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 Principles
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
Customer Value Analysis (CVA)
Whatever product a marketer has to offer in the market, one thing is sure, it’s going to get competition. It depends on the product type and marketplace what degree of competition it’ll get. In highly competitive marketplace, managing the non-price purchase and satisfaction drivers that matter most to customers can positively impact market share. Customers make purchase decisions based on how valuable they perceive the quality of available products or services as they relate to price. Those organization’s that are perceived to offer low value are highly unlikely to attract new customers and retain their existing customers. In a highly competitive market, an organization’s competitive position is determined by the perceived value of its products and services, relative to the competition. Customer value analysis is a powerful analytical technique that help marketing managers to measure and grow relative market share. What is Value Analysis Value analysis is a process to 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
Are Market Research and Marketing Research the Same?
Market research is about understanding the broader marketplace in which we intend to compete. Marketing research, on the other hand, is about understanding what ‘package’ of marketing elements (i.e. the product, price, promotion and distribution factors) the country will need to put together in order to meet customer needs and to succeed in the marketplace. Market research is the more encompassing/broader concept of understanding the market environment in which you will be competing, while marketing research is the more specific/focused view of consumer needs and behavior. In its role as the foundation of marketing, marketing research is arguably marketing’s most important task. Today marketers not only view research as a key ingredient in making marketing decisions they also consider information to be a critical factor in gaining advantage over competitors. Because organizations recognize the power information has in helping create and maintain products that offer value, there is Continue reading