Product mix pricing strategies

 Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The remaining 3p’s are the variable cost for the organization. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors:

1.       Fixed and variable costs.

2.       Competition

3.       Company objectives

4.       Proposed positioning strategies.

5.       Target group and willingness to pay.

 

Product mix pricing strategies

1.  Product/service line pricing: Setting price steps between various products in a product line based on cost differences between the products, customer evaluations of different features and competitors and service line items.

Example: An example would be a DVD manufacturer offering different DVD recorders with different features at different prices eg A HD and non HD version.. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.

2.  Optional-product pricing: Pricing optimal or accessory products sold with the main product. The organization sells optional extras along with the product to maximize its turnover.

Example: This strategy is used commonly within the car industry as i found out when purchasing my car. 
3.  Captive-product pricing: Pricing products that must be used with the main product

4.  By-product pricing: Pricing low–value by-products or services to get rid of them,

5.  Product-bundle pricing: Pricing bundles of products sold together. The organization bundles a group of products at a reduced price. Common methods are buy one and get one free promotions or BOGOF's as they are now known. Within the UK some firms are now moving into the realms of buy one get two free can we call this BOGTF i wonder?

Example: This strategy is very popular with supermarkets who often offer BOGOF strategies.

New product pricing strategies

 Pricing strategies for products or services encompass three main ways to improve profits. These are that the business owner can cut costs or sell more, or find more profit with a better pricing strategy. When costs are already at their lowest and sales are hard to find, adopting a better pricing strategy is a key option to stay viable.

Merely raising prices is not always the answer, especially in a poor economy. Many businesses have been lost because they priced themselves out of the marketplace. On the other hand, many business and sales staff leave "money on the table". One strategy does not fit all, so adopting a pricing strategy is a learning curve when studying the needs and behaviors of customers and clients.

The pricing strategy varies from stage to stage over the life cycle of a product, depending on the market conditions. i. Introduction stage: A new product may simply be either another brand name added to the existing ones or an altogether new product. Pricing a new brand for which there are many substitutes available in market is not a big problem as pricing a new product for which close substitutes are not available.

There are two type of pricing strategies for new product:

Skimming price policy: - Selling a product at a high price, sacrificing high sales to gain a high profit, therefore ‘skimming’ the market. Usually employed to reimburse the cost of investment of the original research into the product - commonly used in electronic markets when a new range, such as DVD players, are firstly dispatched into the market at a high price.

Penetration price policy: - This pricing policy is adopted generally in the case of new product for which substitutes are available. This policy requires fixing a lower initial price designed to penetrate the market as quickly as possible.

 Pricing in maturity stage:- Maturity period is the second stage in the life cycle of a product. It can define for all practical purposes as the period of zero growth rates. The concept of maturity period is useful to the extent it gives out signals for taking precaution with regard to pricing policy.

Pricing a product in decline: - The product in decline is one that enters the post-maturity stage. During this stage, the total sale of the product starts declining. The first step in pricing strategy at this stage is obviously to reduce the price with the objective of retaining sales at some minimum level.

Product life cycle

 Product Life Cycle: The period of time over which an item is developed, brought to market and eventually removed from the market. First, the idea for a product undergoes research and development. If the idea is determined to be feasible and potentially profitable, the product will be produced, marketed and rolled out. Assuming the product becomes successful, its production will grow until the product becomes widely available. Eventually, demand for the product will decline and it will become obsolete.

Product life cycle is a business analysis that attempts to identify a set of common stages in the life of commercial products, for example, introduction, promotion, growth, maturity and decline. The stages of a product's lifecycle can be classified as follows:

Introduction: The introduction stage is characterized by low growth rate of sales as the product is newly launched in the market. Monopoly can be created, depending upon the efficiency and need of the product to the customers. A firm usually incurs losses rather than profit. If the product is in the new product class, the users may not be aware of its true potential. In order to achieve that place in the market, extra information about the product should be transferred to consumers through various media. The stage has the following characteristics: 1. Low competition 2. Firm mostly incurs losses and not profit.

Characteristics of Introductory stages of Product life cycle

1.      Higher investment, lesser profits

2.      Minimal Competition

3.      Company tries to Induce acceptance and gain initial distribution

4.      Company needs Promotions targeted towards customers to increase awareness and demand for product

5.      Company needs Promotions targeted towards channel to increase confidence in the product

Growth: Growth comes with the acceptance of the innovation in the market and profit starts to flow. If the monopoly exists, companies can experiment with new ideas and innovation in order to maintain the sales growth. This stage is the best time to introduce new effective products in the market thus creating an image in the product class in the presence of its competitors who try to copy or improve the product and present it as a substitute.

Characteristics of Growth stage of Product life cycle

1.      Product is successfully launched

2.      Demand increases

3.      Distribution increases

4.      Competition intensifies

5.      Company might introduce secondary products or support services.

6.      Better revenue generation and ROI

Maturity: In the maturity stage, the end of stage of the growth rate and sales slowdown as the product has already achieved acceptance in the market. New firms start experimenting in order to compete by innovating new models of the product. With many companies in the market, competition for customers becomes fierce, despite the increase in growth rate of sales at the initial part of this stage. Aggressive competition in the market results in profits decreasing at the end of the growth stage thus beginning the maturity stage. In addition to this, the maturity stage of the development process is the most vital.

Characteristics of Maturity stages of Product life cycle

1.      Competition is high

2.      Product is established and promotion expenditures are less

3.      Little growth potential for the product

4.      Penetration pricing, and lower profit margins

5.      The major focus is towards extending the life cycle and maintaining market share

6.      Converting customers product to your own is a major challenge in maturity stage

Decline: The decline stage is where most of the product class usually dies due to low growth rate in sales. A number of companies share the same market, making it difficult for all entrants to maintain sustainable sales levels. Not only is the efficiency of the company an important factor in the decline, but also the product category itself becomes a factor, as the market may perceive the product as "old" and may not be in demand. It is not always necessary that a product should go through these stages. It depends on the type of product, its competitors, scope of the product, etc.

Characteristics of Decline stages of Product life cycle

1.      Market is saturated

2.      Sales and profits decline

3.      Company becomes cost conscious

4.      A lot of resources are blocked in rejuvenating the dead product.

5.      There are only three options left with the company

6.       Re positioning or Rebranding of the product to extend product life cycle

o    Maintain the product as it is and reduce costs to get maximum profits till the product can produce profits

o    Take the product off the market.

Causes of new products fall

 Philip Kotler & Gary Armstrong: A new product is a good, service, or idea that is perceived by some potential customers as new.

Causes of new products fall: a) Inadequate market research, b) Inferior quality of product, c) Technical weakness, d) Lacking of good plan, e) Inefficient distribution system, f) If pricing is not appropriate, g) Fault in promotional activities, h) Poor timing in introduction, I) lack of product uniqueness, j) Defect in positioning, k) Fragmented market. L) Shorter product life style, m) More expenses in production, n) Attack of the competitor, o) Lack of managerial efficiency and experience.

Why new product development is important

 Process of developing a new product or service for the market. This type of development is considered the preliminary step in product or service development and involves a number of steps that must be completed before the product can be introduced to the market. New product development may be done to develop an item to compete with a particular product/service or may be done to improve an already established product. New product development is essential to any business that must keep up with market trends and changes.

McCarthy & Perreault: Competition is strong and dynamic in most markets. So it is essential for a firm to keep developing new products as well as modifying its current products to meet changing customer needs and competitors actions.

                New Product development is important because of the following reasons:

a) Fulfill customer’s new demand. B) Increase consumer satisfaction, c) To maintain customer’s loyalty, d) To increase sales, e) To increase profit, f) Cross selling, g) Survival of the firm, h) Technological development, I) To face competition, j) To buildup goodwill and image of the organizations, k) To bring product diversification, l) Maximum utilization of energy and resources, m) To utilize market opportunity, n) Reduce investment risk, o) Creating new prospect of the product.( Example: Sony Trinitron flat screen T.V. or General Air conditioner, To sale Histacin Jayson Pharmaceuticals earn more profit from the market.

