A lot of companies have products with variants rather than than offering just a single version of the product. This is done to target different groups of consumers so that the company can get something out of every segment. For this Product Line Pricing is used in which their are different price marks which then vary on quality, features, and requirements. For examaple Dell the PC manufacturer makes a lot of different versions of its Pcs which then range from $269 to $25000.
Optional-Product pricing is often used with Product-line Pricing in order to sell more to the customers, this is mostly done by electronic companies who prompt you to buy accessories as well with your original product for a better experience. Dell again is another good example of this as when ever you buy a Dell you get options to buy other accessories such as mice, speakers, keyboards, storage devices, flash drives, printers, etc. Car manufacturers are practice this to increase revenues as they offer add-ons such as alloy wheels, cd changers, leather interior, spoilers, and other trim options.
Then there is Captive Product Pricing, which involves selling and making products that must be used along with the main product. Examples being; printer cartridges, video game cartridges, Razor blades, staples, computer software, or camera film(or memory cards these days).
Another clever strategy is By-Product Pricing in which the company sells its By-products at a very cheap rate in order to attract customers to buy the firms main products.
Most Customers are very much attracted when they see Bundle offers, a company may earn more revenue by selling different products in a bundle and giving discount on it, this way they will be able to sell more and give the customers more value. A very common examples is of restaurants which make food deals like Mc Donlads, KFC, Pizza Hut, all they do is bundle in a couple of their products discount them a little and that's its. The customer would be more willing to buy a set bundle rather than buying the same things separately. This is called Product Bundle Pricing.
Showing posts with label Nabeel Hassan. Show all posts
Showing posts with label Nabeel Hassan. Show all posts
Monday, November 9, 2009
Pricing Strategies (Skimming and Penetration)
Pricing is a very sensitive issue, and has to be delt with great care as if not to over price or under price your product or service. Price is the factor which will determine the partial success of your good , so it is important to set a price which would cover your costs and gives you a suitable profit provided the buyer is willing to pay that price.
If you've got a unique product then the best thing to do is to use 'Market-skimming Price'. i.e setting a higher price in order to generate more revenue, however there are certain conditions when this can be used. firstly, the product's quality and image must support its higher price and secondly your costs of producing less of the good shouldn't be high otherwise it would not be profitable. A very good local example would be of about 4 years back when broadband Internet was new and most people had Dial up then, companies like Nexlinx, Worldcall, Micronet, and other ISPs were charging quite a high price for Broadband services, charging you extra for Modem and instalation and the monthly costs were quite high as well. So these companies profited quite well at the time. However when PTCL launched its Broadband back in June 2006 things changed a lot. As PTCL is a very big company, they were able to sell their service at a lower price, and thus they used 'Market-Penetration pricing' aand set their price at almost half to what the other ISPs were charging, and more over they provided the modem free of cost. This brought in a lot of new customers and the existing ones switched to PTCL as well. Other ISPs realizing this tried to lower their costs as well but it was too late as PTCL had already captured the market. But, for Penetration pricing to be effective, consumers must be responsive to price changes, and your variable costs should fall when Volume increases, and the low price has to be maintained for quite a period in order to make customers loyal. PTCL managed to do this, they are still carrying on with their low prices plus continuously giving you more value as competition increases so as to keep up with the market and to have that competitive edge over their competitors.
If you've got a unique product then the best thing to do is to use 'Market-skimming Price'. i.e setting a higher price in order to generate more revenue, however there are certain conditions when this can be used. firstly, the product's quality and image must support its higher price and secondly your costs of producing less of the good shouldn't be high otherwise it would not be profitable. A very good local example would be of about 4 years back when broadband Internet was new and most people had Dial up then, companies like Nexlinx, Worldcall, Micronet, and other ISPs were charging quite a high price for Broadband services, charging you extra for Modem and instalation and the monthly costs were quite high as well. So these companies profited quite well at the time. However when PTCL launched its Broadband back in June 2006 things changed a lot. As PTCL is a very big company, they were able to sell their service at a lower price, and thus they used 'Market-Penetration pricing' aand set their price at almost half to what the other ISPs were charging, and more over they provided the modem free of cost. This brought in a lot of new customers and the existing ones switched to PTCL as well. Other ISPs realizing this tried to lower their costs as well but it was too late as PTCL had already captured the market. But, for Penetration pricing to be effective, consumers must be responsive to price changes, and your variable costs should fall when Volume increases, and the low price has to be maintained for quite a period in order to make customers loyal. PTCL managed to do this, they are still carrying on with their low prices plus continuously giving you more value as competition increases so as to keep up with the market and to have that competitive edge over their competitors.
