One of the core objectives of business organisations is to maximise their profit. Attainment of this goal is only possible if is firm has integrated customer-driven focus. Over the past 2 decades, firms have increasingly considered the concept of market segmentation as an important element in their marketing success. Market segmentation is defined as the process through which a firm partitions its market into small groups depending on the customers’ characteristics and needs. Firms intend to satisfy the consumer’s needs. Currently, adoption of mass marketing can lead into a firm failing. For example, a firm’s margin may be pushed downwards because some needs of a certain category of consumers are not wholly addressed. This may also give the competitor a winning margin. Market segmentation is based on the notion that a market is heterogeneous in nature. Therefore, it is possible for a firm to divide the market into small homogenous groups Continue reading
Marketing Functions
Major Distribution Strategies in Marketing
Companies have to decide on the number of intermediaries to use in their channel. The various strategies that are available are as follows: Exclusive distribution Selective distribution Intensive distribution Exclusive distribution: It involves severely limiting the number of intermediaries handling the company goods or services. It is used when the producer wants to maintain a great deal of control over the source level and service output offered by the reseller. Often it involves exhaustive dealer agreement in which dealer agrees not to carry competitive brand. By generating exclusive distribution, the product hopes to obtain more aggressive and knowledge selling. Exclusive distribution tends to enhance the product image and attain larger markups. It requires greater partnership between the seller and the reseller and it is found in major industrial products, automobiles sector etc. Selective distribution: It involves more than a few and less than all of the intermediaries who are willing Continue reading
Promotional Pricing – Meaning, Types, Advantages, and Disadvantages
Marketing includes a very important concept that is marketing mix; it has four major components that are promotion, people, price, and place. Nevertheless, in the marketing mix after the product, the second most important factor is the kind of price that is being used. This is because the distribution and the promotion mix can be modified by the kind of pricing being used. It can be an enormous job to set up the correct price for products and services while establishing a new company and it could be equally for a company that has a year of existence on the market. The problem could be that if prices are set too high, the risk may be losing customers or customers may not be interested in the product at all. If prices are set to low, the risk may be not returned on the investment and extremely low margins. Before establishing Continue reading
Factors to Consider When Setting Prices
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
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
Introduction to Marketing Research
Marketing research is the intelligence service of a business enterprise. American Marketing Association defined marketing research as “the gathering, recording and analyzing of all data about problems relating to the transfer and sale of goods and services from producer to consumer.” Objectives of Marketing Research To know the demographics and psychographics of customers:- Marketing research tries to reveal the number of persons who buy, why they buy, when they buy, the frequency of their buying, and the sources of their buying. It also includes the social status and the regional location of the customers. To find out the impact of promotional efforts. To know customer response to a new product. To prove ‘what went wrong’. Nature of Marketing Research Marketing research is systematic and objective collection of data, its analysis and evaluation, and decision making in respect of specific aspects of a marketing problem. Marketing Research and Market Research:- Continue reading