New Product Development Strategy

 With a well-considered new product development (NPD) strategy, you can avoid wasting time, money and business resources. An NPD strategy will help you organise your product planning and research, capture your customers' views and expectations, and accurately plan and resource your NPD project. Your strategy will also help you avoid:

·         overestimating and misreading your target market

·         launching a poorly designed product, or a product that doesn't meet the needs of your target customers

·         incorrectly pricing products

·         spending resources you don't have on higher-than-anticipated development costs

·         exposing your business to risks and threats from unexpected competition.

There are several important steps you will need to plan into your NPD strategy.

Define your product : An accurate description of the product you are planning will help keep you and your team focused and avoid NPD pitfalls such as developing too many products at once, or running out of resources to develop the product.

Identify market needs: Successful NPD requires a thorough knowledge of your target market and its needs and wants. A targeted, strategic and purposeful approach to NPD will ensure your products fit your market. Ask yourself:

·         What is the target market for the product I am proposing?

·         What does that market need?

·         What is the benefit of my proposed new product?

·         What are the market's frustrations of existing products of its type?

·         How will the product fit into the current market?

·         What sets this product apart from its competition?

Draw existing market research. You may need to undertake additional research to test your new product proposal with your customers. For example, you could set up focus groups or a customer survey.

Establish time frames: You need to allow adequate time to develop and implement your new products. Your objectives for developing new products will inform your time frames and your deadlines for implementation. Be thoughtful and realistic. Some objectives might overlap but others will be mutually exclusive.

·         Your objective to race against your competition will require efficiency from your team.

·         Your aim to achieve a specific launch date will be influenced by demand for seasonal products and calendar events.

·         Your aim to be responsive to your customers' needs and demands will require time for research to ensure you develop the right products at the right time.

·         Your objective to stick to business as usual and maintain other schedules will affect the resources you make available for NPD.

Identify key issues and approaches: There are many tasks involved in developing a product that is appropriate for your customers. The nature of your business and your idea will determine how many of these steps you need to take. You may be able to skip or duplicate certain stages, or start some of them simultaneously. Key tasks include:

·         generating and screening ideas

·         developing and screening concepts

·         testing concepts

·         analyzing market and business strategy

·         developing and market testing products

·         implementing and commercializing products.

Process of New Product Development

 Every entrepreneur knows that productivity is one of the key ingredients for successful product development. One of the two key processes in Robert’s Rules of Innovation is the NEW PRODUCT DEVELOPMENT PROCESS. A formalized, NPD process – also referred to and best practice: the Stage Gate® Process – is a must, from simple to sophisticated.

The New Product Development process is often referred to as The Stage-Gate innovation process, developed by Dr. Robert G. Cooper as a result of comprehensive research on reasons why products succeed and why they fail.

Step 1: Generating

Utilizing basic internal and external SWOT analyses, as well as current marketing trends, one can distance themselves from the competition by generating ideologies which take affordability, ROI, and widespread distribution costs into account.

Step 2: Screening The Idea

Wichita, possessing more aviation industry than most other states, is seeing many new innovations stop with Step 2 – screening.  Do you go/no go? Set specific criteria for ideas that should be continued or dropped. Stick to the agreed upon criteria so poor projects can be sent back to the idea-hopper early on.

Because product development costs are being cut in areas like Wichita, “prescreening product ideas,” means taking your Top 3 competitors’ new innovations into account, how much market share they’re chomping up, what benefits end consumers could expect etc. 

Step 3: Testing The Concept

As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is important to note, it is different from test marketing. Aside from patent research, design due diligence, and other legalities involved with new product development; knowing where the marketing messages will work best is often the biggest part of testing the concept.  Does the consumer understand, need, or want the product or service?

Step 4: Business Analytics

During the New Product Development process, build a system of metrics to monitor progress. Include input metrics, such as average time in each stage, as well as output metrics that measure the value of launched products, percentage of new product sales and other figures that provide valuable feedback. It is important for an organization to be in agreement for these criteria and metrics. Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.

