Marketing Strategy - Assignment Example

Question a Develop a pricing strategy for the higher-ranged products. Provide a rationale for your strategy? Answer (a Setting prices for a product is one of the most crucial aspects of any business. It determines what a company is willing to earn in exchange of its products. A pricing strategy in general constitutes of manufacturing cost, marketing costs, quality of product, market condition and profit element, in addition, it is also based on product, place and promotion. Price is the only revenue generating activity in a company, which makes it quite important for the overall lifespan of the product. For high ranged products price should justify the quality, performance, features and satisfaction of the product to the consumer. A high range product is often highly priced because of its incomparable features than the rest of the market. These products are usually sold on the “price and quality” relationship because there is a general perception that “higher the price, better the quality”. Due to this, customer is willing to pay greater premium on the product. And all this depends on the excessive dependence of consumers on the relationship of “price and quality” and this leads to the increase in prices, even if the product is of low quality. Premium pricing is also known as prestige pricing. It is a strategy where a product is priced constantly at a higher possible amount to attract potential customers, which is usually the elite class. This strategy is used to enhance the luxury image of the product (e.g. Rolex, Apple, Rolls Royce, and Bentley). In addition to that, nowadays customers also get attracted by certain attributes of the product such as “eco labeling “, which is used to justify price. This strategy is used when the company determines that customer will pay premium price because they believe that “higher price indicates good quality”, “to have a unique product”, “want extreme performance” (Keller, 2006). Question 1 (b): Generate at least two (2) ideas for sales promotion, advertising, and sale promotion strategies? Answer (b): Every business wants to increase their sales to maximize their profits. For this they will have to take certain steps and implement such strategies that will make all this possible. For “Sales Promotion” there are a number of strategies but most commonly used ideas are: a) Go for “SALE” because everyone likes it. This could be a factor of maximizing sales by giving discounts and coupons to the general public or special customers. But the company should not offer sales too many times in a year because it will force the customer not to buy the products at a regular price and wait for sale to purchase them. b) FREE SHIPPPING is also one of the most demanding features for any customer. Because it contains a word “free” and it always attract the customers and works as good discount to customers. The next part plays a crucial role in the sale of any product. This is known as “Sales Advertising”. Advertisement is a mirror of any product because it works like a communication between customer and the product. Now we will discuss ideas for sale advertisement: a) Product Based Approach in it the company focuses mainly on the product to attract potential customers and to create awareness in the general public about the product. For this radio stations, magazines and advertisement vehicles are used. b) Sales Based Approach is merely used to maximize sales by setting low prices and giving incentive to customers. The techniques involved in this kind of approach are “buy one get one free”, “cash back offer” and “discount on all items over a certain limit of sale” etc. Now we will discuss “Sales Promotion Strategies” that increases our business value in day to day basis. To promote the business in an effective manner we need some solid sales promotion strategies. Whether a business use discount schemes, giveaways or an incentive like flexible return policy, it will ultimately increase the value of the business in the long run. Let’s discuss some basic sales promotion ideas: a) Push Strategy: Is a strategy in which customer are encouraged to purchase products by giving incentives and offers. Such techniques are often used by big players in the market. They include buy back offers, sale bundle and wholesale offers. b) Pull Strategy: It is a very technical strategy in which customers are used to create a demand in the market. As the demand goes higher the retailer asks suppliers and distributors for the product, who in response asks the manufacturer for the product. And thus a demand chain prevails. Question 2: Construct a strategy for managing the higher-ranged product brands. Provide a rationale for your strategy? Answer 2: Brand management is one of the core components of any business. To understand how to manage the brand we need to know what a brand is. Brand can be a “name”, “Statement” or a “symbol” which distinguish a company or a seller from others in the market. Question is “Why do we need a brand?” Simple answer is; because we want to boost our sales through good branding. Not only a single product but also the other products which are associated with that brand e.g. “Apple” a very well-known brand in the electronic market, in which consumers have a great confidence. Say if I have used an “iPhone”, which is technologically quite ahead than the rest of the market. I will definitely go for an “Ipad” because of the element of trust and technological edge (Saloner, 2001). There are a lot of strategies regarding the brand management but we will discuss some which can be used to manage high ranged products. They are known as: a) Attitude Branding relates to the customer choice and feeling, which does not necessarily relate to the product or usage of the product. This strategy raises the