1.3.5 Influence of Social Trends on Branding and Promotion Flashcards
1.3.5 Influence of Social Trends on Branding and Promotion -
Viral marketing
Viral marketing refers to a business using its existing social networks to promote a product or service.
- 3.5 Influence of Social Trends on Branding and Promotion
- Social media
Social media use refers to businesses using digital platforms to create and share content socially.
- 3.5 Influence of Social Trends on Branding and Promotion
- Emotional branding
-Emotional branding refers to a business developing a brand that appeals directly to a customer’s emotional state.
Nike’s 2018 Kaepernick campaign was also an example of emotional branding.
- 3.6 Pricing strategies
- factors that influence a business’ pricing strategies
Costs - internal
Product life cycle -internal
Nature of the product - external
The degree of competition - external
- 3.6 Pricing strategies
- factors that influence a business’ pricing strategies
- costs
- Costs influence business’ pricing decisions because businesses usually aim to make a profit.
- A business’ price and costs determine how much profit the business will make. Businesses cannot afford to set a price lower than their costs forever.
- 3.6 Pricing strategies
- factors that influence a business’ pricing strategies
- Product life cycle
- Where a product is in the product life cycle determines whether the business will charge a high or low price for the product.
- When a new product is launched, businesses may charge higher prices to take advantage of exclusivity.
- 3.6 Pricing strategies
- factors that influence a business’ pricing strategies
- nature of the product
- The nature of a product affects pricing in 2 key ways:
- Whether a good is a luxury good will affect how much a business charges.
- Whether the good is hard to differentiate from competitors affects how much a business can charge. If it is similar (homogenous), then businesses usually price at a similar level to competitors.
- 3.6 Pricing strategies
- factors that influence a business’ pricing strategies
- Degree of competition
- The degree of competition affects the pricing decision of businesses because the more competition a business faces, the more options customers have.
- When customers have lots of options for similar products, businesses must compete to attract customers using a lower price.
1.3.6 Pricing strategies -Price skimming
Price skimming is a pricing method where a business sets a relatively high initial price and then gradually lowers it over time. This is often used before a business faces competition in the market. Once competition arrives, there will be downward pressure on the price to fall.
1.3.6 Pricing strategies Why is price skimming used? Benefits?
- Maximise revenue
- To cover fixed costs (research and development)
1.3.6 Pricing strategies Why is price skimming used? - maximise revenue
- Price skimming is used to try and maximise revenue.
- Consumers who buy early on are willing to pay a higher price but the business can still attract other customers who can pay a lower price later on in the product’s lifecycle.
1.3.6 Pricing strategies Why is price skimming used? - To cover fixed costs (research and development)
Price skimming can help to recover the costs of research and development, which can be expensive for technology products.
1.3.6 Pricing strategies What is a disadvantage of price skimming?
- A disadvantage of price skimming is that it can slow down the growth of a product and this can give competitors more time to launch a competing product or service.
- A business does not maximise the number of sales at the start so competitors can get more of a chance to enter the market.
1.3.7 Pricing methods
price penetrations
Price penetration is where a business tries to increase market share by offering a low initial price.
1.3.7 Pricing methods
Why use price penetrations?
-When these goods or services enter the market, a business can attract customers from established competitors.