Step 5: Beta / Marketability Tests

Arranging private tests groups, launching beta versions, and then forming test panels after the product or products have been tested will provide you with valuable information allowing last minute improvements and tweaks. Not to mention helping to generate a small amount of buzz. Word Press is becoming synonymous with beta testing, and it’s effective; Thousands of programmers contribute code, millions test it, and finally even more download the completed end-product.

Step 6: Technicalities + Product Development

Provided the technical aspects can be perfected without alterations to post-beta products, heading towards a smooth step 7 is imminent. According to Akrani, in this step, “The production department will make plans to produce the product. The marketing department will make plans to distribute the product. The finance department will provide the finance for introducing the new product”.

Step 7: Commercialize

At this stage, your new product developments have gone mainstream, consumers are purchasing your good or service, and technical support is consistently monitoring progress.  Keeping your distribution pipelines loaded with products is an integral part of this process too, as one prefers not to give physical (or perpetual) shelf space to competition. Refreshing advertisements during this stage will keep your product’s name firmly supplanted into the minds of those in the contemplation stages of purchase.

Step 8: Post Launch Review and Perfect Pricing

Review the NPD process efficiency and look for continues improvements. Most new products are introduced with introductory pricing, in which final prices are nailed down after consumers have ‘gotten in’.  In this final stage, you’ll gauge overall value relevant to COGS (cost of goods sold), making sure internal costs aren’t overshadowing new product profits.  You continuously differentiate consumer needs as your products age, forecast profits and improve delivery process whether physical, or digital, products are being perpetuated.

 

Remember: The Process Is Loose

The entire new product development process is an ever evolving testing platform where errors will be made, designs will get trashed, and loss could be recorded. Having your entire team working in tight synchronicity will ensure the successful launch of goods or services, even if reinventing your own wheel. Productivity during product development can be achieved if, and only if, goals are clearly defined along the way and each process has contingencies clearly outlined on paper.

Define new product

 Define new product?

Businesses focus on designing new products and selling these products to customers. The company's goal with creating new products involves two parts. The first part consists of finding a product that customers want to pay for; only products that customers purchase produce revenue for the business. The second part consists of beating competitors to market. The first company to offer a product generates the greatest number of repeat customers.

Philip Kotler & Gary Armstrong: A new product is a good, service, or idea that is perceived by some potential customers as new.

Steven J. Skinner: A new product is one that a specific organization has not marketed previously, although other organizations may offer similar products.

Evans & Berman: A new product is a modification of an existing product or and enovation that consumer perceives as meaningful.

Process of developing a new product or service for the market. This type of development is considered the preliminary step in product or service development and involves a number of steps that must be completed before the product can be introduced to the market. New product development may be done to develop an item to compete with a particular product/service or may be done to improve an already established product. New product development is essential to any business that must keep up with market trends and changes.

 Q: Process of New Product

The process of creating a new product involves nearly every department in the organization. Many companies create a new product development team. The team includes representatives from the purchasing department, research and development, the production area, accounting and marketing. The purchasing and accounting representatives contribute financial data regarding the new product. The purchasing representative contacts vendors and provides material cost information to the team. The accounting representative uses the material cost information, estimated labor costs and calculates the total product cost. The accounting representative also calculates a potential profit margin using the anticipated selling price from the marketing department.

 

Q:  Success of a New Product?

Ans: Philip Kotler & Gary Armstrong: To create successful new products, a company must understand its consumers, markets and competitors and develop products that deliver superior value to customers.

The following point should be considered: a) Adequate market demand, b) Proper utilization of money & resources, c) Similar to existing market structured) existing production system, e) Efficiency & experience of management, f) Social acceptability, g) Legal obstacle, h) Environmental influence, I) Differential quality, j) To increase brand & company image, k) Government patronization.

Sales promotion? Purpose? Tools? Objectives? Technique? Explain the tools of Sales promotion

 Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales. Examples include contests, coupons, freebies, loss leaders, point of purchase displays, premiums, prizes, product samples, and rebates. These efforts can attempt to stimulate product interest, trial, or purchase. Sales promotion is one of the seven aspects of the promotional mix. (The other six parts of the promotional mix are advertising, personal selling, direct marketing, publicity/public relations, corporate image and exhibitions.) Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability.