expectations from that particular company and the market as well. This increases the overall competition in the market. b) Ironic Branding is the strategy in which consumer is the primary target. So that they produce something big and exceptional then the rest of the market. With time these brands gain so much attention and respect of the consumers and create such a strong identity that makes them a “NEED” for the consumers. Question 3: Design a plan to measure marketing performance. Provide a rationale for your strategy? Answer 3: “Market Performance Measurement” is the analysis of the market to determine the efficiency and effectiveness of the market. For this we have to give attention towards the strategies, polices and activities in the market and need to align our business goals. To measure the market performance we need to collect the appropriate data. It is very crucial to collect right type of data to get accurate results of the market. Data sampling at this level should be done by responsible individuals of the market and management. Although the collection of data is quite simple but make the words talk is difficult job. After a careful analysis of the data, we can get important information which can bring positive change in our business. One of very prominent models to measure market performance is “Market Mix Model”. It measures the influence of market actions, competition and environment on the product. This is done by creating a relation between market activities and sales. It measures the efficiency and effectiveness of marketing which have contributed in the increase of sales volume. The results obtained from this model are then used to adjust or create marketing strategies and plan so that a forecast sales figure can be derived with respect to change in the market trends. These results can be used in various dimensions of the market to access the performance of the market. With this model we can get year by year analysis of the market and predict the future trends (Nordheilm, 2004). Question 4: Determine any strategic partnerships the department store chain could develop that would promote the higher-ranged-priced products and support the expansion in the west coast? Answer 4: A strategic partnership is an alliance between two or more entities to achieve long term common goals and to benefit from the market trends. Companies usually form strategic partnerships when they have specialization in a single segment of a market and have a hard working team and they wish to advance but the problem is that the advancement to the next stage of market is say, expensive, lack of technical individuals, no funds for advancement. So here come another company who have sufficient funds and technical resource’s but lacks a dedicated team of individuals who can manage advancement to next stage. Now with partnership of both companies both can benefit from each other resources. This strategic relationship can also be understood by manufacturer, retailer and consumer point of view. And this can very well used by department store chain where owner of the store is in a position to purchase bulk quantity directly from manufacturer and negotiate a good price. On the other hand can make more profit by selling it to the end consumer. With respect to the expansion in west coast these strategic partnership will create more jobs, more competition and ultimately more profit. Because it will encourage other businesses to form partnerships so that they can compete in market and maximize their returns. Benefits for companies to form such partnerships are they can mutually play an active role in the business functions, such as marketing and advertising etc. Such partnerships create value and allow the companies to select from a range of opportunities. Where there are so many benefits there are also some causes of concern such as limit of access to the intellectual property, who will take the technological advancements, what will become of employees when the partnership ends and many other issues (Saloner, 2001). Question 5: Select and outline a digital strategy. Provide a rationale for your strategy? Answer: “Digital Strategy” is the process in which we individually categorize organization’s objective, strategy and opportunities in a way which ultimately maximize the benefits to business. This strategy generally includes customer reviews, discovery of new markets and products, improvement in services, technological improvements and innovation of new processes. To gather data they also use statistics from websites, search engines, social media, advertisements, shopping trends and usage of mobile. Now a days “Digital strategy” can be implemented using a combination of market reactions, consumer experience, and product response. This combination will give a series of options that a company can implement. The best option will be exercised based on company requirements and goals. The advantage of this strategy is that it will serve more in the long run; it helps to understand the performance of the business. It informs on assessment basis that what steps could lead to which calculated circumstances. Main disadvantage of such a strategy that over the time it results will contradict from the best result because it needs regular updates and trends of the market. And if a company wants to build or use it when it is required it could be very expensive, time consuming and due its technical nature cannot be made at once on demand (Raymond, 2010). List of References Kotler, P., & Keller, K. (2006). Marketing management . Prentice Hall. Nordheilm, C. (2004). Marketing management: The big picture. Custom Publishing. Saloner, G., Shepard, A., & Podolny, J. (2001). Strategic management . Wiley. Tanner, J., & Raymond, M. (2010). Principles of marketing (B&W). Flat World Knowledge. Read More