Monday, October 26, 2009
Marketing Channels
The First question that arises to us is what is a Marketing channel? For me, its just a fancy way of saying providing goods from the producers to the end consumer. However, simple as it may be, from a marketing perspective it carries great importance.
There are different types of marketing channels such as: Agents, Wholesalers, Retailers, and Logistics.
Agents:
These are people or Firms who work for the producer and they mostly work on commission basis selling goods to wholesalers. Agents also help to market the goods for the producer as they may have access and experience of selling in a market in which your business may have not sold to before. Moreover Agents normally have very good marketing and selling techniques and they often end up giving you a good bargain, even if it means having to sell your goods at a lower price.
Wholesaler:
A wholesalers job is basically to sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots to retailers.
Retailers:
These are the people which will have the most impact on your brand image, your sales, basically in my opinion they are the main medium through which you will sell and the medium which will determine your success. Examples of retailers include stores like HKB, Pot Purri, Al-Fatah, Jalal Sons, Hyperstar and even your corner shop near your house. Now, what is it that you see in these retail outlets which attract you? Advertisements, and what better place to advertise can there be when the customer is right there and can buy your good in an instant. Just reel that customer in make them interested, and that's it, good sold. Thus it is very important to have good relationships with your retailers. You can put on ads, provide special racks for your products, special offers, even have sales personnel appointed in the retail outlet to further market your product. You can even give free samples to customers to show them your product. And the best part you don't have to pay extra for all this advertising, the retailers are more than happy to have the extra adverting as it means a more flashy store and that way more customers. Just imagine what a retail outlet like Hyperstyar would look like if it didn't have any advertising. Just a plain simple boring store with stocks of goods, no flashy ads, nothing to grab your attention. You'd just buy what you want and get out, but with advertisement at retail outlets people get informed they want what the see and that way end
up buying more and so it benefits both the retailer and the producer.
Logistics:
This involves the transfer of your goods from production point or warehouse to wholesalers, retailers, etc. There are special logistics firms and at times the business has its own logistics as well. A very common method is painting the vehicle or applying vinyls to advertise, for example you may have seen vehicles with "Gourmet" vinyls and numerous others as well. DHL is a very good example and they go very far with this type of advertising as you can see for yourself looking at the image below:
Marketing channels reduce distribution costs by being experienced at what they do, they often perform their job more rapidly resulting in faster product delivery, Resellers often provide programs that enable customers to more easily purchase products by offering financial programs that ease payment requirements.
And lastly u can depend on resellers for providing information that can help improve the product. High-level intermediaries may offer their suppliers real-time access to sales data including information showing how products are selling by such characteristics as geographic location, type of customer, and product location (e.g., where located within a store, where found on a website). If high-level information is not available, marketers can often count on resellers to provide feedback as to how customers are responding to products. This feedback can occur either through surveys or interviews with reseller’s employees or by requesting the reseller allow the marketer to survey customers.
There are different types of marketing channels such as: Agents, Wholesalers, Retailers, and Logistics.
Agents:
These are people or Firms who work for the producer and they mostly work on commission basis selling goods to wholesalers. Agents also help to market the goods for the producer as they may have access and experience of selling in a market in which your business may have not sold to before. Moreover Agents normally have very good marketing and selling techniques and they often end up giving you a good bargain, even if it means having to sell your goods at a lower price.
Wholesaler:
A wholesalers job is basically to sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots to retailers.
