However, direct sales can come at a price; you will need storage facilities or retail premises to sell your products directly. Shopping carts on the internet required a degree of Internet knowledge to pull it off and building consumer confidence can prove a tricky business.
Direct to retailer
If you don't want the expense of opening and running your own retail outlet to sell to your customers, then you might consider selling to existing retail outlets. This would obviously save your company a lot of money setting up a variety of retails outlets to cover areas regionally or nationally.
However, the administration behind running a system like this would be considerable. Firstly you would have to have a sales team to consult with the retailers on new products, price and promotion. You would also have to have a method of distributing to many small outlets in which ever region of the country you are selling to: this would cost a small business quite a lot of money and effort. The financial side also needs to be considered as you will have to administer a number of small accounts at the same time.
Wholesaler, merchant or agent supplier
you may, instead, decide to sell through a retailer or merchant supplier depending on the product you hope to sell. If you do decide to do this, you may loose some of your company identity. For example the supplier may request that your product be sold under the merchant or wholesaler brand name. You also loose contact with your end end consumer and so you will be unable to gauge or identify the subtle changes occurring in desire for you product as quickly as if you were directly supplying them.
However, selling to wholesalers or merchant suppliers takes off an enormous amount of pressure of distribution, as this will be done for you. In addition, you can also reduce the level of storage space necessary to hold stock. selling to larger organisation would mean more reliable income of capital and a more stable business for you.
You may decide to have a combination of all the distribution methods to maximise your level of distribution. Whatever, you decide you should consider the best method which you believe would work for you. Consider:
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Where do my customers live?
- What would be the easiest, cheapest and quickest way I could get my product to them
2. Price
Changing the product to reflect the product's life cycle is only part of the essence of a well balanced marketing mix, and so PRICE enters the second important consideration of the marketing mix. When setting a price on a range for your products, you need to ensure that you can recoup any overheads, compete with rival companies and charge a price your customers are willing to pay. To do this you need to fine tune your pricing policy and you could achieve this in a number of ways:
LossLeaderPricing
This involves lowering prices on a number of key products in order to attract a customer to purchase the products. Customers obviously like a bargain and like may be attracted to buy this item even if they had never considered purchasing this item before. Price reductions could be used to entice customers to look at your other products, and any profit lost might well be made up should the customer be persuaded to shop around and purchase other produces not reduced in price. Loss leader pricing might be used to sell off or stimulate interest in products considered to be in the maturity or decline stage of their life cycle.
Penetration Pricing
This type of pricing is used for products identified as being in the "introductory" stage of the product life cycle to enable the product to get a foothold in the market. Prices are artificially reduced to attract the largest possible audience. It is often used to prevent or discourage competitors from capturing the market and used for products that are mass-produced.
Price Skimming
Where Penetration Pricing keeps the pricing below the real market price, price skimming raises the price artificially to enable it to quickly recoup costs and for immediate profit. This type of pricing structure works very well for products that are in demand or where there are few competitors - electronic equipment for example. Caution has to be used when employing this strategy as competitors may well take advantage of these high prices and enter the market quickly with a realistic price thus stealing the market. Again this type of pricing strategy might be used when the product is in its growth stage in the product life cycle as demand is high and sales are high.
Differential Pricing
This involves allowing the same product to be priced differently; this can be justified when the product is sold in areas with differing economic climates, when sold through differing distribution channels, to appeal to a different market segment. For example, you could choose to charge a wholesaler less for buying in bulk than for an individual who only bought on single card. you could also decide to charge more for your card designs in London than you would in the North of England simply because the economy is more stable in London than in the North of England.
Promotion
The fourth part of the marketing mix refers to process of informing your customers of your company's products.
To make your customers aware that your products exist, there are a number of methods you may choose to use, they include:
- Media Advertising (television, magazines, Internet, radio)
- Personal selling (involving a sales person)
- Non-personal communication (persuasion advertising - competitions, free samples.
- Other promotional types include public relation exercises and free publicity.
Promotion needs to be carefully planned, and it is usual to decide on a new promotional plan each year. There should be one main objective to the promotion campaign and that particular emphasis should be projected during a certain time to a certain market segment.
Using establishes who are the best market segments to aim your campaign towards. The message of your campaign must be focused towards the and it must relate to the promotional objectives. Time your promotion, when and where is the optimum impact likely to be. Which promotional technique you decide to employ must have a bearing on how best you can reach this segment and which technique would best put your message across favourably. Here are a few techniques you might consider employing:
USE OF AN ADVERTISING AGENCY
The advertising agency consists of specialised people who are able to promote your campaign more effectively and can be called upon when needed to assist the operation without the necessity of having to employ full time staff dedicated to advertising within the business.
PERSONAL SELLING
Sales men selling to the customer on a one to one basis. Advantages being that questions can be answered straight away, problems can be sorted out at a personal level. The sales man remains with the customers case through to the completion of the sale.
THE PROCEDURE OF PERSONAL SELLING
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Determine what is to be sold
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Plan a programme
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Prepare a sales call (making appointments etc.)
- Record the interview
ADVERTISING
You will most probably produce a brochure for your business, but it is also a necessity for any operation to advertise their product.
Advertising can either be concentrated on the general image of the company or a specific product for example a special offer.
