Moreover, each market must be analysed to determine the cost of providing channel services. What is appropriate in one country may not be effective in another. Channel strategy in a global marketing program must fit the company’s competitive position and overall marketing objectives in each national market. If a Continue reading
Concepts of Ethical Consumerism and Consumer Activism
Concept of Ethical Consumerism Over the last ten or twenty years, more and more people around the world, primarily in industrialized countries, have become better informed and more aware of the origins of the goods they purchase on a day-to-day basis, the buying policies and practices of the shops they visit and the policies and principles of the services they buy. In a growing number of cases, this increased awareness and knowledge is affecting consumer practices and may be the difference between someone buying a particular product or service or not. There are a number of reasons for this development, which is commonly referred to as “ethical consumerism”, or also “ethical consumption”, “ethical purchasing”, “moral purchasing”, “ethical sourcing”, “ethical shopping” or “green consumerism”. Fundamentally, ethical consumerism is consumers taking responsibility for their decisions in purchasing goods and services. Two key elements that have contributed to this development and that are Continue reading
An Introduction to Affiliate Marketing – Steps and Strategies
One of the easiest forms of online marketing is affiliate marketing. It is a marketing strategy where a merchant or a business house pays an affiliate for making a sale of their products and services. In short affiliate marketing means redirecting or referring a customer to a product or service that the affiliate marketer recommends with the intention of converting him into a client. The affiliate marketer is paid on the basis of the sales he or she generates for the company or the business house. The four main people involved in affiliate marketing are the seller/company/business house/brand, the affiliate or the network which promotes the product, the publisher and the customer. There are also secondary players involved in this game of affiliate marketing. They are the affiliate management agencies, the super affiliates and the specialized third party vendors or sellers. Affiliate marketing and internet marketing do overlap at times Continue reading
Brand Extension – Meaning, Advantages, and Disadvantages
In over two decades, the business strategy of introducing new products as extensions has become popular. Similarly, brand extension is considered as a key to developing a brand. In detail, it is widely used as eight out of ten new products are introduced as a brand extension in the market. Brand extension strategies are broadly applied in order to reduce marketing expense in launching new products, enhance the well-known and quality of core brands, and lessen the risk for companies. Brand extension is defined as a product whose nature and function differ from those of products currently commercialized under the brand name. In other words, brand extension is defined as using an established brand name so-called parent brand or core brand to introduce a new product. The Advantages of Brand Extension As an efficient strategy, brand extension has become a usual occurrence over the last fifteen years. There is a Continue reading
The Role of Group Influence in Consumer Behavior
So is its true that individualism is dead and that consumer behavior is dominated by the influence of groups? There is no doubt consumer behavior is heavily influenced by groups. Individuals are always striving to conform to group behavior and to please others and this influences the purchase choices that they make. The influence of groups also helps to establish trends in lifestyle, fashion, and the assimilation of new products, into the lives of consumers. The notion of ‘virtual communities’ has been around ever since the inception of the internet. Whereas people used to meet and form communities geographically, the internet allows groups of like-minded people to meet virtually through communities based on, for example, online chat rooms and forums. Here individuals, who share common interests, can make contact with each other without any geographic restrictions. The interaction between members of such groups tends to be more uninhibited that it Continue reading