Price, People, Packaging, Positioning Flashcards
the value of money in exchange for a product or service
PRICE
the amount or value that a customer gives up to enjoy the benefits of having or using a product or service.
PRICE
In commerce, price is determined by what:
A buyer is willing to pay
A seller is willing to accept
The competition is allowing to be charged
helps the business owners define the particular price at which they can maximize profits on sales of their product or services.
Pricing strategy
a wide range of factors should be considered when setting prices of the product or service.
Pricing strategy
10 Different pricing strategies
Penetration Pricing
Skimming Pricing
Competition Pricing
Bundle Pricing
Product Line Pricing
Premium Pricing
Optional Pricing
Cost-plus Pricing
Psychological Pricing
Value-based Pricing
The price charged for products and services is set artificially low in order to gain market share.
Once this is achieved, the price is increased
- Penetration Pricing
A company charges a higher price then slowly lowers the price to make the product available to a wider market because it has a considerable competitive advantage.
- Skimming Pricing
Seller uses prices of competing products as a BENCHMARK instead of considering own costs or the customer demand.
In reality, a firm has three options: to price lower, price the same or price higher than competitors
competition Pricing
a firm has three options:
to price lower,
price the same
or price higher than competitors
The act of placing several products or services together in a single package and selling for a lower price than would be charged if the items were sold separately.
- Bundle Pricing
The practice of reviewing and setting prices for multiple products that a company offers in coordination with one another.
Rather than looking at each product separately and setting its price, product-line pricing strategies aim to maximize the sales of different products by creating more complementary, rather than competitive, products.
If you offer more than one product or service, consider the impact that one product’s or service’s price will have on the others.
- Product-line Pricing
Setting the price of a product higher than similar products.
The goal is to create the perception that the products must have a higher value than competing products because the prices are higher.
- Premium Pricing
The company earns more through cross-selling products along with a basic core product.
The main product does not have many features (and is priced low) which can be enhanced through optional or accessory products which are sold at premium by the same company.
- Optional Pricing
Cost plus pricing involves adding a markup to the cost of goods and services to arrive at a selling price.
Under this approach, you add together the direct material cost, direct labor cost, and overhead costs for a product, and add to it a markup percentage in order to derive the price of the product.
- cost-plus Pricing
cost-plus pricing, you add together the
direct material cost, direct labor cost, and overhead costs for a product,
and add to it a markup percentage in order to
derive the price of the product.
- cost-plus Pricing
Example:
An entrepreneur started her own clothing line. She needed to calculate the selling price for a long sleeve shirt.
The following are the costs for producing the shirt:
material and labor costs = Php 400
overhead costs = Php 200
The total cost adds up to Php 600
If the entrepreneur decides to have a mark-up amount of 50%, the selling price will be calculated through this formula:
Selling price = 600 (1+50%) = 600 (1.50)
Selling price = Php 900
Thus, the selling price for a long sleeve shirt should be Php900.
is the practice of setting prices slightly lower than rounded numbers, in the belief that customers do not round up these prices, and so will treat them as lower prices than they really are.
- Psychological Pricing
This practice is based on the belief that customers tend to process a price from the left-most digit to the right, and so will tend to ignore the last few digits of a price.
- Psychological Pricing
A price-setting strategy that centers on understanding what customers are willing to pay for a product or service based on its perceived benefits and value.
- Value-based Pricing
4 Categories of Pricing Issues
Buyer-seller interactivity
Price discrimination
Price format
Opportunistic pricing
The amounts displayed in stores are not even the actual prices that buyers have to pay.
Rather, prices have to be first negotiated during an interaction between the seller and the buyer.
Buyer-seller interactivity
When a product is sold at different prices to different consumers, it is called _______.
From the perspective of any business, _____ may present several advantages, most especially ________
Price discrimination
profit maximization.
This pricing issue involves how a price is expressed to the market.
Businesses adopt the practice of pricing a product a cent or two below the round number (Php 99.99 or Php 199.99), which has the psychological effect of lowering the leftmost digit.
Price format
Well-known businesses and some luxury brands may have the opportunity of charging a hefty price to their products.
________ is oftentimes used to drive competitors out of the industry based on efficiency.
Opportunistic pricing
The idea is to create an awareness, attract and induce the consumers to buy the product, in preference over others.
promotion
refers to the complete set of activities, which communicate the product, brand or service to the user.
promotion
3 Objectives of Creating a Promotional Plan
To create brand or product awareness
To generate demand
To differentiate a product from its competitors
Five Main Components of Promotional Mix
Advertising
Public Relations or PR
Personal Selling
Sales Promotion
Direct Marketing
This promotional method is used to create awareness and deliver information to the target audience.
