Branding decisions are important to company strategy and a powerful product differentiation tool. Some companies brand individual products separately while others build company brands that span their entire product lines. But what exactly is a brand?
Definition of a brand
The American Marketing Association defines a brand as:
What makes your offering different from the rest? What can you do to stand out from the pack? This article deals with the concept of product differentiation. It's a topic relevant to all businesses and a core marketing concept.
Competitors, as it relates to marketing, are companies that satisfy the same customer need or want. Someone in the market for a car wants “a means of transportation” - subways, buses, bicycles can meet that need. From a marketing perspective, the concept of competition involves a broad set of potential and actual competitors.
In this article, we turn our attention to situations where price changes might be needed and how to manage these changes.
Raising Prices
Successful price increases are can increase profitability significantly. This is especially true if profit margins are low. Let's look at a simple example to illustrate. Below we show how a 1% price increase can result in a 20% profit increase assuming sales volume doesn't change.
Promotional pricing can help stimulate consumer interest and early purchase. It can also encourage the hesitant or unwilling to go ahead and buy. Here we outline several promotional pricing techniques.
In this article, we outline some common pricing techniques and situations in which they might be used. We also discuss how consumer psychology, product quality and advertising can affect pricing levels. If you're unfamiliar with terms like "fixed costs", "variable costs" and "demand elasticity", it will help to take a quick look at our article on determining demand and calculating costs before reading this article.
What price point should you set for your products and services? This important and common question can better be answered by determining company objectives. Several common company objectives are:
Different prices for a product result in different levels of consumer demand. Assuming consumers are rational, increasing the price of a product results in a decrease in the number of consumers who are willing to pay that price. In other words demand decreases when price increases. Of course, the world is not a rational place and there are situations where increasing price can increase consumer demand.
It's difficult to over-stress the importance of customer satisfaction. Sustained profitability is only possible through building customer value and satisfaction. Profit comes as a consequence of building customer value.
As Henry Ford said:
"Business must be run at a profit... else it will die. But when anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence."
Marketing is a term we hear all the time, but what is it exactly? This article outlines some core marketing concepts.
Marketing Definition
The American Marketing Association defines marketing in this way:
“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”
The American Marketing Association defines a brand as:
What makes your offering different from the rest? What can you do to stand out from the pack? This article deals with the concept of product differentiation. It's a topic relevant to all businesses and a core marketing concept.
The Concept of Competition
Promotional pricing can help stimulate consumer interest and early purchase. It can also encourage the hesitant or unwilling to go ahead and buy. Here we outline several promotional pricing techniques.
