Wednesday, November 17, 2010

Market Research Techniques

Market research is indeed a good step if you are deciding to put up a small business or if you want to improve the performance of your business. One of the mistakes of some businesspeople is to assume that they pretty know their market well and disregards market research as a very good step in knowing what your clients need and want.
Conducting a good research on your market will also help you outwit competitors as this will be a good way to learn firsthand from your target market on what they want, what they prefer so you can conceptualize on the improvements that you want to do with your products. If you are thinking of conducting a research for your business, and you want to explore the market research techniques and methods that you can use, here are some ideas that may be of help.
1. Surveys. Surveys are among the most common and one of the best ways to gather data for your research. Of course, aside from getting answers from direct from the individual, you can also solicit a good and specific answer especially if you can ask follow up questions.
You can however do the surveys in many other ways as well. You can do surveys through questionnaire form and interview the person directly, or you can mail them, although mailing them generates lesser response than doing the interview personally. You can also do it as an online survey or through telephone. Of course, your choice of these market research techniques can be based on the cost, the turnout, as well as the reliability of the data gathered.
2. Focus group discussions. This is also another way of gathering data for your business research. This actually involves discussing a certain topic in a group and collecting their ideas about it. The discussion is then documented, either by either videotaping or by observing. This is also a fast technique to get data as well.
3. Interviewing the respondents personally. Indeed, if you want to know what your market is like and what are their thoughts, you can go and interview them personally. With personal interview, you can also ask open-ended questions that allow you to gather more data. Unlike those with questionnaires, these are usually unstructured interviews. These however may be less reliable than surveys and focus group discussions.
Aside from these data gathering methods, you can also use other market research techniques such as gathering data from free secondary sources and then do the primary data gathering if you think you need more specific data. However, going for the primary data is a good choice in your research especially if you want to outsmart your competitors, as this will often give you good and accurate data on the behavior of your market.
With accurate data, you will also be guided correctly on what to do or improve. Indeed, if you want to move ahead of the competition, do your market research. Techniques, methods and strategies in doing so are readily available and you can even do so with lesser costs as well.

Market Research Methods

Giving importance to the market research is a sure fire strategy that could bring benefits to your business. Regardless of what line of trade you have it pays to know what people are currently buying. Testing out market research methods will not be hard to do once you fully grasps its effectiveness.
Typically market analysis fall into just a few simple categories; researchers will ask potential clients and customers questions directly, or they will observe trends and buying patterns to see how they relate to various aspects of a business. Take further look into popular market research methods so you may have the idea of how this information gathering can serve your business.
Interacting to the actual customers is the best way to answer most needed questions and gauge how big is the market. Business venues often times create survey forms that clients can answer while some will even assign personnel of their company to ask people about their service or product. You must see how valuable this is in the long run.
Questions in a survey could start off with the actual product but can also bring the detail to other factors that can affect customers' choices and that can help any kind of business. It could be that a client likes your service but not the facilities in your shop.
For an online business you may get a comment about how complicated it is to browse on your page. Raw data from these surveys can turn to better ways of handling your business plus a possible chancing on a marketable product. Closely putting yourself in your customer's shoes is what market research should be to give your company long time benefits.
Sales and trending information are two of the most useful market information. If you want to pin at which product is selling hot you can always rely on their sales result. These reports can also show that even if the product gets good sales now, it may not have the strength to carry on for another year or so.
These trends can tell you which products should stop selling over time. By reading the trend one can easily see those products that is losing marketability. You may also notice that another competitor's product is selling more briskly than yours, which means you may want to consider such a product for your company. These methods of research are simple and straightforward but they do require some time and effort to recognize these patterns.
Making yourself expose to what market wants is a good step to make your company at par with the competition.A business stays alive because of profits and using effective research methods can add up in-depth value to how you gain it.

The Marketing Environment

No business exists and operates in a vacuum, but as a part and parcel of the environment in which it finds itself. Efficient and effective marketing strategy is a function of the marketing manager's ability to understand the environment in which the business operates.
The marketing environment consists of a set of factors or forces that operate or influence a company's performance in its chosen target market.
Jain (1981:69) defined the marketing environment to include all those factors that may affect the organization directly or indirectly in any perceptible way. Marketing environment factors affects the organization by the way of input and the organizations also affect the environment by output. The relationship between the organization and the marketing environment is often referred to as "inseparable" the organization and it environment are constantly in a state of: give and take" or homeostasis.
The marketing environment consist of those forces or element that impacts on the company's capability to operate effectively in its chosen target market.
The marketing environment is divided into two major components. The elements are,
Internal environment: the internal environment is concerned with the controllable variables. Controllable variables are categorized into two groups, they are; the strategy variables and unmarketable variables. External environment: the external environment is concerned with the uncontrollable variables. These variables are called uncontrollable because the marketing manager cannot directly control any of the elements. The marketing manager is left with the option of adapting to the environment by prompt observation, analysis and forecasting of these environmental factors. The external environment can further be divided into two components, the micro environment and the macro environment.
Micro environment:
The elements that fall under the micro environment consist of forces or factors in the firm's immediate environment that affect the firm's capability to perform effectively in the market place. These forces are suppliers, distributors, customers and competitors. Let us discuss each of the variables in details.
Suppliers:
Suppliers are business customers who provide goods and services to other business organizations for resale or for productions of other goods. The behavior of certain forces in the suppliers can affect the performance of the buying organization positively or negatively. The critical factors here are the number of suppliers and the volume of suppliers to the industry. An audit of the suppliers will enable us to appreciate their strength and bargaining power, which the suppliers hold over the industry as a whole. The answers to the issues concerned have the potentials to affect the capability of firms in the industry to effectively deliver need-satisfying goods and/ or services. The trend today is that buyers attempt to persuade the supplier to provide exactly what the firms want. This process is known as "reverse marketing".
Customers:
Customers are those who buy goods and/ or services produced by the company. In a purchase chain, different people play significant roles before a purchase decision is made. The various influences must be understood. The customer may be the consumer of the products where he/she is the user. The critical factor here is that needs and wants of consumers are not static. They are fast changing. The changes in the preferences of the consumer create opportunities and threats in the market. The changes called for the marshaling of separate strategy to either fit into windows of opportunities or survive the threats in the market. A good knowledge of consumers' behavior will facilitate the design and production of goods and services that the customers need and want, and not what they are able to produce.
Competitor:
A competitor is a firm operating in the same industry or market with another firm. The consideration here is that, Firm A produces a substitute to that of firm B (industrial approach) or firm A and firm B seeks to satisfy the same customer need (market approach.

