Mkt501 solution
Thursday, May 06, 2010 Posted In Mkt Edit This
Supposed you have been hired as a Marketing manager in a Food Supplement Company. Your company is planning to introduce Packed Branded Fresh Vegetables in the market. Selected target market for your company is Lahore. Now you are required to prepare an analyses based report based on all 4 Ps before launching this new product in the market showing suggested strategic decisions for all 4 Ps.
Based on your marketing Mix analysis, how will you fix following decisions?
Product Decisions
Pricing Decisions
Placement Decisions
Promotion Decisions
Answer:
As a Marketing manager in a Food Supplement Company, Based on marketing Mix analysis the decision is marked in following way:
Product Decisions:
When placing a product within a market many factors and decisions have to be taken into consideration. These include:
Product design – Will the design be the selling point for the organization as we have seen with the iMAC, the new VW Beetle or the Dyson vacuum cleaner.
Product quality: Quality has to consistent with other elements of the marketing mix. A premium based pricing strategy has to reflect the quality a product offers.
Product features: What features will you add that may increase the benefit offered to your target market? Will the organization use a discriminatory pricing policy for offering these additional benefits?
Branding: One of the most important decisions a marketing manager can make is about branding. The value of brands in today’s environment is phenomenal. Brands have the power of instant sales; they convey a message of confidence, quality and reliability to their target market.
Brands have to be managed well, as some brands can be cash cows for organisations. In many organisations they are represented by brand managers, who have Hugh resources to ensure their success within the market.
A brand is a tool which is used by an organization to differentiate itself from competitors. Ask yourself what is the value of a pair of Nike trainers without the brand or the logo? How does your perception change?
Increasingly brand managers are becoming annoyed by ‘copycat’ strategies being employed by supermarket food retail stores particular within the UK . Coca-Cola threatened legal action against UK retailer Sainsbury after introducing their Classic Cola, which displayed similar designs and fonts on their cans.
Internet branding is now becoming an essential part of the branding strategy game. Generic names like Bank.com and Business.com have been sold for £m’s. (Recently within the UK banking industry we have seen the introduction of Internet banks such as cahoot.com and marbles.com the task by brand managers is to make sure that consumers understand that these brands are banks!
Product Pricing: Price your product or service
Introduction to Product Pricing
The price you charge for your product or service is one of the most important business decisions you make. Setting a price that is too high or too low will - at best - limit your business' growth. At worst, it could cause serious problems for your sales and cash flow.
If you're starting a business. Carefully consider your pricing strategy before you start. Established businesses can improve their profitability through regular pricing reviews.
There are two crucial points to consider when setting your prices:
The price and sales levels you need to set to make sure your business is profitable.
Where your product or service stands compared with your competition.
Pricing Decision:
Is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization? The remaining 3p’s are the variable cost for the organization. It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors:
Fixed and variable costs.
Competition
Company objectives
Proposed positioning strategies.
Target group and willingness to pay.
Pricing Strategies
An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve.
Penetration pricing: Where the organization sets a low price to increase sales and market share.
Skimming pricing: The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.
Competition pricing: Setting a price in comparison with competitors.
Product Line Pricing: Pricing different products within the same product range at different price points. An example would be a video manufacturer offering different video recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.
Bundle Pricing: The organization bundles a group of products at a reduced price.
Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place. The seller will therefore charge 99p instead £1 or $199 instead of $200
Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, Porsche etc.
Optional pricing: The organization sells optional extras along with the product to maximize its turnover. This strategy is used commonly within the car industry.
Placement Decisions:
This refers to how an organization will distribute the product or service they are offering to the end user. The organization must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its overall marketing objectives. If an organization underestimate a demand and customers cannot purchase products because of it, profitability will be affected.
What channel of distribution will they use?
Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer.. Direct distribution involves distributing direct from a manufacturer to the consumer For example Dell Computers providing directly to its target customers. The advantage of direct distribution is that it gives a manufacturer complete control over their product.
Distribution Strategies
Depending on the type of product being distributed there are three common distribution strategies available:
1. Intensive distribution: Used commonly to distribute low priced or impulse purchase products e.g. chocolates, soft drinks.
2. Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.
3. Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.
If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience.