Retailers:
These are the people which will have the most impact on your brand image, your sales, basically in my opinion they are the main medium through which you will sell and the medium which will determine your success. Examples of retailers include stores like HKB, Pot Purri, Al-Fatah, Jalal Sons, Hyperstar and even your corner shop near your house. Now, what is it that you see in these retail outlets which attract you? Advertisements, and what better place to advertise can there be when the customer is right there and can buy your good in an instant. Just reel that customer in make them interested, and that's it, good sold. Thus it is very important to have good relationships with your retailers. You can put on ads, provide special racks for your products, special offers, even have sales personnel appointed in the retail outlet to further market your product. You can even give free samples to customers to show them your product. And the best part you don't have to pay extra for all this advertising, the retailers are more than happy to have the extra adverting as it means a more flashy store and that way more customers. Just imagine what a retail outlet like Hyperstyar would look like if it didn't have any advertising. Just a plain simple boring store with stocks of goods, no flashy ads, nothing to grab your attention. You'd just buy what you want and get out, but with advertisement at retail outlets people get informed they want what the see and that way end
up buying more and so it benefits both the retailer and the producer.
Logistics:
This involves the transfer of your goods from production point or warehouse to wholesalers, retailers, etc. There are special logistics firms and at times the business has its own logistics as well. A very common method is painting the vehicle or applying vinyls to advertise, for example you may have seen vehicles with "Gourmet" vinyls and numerous others as well. DHL is a very good example and they go very far with this type of advertising as you can see for yourself looking at the image below:
Marketing channels reduce distribution costs by being experienced at what they do, they often perform their job more rapidly resulting in faster product delivery, Resellers often provide programs that enable customers to more easily purchase products by offering financial programs that ease payment requirements.
And lastly u can depend on resellers for providing information that can help improve the product. High-level intermediaries may offer their suppliers real-time access to sales data including information showing how products are selling by such characteristics as geographic location, type of customer, and product location (e.g., where located within a store, where found on a website). If high-level information is not available, marketers can often count on resellers to provide feedback as to how customers are responding to products. This feedback can occur either through surveys or interviews with reseller’s employees or by requesting the reseller allow the marketer to survey customers.
Sunday, October 18, 2009
Guide to Questionnaire making
Writing a good questionnaire. (Which hopefully wont leave your customers feeling irritated and confused.)
Questionnaires and other types of surveys are at times a burden on many people and they often don't like to participate in the blank filling process, its boring and its time consuming.But there is a way around this problem.
Design the questionnaire in such a way that it doesn't take up too much time, and also that it doesn't end up annoying the customer. following are the steps to writing up a good questionnaire:
Limit it as much as possible, don't go into unnecessary details, explanations and stuff which would irritate the customer. Focus on what feedback you want to get, which would be useful for the company, don't go around asking stuff just for the fun of it or stuff which wont get you anywhere.
2. Use simple words
DO NOT use jargon, that is a big No No. Your not asking your employees or the authorized personnel about stuff so don't go about using technical terms. Further it would do you much good if you stick with plain English rather than using elaborate words, the customer wont like that at all, and you will just confuse them.
3. Assure a common understanding
Make sure the questions you ask are interpreted by everyone in the same manner, make sure you don't use abbreviations which may not be quite popular or used by everyone.
4. Start with interesting questions
Now, you don't want to bore them right at the start, so be sure that you've got interesting questions which customers would love to answer. For example, if your surveying the market for ice creams you might want to start it of by asking what your favorite flavor?, which new flavor would you like to have?, stuff like that.
5. Don't write leading questions
Don't go on asking questions that ask for too much detail, that will just made the questionee skip that question as no one wants to waste their time in writing a paragraph about why you like blueberry ice cream so much.
6. Avoid double negatives
Respondents can easily be confused deciphering the meaning of a question that uses two negative words.
7. Balance rating scales
If your questionnaire includes ratings like very good and poor make sure you go to both extremes and same with numbers as well. Make sure its balanced, like on a scale of 5 or 10.
8. Do Not include too many choices for a question
Keep the options limited, don't give a lot of options or you will end up confusing the person.