The Marketing Audit

Often, when things are not going as well as they could or perhaps opportunities are being missed, the best thing to do is refer back to the basics. This brings us to the need to assess where we are before we move to the next level of our business development.
A fundamental part of the planning process for a business seeking to develop a marketing plan is the coordination of a Marketing Audit. The primary function of the Audit it to systematically examine each element of the company's marketing mix to determine the viability of the marketing components to the overall business objectives.
The focus of the Marketing Audit is to provide:
· A snap shot of the business.
· An internal examination at the way marketing is managed and planned.
· Identify areas where more effort is required.
· A review of existing and past activities.
· An examination of what has worked and what has not worked and why.
· Opportunities to be exploited.
· Marketing Focus and direction.
· External influences such as competitor review; finding effective benchmarks of best practice.
· Recommendations that can be made to make strategies more effective.
· Examination of company marketing structure From the audit review process, priorities are assembled in a report along with a prioritized action plan.
Conducting the Marketing Audit:
When conducting the Audit, it is best to involve a variety of key stakeholders, both internal and external. Having an independent audit provides a more thorough and cost effective result as the biases are removed and new eyes take on a company holistic approach. Marketing World works through a varied process to quickly identify areas of opportunity for your business within your specified industry.

What is Marketing Distribution?

Another way to position this question is, what are the means used by a company to move their product from the manufacturer to consumer? The distribution marketing's primarily role is to provide a link between production and consumption of a given good or service. There are two general or primary forms of distribution, direct and indirect.
Direct Marketing
An example of direct marketing distribution would be a factory outlet store or a direct sales network marketing company. In both instances the product is distributed directly to the consumer from the manufacturer. This mode of distribution has its benefits to the consumer as it allows for discounted prices by eliminating the "middle-man". This would include anyone who is in a multi-level company, an individual who is selling a product or service directly from their home to individuals or any factory outlet mall. The amount of products moved through this means of distribution is much smaller than the indirect method of distribution.
Indirect Distribution
This would account for any situation where the manufacturer sells products to a retailer and the retailer in turn sells them to the customer. Another example of indirect distribution includes an additional party. This is where the product goes from manufacturer to wholesaler, wholesaler to retailer, then retailer to consumer. In the indirect distribution channel you can see that with an increased number of parties involved each will get their "cut" thus making the cost to the consumer slightly higher. The trade off is often that the products are able to be acquired by the customer in a more convenient way. The consumer pays a little bit more in order for the products to be more readily accessible.
Matt is a top trainer and internet marketing coach who works with many industry leaders from around the world. To learn more about Matt or how you can earn five figures monthly from home in your spare time without having to sell, take a look at Total Time Freedom

Decision Support Systems in Marketing

Abstract
The practical application of decision support systems in marketing is still in its infancy,
even though academic research has been recommending the use of such systems
for years. This is largely due to the lack of a single, generally applicable decision
support system. The specific requirements and problems of management are
too dissimilar to make the development of one universal decision support system
feasible. However, improved PC performance, enhanced market survey methods
such as conjoint measurement, and further developed programming tools permit
the varying requirements to be fairly flexibly met. The following article describes
state-of-the-art know-how regarding the practical utilization of such systems, and
addresses the preconditions for employing them.We have included many examples
gathered from our own experience with numerous applications.Introduction
Most industries have experienced a proliferation of products and competitors during
the last 20 years, a development which can be expected to continue. A valid
forecast of the impact of product and price measures will be even more important,
but also more difficult. In other areas like engineering, environment and training
the application of decision support systems has been already practiced. The objective
is always the same: To replicate complex interdependencies in a computer
model as realistically and, at the same time, as simply as possible. Doing so helps
forecast the impact of important decisions, minimize risk and reduce product development
time and cost. For example, semiconductor chips and processors are
designed, developed and tested today almost exclusively with computers. Flight
simulators used to train pilots can simulate a wide variety of situations without endangering
pilots or passengers. The automobile industry has simulators in which
a vehicle’s road handling characteristics can be simulated under various weather
conditions and in crash testing, resulting in reduced research and development
costs.
In contrast, the practical application of decision support systems inmarketing is
still in its infancy, even though academic research has been recommending the use
of such systems for years (Leeflang et al. 2000, Little 1979, Nikolaos and Siskos
2002). This is all the more remarkable given the large uncertainty under which
marketing departments attempt to optimally adjust products and pricing to customer
needs within the environment of an ever increasing competition and growing
complexity of markets and competitive frameworks. Judging from our own experiencedecision support systems deliver great value in supporting such adjustments.
With their help, the effects of product or pricing measures can be forecast prior to
their implementation which significantly reduces uncertainty.
Objectives of decision support systems
Instinct, experience and intuition alone are not sufficient for objectively evaluating
the bottom line impact of such important matters as the launch, modification
or elimination of a product, product bundling or price differentiation measures.
That is where the value of decision support systems lies (Dolan and Simon 1996);
they provide decision makers with a tool which allows market reactions to various
courses of action to be objectively tested prior to implementation, at low cost and
without risk (Lilien et al. 1992). In this context, decision support systems can be
used for planning and developing marking measure as well as to answer strategic
questions. Indeed, a well designed decision support system can and ideally should
be used for all product and pricing decisions made during the entire product life
cycle. For example, a German mobile telecommunication company used such a decision
support system to test the effects of new pricing structures and to evaluate
quarterly if price adjustments are necessary.

The Top 10 Marketing Tips of All Time

With more than a decade of experience in marketing, ranking from pay-per-click to direct mail, I’ve seen a lot of failures and far more successes when it comes to marketing.
Today, the art of marketing is far more complex than it once was. However, many of the same basic principles still apply. Too often, professional marketers and small business owners overlook the basic techniques that have separated successful campaigns from those that never turn a profit. Here is my all time list of effective marketing tips.
Know your audience. Successful campaigns get that way because marketers know their audience. They fully understand their needs, how to help meet those needs and how to create demand. Knowing and understanding your audience through proper market segmentation means a well targeted campaign that generates a profitable return.
Focus on the offer. A marketing offer is the driving force of marketing promotions that drive results. In fact, market testing has proven that the offer is the most significant criterion for conversion. Focus on your offer if you want to be successful.
Split test. Never ever run a campaign without testing something. One of the most common is a split test which allows you to simultaneously test two versions of something. It can be a web page, post card, or email. Split testing is essential for improving performance.
Never work alone. The most creative ideas come from working with other creative people. Don’t feel like you need to have all the answers or great ideas. You may start with an idea, but an open dialog with creative individuals will make it better.
Don’t sell on price. I’ve seen so many marketers fail because they sell on price alone. This leads to a discounting war, lower profitability, and often bankruptcy. Rather, focus on creating so much value that the perception of price becomes insignificant.
Consistent messaging. Consider the entire user experience before you launch a campaign. From email to website to offer, is the prospect having a consistent user experience? If they are, your campaigns stand above 98% of others.
Create value after the sale. As marketers, it’s our job to understand our market segment and build relationships, not dump people off at the front door of our store and walk away. Focus as much of your energy on building relationships with customers as you do prospects.
Test. Test. Test. In addition to split testing, you should consider multiple forms of testing in each marketing discipline. For direct mail, test headlines, offers, copy, time of direct mail drop, etc. Consider testing a life long mission.
Integrated Marketing Works Best. You can’t rely on one form of marketing to carry you to success. It’s okay to generate most of your leads or sales through PPC marketing if you will but what happens when that dries out? Use multiple media sources to meet your goals.
Nothing can replace experience. You can run out and hire all of the best consultants in the world, but you still have to do the work. Nothing can replace actual experience. It will make you a stronger marketer and more successful in the long term.
Apply these helpful marketing tips if you want to be truly successful. These techniques and tips are applied by successful marketers on a daily basis. The result is an ever growing success rate of marketing success

