4 Roles of the Product Pricing Strategy

Pricing Strategy

Product Prices Perform various functions in the marketing program.

Here are the 4 major roles of “Price” in marketing:

1) Signal To The Buyer – Price offers a fast and very direct way of communicating with your customers. The price is visible to your buyer and provides a basis of comparison between brands. Price also can be used to position your brand as a high quality product.

2) Instrument of Competition - Price offers you a way to quickly attack competitors, or alternatively to position your business away from direct competition.

3) Improving Financial Performance - Because Prices determine financial performance, pricing strategies will impact a business’s financial statements both in the short and long term.

4) Marketing Program Considerations - Prices can also substitute for advertising and sales promotion, in addition to being used to reinforce these activities in the marketing program. For example, pricing strategy can be used as an incentive to channel members as the focus of promotional strategy and as a signal of value.

In deciding the role of pricing in the marketing strategy you must evaluate the importance of prices to competitive positioning, probable customer reaction, financial requirements, and relationships in the marketing mix.

Marketing Basics ~ The 4 P’s Of Marketing

The 4 P’s Of Marketing

By: Josh Druck

1) Product – Characteristics of your product or service. Does it meet the needs of your customers and provide them with satisfactory results. The Product Strategy includes how your products will be positioned against the competition in the product market.

2) Price – What does it cost, and how much are the customers willing to pay. Deciding a Pricing Strategy, and providing results are crucial. Create “Attractive Prices”.  The pricing strategy should emphasize the value and uniqueness of your merchandise.

3) Place – Available in the right place, at the right time, and in the right quantities. Positioning Strategy is used to also communicate the desired positioning of a service in the target market. Positional Effectiveness is how well the management’s positioning objectives are being achieved in the target market. If your product/service is not where your costumers are, you will lose money.

4) Promotion – Product Promotional Strategy uses an effective combination of  advertising, sales promotion, personal selling, and public relations/internet marketing/social media to communicate with customers.  Always convey a business culture of a “customer driven company”.

Choosing the right market target strategy can affect the performance of the whole business. The targeting decision is critical to guiding the positioning of a brand or business in the marketplace. Sometime a single target cannot be selected because the business competes in several market segments. Locating a business’s best matches between it’s capabilities and a market segment’s value, may first require a detailed analysis of several segments. Targeting decisions establish key guidelines for business and marketing strategies. Overall the 4 P’s of Marketing provide us with a simple marketing structure of product creation, price, placement and distribution.

Social CRM Strategy (CRM Strategy 102)

Who Is the Social Customer?

  • The social customer consumes information in a different way, and learns about breaking news through Twitter and Facebook, favoring what their network has curated and surfaced as important information.
  • The social customer learns about new products and brands through social channels and trusts their social network to provide honest feedback about it, as opposed to a brand’s one-way advertising message.
  • The social customer is savvy, doesn’t respond well to unsolicited SPAM in their social networks or overly promotional tweets, but is open to relevant information that meets their needs at that particular moment.
  • The social customer expects brands to be present and active in the same social venues where they hang out, listening to their feedback, whether it’s negative or positive.
  • The social customer expects you to listen and engage with them, not only when it coincides with an e-mail blast or new feature release, but rather when they need you. And you better respond fast, in real-time, or they will either move on to a competitor, or tell their friends about their bad experiences.

Because the social customer can talk to a brand through many channels at the same time, they expect everyone they talk to from your company to have the same background on the issue. For example, if I complain about an airline on Twitter, I want the representative who engages me there to know my itinerary and the full history of our interaction through various channels.

Bottom line: The social customer owns the relationship, and you need to earn their trust.

What Is Social CRM?

Paul Greenberg, an author and leading authority on SCRM, stated that Social CRM is “…designed to engage the customer in a collaborative conversation in order to provide a mutually beneficial value in a trusted and transparent business environment. It’s the company response to the customer’s owning of the relationship.”

Michael Fauschette says: “Social CRM is the tools and processes that encourage better, more effective customer interaction and leverage the collective intelligence of the broader customer community with the intended result of increasing intimacy between an organization and its prospects and customers. The goal is to make the relationship with the customer more intimate and tied to the company by building a public ecosystem to better understand what they want and how they interact with the various company touchpoints like sales, customer service etc…”

In the end of the day, it doesn’t really matter what you call Social CRM or how you define it, as long as you understand it and know how to apply it to your organization. It’s all about the execution. At Attensity, for example, they developed the “LARA” framework, which addresses the end-to-end process of Social CRM:

  • Listen to customer conversations
  • Analyze those conversations
  • Relate this information to existing information within your enterprise
  • Act on those customer conversations

(source)

(img source)

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: