Entrp 1: Lecture 5 & 6
PRODUCT AND PRICE STRATEGY
Learning Objectives
 Describe the marketing mix
 Explain the importance of branding
 Describe primary and secondary market research
 Create a marketing plan
 Identify marketing tools
 Pricing Strategy
Marketing Mix
6-3
 Marketing is process of developing mutually
satisfying relationships with customers
 Four Ps in the classical marketing mix
The set of controllable, tactical
marketing tools that the firm blends to
produce the response it wants in the
target market.
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Product
Place
Price
Promotion
Marketing Mix
PRODUCT
PRICE
List Price
Discounts
Allowances
Payment Period
Credit Terms
Variety, quality,
Design, Features,
Brand name,
Packaging,
Services
Target Customers
Intended Positioning
PROMOTION
Advertising,
Personal Selling
Sales Promotion
Public Relations
PLACE
Channels
Coverage
Locations
Inventory
Transportation
Logistics
Putting Together: Marketing Mix to create awarness
Market Mix
Product
Promotion
Price
Place
Awareness
Strategies
What is the Product? How is it Positioned? (a)Product as Service:
SIM card;
(b)Product as Product: Coffee; (c)Service as Service: Legal Advise or
(d) Service as Product: DHL logistics, software etc
Create a Customer Portfolio. Contact them through personalized
emails or SMS based marketing. Collaborate with partner institutions
to create shared log ins.
Free trials for 1 month. Discounted fee for 3 months and then
regular charge. Charges will be based on type and variability of services.
Distribution channels cold be banks by enabling strategic relations.
Interest
Trial
Make
Customers
dependent
Create
Market
Marketing Mix (continued)
6-6
 Marketing mix from customer’s viewpoint
 Four Cs marketing mix model
Customer needs and wants
 Convenience
 Communication
 Cost to customer

Marketing Mix (continued)
6-7
Convenience
(Place)
Customer Needs
(Product)
Marketing
Mix
Communication
(Promotion)
Cost to Customer
(Price)
Building Your Brand
6-8
 A brand
 Incorporates customers’ perceptions of and experiences with a
business
 Combination of name, logo, and design that identifies a
business’s products and services in consumers’ minds
 Trusted brand can drive sales
 Examples
Building Your Brand (continued)
6-9
 Define how you want products/services perceived by
customers
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
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Understand core elements of business
Differentiate core elements from competitors’ core elements
Identify how products/services meet customers’ needs
Decide how to convince customers that products/services best
meet their needs
Building Your Brand (continued)
610
 Discover words, phrases, images to put best public
“face” on business
 Brand names and Slogans
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Simple
Easy to remember, spell, and understand
Have “snap”
May be a proper name or use personification
Building Your Brand (continued)
6-
 Domain name (URL) and branding
11
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Address associated with a Web page
Can be used to help build a brand
Single- and common-word domain names largely already taken
 Office.com, Business.com, dell.com
 MAKE Website Synonymous with the Brand
Building Your Brand (continued)
612
 Use creative “brainstorming” to develop brand
name
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
Create list of words or phrases and combine them in creative
ways
Ask for help from friends, family, advisors
 Pay for professional help in developing brand
name

The Namestormers, NameLab
Building Your Brand (continued)
613
 Domain name (URL) registration
 Managed by ICANN for the U.S. Dept. of Commerce

Top-level domains identify the general category in which a
domain name is registered
Building Your Brand (continued)
614
Building Your Brand (continued)
615
 Tying URL to business name can help build a brand
amazon.com
 register.com
 bn.com
 ey.com
 Some e-businesses use clever, made-up words for URL
 google.com