Promotion Decisions
In the context of the marketing Mix promotion aspects the various aspects of marketing communication. That is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:
Promotional strategy
Advertising
Personal selling & sales force
Sales promotion
Public relations & publicity
Marketing communications budget
Based on your marketing Mix analysis, how will you fix following decisions?
Product Decisions
Pricing Decisions
Placement Decisions
Promotion Decisions
Answer:
As a Marketing manager in a Food Supplement Company, Based on marketing Mix analysis the decision is marked in following way:
Product Decisions:
When placing a product within a market many factors and decisions have to be taken into consideration. These include:
Product design – Will the design be the selling point for the organization as we have seen with the iMAC, the new VW Beetle or the Dyson vacuum cleaner.
Product quality: Quality has to consistent with other elements of the marketing mix. A premium based pricing strategy has to reflect the quality a product offers.
Product features: What features will you add that may increase the benefit offered to your target market? Will the organization use a discriminatory pricing policy for offering these additional benefits?
Branding: One of the most important decisions a marketing manager can make is about branding. The value of brands in today’s environment is phenomenal. Brands have the power of instant sales; they convey a message of confidence, quality and reliability to their target market.
Brands have to be managed well, as some brands can be cash cows for organisations. In many organisations they are represented by brand managers, who have Hugh resources to ensure their success within the market.
A brand is a tool which is used by an organization to differentiate itself from competitors. Ask yourself what is the value of a pair of Nike trainers without the brand or the logo? How does your perception change?
Increasingly brand managers are becoming annoyed by ‘copycat’ strategies being employed by supermarket food retail stores particular within the UK . Coca-Cola threatened legal action against UK retailer Sainsbury after introducing their Classic Cola, which displayed similar designs and fonts on their cans.
Internet branding is now becoming an essential part of the branding strategy game. Generic names like Bank.com and Business.com have been sold for £m’s. (Recently within the UK banking industry we have seen the introduction of Internet banks such as cahoot.com and marbles.com the task by brand managers is to make sure that consumers understand that these brands are banks!
Product Pricing: Price your product or service
Introduction to Product Pricing
The price you charge for your product or service is one of the most important business decisions you make. Setting a price that is too high or too low will - at best - limit your business' growth. At worst, it could cause serious problems for your sales and cash flow.
If you're starting a business. Carefully consider your pricing strategy before you start. Established businesses can improve their profitability through regular pricing reviews.
There are two crucial points to consider when setting your prices:
The price and sales levels you need to set to make sure your business is profitable.
Where your product or service stands compared with your competition.
Pricing Decision:
Is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization? The remaining 3p’s are the variable cost for the organization. It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors:
Fixed and variable costs.
Competition
Company objectives
Proposed positioning strategies.
Target group and willingness to pay.
Pricing Strategies
An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve.
Penetration pricing: Where the organization sets a low price to increase sales and market share.
Skimming pricing: The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.
Competition pricing: Setting a price in comparison with competitors.
Product Line Pricing: Pricing different products within the same product range at different price points. An example would be a video manufacturer offering different video recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.
Bundle Pricing: The organization bundles a group of products at a reduced price.
Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place. The seller will therefore charge 99p instead £1 or $199 instead of $200
Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, Porsche etc.
Optional pricing: The organization sells optional extras along with the product to maximize its turnover. This strategy is used commonly within the car industry.
Placement Decisions:
This refers to how an organization will distribute the product or service they are offering to the end user. The organization must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its overall marketing objectives. If an organization underestimate a demand and customers cannot purchase products because of it, profitability will be affected.
What channel of distribution will they use?
Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer.. Direct distribution involves distributing direct from a manufacturer to the consumer For example Dell Computers providing directly to its target customers. The advantage of direct distribution is that it gives a manufacturer complete control over their product.
Distribution Strategies
Depending on the type of product being distributed there are three common distribution strategies available:
1. Intensive distribution: Used commonly to distribute low priced or impulse purchase products e.g. chocolates, soft drinks.
2. Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.
3. Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.
If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience.
Promotion Decisions
In the context of the marketing Mix promotion aspects the various aspects of marketing communication. That is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:
Promotional strategy
Advertising
Personal selling & sales force
Sales promotion
Public relations & publicity
Marketing communications budget
