I will keep a constant check on my competition. I will monitor their progress and use their product life cycle to help me keep me ahead of my competitors. I will also keep a check on my own radio station-adapting it to suit my listeners. This would hopefully keep my listeners loyal to my radio station.
The price in my situation would be the price that I charge the companies who may want to advertise on my radio station. This would vary with the times that their advert would air on my radio station. At times when there are many listeners the price of the time slots would be more expensive.
My price would also vary on the frequency of the advert on the radio station. The more frequent the more expensive it would be.
My price would also depend on my fixed and variable costs, the money the radio station makes on the adverts will be the main source of income so this does have to be able to cover all aspects including paying off debts and the premises.
There are many pricing strategies that I could use in selling advertising space:
Penetration Pricing-is where my radio station could start with a very low price when the station is new, and is used to increase the interest from listeners.
Skimming-is when my radio station could charge a high price to make the time slots seem desirable to customers who have a larger income.
Destroyer Pricing-this is when my radio station could charge prices which they know are unprofitable for their competitors, driving them out of the market. However this is illegal.
Price Discrimination- this is charging different prices to different customers for the same time slot e.g. larger more known firms.
Competition Pricing- this is where my radio station could charge very similar prices as other stations. Usually this happens where there is very little product differentiation, for example there is very little that my radio station could offer as product differentiation.
The strategies that I will use will be a mixture of two of the above, I will use penetration pricing and competition based pricing. The reason I have chosen to use these types of pricing is because I want to be successful in my radio station, and if I start with penetration pricing I will hopefully get some well-known businesses to advertise on my radio station, as I will be aware that it could improve the image of my radio station.
I will use mainly competitive based pricing. I will only use penetration pricing twice in the whole day. I have used penetration pricing at the off peak times in the day. I want to do this so that I will not lose out on money, because at peak times I shall be competing with other radio stations. I want to build up a good relationship with my sponsors.
There are 3 aims of advertising:
Compete with other shops
Create a image
Currently in the biggest spender on this form of advertising, is the government this advertising is used to pass on information to the public. The passing on of this information is very important in any advert.
The washing power industry spends as much as the government on advertising, their adverts try to persuade the viewer that their products are much better then the compensation. Their goal is to attract people to buy their products.
I would need to invest some money into advertising my radio station for the following reasons:
To make customers aware of the new radio station
To persuade customers to switch from rival radio stations
The ultimate aim of these points is to make more people listen to the radio station.
The places I will advertise from depends on three things:
My target audience.
The size of my market.
The size of my advertising budget.
There are many ways in which I can advertise my radio station, here are some of them and their advantages and disadvantages:
Once that I have retained some profit I maybe able to use other mediums of advertising because most of them seem to be expensive. I shall be advertising in local newspapers, using leaflets and advertising outside the building where I have decided to set up my radio station, I have got permission from the landlord of the building to do so.
In my first month I predict that with all the advertising I want to I do I will spend GBP 236. I have done research into the advertising costs and the people I spoke to, Roubert Advertising, Barking, quoted me this price.
If I locate my radio station at a convenient place I can also advertise my radio station in that place and hence some of my advertising budget can be used to find a better place to set up my radio station.
I am thinking of setting up my radio station in Barking, when I did my questionnaire I found that the majority of people I asked lived in London, but I have done some research into building prices in the London area and found them to be way over my budget. Some of the areas I looked at were asking for more than GBP 5000 a month. That is well over my budget and there is no way I could afforded that. The second most popular place was Baking. I have done some research into the area and have found many vacant buildings and the rent prices are at a reasonable rate as well.
I have chosen to situate my radio station where the white arrow is. I have researched this area and have found out the rent costs. I have included the estate agents overall view of the building on the next page. I have discussed it with the landlord and we have agreed to pay him GBP 1500 a month plus a deposit of one months rent. We have chosen the 6th floor, it has wonderful views and the security is good being at a high level with the amount of technical equipment that we will have.