Marketing

Dealing with Competitors

The Concept of Competition

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.

 
 
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Raising and Lowering Prices

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.

 
 
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Promotional Pricing

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.

 
 
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Setting a Price

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.

 
 
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Pricing Objectives

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:

 
 
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Determining Demand & Calculating Costs

Product Demand

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.

 
 
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Increasing Customer Satisfaction & Retention

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."

 
 
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Essential Marketing Concepts

Marketing is a term we hear all the time, but what is it exactly? This article outlines some core marketing concepts.

Marketing Definition

Essentially, marketing means creating, promoting, and delivering goods and services to consumers and businesses. Marketing activities are not limited to products you buy in a store. The scope of what is marketed is (perhaps surprisingly) vast. Goods, services, organizations, people, places, experiences, events, property, information and even ideas are marketed.

 
 
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