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 Management Basics
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 Importance of Advertising in Marketing Communication
Advertising has four characteristics: it is persuasive in nature; it is non-personal; it is paid for by an identified sponsor; and it is disseminated through mass channels of communication. Advertising messages may promote the adoption of goods, services, persons, or ideas. Because the sales message is disseminated through the mass media – as opposed to personal selling – it is viewed as a much cheaper way of reaching consumers. However, its non-personal nature means it lacks the ability to tailor the sales message to the message recipient and, more importantly, actually get the sale. Therefore, advertising effects are best measured in terms of increasing awareness and changing attitudes and opinions, not creating sales. Advertising’s contribution to sales is difficult to isolate because many factors influence sales. The contribution advertising makes to sales are best viewed over the long run. The exception to this thinking is within the internet arena. While Continue reading
Effect of Relationship Marketing on Customer Retention
There is a relationship between two or more parties who are in contact with each other, comprise supplier (seller) and customer. Relationship marketing begins to provide framework for such marketing situations as describe by the two experiences. But its applicability has also invaded consumer goods and services. Relationship marketing became a common approach of marketing. Nowadays, there are the four waves of marketing comprise Mass marketing, Targeted marketing, Global marketing and finally Relationship marketing. Those waves play an important role by itself. Three of four waves share one thing in common. Its goal is maximizing sale in Mass marketing, Global marketing or Target marketing. After all they try to increase sale and endure profitable growth simultaneously and marketers are beginning to appreciate that they need more creation and reinforcement of building customer relationships. The relationship marketing is influenced by some areas of marketing comprises traditional marketing, sale management and marketing Continue reading
The Benefits and Harms of Advertising
The Benefits of Advertising Enormous human and material resources are devoted to advertising. Advertising is everywhere in today’s world, so that, as Pope Paul VI remarked, “No one now can escape the influence of advertising.” Even people who are not themselves exposed to particular forms of advertising confront a society, a culture – other people – affected for good or ill by advertising messages and techniques of every sort. Some critics view this state of affairs in unrelieved negative terms. They condemn advertising as a waste of time, talent and money – an essentially parasitic activity. In this view, not only does advertising have no value of its own, but also its influence is entirely harmful and corrupting for individuals and society. But advertising also has significant potential for good, and sometimes it is realized. Here are some of the ways that happens. Economic Benefits of Advertising Advertising can play Continue reading
Benefits of Integrated Marketing Communication
Integrated Marketing Communication is defined as the coordination and integration of all marketing communication tool, avenues and sources within a company into seamless program that maximize the impact on customer and other end users at a minimal cost. This integration affects all firm business-to-business, marketing channel, customer-focused, and internally directed communications. It is a management concept that is designed so that all the marketing communication which consists of advertising, sales promotion, public relation, and direct marketing work together as a unified force rather than each of those marketing communication work in isolation. Besides, it acts as an aggressive marketing plan because it sets and tracks marketing strategy that captures and uses extensive amount of customer information. It also ensures that all forms of communications and messages are carefully linked together to achieve specific objective. Benefits of Integrated Marketing Communication Integrated Marketing Communication ensures that all forms of communications tools and Continue reading