- advertising
gives the advantage of selecting the territory and audience to which the message is to be directed.
It is also cheaper than TV advertising.
Radio
fast-developing medium of advertising and is getting increased popularity these days.
It is more effective as compared to radio as it has the advantages of sound and sight.
On account of pictorial presentation, it is more effective and impressive and leaves a lasting impression on the mind of the viewer.
Television
carry their messages entirely through the visual mode.
These media consist of newspapers, magazines and direct mail.
You can also advertise electronically through your company website and provide important and pertinent information to clients and customers.
You can protect some parts of your website through passwords and give access to member customers.
You can also send advertisements via direct e-mail as part of your promotional strategy.
Electronic
It is important for every business, as each happy customer can steer dozens of new ones your way.
And it’s one of the most credible forms of advertising because a person puts their reputation on the line every time they make a recommendation and that person has nothing to gain but the appreciation of those who are listening.
Word of Mouth
In _____, the article that features your company is not paid for.
The reporter, whether broadcast or print, writes about or films your company as a result of information he or she received and researched.
- Public relations or pr
______ occurs when an individual salesperson sells a product, service or solution to a client.
Salespeople match the benefits of their offering to the specific needs of a client.
Today, _____ involves the development of longstanding client relationships.
- Personal selling
Five Stages of Personal Selling Process
Prospecting
Making first contact
The sales call
Objection handling
Closing the sale
______ is any initiative undertaken by an organization to promote an increase in sales, usage or trial of a product or service (i.e., initiatives that are not covered by the other elements of the marketing communications or promotions mix).
- Sales promotion
5 types of advertising
Radio
Television
Print
Electronic
Word of Mouth
5 Sales promotion technique
Free gifts
Free sample
Free Trial/Taste
Customer Contests
Special Pricing
There are many ways to utilize this particular sales promotion technique.
A newly opened store, for example, may offer the first 10 customers free items worth 100 pesos.
Free Gifts
Providing ____ is a technique used to introduce new products to the marketplace.
____ give the consumer a chance to see how well they like a product or try something they otherwise would not normally buy.
Free Sample
Samples
A ______ is a way for a consumer to try a new product while eliminating risk.
It may be used when a product is unique to the marketplace.
Free Trial/Taste
Contests offer the customer a chance to win prizes like cash or store merchandise.
Customer Contests
is used to offer consumers a lower price for a period of time or to purchase in multiple quantities.
Special Pricing
is a promotional method that involves presenting information about your company, product, or service to your target customer without the use of an advertising middleman.
It is a targeted form of marketing that presents information of potential interest to a consumer that has been determined to be a likely buyer.
- Direct marketing
9 Forms of Direct Marketing
Brochure
Phone Calls
Coupons
Newsletters
Catalogs
Text Messages
Emails
Post Cards
Fliers
5 Digital Era Types
Social Media Marketing
Content Marketing
Affiliate Marketing
Email Marketing
Search Engine Optimization (SEO)
Many businesses are utilizing different social media platforms to communicate their products and services to their target audience.
Social Media Marketing
Content can be presented in various formats, including blogs, e-books, how-tos, online articles, forums, and so forth.
This promotional strategy aims to attract new and potential customers by creating and sharing valuable information.
Content Marketing
Content can be presented in various formats, including
blogs,
e-books,
how-tos,
online articles,
forums, and so forth.
takes into account the presence of third parties who are responsible for giving commissions or rewards to their affiliates.
Affiliate Marketing
is a relatively low-cost promotional strategy that aims to build brand and customer loyalty.
Email Marketing
is an umbrella term for the different methods used in increasing the visibility of a website or blog online.
It considers different kinds of search, including image search, news search, and video search.
Search Engine Optimization (SEO)
It considers different kinds of search, including
image search, news search, and video search.
They regarded as the primary key toward a successful implementation of marketing strategies of any business.
people
They play a vital role in service delivery as well as in customer relationship retention.
people
These ____ are relied on by the business to design, develop, manufacture, and produce products to the end consumers.
people
The people rendering the service must be competent and skilled enough so that that the clients will patronize your service.
The marketing efforts of people are to create customer awareness, to arouse customer interest, to educate customers, to close the sale and to deliver the product.
people
people 2 vital role
service delivery
customer relationship retention.
people are relied on by the business to
design,
develop,
manufacture,
and produce products to the end consumers.
The people rendering the service must be ______ so that that the clients will patronize your service.
competent and
skilled enough
2 Recruitment Methods
Internal Recruitment
External Recruitment
is the process of filling vacant employment positions by the employees who are already working within the business premises.