Purpose of sales promotion:

Companies use sales promotion:(1) to attract new product users who will hopefully turn into loyal consumers; (2) to reward existing consumers with a price reduction to maintain their loyalty; and (3) to encourage repeat sales from occasional consumers.

Objectives of Sales Promotion:

Basically, sales promotion has three specific objectives. First, it is meant to provide important marketing information to the potential buyers. Secondly, to convince and influence the potential buyers through persuasive measures. Thirdly, sales promotion is meant to act as a powerful tool of competition. The specific objectives of sales promotion are as follows:

a.  To introduce new products or services:

Sales promotion is often used to motivate prospective consumers to try new products and services. Dealers are also induced to introduce new products and services in the market. Usually, free samples are provided through dealers during such introduction. Similarly, discounts in cash or goods may also be offered to dealers to stock new products or deal with new services. Free samples, trade discounts, cash discounts are basically sales promotion measures.

b.  To attract new customers:

Sales promotion measures also play an important role in attracting new customers for an organization. Usually, new customers are those persons that are won away from other firms. Samples, gifts, prizes, etc. are used to encourage consumers to try a new brand or shift their patronage to new dealers.

c.  To induce existing customers to buy more:

Sales promotion devices are most often used to induce the existing customers of a firm to buy more. Product development, offering three products at the cost of two, discount coupons, are some of the sales promotion devices used by firms to motivate the existing buyers to buy more of a specific product.

d.  Helps the firm to remain competitive:

Most of the companies undertake sales promotion activities in order to remain in the competitive market. Therefore, in the modern competitive world no firm can escape the responsibility of undertaking sales promotion activities.

e.  To increase sales in off-seasons:

Many products like air-coolers, fans, refrigerators, air-conditioners, cold drinks, room heaters, etc. have seasonal demand. Manufacturers and dealers dealing with such type of goods make every effort to maintain a stable demand throughout the year.

In other words, firms try to encourage the purchase of such goods in off-seasons also. That is the main reason behind discounts and off-season price reductions of such items in the market during slack seasons.

f.  To add to the stock of the dealers:

Dealers like wholesalers and retailers usually deal with a variety of goods. Their selling activity becomes easier when the manufacturer supplements their efforts by sales promotion measures. When a product or service is well supported by sales promotion, dealers are automatically induced to have more of such items.

 

Sale Promotion Technique: Important Techniques of sales promotion are as follows:

1)       Rebate: under it in order to clear the excess stock, products are offered at some reduced price. For example, giving a rebate by a car manufacturer to the tune of 12,000/- for a limited period of time.

2)       Discount: Under this method, the customers are offered products on less than the listed price. For example, giving a discount of 30% on the sale of Liberty Shoes. Similarly giving a discount of 50% + 40% by the KOUTONS.

3)       Refunds: Under this method, some part of the price of an article is refunded to the customer on showing proof of purchase. For example, refunding an amount of 5/- on showing the empty packet of the product priced 100/-

4)       Product combination: Under this method, along with the main product some other product is offered to the customer as a gift.

5)       Quantity Gift: Under this method, some extra quantity of the main product is passed on as a gift to the customers. For example, 25% extra toothpaste in a packet of 200 gm tooth paste. Similarly, a free gift of one RICHLOOK shirt on the purchase of two shirts.

6)       Instant draw and Assigned gift: Under this method, a customer is asked to scratch a card on the purchase of a product and the name of the product is inscribed thereupon which is immediately offered to the customer as a gift. For example, on buying a car when the card is scratched such gifts are offered – TV, Refrigerator, Computer, Mixer, Dinner Set, T-shirt etc.

7)       Lucky draw: Under this method, the customers of a particular product are offered gifts on a fixed date and the winners are decided by the draw of lots. While purchasing the product, the customers are given a coupon with a specific number printed on it.

On the basis of this number alone the buyer claims to have won the gift. For example, Buy a bathing soap and get a gold coin offer can be used under this method.

8)       Usable benefits: Under this method, coupons are distributed among the consumers on behalf of the producer. Coupon is a kind of certificate telling that the product mentioned therein can be obtained at special discount. Possession of a coupon motivates the consumer to buy the product, even when he/she has no need of it. Such coupons are published in newspapers and magazines.