Catering Business Marketing Ideas

Before you start to write a marketing plan for your catering business you should do some research in the market to find out what your potential competitors are offering. You also need to know exactly what prospective clients are looking for.
The following article sets out some ideas to consider as you proceed to put together your catering business marketing strategy.
What are you Selling?
Before you can start your marketing plan you must first be able to clearly define exactly what products and services you are selling. Before you can plan your menus and services you need to understand what the people in your target market want.
There are many different catering niche markets such as wedding receptions, seated dinner events, corporate functions, barbecues, boxed lunches and picnics to name a few.
When choosing the kind of food that you would like your catering service to specialize in you should try to choose an area that is currently being under served. Or you could specialize in area that is so popular that there is plenty of space in the market for a new player. If you do your research and talk to enough people you will be able to reveal what these areas are.
Branding Ideas
A brand is not only about your companies visual representation in the market. Sure you need a great catering business name and logo design but there is much more to a brand than that. Your brand is all about your reputation in the market, the promises that you make to clients and the standards that they expect. If customer perceptions of your brand are positive then it will make your marketing efforts much easier.
Set high standards for your business and go out to satisfy clients with great service wherever possible. Always try to over-deliver with your service and you will find that you have grown a strong brand in no time.
Pricing and Packaging Catering Services
The next step in the process of designing your marketing plan is to package your products or services into marketable units with pricing that is attractive and profitable.
Create some promotional materials for your catering business. Every time you cater an event don't forget to take pictures of the dishes that you have prepared. You can use them in your brochures, information packs, menus or on your website to show customers how your food is presented.
How will you Compete?
Try to go into an area that you have a competitive advantage in because you have unique skills or because you have access to unique suppliers for example. If no area jumps out here just try to think about how you can offer the same service as other caterers but in a way that makes you stand out from them. You need to develop a 'unique selling proposition' that sets you apart from what your competitors are offering.
Advertising and Marketing Methods
Research and implement a marketing strategy that combines traditional advertising methods, online marketing of your website, direct marketing and buying leads. You can also experiment with other forms of marketing such as 'word of mouth' or networking.
Test every method and track them carefully wherever possible to discover which methods justify the costs and time involved.
Sales - Closing the Deal
When going along to meet with prospective clients always take a few small samples of your food, even if it is just a few hors d'oeuvre's for them to try. Learn how to sell your services to a customer and how to encourage them in a polite way to spend a little more than what they originally planned.
Work out a consultation and sales process that can be refined over time until perfected. Some caterers prefer to communicate naturally while others work predominantly off a sales script. Find out what works best for you.
Successful catering business owners develop marketing systems that are constantly bringing new prospects to their business. They then make the most of the leads that they get and know how to maximize sales. Mastering the art of catering business marketing is one of the most important factors leading to a 'six figure' income in this business.

Grassroots Marketing Campaign

Many people, in a rush to spike sales through the roof, think too big and end up completely missing out on one of the best free marketing opportunities on the net: discussion forums. Instead of focusing on individual sales, they go immediately for ads that promise thousands of visitors, pay-per-click search engines that could potentially expose them to thousands, and even sloppily-produced and sometimes fraudulent spam submission programs.
Even though it is essential to increase your rating with search engines, to purchase pay-per-clicks, and to participate in link exchanges and banner exchanges, discussion forums can often provide an extra, non-conventional sales medium to your campaign that allows you to quickly pull in customers with personal contact and conversational presentations of your product.
You can find these boards by searching for the specific product you sell and then adding the word "messageboard" or "forum" or "discussion forum" after it in quotations. For instance, I sell marketing tools and online business-builders on one of my websites, so when I look for forums to market my products in, I go to google or overture and type in "business messageboard" or "marketing forum." Find as many of these highly-trafficked forums as you can and sign-up. Some of them will require you to confirm it through your email address.
Before you begin actually posting on the boards, you need to lay down some general rules of approach. I would suggest the following methods, but you can decide for yourself what you think is appropriate for your business and situation.
These are my rules:
When I market on discussion forums, I always try to provide more for the board than I take away from it in potential sales. Not only is it ethical, but it's also good business. When people ask questions, I use the expertise I've gained from Internet business-building and marketing to legitimately answer their questions. If I signed up for every board I could find, and then slapped a boilerplate marketing pitch on every site, I'd just get ignored or banned.
I cannot stress enough how important it is to legitimately get involved with the forum community. It is definitely a goldmine for highly-targeted customers and it is possibly the fastest marketing medium on the Internet, but it is also very important to respect that it doesn't primarily serve as an ad host. If you stay low-key and helpful, people will respect your opinion more and will want to see what you have to offer. This is where your signature comes in...
When you create your account for most boards, they will give you the option of creating a signature, which they will attach to the bottom of every post you make. This is the best way to pull customers from messageboards--by alluring them with your signature. Write something catchy or intriguing and then slap a link to your site or email address on it. Remember: the more helpful you are (the more times you post advice/hints), the more times your signature appears... and the more potential hits you'll get to your site.
Next, you'll want to decide when it's appropriate to market outside of your signature. I personally only market in three situations outside of my signature in forum discussions. If a person asks a question about a specific product or service I market, then I'll respond because I'm qualified to do so and because I truly believe they should use my products to achieve the best possible results. If there's a discussion thread where everyone is marketing products and it is generally accepted, I will market my product if a) it is related and b) I have already posted several times on the messageboard. Also, I will market my product whenever there is a forum solely dedicated to marketing your products.
Last, you'll want to decide how much original content you want to post and how much you want to be boilerplate. You'll want to find a healthy combination of the two to avoid being called a spammer or wasting too much time marketing on forums. I personally have several boilerplate ads that I have saved for signature files, ad-only forums, and personal product marketing discussions. I keep them all saved on a word file and I pull them up to copy-and-paste when I'm spending a night of advertising on messageboards.
Discussion forums can drive buying customers to your site faster than any other marketing medium. Do not abuse them, establish a reputation in your forums, streamline the process. . . and your work will come back to you quickly in profit.
Isaiah Hull publishes Work At Home Right Now, a fresh and informative newsletter about making money on the internet and using proven methods to increase your site’s traffic and profitability. If you’re looking for time-saving and money-saving tools, as well as honest business advice