Internal recruitment
Internal Recruitment 3 types
Promotions
Transfers
Employee Referrals
It aims to shift any employee from a lower position to a higher one with more responsibilities attached, remuneration, and ranking privilege.
A. Promotions
It involves the shifting of an employee from one department to another, depending on the qualifications of the position involved.
B. Transfers
With this approach, current employees may refer people who they think are suitable or fit for the job.
This is adopted by most businesses, for it saves cost and time compared to hiring people from various external sources.
C. Employee Referrals
This type of recruitment refers to the hiring of employees outside the business.
Applicants seeking opportunities have no connection with the internal affairs of the business.
- External Recruitment
External Recruitment 3 Types
Employment Agencies
Advertisements
Walk-ins
are typically run by public, private, and government sectors.
These sectors maintain a DATABASE where vital information of qualified candidates are stored and kept.
A. Employment Agencies
Employment agencies are typically run by
public, private, and government sectors.
where vital information of qualified candidates are stored and kept.
DATABASE
Recruiting through ______ is very popular and much preferred by a lot of employers.
Job vacancies are thoroughly described and announced through different print and electronic media.
B. Advertisements
are thoroughly described and announced through different print and electronic media.
Job vacancies
This direct form of external recruitment is done when prospective candidates are invited to apply for any job vacancy.
In this case, a definite date, time, and venue of the interview are given to the candidates without the need to submit their applications in advance.
C. Walk-ins
In this case, a _____, ______, and _________ are given to the candidates without the need to submit their applications in advance.
definite date,
time, and
venue of the interview
Motivation pertains to a person’s direction to behave or act in life. In the entrepreneurial aspect, managing motivation is a critical aspect of the success of any business.
Employers must motivate their employees by setting an example and identifying what the employees really desire.
Motivated Workforce
pertains to a person’s direction to behave or act in life.
Motivation
Every individual wants to be recognized for something that he or she has remarkably done or made.
A simple act of acknowledgment from the higher-ups will mean a lot to any employee.
Acknowledge any employee’s achievement.
Always remember that employees will stay in business if they have a reason to.
Starting an incentive program will keep them motivated and will help them stay focused.
Offer employee rewards.
It must be remembered that a great business is one that provides excellent customer service.
To be able to give this kind of service, a group of high-caliber employees must be present to answer or resolve the queries of the customers and to make sure that they are getting their money’s worth.
Proper Customer Service
When a company presents a product or service in a way that is different from the competitors, they are said to be “_______” it.
positioning
positioning
Positioning refers to a process used by marketers to create an image in the minds of a target market.
Solid positioning will allow a single product to attract different customers for not the same reasons.
For example, two people are interested in buying a phone; one wants a phone that is cheaper in price and fashionable while the other buyer is looking for a phone that is durable and has longer battery life and yet they buy the same exact phone.
will allow a single product to attract different customers for not the same reasons.
Solid positioning
_____refers to a process used by ______ to create an image in the minds of a target market.
Positioning
marketers
three basic concepts for positioning
Functional Position
Symbolic Position
Experiental Position
deal with solving a problem, providing benefits and getting a favorable perception from investors, stockholders and consumers.
Functional Positions
deal with self-image enhancement, ego identification, belongingness, social meaningfulness and affective fulfilment
Symbolic Positions
deal with providing sensory or cognitive stimulation.
Experiential Positions
3 Functional Positions
solving a problem,
providing benefits and
getting a favorable perception from investors, stockholders and consumers.
5 Symbolic Positions deal with
self-image enhancement,
ego identification,
belongingness,
social meaningfulness and
affective fulfilment
2 Experiential Positions
providing sensory
or cognitive stimulation.
Confirm your understanding of market dynamics
Identify your competitive advantages
Choose competitive advantages that define your market “niche”
Define your positioning strategy
Communicate and deliver on the positioning strategy
Steps of the positioning process
5 Steps of the positioning process
Confirm your understanding of market dynamics
Identify your competitive advantages
Choose competitive advantages that define your market “niche”
Define your positioning strategy
Communicate and deliver on the positioning strategy
Four Elements of Product Positioning
Vision and mission
Product category
Customer pain points
Product differentiation
A statement that is strategically used by businesses to instill into the minds of the target market a positive image of their products and services.
Product Positioning Statement
A well-crafted ______ must be able to describe the intended audience of a product and the crucial reasons why customers should choose it over all others.
It is a statement that makes the product different from its competitors.
Product Positioning Statement
It is a statement that makes the product different from its competitors.
Product Positioning Statement
