Make sure you really understand what makes your company stand out from the competition. For example, when Lululemon was first established, they were looking for a name that was attention-grabbing and that people would remember. They also wanted something that had appeal around the globe. Their made-up word, with three l’s, helped them to stand out.
If you read Seth Godin’s book We Are All Weird, you’ll read about a shift where instead of always trying to appeal to the masses (and an average consumer), it makes good business sense to pay attention to the diversity present in the marketplace and offer choices that reflect the people we are actually marketing to.
Whether you are a for-profit, non-profit, or not-for-profit company, you have to be making money in order for the business to flourish. This means that no matter who you are, you need to understand every aspect of your business when establishing price. If you forget to allow for certain costs and sell the product at a loss, your stakeholders won’t stand for it.
On the other hand, some products are deliberately priced at a “deal” price (also known as a loss leader) to draw people in to the store where they will be sold other products. A car can be priced below cost, but by the time that the extended warranty, roadside service, fabric protection, and chrome package are added, there is no loss for the company any longer.
Psychological pricing is what has stores using prices that end in 95 or 99 cents. The idea is that people will pay R39.99 for a product they won’t pay R40.00 for.
In a competitive market, you will see marketing strategies that will meet or beat a competitor’s price in order to gain (or regain) market share. If you visit a website or pick up a flyer and see the phrase, “We will match any competitor’s advertised price and beat it by 5% on all our products,” you are witnessing meet or beat competition in action.
Price and quality are things that must always be considered in pricing services and non-tangible products. If you have a service and price it very cheaply, people may not value what you offer in terms of the knowledge and expertise that is required to develop that service. Make sure that you are doing sufficient research.
Penetration refers to introductory pricing that is deliberately low in order to gain market share. The idea is to price products at a low per unit amount and then sell a high number of units with the objective of gaining recognition in the market.
This is all about how you will distribute and provide your product. Your analysis of distribution channels will help you flesh out this part of your plan. Will you be a wholesaler, distribute products through a franchise, have brick and mortar retail outlets, or be an online-only store? You can also choose several methods to create a big presence. Leveraging social media can help you to create a large “place” with or without having an actual physical presence.
Promotion refers to the way that the market sees your product. It is very difficult to get shelf space in a retail store, so you have to decide how you will draw your potential purchasers’ attention. Pizza shops might send staff members to stand on the corner with a sandwich board describing this week’s deal. Cupcake stores might have someone dressed in a giant cupcake costume waving to passersby. Coupons, flyers, newsletters, banner or pop-up ads on a website, and special deals are also part of a promotion strategy.
Public relations campaigns can also be used to promote a product. Internet marketing is another form of promotion that can use programming and keyword techniques to ensure that a search for products like yours will lead to your company’s website.
The esthetic value of your packaging can draw a customer’s eye or can turn them away. Designers and marketing firms aim to create the best packaging possible to attract consumers or at least create some kind of reaction. In addition, items must also be packaged in a way that protects the contents. Cardboard boxes, protective materials (like Styrofoam), labeling, color, and appeal must all be considered to present your product appropriately and protect it from damage.