The main forms of advertising are:-
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TELEVISION
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RADIO
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NEWSPAPERS AND MAGAZINES
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TRAVEL TRADE PRESS
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VIDEOS
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POSTERS
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CINEMA
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EXHIBITIONS AND TRADE FAIRS
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INTERNET
It is worth noting that the higher the profile the more expensive your advert becomes. Television is the most costly and can cost thousands of pounds for only a few minutes, National Radio and newspapers are cheaper ways to advertise and the local newspaper is even cheaper still. The Trade Press is another good option when wanting to aim your product at a particular market.
Whatever you decide you must ensure that it will have the right impact on the customers you are aiming at. Conduct plenty of research; ask:
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Where do my customers "hang-out"?
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What would attract their attention?
If you can answer these questions you will have some idea what type of promotion that would be the most effective. A bad decision could cost you a lot of money with poor results.
Product Phases (life-cycle)
Products also go through what is known as a life cycle or phase. When exploring what mix is best suited to your product, you should also consider where in the life-cycle your products lie:
Introductory Phase
If you are releasing a brand new product or service then it will be a baby in the market and will need to be introduced to your market. How you price, promote and place this into the market place will need careful consideration.
Growth Phase
If your product or service has been enjoying being the only one on the market, you may have noticed that others are also joining in and entering a competitive product or service and this will have an affect of the healthy sales you might be enjoying at the moment. How you react to this will have an impact on the survival of your product - Will you drop the price to compete, will you change the way in which you promote it, will you change the distribution method?
Maturity Phase
If you product is one of many competing products, then you can consider that your product is a mature one. If this is the case then you have to take care that interest for your product is not lost. Maturity of a product is a dangerous time and it could get swallowed up by your competitors. As with a product in the growth part of the life-cycle - Will you drop the price to compete, will you change the way in which you promote it, will you change the distribution method?
Decline Phase
Perhaps you have noticed that one of your products is losing its appeal; sales or interest might have dropped. If this is the case, your product may be in decline and if you are not careful it may die. This part of the cycle need careful consideration. You might decide, enough is enough, and remove it from your shelves or you could re-invent it by changing by packaging or product name. Take a close look at your market research data - could you aim it at a different type of person?
Depending which phase you felt your products were at - introductory, growth, maturity or decline, you would be able to make further decisions at to what price to charge, where to sell your product and what type of promotion would be most effective.
The period that starts with the initial product specification and ends with the withdrawal of the product from the marketplace. A product life cycle is characterized by certain defined stages, including research, development, introduction, maturity, decline, and abandonment
is one of the marketing tools. The product life cycle can be used to examine the sales and profits a product or service is making, relative to the length of time in the marketplace
The conditions a product is sold under will change over time. The Product Life Cycle refers to the succession of stages a product goes through. Product Life Cycle Management is the succession of strategies used by management as a product goes through its life cycle.
Marketing stratergy
Strategy is the crafting of plans to reach goals. Marketing strategies are those plans designed to reach marketing goals. A good marketing strategy should integrate an organization?s marketing goals, policies, and action sequences (tactics) into a cohesive whole. The objective of a marketing strategy is to put the organization into a position to carry out its mission effectively and efficiently.
Marketing starts with market research, in which needs and attitudes and competitors' products are assessed, and continues through into advertising, promotion, distribution, and, where applicable, customer servicing and repair, packaging, and sales and distribution
the broad marketing thinking that will enable an organisation to develop its products and marketing mixes in the right direction, consistent with overall corporate objectives.
Quality
to be at a high degree of excellence; something that is good or well done
Brand name
A name or symbol used to identify a seller's goods or services, and to differentiate them from those of competitors. Because a brand identifies a product's or service's source, thus protecting against competitors who may attempt to market similar goods or services, companies have an incentive to invest in the quality, consistency, and imagery of their brand. Branding dates back to ancient times, when names or marks appeared on such goods as bricks, pots, ointments and metals. In medieval Europe, trade guilds used brands to provide quality assurance for customers and legal protection for manufacturers.
Packaging
The packaging is the outer wrapping of a product. It is the intended purpose of the packaging to make a product readily sellable as well as to protect it against damage and prevent it from deterioration while storing. Furthermore the packaging is often the most relevant element of a trade mark and conduces to advertising or communication.
Socio economic grouping
Definitions of Socio-Economic Groupings
A Professional people, senior managers in business or commerce, top civil servants,
and retired people previously grade A and their widows
B Middle management executives in large organisations with appropriate qualifications,
principal officers in local government, civil service top management or owners of
small business concerns, educational and service establishments, and retired people
previously grade B and their widows
C1 Junior management, owners of small establishments and all others in non-manual
positions, and retired people previously grade C1 and their widows. Jobs in this
group have very varied responsibilities and educational requirements
C2 All skilled manual workers and those manual workers with responsibility for other
people, and retired people previously grade C2 with pensions from their job and their
widows
D All semi-skilled and unskilled manual workers, apprentices and trainees to skilled
workers, retired people previously grade D with pensions from their job and their
widows
E All those entirely dependent on the state long-term through sickness, unemployment,
old age or other reasons, those unemployed for a period exceeding six months
(otherwise classified on previous occupation), casual workers without a regular
income
Marketing
Marketing is the process that identifies, anticipates and satisfies customer requirements efficiently and profitably
Marketing involves a number of business activities, including market research, product design, pricing, advertising and promotion, costumer service, distribution and packaging and after-sales service.
Marketing objectives: aims that a business hopes to achieve through its marketing action, e.g.
Marketing plan: this document setting out the strategies by which a business will achieve its marketing objectives. The plan will include details of target markets, advertsing and promoto