Geo-Marketing As a New Business Marketing Tool


Geo-Marketing (or Geographic Marketing) is a new method of marketing a business and its website through web searches, mobile searches and social media. As you can see, the geo-marketing tools being used are digital and through the Internet or Mobile devices.
While geo-marketing's definition is the association of data and maps in the traditional sense, the added convergence of local business listings, mobile marketing, and social media makes this method of marketing more powerful than ever before. This marketing tool is no longer just a large business marketing tool, but is available to small and medium size businesses too.
We should define what we mean by local business. A local business is any sized business dependent on the local consumer for its revenue. This means you could be a national company like Home Depot, U-Haul, or Best Buy or you could be a local florist or independent store only known to your local geography.
From a technical standpoint an Internet user's IP address is tied to GPS data, like longitudes and latitudes, which are mapped with technology to geographies around the world down to the city and street level. While all this data may seem overwhelming, the good news is that most businesses do not need to concern themselves with this part of geo-marketing. Many of the tools already have all of this information built into their software or hardware technology so we can stay focused on how we will use geo-marketing tools.
The difficulty with any new marketing tool is a business's inability to adopt the methodology early. When it comes to technologies and the Internet, in the past, by the time most businesses are ready to adopt a marketing tool, the industry has already moved on to something new. Being an early or at least an earlier adopter of marketing methods on the Internet and through digital devices can only benefit the business.
We have seen many signs over the past two years regarding the evolution of geographic marketing. When companies like Google, Apple, and the investment community of Wall Street start to put $100 million and more behind a technology it will become part of our daily lives whether a business wants it or not. Consumers have and will be using more of these geo-marketing tools to find businesses, services or products near them.
Let's take a look at the three main tools that consumers are using to find businesses, products or services close to their geography.
1. Web searches are the first and most obvious, however, these are web searches in which a map displays with targets the businesses that match the search criteria. Unlike the traditional yellow pages, these geo-listings (a.k.a. Local Business Listings) can be claimed and updated with your business marketing information in order to meet these search criteria.
While this may sound relatively easy, geo-listings also include: consumer reviews that need to be managed; the clean-up of duplicate listings; coupons; offers; discounts; videos; photos; citations; QR bar codes; and, hyper local websites. Understanding what to start with and how to strategically use these components can be done by a professional marketing firm that specializes in this area. You can read more about these components in one of our previous articles on our blog.
2. Mobile Marketing is the next most significant geo-marketing tool in which SMS Texting, Mobile Applications, Mobile version of your website, and Mobile advertising are your key components. The starting point in this process will be with SMS Texting to get your alerts out to customers that subscribe to your short bursts of information. The reason why this is your starting point is that it will take time to build your list of subscribers.
3. Social Media Marketing continues to evolve and is, also, geographic in its targeting ability. Consumers are using Twitter, Facebook, LinkedIn, Wiki sites, Four Square, Instant Messaging and other social community tools on their mobile devices. While they use it mostly to find businesses, products and services, in the social communities they are seeking recommendations from their friends (near and far). They are, also, using these social communities to post their experiences with a business, product or service. For this reason you have to monitor the social communities in order to embrace any potential problem situations and work with them.
These three geo-marketing components are important to any business size - large or small - and each have their own sub-components that need to be well understood in order to succeed. Understanding the strategy amongst them; the acceptance and embracing them early; and, finally planning on a 3-year return will put you on the right path of geo-marketing.
Certainly your time resources are limited and Geo-Marketing Services are provided by SmartFinds Internet Marketing. You will find this to be of great benefit to your time resources and the low cost service may eliminate your yellow page ad costs. Let the experts of over 16 years Internet marketing experience help you use this local business marketing tool properly and prevent brand security issues from occurring.
SmartFinds Internet Marketing is a Internet marketing agency providing strategic solutions to businesses to use all aspects of the Internet for the marketing objectives. The creativity and imagination from SmartFinds helps to apply the technological aspects of the digital marketplace to the marketing objectives of a particular business. Initial research provides SmartFinds the ability to develop a digital strategy that can be measured every step of the way to insure business growth and revenue generation. Some of SmartFinds' clients have included Delphi, Flagstar Bank, Guardian Industries, Soave Enterprises, Detroit Convention and Visitors Bureau, McCann Erickson, Wendy's and others

Using Marketing Apparel

In A Classy Way - Classy Apparel For Classy Business People: When it comes to marketing apparel, most corporation people think of this type of clothing in terms of T-shirts, caps, windbreakers or work jackets. However, there is an entirely different spectrum of marketing apparel that can work for the most professional office. A simple white industry shirt or sports jacket can have an embroidered venture logo on the pocket with an elegantly tinted stitching. Handkerchiefs are another marketing piece that are simple enough to wear yet still maintain the professional appeal. For ladies or men, promotional shirts, jackets and vests are a wonderful way to inspire sector dedication and loyalty. These are priced reasonably and provide great employee incentive during sales and marketing campaigns or for a special sector convention.
Business Promotion With Class: Most establishments shy away from the "in your face" type promo pieces if the corporation offers a corporate product or service. This is when advertising jewelry can be a big plus. Reward the super achievers in a more classy way with a promotional pendant on a gold chain for the ladies with the venture logo or advertising watches for men and women. Men don't mind promo tie tacks while ladies will love wearing a advertising stick pin or brooch. Add the enterprise logo and these advertising solutions make for a classier approach to promoting the company.
Advertising Pieces For The Desktop: When it comes to marketing merchandise for employees and employers, a number of top quality deck clocks, desk sets with pen and pencil in a variety of silver or gold give a certain air to the professional's desk. There are also a number of promo leather gadgets for desktops such as memo holders, desk pads, pen, pencil, stamp and paper clip organizers in matched sets. Executives love these as much as their company associates.
The Company Golf Outing And Other Sports: Even though executives are required to provide good will with their clients and co-workers with sports outings like golf, softball or for spectator sports, marketing pieces can play a big role in organization identification. Choose promotional sweaters, winter scarfs or even gloves with a strategically placed corporation logo. One of the more popular promotional pieces today are promotional stadium blankets that come in handy when the firm associates take in a local or national football game or soccer game. Most of these are available in fleece as well as wool in a wide range of colors suited for the sports enthusiasts. Not only are these utilized for spectator sports but also for picnics.