9)       Full Finance @ 10%: Under this method, the product is sold and money received in installment at 0% rate of interest. The seller determines the number of installments in which the price of the product will be recovered from the customer. No interest is charged on these installments.

10)   Samples or Sampling: Under this method, the producer distributes free samples of his /her product among the consumers. Sales representatives distribute these samples from door-to-door. This method is used mostly in case of products of daily use, e.g. Tea, Washing Powder, and Toothpaste etc. Thus, the consumers willy-nilly make use of free sample.

11)   Contests: Some producers organize contests with a view to popularizing their products. Consumers taking part in the contest are asked to answer some very simple questions on a form and forward the same to the company. The blank form is made available to that consumer who buys the product first.

Result is declared on the basis of all the forms received by a particular date. Attractive prizes are given to the winners of the contest. Such contests can be organized in different ways.

 

Sales Promotion Tools:  Sales promotion tools are given below:

Free Samples:  It often takes more than advertising to break consumers’ brand loyalty, especially if they have been using a product or shopping at a particular store for years. One reason is the worry that trying something new will result in a waste of money if they don’t like the new product. Offering customers a chance to try your product or service risk-free is a common method of breaking brand loyalty and converting competitors’ customers into your customers.

Rebates: Instead of offering consumers a discount on the price they’ll pay for your product, offer a rebate, which is a monetary amount consumers receive later, generally in the form of a check you send via mail. This allows you to gather customer information and create a mailing list, a benefit you can't get simply through a point-of-sale discount.

Buy One, Get On Free: Consumers love a good deal, and they love freebies even more. Offering a free product if the consumer purchases one is a time-honored sales promotion that works for several reasons. If your margins are high enough, you might be able to cover your costs for both products at your selling price for one. This type of promotion allows you to double the amount of time the consumer uses your product, potentially leading to a better experience and an affinity for your product. This strategy also can help you decrease your dependence on costly, free-sample giveaways.

Point-of-Purchase Displays: To stimulate impulse buys or to remind regular customers not to leave the store without a specific product, marketers have used in-store displays for generations. These are signs, racks or other physical promotional pieces that stand out from their surroundings while touting a particular product or offer.

Loss Leaders and Discounts: As with free samples or buy-one-get-one-free promotions, loss leaders make products or services available below the seller’s cost. Some restaurants offer entrée or sandwiches as loss leaders because they make enough profits on additional sales of soups, salads, fries, drinks and desserts to turn a profit. Loss leaders often have a dual goal of generating a profit and getting consumers into a store to stimulate future sales. Discounts are markdowns on products or services that help reduce slow-moving product or temporarily spike sales.

Importance of Marketing Communication

  Although marketing can take many forms, all marketing is an act of communication. The fundamental goal of marketing is to deliver a message to potential consumers designed to convince them to perform a specific action--usually to purchase a particular product or service. To be an effective marketer, one must have a keen grasp on the effects of different media on communication and understand how consumers are most likely to interpret various messages.

Communication Media:

Marketers can communicate a single message using a variety of different media. To market effectively, a marketer must determine both how the characteristics specific to various media--both their advantages and disadvantages--and know which are best suited to an organization's message. In addition, the marketer should also know how to adapt an organization's message to fit each media, so that the consumer is delivered the same message through a number of different formats.

Direct vs. Indirect Messages:

The message is a piece of marketing can be either direct, indirect, or a combination of both. For example, a sign that reads "Save a Tree: Recycle" is a relatively direct piece of marketing. By contrast, a photo of a fashion model wearing an elegant dress and holding a bottle of perfume is relatively indirect. The viewer must infer that the model is advertising the perfume and--the marketer hopes--associate the perfume with beautiful, well-dressed people.

One-way vs. Two-Way:

With the advent of social networks and user-generated content--the so-called web 2.0--many savvy marketing companies understand that the most effective marketing is often interactive than the presentational. While traditional advertising has consisted of a company broadcasting or publishing a message to a target audience, information-age advertising involves a dialogue with potential consumers.

