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The Marketing Mix - Product and Price
Business Analysis B
Describe and define the importance of product features, branding, and positioning
Explain how to price products or services using various methods
The US is nor product driven anymore, it's consumer driven
The marketing concept can give small businesses an advantage over larger business because they can be more responsible and flexible when trying to satisfy customer needs
Identify Your Product Mix
A product mix is the different product/services a business sells Entrepreneurs realize that in a consumer driven economy they must include some products in their mix as a convenience for their customers
Oftentimes a small % of the product selection makes up the majority of the sales revenue
Select Product Features
Product characteristics that will satisfy customer needs. Every product has features, these includes
When you select product features, always remember to consider our target-market
Consider Branding, Packaging, and Labeling
Making your product stand out from all the others, branding is the name, symbols or design used to identify your product. The package is the box, container, or wrapper in which the product is placed. The label is where info about the product is given on the package.
Position Your Products or Services
Positioning is creating an image for a product in the customer's mind. Business position a product in a certain markets to get a desired customer response
The price is the actual amount a customer pays for a product or service. To earn profit, your prices need to be high enough so that revenues exceed expenses
Set Pricing Objectives
Establish an image
Consider the Return on Investment
The amount earned as a result of the investment, usually expressed as a percentage.
Determine the Market Share
Market share is a business's percentage of the total sales generated by all companies in the same market. Networking involves establishing informal ties with people who can help your business grow.
Price a Product:
Determine the possible prices for products.
Pricing that is determined by how much customers are willing to pay for a product or services
Pricing that is determined by using the wholesale cost of an item as the basis for the price charged
Pricing that is determined by considering what competitors charge for the same good or services.
Price a Service:
It is important to consider not only the cost of any items used in providing the service but also the amount of time involved and anything that is included with the service
The price to charge for service can be determined by the amount of time it takes to complete the service.
Services can be bundled or combined under one price, rather than making the customer pay for each individual part of the service.
Different techniques may be used to set prices at different stages of the business, pricing can make or break a business
Two introductory pricing techniques are price skimming and penetration pricing. Price skimming is used when a product is new and unique. Penetration pricing starts out with a low introductory price with the goal of building a strong customer base
Pricing based on the belief that certain prices have an impact on how customers perceive a product
Prestige pricing is selling at a high price in order to create a feeling of superior quality and social status
Odd/even pricing suggests that buyers are more sensitive to certain ending numbers
Price lining involves offering different levels of prices for a specific category of product based on features and quality.
Promotional pricing is offering lower price for a limited time to increase sales. This is temporary and price will return to normal when the promotion ends
Multiple unit pricing involves pricing items in multiples, such as 10 for $10. This suggests a bargain. People will buy more items than they would if they were priced individually.
Pricing that offers customers a reduced price, encourage customers to buy
Cash discounts are offered to customers to encourage early payment of invoices
Quantity discounts are reduction in price based on the purchase of a large quantity
Trade discounts are reduction on the list price granted by a manufacturer or wholesaler to buyers in the same trade
Seasonal discounts are used for selling seasonal merchandise out of season.
Summary: this chapter describes and define the importance of product features, branding and positioning. It also explains how to price products or