9. Avoid difficult recall questions
Avoid asking questions that would deal with a previous experience as the customer may not remember exact details and end up giving false feedback.
10. Put your questions in a logic order
The order in which you ask the questions matters a lot, you don't want the customer pondering on a specific issue and then you bring him back to some totally different issue. That would just end up in making it difficult for the customer to answer correctly.
11. Pre-test your survey
Try testing the survey on your peers, ask them for feedback, or any problems they might have had while answering the questionnaire. This should also give you an idea about what kind of answers you might get.
12. Naming your survey
This is extremely important with e-mail surveys, having the subject named survey is just gonna give you a straight trip to the trash bin, instead try alternative and catchy subjects.
Here are examples of survey names that might be successful in getting attention:
Memo From the Chief Executive Officer
Evaluation of Services of the Benefits Office
Your Opinion About Financial Services
Free T-shirt
Win a Trip to Paris
Please Respond By Friday
Free Subscription
Win a notebook computer
Keep these tips, well not tips..... Guide, yea guide to questionnaire making and hopefully you will be successful in making a good survey which will get you what you need.
Questionnaires and other types of surveys are at times a burden on many people and they often don't like to participate in the blank filling process, its boring and its time consuming.But there is a way around this problem.
Design the questionnaire in such a way that it doesn't take up too much time, and also that it doesn't end up annoying the customer. following are the steps to writing up a good questionnaire:
- Write a short questionnaire
Limit it as much as possible, don't go into unnecessary details, explanations and stuff which would irritate the customer. Focus on what feedback you want to get, which would be useful for the company, don't go around asking stuff just for the fun of it or stuff which wont get you anywhere.
2. Use simple words
DO NOT use jargon, that is a big No No. Your not asking your employees or the authorized personnel about stuff so don't go about using technical terms. Further it would do you much good if you stick with plain English rather than using elaborate words, the customer wont like that at all, and you will just confuse them.
3. Assure a common understanding
Make sure the questions you ask are interpreted by everyone in the same manner, make sure you don't use abbreviations which may not be quite popular or used by everyone.
4. Start with interesting questions
Now, you don't want to bore them right at the start, so be sure that you've got interesting questions which customers would love to answer. For example, if your surveying the market for ice creams you might want to start it of by asking what your favorite flavor?, which new flavor would you like to have?, stuff like that.
5. Don't write leading questions
Don't go on asking questions that ask for too much detail, that will just made the questionee skip that question as no one wants to waste their time in writing a paragraph about why you like blueberry ice cream so much.
6. Avoid double negatives
Respondents can easily be confused deciphering the meaning of a question that uses two negative words.
7. Balance rating scales
If your questionnaire includes ratings like very good and poor make sure you go to both extremes and same with numbers as well. Make sure its balanced, like on a scale of 5 or 10.
8. Do Not include too many choices for a question
Keep the options limited, don't give a lot of options or you will end up confusing the person.
9. Avoid difficult recall questions
Avoid asking questions that would deal with a previous experience as the customer may not remember exact details and end up giving false feedback.
10. Put your questions in a logic order
The order in which you ask the questions matters a lot, you don't want the customer pondering on a specific issue and then you bring him back to some totally different issue. That would just end up in making it difficult for the customer to answer correctly.
11. Pre-test your survey
Try testing the survey on your peers, ask them for feedback, or any problems they might have had while answering the questionnaire. This should also give you an idea about what kind of answers you might get.
12. Naming your survey
This is extremely important with e-mail surveys, having the subject named survey is just gonna give you a straight trip to the trash bin, instead try alternative and catchy subjects.
Here are examples of survey names that might be successful in getting attention:
Memo From the Chief Executive Officer
Evaluation of Services of the Benefits Office
Your Opinion About Financial Services
Free T-shirt
Win a Trip to Paris
Please Respond By Friday
Free Subscription
Win a notebook computer
Keep these tips, well not tips..... Guide, yea guide to questionnaire making and hopefully you will be successful in making a good survey which will get you what you need.
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