Communication Across Cultures:

One of the difficulties that companies in a globalized world run into is the complexity of communicating to potential customers who are part of a very different culture. While some marketing messages may be appropriate for some audiences, a skillful marketer will know that these same messages may communicate something very different in another culture.

Discuss the steps in developing effective marketing Communication

 The marketing communicators must (1) identify the target audience (2) Determine the communication objectives (3) Design the message and (4) manage and coordinate the total marketing communication process.

Identify the Target Audience : A marketing Communicator must start with a clear target audience in mind. The audience may be potential buyers of the company’s products, current users, deciders, or influence. The audience may be individuals, groups, particular publics or the general public. The target audience will critically influence the communicator’s decision on what is to be said. How it is to be said, when it is to be said, where is to be said and who is to say it.

Determining the communication Objectives : Once the target audience and its characteristics are identified, the marketing communication must determine what response is sought. The ultimate response of course, is purchase. But behavior is the end result of a long process of consumer decision marking. The marketing communicator needs to know how to move the target audience from where it now stands to a higher state of readiness to buy. We will work with the “hierarchy – of – effects “models and described the six buyer – readiness states Awareness, Knowledge, liking, Preference, Conviction, and Possible, depending upon the degree of consumer involvement and the degree of brand differences.

Designing the Message : Having defined the desired audience response, the communicators move to developing an effective message. Ideally the message should get attention, hold interest, arouse desire and obtain action. In practice, few messages take the consumer all the way from awareness through purchase, but the frame work suggest the desirable qualities.

Managing and Coordinating the Marketing Communication Process : The wide range of communication tools and messages available for reaching the target audience makes it imperative that they be coordinated. Other wise the messages might be ill timed in terms of the availability of goods: they may lack consistency: or they might not be cost effective. Left alone, each manager of a communication resource will fight for more budget irrespective of the relative merits of each tools.

Social Responsible of Marketing Communication

 Effective marketing draws customers to a business and, hopefully, increases profits. When a business advertises products or otherwise communicates with potential customers, marketing communications must be responsible, and the company must be accountable for what it says in its marketing materials. Irresponsible marketing may result in injuries to customers -- physically or financially. Further, untruthful or misleading advertisements may expose the business to lawsuits from customers.

 Truthful Content

The Federal Trade Commission (FTC) enforces laws regarding marketing and advertisements. In general, responsible marketing communications must "tell the truth and not mislead consumers," according to a writer on the FTC's Bureau of Consumer Protection Business Center website. Businesses cannot lie in advertisements or other marketing communications. While related to truthful content, the communications also cannot be misleading or deceptive.

Not Deceptive

An advertisement may be truthful, yet still be deceptive. If a business does not include all the relevant facts, or otherwise slants the language of the marketing communication in a way that a customer would be mislead by the facts of the content, the communication is not considered a responsible type of message.

Full Disclosure in Plain Language

Problems or concerns related to the product must be clearly stated in a conspicuous spot on the marketing communication and in language that the average consumer will understand. Any limits on liability or concerns regarding warranties or other promises must be fully spelled out either in the advertisement or in a supplement that accompanies the advertisement. Consumers must be provided with enough information about the product to make an informed decision as to whether they want to expend their resources on that item.

Inoffensive Content

The content must also "fit" the intended audience. The Entertainment Software Rating Board (ESRB), for example, makes a point to companies that produce video games or software intended for mature audiences -- they must not target younger consumers. A game labeled "Mature" should not be advertised during times when the programming is primarily geared toward a younger audience, such as Saturday morning cartoon shows. Further, the content of the advertisement should not be offensive to the general public.

Product Life Cycle

 Pre-Introduction: Light advertising, pre-introduction publicity

Introduction: Heavy use of advertising, public relations for awareness, sales promotion for trial

Growth: Advertising, public relations, branding and brand marketing, personal selling for distribution

Maturity: Advertising decreases, sales promotion, personal selling, reminder & persuasion

Decline: Advertising and public relations decrease, limited sales promotion, personal selling for distribution

Next let's briefly walk through each of the various parts of the marketing communications mix.