Small Business Hungry for Internet Marketing

Tight budgets and limiting monthly expenses are prime goals for today's small business but the need for quality customers creates a willing audience. Most understand the value that internet marketing could add to their business but few have any idea of where to start.
Many businesses have a website but few have designed it to attract new customers and capture their commitment. Adding a few new pages and revising it to focus on marketing can make a dramatic effect on its results. Wording, graphics and video can upgrade a plain site into a customer generator.
Marketing on the Internet is much less expensive than traditional advertising methods and there is more flexibility with it. Advertisements will reach a larger audience and will stay active much longer than offline marketing.
Internet marketing gives you 24 hour visibility and can be reached by search engines, links and tied to other advertising. Customers can access products and services when they are ready to buy.
However, even those brave enough to begin to research marketing ideas for small business are soon overwhelmed with overhyped offers to generate customers. While any presence on the internet is positive, it doesn't significantly help unless it fits their web profile. A comprehensive well managed web presence makes all individual efforts more successful.
Different Internet Marketing Methods
• Search Engine Optimization
• Back Links
• Social Networking
• Newsletters
• Autoresponders
• Blogs
• And more
While most of these terms are familiar, it is rare to find a small business that has effectively utilized any of these advantages. Proof is evident when asking a small business how many visits their website had last month. Because their current efforts haven't been felt, they see no real value to today's most effective marketing tool. The opportunity to assist this market in achieving a cost effective customer generator is massive. The next few years will see a rapid expansion in services to fill this void and coordinate the delivery of local marketing.

Chiropractic Marketing 101

If you'd like a terrific way to bring in new patients that costs next to nothing, then you will benefit greatly from this chiropractic marketing article.
The biggest problem that chiropractors have are finding effective marketing strategies that have an immediate payoff but don't require spending a fortune. Also, most are not good at marketing chiropractic or making themselves visible on the internet. This is a severe problem that is definitely costing you business since 82% of consumers now use the internet to find health care providers.
This strategy fits the bill perfectly and solves both problems. Yet when I tell you what this chiropractic marketing strategy is you might not think yourself capable of doing this but trust, it's easy and fun to do!
You are going to do your own internet talk show. I'd like to introduce BlogTalkRadio to your marketing strategy. I am not affiliated with BlogTalkRadio in any way just so you know. It is a free website that let's anyone do an interactive live talk show, records it, and even archives it so people can listen to replays or even download the MP3 of your show.
Here is how my chiropractic clients are using BlogTalkRadio to get patients into their clinic right now and how you can to:
  • Schedule your first talk show. Just do it! I suggest 30 minutes in length for your show. Pick a topic that is very easy for you to talk about such as help for chronic back pain sufferers. Remember, you definitely want this to be interactive with people calling in and writing in questions (BlogTalkRadio supplies a free phone line and chat room for you). The more interactive they are with your show content, the better the show, the more energy it will ooze, and the more booked appointments you will yield.
  • Carefully use a show title that contains keywords that will make it easy for people to find your show on the internet! You're doing this for marketing, not charity, so use keywords that local consumers will be searching for when looking for a local chiropractor. Use the free Google Keyword Research tool for ideas. At a bare minimum you want your city name and main symptom in your title such as "Rochester" and "Back Pain". This is critical otherwise people won't find your talk show when they're hunting the internet for your services.
  • Create an email series! You want to generate lots of excitement and anticipation about your talk show. Send an announcement email to your patient base telling them you're launching a talk show! They will love the idea, your authority instantly increases in their mind, and what you want to do is encourage them to partake. My doctors who have done this tell me the email reactivates patients resulting in immediate business before they even do their show. Send another reminder email. Finally, send a post-show email with the link to the replay.
  • Leverage your content! What we've been doing that is working really well, is to download the show as an MP3 and burn it to cd. Burn a stack of cd's and leave them on your check in counter. Hand them out to patients freely.
  • Sell new services! If you're launching a new service in your practice such as spinal decompression or cold laser, doing a talk show on the topic is a great way to introduce the new service.
  • BlogTalkRadio can have you listed at the top of Google's search results pretty fast. I recently did my chiropractic marketing makeover show and within 2 hours it was showing up very high in Google. Clients have experienced similar
  • You can embed the show on your practice website which enhances your credibility and authority. This really makes you stand out versus others and in the world of marketing this is a very good thing.

How To Use Your Email List To Generate Sales

If you are wondering about what can be done with your very own email list, you may want to read this article. In this article, you will find out how email marketing is actually done, the importance of scheduling your email broadcast and finally, how to do a high quality email campaign. After reading this article, you will get a more in depth understanding about how to utilize your email list in order to generate sales and profit, while keep your advertising cost lower.
First of all, quite a number of business use email to just sell to their customers. However it may not be a good way to do email marketing. Imagine when you start meeting some new people; you may not want to sell to them immediately because, the relationship with them is still not built up. Therefore, if you want to do good email marketing, the first thing is to provide helpful content for your customers in order to build up the relationship with them. When you think you have provided enough quality content, you may start asking for sales. Since they have already known that you are a good person who always provides value to their customers, they will believe you and buy what you offer to them.
However, to ensure your customer reads your email, you need a highly reliable email service. Most of the time you need a system that can schedule sending of email so that, whenever a customer joins as a subscriber, they can still receive email after certain period of time. There are some email services that provided exactly that kind of system, such as AWeber, iContact or GetResponse. You may search in Google and find the best fit for you. When you have an email service, it is time to start your email campaign.
To create your own email campaign, all you need is some good content and an excellent offer. Generally speaking, you have three types of email that you will send out.
  • Content only: you just provide helpful content to your customer, and nothing else. But you need to ensure that your content is good enough to help your customers.
  • Content plus sales: This kind of email contains some contents and an offer. The offer is usually an affiliate offer but it can also be your own product or service. So your customer may first read your content and then they found your offer at the end of the email.
  • Purely sales: It is a sales only email, which will contain everything about your offer. It generally contains a list of benefits that your customer will get and give a link in the email to allow your customer to see your sales letter.
Generally speaking, you may want to start with a few content only emails, and then give them a purely sales email to allow them to buy.
I hope by far you know how to use your email list to generate sales. Remember most of the businesses just send out sales email but nothing else, which is not very effective. And to ensure your reader receives your email, you need a high quality email services like AWeber. Finally, your email promotion sequence should be started by giving out good content first, then give your offer to your email list after several email. It is by far the most effective way to leverage the power of email marketing. So take action and make some money now.

