1 04/10/23

PRICING STRATEGIES & SALES

………………………………….

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Selling Vs Marketing Concept

• Selling focuses on the needs of the seller; Marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product in to cash; Marketing with the idea of satisfying the needs of the customer using synergy

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Selling Concept

• Consumers and business if left alone, will normally buy a small quantity of Organization’s products. For this very reason, the Organization must undertake an aggressive selling and promotion effort

• - Buying inactivity (conflict)

• - The set for effective selling to stimulate more buying

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The Marketing Concept

• The Organizational goals could be achieved if the Company will be more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets

• - Start and end with the customer

• - Love the customer not the product

• - Profits through customer satisfaction

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Four Pillars of the Marketing Concept

• Target Market

• Customer needs

• Integrated Marketing

• Profitability

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How Price Fits into Marketing Program Positioning Strategy

Marketing programpositioning strategyProduct

strategy

Targetmarket andobjectives

Distributionstrategy

Pricestrategy

Promotionstrategy

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PRICING SITUATIONS

New product pricing

Life cycle pricing

location strategy change

Countering competitive threats

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Pricing Strategy for Newand Existing Products

Set PricingObjectives

Analyze thePricing Situation

Select PricingStrategy

Determine SpecificPrices and Policies

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Factors Impacting the Pricing Situation

Customer Price feeling

Legal and Ethical Constraints

Competitors’ Likely Responses

Analyzing the Pricing Situation Product

Costs

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Guide to Cost Analysis

Determine coststructure

A

Analyze cost andvolume relationships

B

Analyze competitiveadvantage

C

Estimate the effectof experience on costs

D

Determine the extentof control over costs

E

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Determinants of Pricing Flexibility

Costs

Demand

Demand-Cost GapCompetition Legal and Ethical Influences

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Basis of Determining Specific Prices

Cost CompetitionDemand

Finally

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PRODUCT DECISIONS

• Product and Service Classification System

• The Product Life Cycle

• Introduction to product matrices

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Product and Service Classification System

• Convenience goods - little effort, relatively inexpensive

• Shopping goods - e.g. equipment, more expensive, infrequent

• Speciality goods - extensive search e.g. Jewellery.

• Unsought goods - e.g. Buying a shirt just after seeing it.

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Few:Few: trial of trial of early earlyadoptersadopters

Growing adopters:Growing adopters: trial of trial of product/service product/service

Entry of Entry of competitorscompetitors

Growing selectivityGrowing selectivity of purchase of purchase

May be manyMay be many

Saturation ofSaturation of users users

Repeat purchaseRepeat purchase reliance reliance

Fight to maintainFight to maintain share share

Drop-offDrop-offin usagein usage

Exit of someExit of somecompetitorscompetitors

Development

Growth

Maturity Decline

The Product Life Cycle (PLC) Model

Product Life Cycles

• Product Life Cycle – shows the stages that products go through from development to withdrawal from the market

• Product Portfolio – the range of products a company has in development or available for consumers at any one time

• Managing product portfolio is important for cash flow

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Product Life Cycles

• Product Life Cycle (PLC):– Each product may have a different life cycle– PLC determines revenue earned– Contributes to strategic marketing planning– May help the firm to identify when a product needs

support, redesign, reinvigorating, withdrawal, etc.– May help in new product development planning– May help in forecasting and managing cash flow

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Product Life Cycles

• The Stages of the Product Life Cycle:– Development– Introduction/Launch– Growth– Maturity– Saturation– Decline– Withdrawal

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Product Life Cycles

• The Development Stage:• Initial Ideas – possibly large number• May come from any of the following –

– Market research – identifies gaps in the market– Monitoring competitors– Planned research and development (R&D)– Luck or intuition – stumble across ideas?– Creative thinking – innovations, guessing?– Futures thinking – what will people be

using/wanting/needing 5,10,20 years hence?

