Topic 2: Product
Product Trial
 This
is when a business gets customers to
buy a product for the first time. This may
be because the product is new on the
market.
 Hopefully this will instil some brand loyalty
and ensure repeat purchases.
 Getting a customer to trial a product for the
first time means using certain aspects of
the 4Ps of marketing.
Product Trial
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Price:
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Penetration pricing can be used when the product is
new. This means initially selling it at a much reduced
price and then raising the price once it has established
some brand loyalty.
Money off coupons can be used in newspapers,
magazines and/or through direct mailing.
Promotional pricing can be used if the product is not
new. This means lowering the price for a limited time
to try and encourage new people to try it out. BOGOF
or 2 for 1 could also be used as part of this.
Product Trial
 Product:
 Free
samples using magazines, direct mailing
or a stand in the supermarket
 Test trials e.g. test drive a car
 Trying out a product in the shop e.g. new
video game
Product Trial
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Promotion:
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Advertising – TV, radio, newspapers, magazines etc.
Companies will try to make sure they can reach their target
audience by using specific magazines or TV programmes.
Sponsorship – Sponsoring a TV programme is a good way
of getting people to notice your product and trial it.
Billboards and/or any flat space e.g. buses
Publicity – have a launch party and invite journalists to
come. Give them a brochure and ask them to write about
the product in their publications.
Celebrity endorsement – get a celebrity to champion the
product.
Viral marketing – use Twitter, FaceBook, YouTube,
MySpace to get people talking about it and recommending
it to friends.
Product Trial
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Place:
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Manufacturers often need to persuade retailers to
devote shelf space to the product. Often this means
that they will have to pay for the privilege.
Also manufacturers may have to pay for any
promotional deals that the retailer has such as
BOGOF and 2 for 1
Repeat Purchase
 Repeat
purchase is when a customer buys
a product more than once.
 Customer loyalty is the willingness of
customers to make many repeat purchases
from one company or of one product.
 Repeat purchases is the key to success of
most business. It is less expensive to
achieve than launching new successful
products.
Repeat Purchase
 Promotion:
 Advertising
is very important for keeping the
brand in the consciousness of customers. All
forms of advertising are suitable to achieve
this.
 Many other forms of promotion are also useful
for this e.g. money off coupons, competitions,
special offers etc.
Repeat Purchase
 Price:
 Showing
that the product gives value for
money is a good way of considering the price.
 Sometimes firms can maintain a high price –
known as prestige pricing – because they are
attracting people with relatively high incomes
who want to purchase something exclusive or
of high quality.
 Promotional pricing can be very useful
occasionally.
 BOGOF and 2 for 1 can be good.
Repeat Purchase
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Product:
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Must meet or exceed customer expectations
The brand should match the image of the customer
The product should be made to feel as if the customer
cannot live without it
The product needs to be able to satisfy a customer’s
need or want
The product could satisfy more than one need or want
(dual purpose)
New varieties to keep consumer’s interested.
New technology to keep consumers interested.
Repeat Purchases
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Place:
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Manufacturers often need to persuade retailers to
devote shelf space to the product. Often this means
that they will have to pay for the privilege.
Also manufacturers may have to pay for any
promotional deals that the retailer has such as
BOGOF and 2 for 1
Questions
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1.
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2.
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Answers B and D
Comments
A incorrect – low or high production costs will not persuade or dissuade a
customer from buying the product.
B correct – a relevant free gift acts as an incentive to the purchaser.
C incorrect – this is a human resources matter and has no bearing on a
customer’s decision to purchase.
D correct – a reduced price may persuade a customer to buy a product
without having to spend too much money on it.
E incorrect – many of the other magazines may have different target markets.
Answer A
Comments
A correct – a lack of loyalty means that customers will not return to purchase
the same brand again and again.
B incorrect – a lack of loyalty often reduces sales levels.
C incorrect – good value often results in customer loyalty.
D incorrect – large price cuts are not a guarantee of customer loyalty as it is
often based on many different factors
Questions
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3.
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Answer C
Comments
A incorrect – the amount of profit is based on several different
factors and not just sales levels.
B incorrect – repeat purchases maintain sales levels for a
company.
C correct – advertising encourages people to make repeat
purchases.
D incorrect – little brand loyalty would not generate repeat
purchases. Also, in the pizza market people do tend to have
brand loyalty.
Repeat Purchases
 Other
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key factors:
Be sure everyone in your company provides
outstanding service to your customers.
Stay in touch with customers and ask for feedback.
Tell someone by in person, on the phone, or by mail,
"Thank you for your business.