Effective Marketing in 2011

Direct Mail Vs Email Marketing

Reaching out to maximum customers in the shortest possible time is the basis of marketing. Direct mail marketing for your business is the age-old strategy of promoting your products and services by mailing newsletters, printed ads, catalogs, letters and other business mails to the targeted market. Over the time as technology developed, and internet came to the fore, the marketing strategies also took a complete turn. Enabling instant communication to a vast number of individuals, email marketing was seen as the new revolution in the marketing world.
The traditional form of direct mail marketing for your business including collecting customer addresses, preparing advertisement leaflets, applying postage and mailing them, all took a backseat. Instead email marketing with its extremely low operation cost, instant gratification and the ability to connect with a large number of consumers at the same time emerged as a far more preferable alternative. Thus, leaving the traditional marketing style of physically posting newsletters, direct mail marketing for your business took the form of sending advertising communication through emails. With information being sent from one corner of the world to another within seconds, the speed of the new system was its biggest advantage. Email marketing allowed entrepreneurs to reach out to consumers with personalized and dynamic messages. Advertisers too could connect with email subscribers who had opted-in to receive email communication from them. But as with any overused system, flaws emerged in email marketing too.
The biggest problem associated with email marketing is the possibility of being viewed as spam emails. Everyday internet users receive a large number of unsolicited emails posing as genuine business communication. The increasing number of spam emails has led to the development of stronger spam filters, spam laws and users being more cautious about the mails they receive. Emails with subject line resembling spam emails are now automatically sent to the spam folder or are deleted without even opening, which ultimately costs the marketer.
With the development of newer applications like blogging, article writing, affiliate marketing and social networking, the dimensions of online marketing are undergoing further change. However, email marketing still occupies a major position in the marketing world. The latest trend is to combine the positive aspects of both traditional marketing and online marketing to create a form of blended marketing.
With this type of marketing strategy email marketing can be combined with direct mail marketing for your business to achieve greater results. Emails can be used to introduce an advertising campaign which would create awareness among the customers about your product or service, which can then be followed up by direct mails. Alternatively, a direct mail campaign can also be followed up by emails containing purchase links which would enable the customers to land up directly on the shopping page. Hence, despite certain disadvantages, email marketing continues to be an effective form of marketing.
Joel Green is head of Internet Marketing for The Graham Marketing Group and assists businesses with building their brand through article, email, social media, and video marketing. If you are looking to increase your brand on line then contact him for a free on line video consultation. Have a Social Media Marketing Strategy is becoming more and more important to small and medium businesses. Do you have a strategy in place to dominate Google and Social Media for 2011?

Tuesday, November 16, 2010

Integrating Competing Online Marketing Strategies

We keep hearing how email marketing is better than social networking marketing, or that mobile marketing is better than email marketing. There really is no need for all the competition - why compete when you can integrate?
Email has proven its immortality. It's been stated time and time again that the email era has come to an end, particularly now with the advent of social networking sites. However, for every site you sign up with, you need an email address. Furthermore, what do people typically check every morning at work? Their emails! It remains a highly effective direct marketing tool.
The ideal email marketing platform allows you to integrate your email, mobile and social marketing, through tools like email marketing templates, bulk sms marketing, and widgets linking email recipients to social networking channels like Facebook, Blogs, Twitter, LinkedIn, and MySpace. Employing all these channels for your business ensures a wider distribution to your clients. Most online consumers make use of a variety of online sites, and they all have different preferences. Research shows that most respondents (78%), found email marketing most effective. However, if this method is jointly employed with mobile and social marketing, your business is bound to flourish.
Each online medium has its advantages disadvantages for various target markets. Implementing as many as possible and leveraging their combined strengths is a sure recipe for online marketing success! Knowing your various target markets and what works best in gaining their attention is going to get your business marketing campaign far.
Cross-promotional efforts can help companies spread the word and maximize their exposure.
  • Email marketing newsletters can be used to advertise new Facebook or Twitter feeds, while you can use your social profiles to gather email newsletter signups.
  • Both mediums can be used to drive traffic to your website, by linking to your site or blog.
  • Your email newsletter registration section should include a prompt to join your business on Twitter, Facebook etc. Similarly, you can post a newsletter subscription form on your Facebook page.
  • Join industry-related LinkedIn and Facebook groups, assigning knowledgeable agents within your company to answer questions, thus positioning your business as a valuable industry resource. Make sure your representatives advertise the fact that you have a newsletter should your new connections want to receive regular information and updates.
Harnessing the combined powers of email, mobile and social will boost the efficiency of your digital marketing strategy.

Email List Building

Many people would like to build an email list and start making money online but are afraid they have to be a Guru to succeed with email marketing.
Nothing could be further from the truth. While the gurus are all over the internet promoting their huge launches with products that cost $1000 to $2000 a pop, most people looking for information are just searching for really good products that will actually help them.
This is where you come in! Remember, all the gurus had to start exactly where you are at right now.
So how did the gurus get started and become successful?
They built trust with blogs and websites.
These sites showed their human side and they delivered rock solid content. This caused people to comment on their blog posts, which led to an ongoing discussion and built trust.
The responses left on their blog are now a permanent record on the internet and when a new person comes online and does some research on the guru, they will find their site, read the posts and comments, and see that they actually help people.
They contributed comments on niche forums:
When people were desperately searching for a cure to their problem, the guru was their on the forum to deliver a good answer or recommend a product which built trust.
They joined online internet marketing communities and developed relationships:
When they joined these online communities they contributed comments, content and links to outside resources to help the community as a whole, and developed relationships with the up and coming gurus.
These relationships eventually turned into joint ventures and everybody profited which in turn created very small and private online communities that only a select few are allowed to join.
They created products and sold them to the people who trusted them:
During their exploits on the internet answering questions, researching topics, and watching what other Gurus were doing, they created products and sold them to their email list of subscribers they had accumulated by helping other people in the methods described above.
To sum this up, people on the internet are searching for people to help them and you do not have to be a guru to sell your products online.
You have to have people who trust you, deliver good and well researched content, which will help you succeed with your email list building & marketing efforts.

Planning an Email Marketing Approach That Works for Your Busines

Email marketing has long been one of the top performing direct marketing channels. Low-cost tools that can reach a wide, yet targeted audience, bulk email marketing campaigns have proven to yield impressive results for small businesses.
So how do you go about implementing an email campaign?
  1. You have to aim before you shoot! Firstly, get to know your target market. To interest your reader, you need to know who your reader is. This includes all the important demographics from personal addresses, age, gender, etc. Some data pools can go further into particulars such as purchase history and buying preferences.
  2. For optimal results from your direct email marketing, you need to figure out what time and day would suit your clientele best.
  3. Then, write in a style that would suit them. Your writing style will surely change when you are aiming to attract a teenager to when you're targeting someone in their mid-forties.
  4. Consider their interests, give them something to identify with.
  5. When considering your style of writing, take heed of 'your average Joe'. Unless you're writing to an academic audience, keep your language simple and approachable.
  6. Once you have found the strategy you are going to implement, test it.
  7. Assess the improvement your strategy is making, if any. Note what works and what doesn't work.
  8. Upgrade your strategy. Keep updating and improving your strategy until you see what works best.
  9. Once you've established the correct target market and your strategy has been tried, tested and approved, stick to it for as long as market trends stay the same.
A targeted email marketing scheme saves you costs and improves results. As you narrow down your target market, you can channel your announcements, advertisements, and eflyers to your particular market segment. This saves advertising efforts and costs on other groups who may not be interested in your product. You will only be engaging with the people who are most likely to buy your product or services. This will also assist you if you are marketing customized products.
Sign up with a provider that offers you all the email marketing services you need. Global email marketing solution, GraphicMail has had great success with clients such as Cosmopolitan, SA Airlink, Europcar and the American Medical Association.