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Product Life Cycles

• Product Development: Stages– New ideas/possible inventions– Market analysis – is it wanted? Can it be produced

at a profit? Who is it likely to be aimed at?– Product Development and modification– Test Marketing – possibly local/regional– Analysis of test marketing results and amendment

of product/production process– Preparations for launch – publicity, marketing

campaign

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Product Life Cycles

• Introduction/Launch:– Advertising and promotion campaigns– Target campaign at specific audience? – Monitor initial sales– Maximise publicity– High cost/low sales– Length of time – type of product

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Product Life Cycles

• Growth:– Increased consumer awareness– Sales rise– Revenues increase– Costs - fixed costs/variable costs, profits

may be made– Monitor market – competitors reaction?

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Product Life Cycles

• Maturity:– Sales reach peak– Cost of supporting the product declines– Ratio of revenue to cost high– Sales growth likely to be low– Market share may be high– Competition likely to be greater– Price elasticity of demand?– Monitor market – changes/amendments/new

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Product Life Cycles

• Saturation:• New entrants likely to mean market is ‘flooded’• Necessity to develop new strategies becomes more pressing:

– Searching out new markets:• Linking to changing fashions• Seeking new or exploiting market segments• Linking to joint ventures – media/music, etc.

– Developing new uses– Focus on adapting the product– Improving the standard or quality– Developing the product range

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Product Life Cycles

• Decline and Withdrawal:– Product outlives/outgrows its usefulness/value– Fashions change– Technology changes– Sales decline– Cost of supporting starts to rise too far– Decision to withdraw may be dependent on

availability of new products and whether fashions/trends will come around again?

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Product Life Cycles

Sales

Time

Development Introduction Growth Maturity Saturation Decline

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Product Life Cycles

Sales

Time

Effects of ExtensionStrategies

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Product Life Cycles

Sales/Profits

Time

PLC and Profits

PLC

Losses

Break Even

Profits

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STRATEGY IMPLEMENTATION &

CONTROL

• Implementation is the process that turns a marketing plan into specific tasks to be performed and ensures that they ultimately accomplish the plan’s objectives.

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STRATEGY IMPLEMENTATION &

CONTROL

• If the implementation process is not well thought-out and managed, the plan will not succeed.

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Factors in Implementation

• On-time and accurate performance by marketing staff, agencies and vendors (the organization staff must deliver their services according to the specifications in the plan)

• Clear delineation of responsibilities of various elements of the implementation process (each task must be accomplished and naming the individual responsible)

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Factors Cont …

• Communication of the plan’s objectives, strategies, and tactics throughout the bank (it is important that all areas of the bank be aware of the bank’s marketing efforts).

• Cooperation of all areas affected by implementation (the individual who chairs the task force must effectively steer the group toward the desired end).

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Factors Cont …

• Monitoring of results (having a system in place for monitoring the implementation process and its progress toward achievement of the plan’s goals) = PROGRESSIVE EVALUATION

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STRATEGY CONTROL

• The control process involves continuous monitoring and evaluation of the strategic plan as well as feedback necessary to ensure that the plan has been assigned and communicated to the right people in the right way.

• Adequate monitoring system will help to trace the causes of problems and take corrective actions.

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STRATEGY CONTROL

• Plans may derail because of the changes in the operational environment (competition, technology, social, economic, political or legal factors)

• Or some situation within the firm (lack of cooperation at the operating level): Therefore

• Problems should be viewed as opportunities for learning, growth, and improvement.

FINALLY

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Total Concluding Summary

• It is imperative for any marketer to understand the role of strategy in Business

• Strategy is se of unified Coherent and integrated set of ideas

• There are long and short term strategies• Customer are not and will never buy products

but values• Understand the mission of an organisation

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Summary Cont..

• You need to analyse your customers in order to be customer driven

• Industry analysis is important to determine the attractiveness of an industry

• Market driven strategies are more sustainable .. AND

• Product decision are necessary in order to make proper choice of the strategy

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THE END !!!

• Companies which will ignore strategic Marketing have no room in competition

• Always understand your competitors as you understand yourself.

• THANK YOU!!