Building Your Brand (continued)
616
 Brand names, domain names, trademarks are becoming more
interchangeable
 Make certain a URL does not infringe on the brand or trademark
of an existing company
Market Research
617
 Collecting and analyzing data to make business
decisions
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Primary research
 Uses quantitative or qualitative methods to physically
collect and analyze data and then publish the results
Market research company examples
 NPD Group
 Forrester
 IDC
 Frost & Sullivan
 Gartner
Market Research (continued)
618
 Secondary research
› Collects data from secondary sources who have already
performed the primary research
› Resources for secondary research
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Reports published by market research companies
Industry white papers
Government databases
Trade associations
Professional journals: Mckinsey Quarterly
Creating a Marketing Plan and Strategize
619
 Provides the details for the marketplace analysis
section of a business plan
 Plan elements
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Executive Summary
Situational Analysis
Objectives, Strategies, and Tactics
Budget and Performance Measures
Creating a Marketing Plan and
Strategize
(continued)
620
 Situational Analysis section
 Explains what is known about the marketplace
Market size (Total Shipments X Average Unit Price)
 Market segments
 Target market
 Market Positioning

Creating a Marketing Plan and Strategize
Stage1
6Identify Bases
for Segmenting
21
Market
Stage 2
Develop Relevant Market Segment
profiles
Stage 3
Forecast Total Potential Within
each segment
Stage 4
Analyze Competitive Forces
within each Segment
Determine Marketing
Program to serve each
segment
Forecast own market share for
each segment
Stage 5
Estimate Cost benefit for Each
Segment
Do Benefits outweigh Costs for
each segment?
Decision on selection of target
segments
Marketing Strategy
2 - 22
Marketing Strategy
223
Strategy

Customers grouped by:
Geographic
 Demographic
 Psychographic
 Behavioral

1. Market
Segmentation
2. Target marketing
3. Market
Positioning

Market segment is a group
of consumers who respond
in similar ways to
marketing efforts
Market Segmentation
Clinique for Men
products are designed
for a segment of men
who will pay more for
skin care products.
Marketing in Action
2 - 24
Marketing Strategy
Strategy
1. Market
Segmentation
2. Target marketing
3. Market
Positioning
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
Evaluation of each
segment’s attractiveness
Selection of segments with
greatest long-term
profitability
A company can choose one
or several segments to
target
Target Markets
Business Week
magazine targeted to
business professional
who don’t have much
time
Marketing in Action
2 - 26
Marketing Strategy
227
Strategy
1. Market
Segmentation
2. Target marketing
3. Market
Positioning
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The place the product
occupies in the consumer’s
mind
Products are positioned
relative to competing
products
Marketers look for clear,
distinctive and desirable
places in positioning
Target Positioning
 Amazon.com was
created to make
shopping hasslefree and from
home
Marketing in Action
2 - 28
Creating a Marketing Plan and Strategize
(continued)
629
 Objectives, Strategies, and Tactics section
 Objectives describe marketing mission
 Strategies identify what is to be accomplished
 Tactics detail how it will be done
 Budget and Performance Measures section
 A budget estimates the cost of the plan
 Performance measures evaluate the results of plan
implementation
Marketing Tools
630
 Search tool submissions
 Search engines use spiders to browse the Web and locate
new pages to build indexes
 Directories use human submissions of Web page
information to build indexes
 Most modern search tools use a combination of both means
to build indexes
 E-businesses can submit Web page information to multiple
search tools
Marketing Tools (continued)
631
 Search engine optimization (SEO)
 Build Web pages that are easy to index by search engines
Relevant inbound links (most important)
 Use good HTML tags/structure
 Write clear and on-topic Web page text
 Use descriptive page titles
 Avoid frames and dynamic content
 Use text navigation links
 Use meta tags: used to add information to a web page that a
web browser can see.