Overcoming Email Marketing Legal Issues

There are certain legal issues connected with Email marketing that prevents it from being used in an extensive manner. The data protection act plays a big role in making sure that you manage your subscriber list in a proper manner. There is a need to comply with the law and ensure that you do not continuously send mails to people who are not interested in your product or services.
When you send emails to your subscribers make it a point to avoid revealing recipient's details within the mail. Create the mail group so that it can send a blind carbon copy to each of the members in the subscribers list. While sending out the email marketing mail, it is important to avoid revealing your own personal identity. Certain e-commerce regulations are also in place whereby these email marketing mails need to include information related to the business including full name and contact details.
If you are offering products and services that can be purchased then the price has to be included in the mail. It is also mandatory to have a link that allows subscribers to opt out from the mailing list in case they are not interested in receiving mails from you. Another important thing is that you cannot send unsolicited marketing messages unless there is prior consent from the subscriber.
All these measures have been taken for protecting the interest of the consumers. There will be no exemption if the address was collected during sale or other events. Consent of the consumer is important to avoid legal hassles in the future. When we talk about individual subscribers then make sure to avoid including companies or individuals within these companies.
The e-commerce regulations have been specifically put in place so that there is differentiation between commercial mails and other mails being sent out through the email medium. The most important thing that leads to legal issues has been the unavailability of unsubscribe mechanism that allows people to 'opt-out' for getting hold of further email marketing content through their mail.
There is a need to make sure that email marketing does not turn into spamming. Spam mails are basically unsolicited commercial email that is sent to individuals without their consent. Unrequested messages are considered as spam mails. Therefore, to avoid legal issues make sure not to send them at all. The only exception can be when you have a long-standing business relationship with them.
In case the customer keeps purchasing a lot of things from you then it can be a possibility that you send out mails to inform them about new products in a similar category of purchased products. It is also important to let your subscriber have an idea regarding the number of emails they will receive in a certain period. This is the differentiating factor between regular emails and occasional ones. Occasional commercial mails should not be sent in a frequent manner. There can be a situation where your customer will be fed up of your daily mails and opt out of the mailing list in a quick manner.

Connecting And Developing Relationships With Your Subscribers and Customers

You might have noticed how people on the internet can shift around a lot. They move from site to site, ezine to ezine, and business to business looking for what they're after. Mostly they're looking for a responsiveness about their problem that they want a solution for.
1. You need to get inside the heads of those people that you want to attract to your business and keep them there. You do this by having the experiences that they've had and have found a way through them. In internet marketing it's getting a business set up and at least starting to make money. That puts you ahead of most people. You can then honestly communicate the problems and your solutions to them. Of course, you'll still be meeting with problems but that's part of the learning curve for you and your customers.
2. Address yourself to an individual in your audience. It will be made up of different types wanting different things from you. Use your imagination and experience to visualise those typical individuals. Use photographs or pictures if you can to make it more real for yourself. Also, write down the qualities these typical audience members have, including clothes, family, income, attitudes, problems online and so on. Then you can address yourself directly to them as if speaking to each separate individual person.
3. You don't just want to work out whereabouts they are at the moment in the online business life, but also where they're going as the next step in that life. Different people will be at different stages, although there's still basic elements to cover. For example, there'll be setting up a list. But some will want very simple outlines of what's required while others will already have a list and want to know how to develop their relationship with it even further. Obviously, you start to help where you can in terms of your own experience which is bound to grow so that you can help others at a different stage, later on.

5 Easy E-Mail Marketing Tips

E-mail marketing has turned viral, and because of this, has become somewhat of a bane to the average e-mail user. The word viral is no misnomer, either, as millions and millions of SPAM based advertisements spread the internet looking for hosts to lock onto with hook, tooth and claw.
There are, however, techniques to guide the online marketer. Tips dripping with decorum and scruples, so much so, that it leads to potential business actually asking for your advertisements to be sent their way. We all know the feeling of frustration that comes about with an inbox full of unwanted adverts for unwanted products. Use these five tips wisely, however, and you could soon have a database full of e-mail addresses that would gladly welcome all your marketing endeavors.
Be Persistent
The shear nature of society today is that of being bombarded by relentless and innumerable sources of information. Your e-mails disclosing your intent can easily be overlooked, deleted. Statistics on the matter state that it should take around 20- 30 imprints of a certain concept or logo before the average working person absorbs what information is available. Be persistent in your marketing ploy, without causing frustration or irritation.
Use More Text
Animated e-mails with clever flash and colorful logos get sent to the deleted items folder faster than any other. With new and improved filters spawning by the hour, there is no guarantee that the full message of your advert will reach the intended destination. Lose the flash and increase the text. Your message will load faster and with content that is well-written and to the point, your text should be able to sell your product better than any flashy e-mail ever could, and it will slip through the filters with ease.
Stop Sending at the right Time
If your recipients stop replying there is a good chance they no longer want to receive your e-mails. You need to re-establish your relationship before you send them any more of your messages. Just as you would stop if they requested a removal from your mailing list, the ethical thing would be to hold the mailing until you've established whether they want you to continue or not. It could be the mere matter of them not getting your messages but if they no longer want to do business with you, re-evaluate your relationship but respect the wishes of the client.
Ask Permission
E-mail has quickly established itself as one of the most personal forms of advertising out there, and because of this deep personal nature, the client must, at all times, be respected. Without obtaining adequate permission you run the risk of SPAM penalties and could even be banned outright with most destinations blocking your content due to your online reputation. The main downside, though, is the fact that you destroy relationships and effectively shoot yourself in the foot when it comes to certain important customer relations.
Make your Message worth Reading
As previously stated, your client will be receiving content from an uncountable number of sources. You need to make sure that your content, promoting your business, makes the most impact. Special offers, catalogues, information on specials and even coupons for special reductions and freebies, all make your message standout and most likely the one your client is going to take the time out of his or her busy day, to read.
Utilize the power of e-mail as a valuable marketing tool. If done with decorum and a touch of smarts, your company could be the antidote to the virus of SPAM and e-mail marketing bombardment. Make sure you're not just another e-mail advert, create a signature style that your client will recognize as quality and watch as your clientele address book grows.

Pricing Strategy

One of the four major elements of the marketing mix is price. Pricing is an important strategic issue because it is related to product positioning. Furthermore, pricing affects other marketing mix elements such as product features, channel decisions, and promotion.
While there is no single recipe to determine pricing, the following is a general sequence of steps that might be followed for developing the pricing of a new product:
  1. Develop marketing strategy - perform marketing analysis, segmentation, targeting, and positioning.
  2. Make marketing mix decisions - define the product, distribution, and promotional tactics.
  3. Estimate the demand curve - understand how quantity demanded varies with price.
  4. Calculate cost - include fixed and variable costs associated with the product.
  5. Understand environmental factors - evaluate likely competitor actions, understand legal constraints, etc.
  6. Set pricing objectives - for example, profit maximization, revenue maximization, or price stabilization (status quo).
  7. Determine pricing - using information collected in the above steps, select a pricing method, develop the pricing structure, and define discounts.
These steps are interrelated and are not necessarily performed in the above order. Nonetheless, the above list serves to present a starting framework.

Marketing Strategy and the Marketing Mix

Before the product is developed, the marketing strategy is formulated, including target market selection and product positioning. There usually is a tradeoff between product quality and price, so price is an important variable in positioning.
Because of inherent tradeoffs between marketing mix elements, pricing will depend on other product, distribution, and promotion decisions.

Estimate the Demand Curve

Because there is a relationship between price and quantity demanded, it is important to understand the impact of pricing on sales by estimating the demand curve for the product.
For existing products, experiments can be performed at prices above and below the current price in order to determine the price elasticity of demand. Inelastic demand indicates that price increases might be feasible.

Calculate Costs

If the firm has decided to launch the product, there likely is at least a basic understanding of the costs involved, otherwise, there might be no profit to be made. The unit cost of the product sets the lower limit of what the firm might charge, and determines the profit margin at higher prices.
The total unit cost of a producing a product is composed of the variable cost of producing each additional unit and fixed costs that are incurred regardless of the quantity produced. The pricing policy should consider both types of costs.

Environmental Factors

Pricing must take into account the competitive and legal environment in which the company operates. From a competitive standpoint, the firm must consider the implications of its pricing on the pricing decisions of competitors. For example, setting the price too low may risk a price war that may not be in the best interest of either side. Setting the price too high may attract a large number of competitors who want to share in the profits.
From a legal standpoint, a firm is not free to price its products at any level it chooses. For example, there may be price controls that prohibit pricing a product too high. Pricing it too low may be considered predatory pricing or "dumping" in the case of international trade. Offering a different price for different consumers may violate laws against price discrimination. Finally, collusion with competitors to fix prices at an agreed level is illegal in many countries.

Pricing Objectives

The firm's pricing objectives must be identified in order to determine the optimal pricing. Common objectives include the following:
  • Current profit maximization - seeks to maximize current profit, taking into account revenue and costs. Current profit maximization may not be the best objective if it results in lower long-term profits.
  • Current revenue maximization - seeks to maximize current revenue with no regard to profit margins. The underlying objective often is to maximize long-term profits by increasing market share and lowering costs.
  • Maximize quantity - seeks to maximize the number of units sold or the number of customers served in order to decrease long-term costs as predicted by the experience curve.
  • Maximize profit margin - attempts to maximize the unit profit margin, recognizing that quantities will be low.
  • Quality leadership - use price to signal high quality in an attempt to position the product as the quality leader.
  • Partial cost recovery - an organization that has other revenue sources may seek only partial cost recovery.
  • Survival - in situations such as market decline and overcapacity, the goal may be to select a price that will cover costs and permit the firm to remain in the market. In this case, survival may take a priority over profits, so this objective is considered temporary.
  • Status quo - the firm may seek price stabilization in order to avoid price wars and maintain a moderate but stable level of profit.
For new products, the pricing objective often is either to maximize profit margin or to maximize quantity (market share). To meet these objectives, skim pricing and penetration pricing strategies often are employed. Joel Dean discussed these pricing policies in his classic HBR article entitled, Pricing Policies for New Products.
Skim pricing attempts to "skim the cream" off the top of the market by setting a high price and selling to those customers who are less price sensitive. Skimming is a strategy used to pursue the objective of profit margin maximization.
Skimming is most appropriate when:
  • Demand is expected to be relatively inelastic; that is, the customers are not highly price sensitive.
  • Large cost savings are not expected at high volumes, or it is difficult to predict the cost savings that would be achieved at high volume.
  • The company does not have the resources to finance the large capital expenditures necessary for high volume production with initially low profit margins.
Penetration pricing pursues the objective of quantity maximization by means of a low price. It is most appropriate when:
  • Demand is expected to be highly elastic; that is, customers are price sensitive and the quantity demanded will increase significantly as price declines.
  • Large decreases in cost are expected as cumulative volume increases.
  • The product is of the nature of something that can gain mass appeal fairly quickly.
  • There is a threat of impending competition.
As the product lifecycle progresses, there likely will be changes in the demand curve and costs. As such, the pricing policy should be reevaluated over time.
The pricing objective depends on many factors including production cost, existence of economies of scale, barriers to entry, product differentiation, rate of product diffusion, the firm's resources, and the product's anticipated price elasticity of demand.

Pricing Methods

To set the specific price level that achieves their pricing objectives, managers may make use of several pricing methods. These methods include:
  • Cost-plus pricing - set the price at the production cost plus a certain profit margin.
  • Target return pricing - set the price to achieve a target return-on-investment.
  • Value-based pricing - base the price on the effective value to the customer relative to alternative products.
  • Psychological pricing - base the price on factors such as signals of product quality, popular price points, and what the consumer perceives to be fair.
In addition to setting the price level, managers have the opportunity to design innovative pricing models that better meet the needs of both the firm and its customers. For example, software traditionally was purchased as a product in which customers made a one-time payment and then owned a perpetual license to the software. Many software suppliers have changed their pricing to a subscription model in which the customer subscribes for a set period of time, such as one year. Afterwards, the subscription must be renewed or the software no longer will function. This model offers stability to both the supplier and the customer since it reduces the large swings in software investment cycles.

Price Discounts

The normally quoted price to end users is known as the list price. This price usually is discounted for distribution channel members and some end users. There are several types of discounts, as outlined below.
  • Quantity discount - offered to customers who purchase in large quantities.
  • Cumulative quantity discount - a discount that increases as the cumulative quantity increases. Cumulative discounts may be offered to resellers who purchase large quantities over time but who do not wish to place large individual orders.
  • Seasonal discount - based on the time that the purchase is made and designed to reduce seasonal variation in sales. For example, the travel industry offers much lower off-season rates. Such discounts do not have to be based on time of the year; they also can be based on day of the week or time of the day, such as pricing offered by long distance and wireless service providers.
  • Cash discount - extended to customers who pay their bill before a specified date.
  • Trade discount - a functional discount offered to channel members for performing their roles. For example, a trade discount may be offered to a small retailer who may not purchase in quantity but nonetheless performs the important retail function.
  • Promotional discount - a short-term discounted price offered to stimulate sales.