Note: using certain Web page design elements, such as frames,
flash content, and image navigation links, can make it more
difficult for a spider or to index a Web page.
Marketing Tools (continued)
632
 Public relations effort
 Establishes and maintains a company’s public image
 Timely press release is a cost-effective marketing tool
 Good idea to work with a PR professional
Marketing Tools (continued)
633
 Online advertising
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Banner and sidebar
ad
 Rectangular image
 Linked to
advertiser’s site
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Pop-up or popunder ads
 Appear in own
window above or
below browser
window
 Linked to
advertiser’s site
Marketing Tools
(continued)
6 Online advertising
(continued)
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Rich media ads
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Interactive elements,
Flash technologies,
streaming media
Shoshkele and streaming
media ads
 Permission-based
marketing
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Opt-in e-mail or
newsletters
Double opt-in process
verifies recipient
voluntarily receives
messages
34
Marketing Tools
(continued)
635
 Online advertising
(continued)
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Search tool or portal
advertising
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Featured placement at
other Web sites
Pay-per-click search tool
ads
Featured placement in
search results lists
Featured placement on
same page as search results
list
Based on relevant search
keywords
Yahoo!, Search Marketing,
and goClick.com
Marketing Tools (continued)
636
 Traditional advertising
 Radio
 TV
 Print media
 Outdoor advertising
 Direct mail
 Used together with online advertising to acquire
new customers as inexpensively as possible
Marketing Tools (continued)
637
 Link exchanges
 Exchange links with Web sites to boost link popularity
 Drive new customers to Web site and improve SEO
 Beware of link farms and link stuffing
 Newsgroups and Web-based forums
 Participation in can indirectly promote a business
Marketing Tools (continued)
638
 Word of mouth
 Electronic word of mouth exploits the network effect and
viral marketing
 Business blogs
Put a “human face” on a business
 Way to keep tabs on what customers, potential customers, and
competitors are thinking and saying
 Provide valuable feedback on products and services

Marketing Tools (continued)
639
 RSS and Podcasting
 Syndication of Web page content or audio using XML
technologies
 Affiliate programs***
 Arrangement in which an e-business pays a fee or
commission when a customer clicks through from another
site and makes a purchase
Marketing Tools (continued)
640
 Web rings
 A group of similar e-businesses linked together in a circular
“chain”
 Visitor can click through from site to site in the chain
 Awards
 Can give a startup e-business more credibility in the
marketplace
Marketing
 Using Marketing to Shape Perceptions and
Expectations
 Perceptions and expectations of value can be as
important as actual value. To influence, can use:
 Preannouncements and press releases
 Can build “mind share” in advance of actual market
share
 Can forestall purchases of competitors’ products
 Reputation
 Provides signal to market of likelihood of success
 Credible commitments
 Substantial irreversible investments can convince
market of firm’s confidence and determination
Pricing
 Price influences product positioning, rate of adoption, and cash
flow.
 What are firm’s objectives?
 Survival
 Maximize current profits
 Maximize market share
 Typical pricing strategies for new innovations:
 Market skimming strategy (high initial prices)
 Signals market that innovation is significant
 Recoup development expenses (assuming there’s
demand)
 Attracts competitors, may slow adoption
Pricing
 Penetration
Pricing (very low price or free)
 Accelerates adoption, driving up volume
 Requires large production capacity be established early
 Risky; may lose money on each unit in short run
 Common strategy when competing for dominant design
 Can
manipulate customer’s perception of price
 Free initial trial or introductory pricing
 Initial product free but pay for monthly service
 Razor and razorblade model: Platform is cheap but
complements are expensive (as in video games)
Distribution
 Selling Direct versus Using Intermediaries
Selling direct
 Gives firm great control over selling process, price and service
 Can be expensive and/or impractical
 Intermediaries may include:
 Manufacturers’ representatives: independent agents that
may promote and sell the product lines of one or a few
manufacturers.
 Useful for direct selling when its impractical for manufacturer
to have own direct sales force for all markets.
 Wholesalers: firms that buy manufacturer’s products in bulk
then resell them (typically in smaller, more diverse bundles)
 Provide bulk breaking and carry inventory.
 Handles transactions with retailers and provides
transportation.

Distribution
 Retailers:
firms that sell goods to public
 Provide convenience for customers
 Enable on-site examination and service
 Original
equipment manufacturers (OEMs):
 A company that buys products (or components) from other
manufacturers and assembles them or customizes them and
sells under its own brand name. E.g., Dell Computer
 Aggregates components from multiple manufacturers
 Provides single point-of-contact and service for customer

In some industries, information technology has enabled
disintermediation or reconfiguration of intermediaries.
 E.g., online investing enables customers to bypass brokers;
online bookselling requires retailer to provide delivery
services.