Trig Point Marketing and e-Commerce Consultancy
10 Mill Road
Westtbourne, Nr. Chichester
Sussex, UK, PO10 8TH
Email: dave@trig-point.co.uk
Phone: +44 (0)1243 374559
Mobile: +44 (0)7834 32 40 31
Trig Point Marketing and E-Commerce Consultancy
Welcome to Trig Point Marketing Consultancy, providing Marketing Support and Consultancy across the South East of England including Sussex, Hampshire and London our specialism being Marketing Strategy for SMEs. You can now follow us on Twitter, where Marketing Strategist Dave Cousin will be giving his latest thoughts on Marketing and keeping you up to date with all new news and developments on this site.
Trig-Point’s New Site is here
If you are thinking our new site looks a lot like the old one well that’s the idea but now it has actually been converted to WordPress. Having working with WordPress on other sites for clients and recommending it to others it is time we got WordPressed ourselves.
Hopefully a WordPress site will mean more new content and comment more often as we now don’t have to edit the site in Dreamweaver and upload every time. I am also determined that this will be a new start with our SEO, we know what we should be doing but often find ourselves too busy doing it for other people.
The content we will be adding to the site is meant to be information you can actually use so if there are any ideas you have for Marketing articles you would find useful then please do e-mail your ideas.
Dave Cousin’s Marketing Philosophy
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Dave Cousin’s Marketing Philosophy
Article
A new business starts from an idea to offer a product or service to a group whom one believes demands this product at a price where the business can make a profit, this is marketing at its most basic but also its most important, if you can’t show that people want what you are offering then stop right there.
Marketing is far more than just promotion, as some people suppose, Marketing is about forming a full offering which people demand and from which you can derive profit, this profit should ideally be more than you can make with another offering although other factors such as running a business that those running it will enjoy, however this is secondary to making an offering from which you can at least break even.
Having mentioned that if you cannot show that people want what you are offering then do more research or try something else, far too many people start from the wrong point, either ‘this is a business I would enjoy running I will worry about marketing later’, or ‘this is a business I can afford to setup I will worry about marketing later’.
The offering you choose is made up of the marketing mix and until you have this right you can’t move ahead you may find after research that there is no way to make a suitable offering so ideally you need to know this before investing in setting up a business. Good Marketing Planning and decent Market Research can significantly minimise risk.
To start you should have an idea of what you are going to offer and you will need a unique selling point, it could be a whole variety of things giving you a competitive advantage such as that you have a new manufacturing technique allowing you to offer a better product or a cheaper product, it could be that you have an idea for a unique advertising campaign or it may be that you will be the only business offering a particular service in a particular location but there must be something. From here you will have an idea of who your target market might be, though this may need further research.
The marketing mix should generally come from analysing a target market and trying to offer them a product they want at a price they want to pay at an outlet they are happy to use promoted in a way that will ensure they make a purchase, or in some cases another most wanted response. This is the same for B2B and B2C and for services though with a few extra considerations.
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Ten questions to consider before setting up an e-commerce store:
Article
There is a lot to consider when setting up an e-commerce business or taking an existing business online but these are some of the initial areas to consider once you have a basic idea of what you are selling. You may be unable to answer all of these questions but we hope the extra information will help you as well as some of our other articles.
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Do you have a competitive advantage or unique selling point? This could be something like an exclusive product, a product not sold online, products available to you cheaper than your competitors? You need to have some reason why people will buy from you and there are a number of ways you can do this; it can even be a mixture of advantages not available elsewhere such as being the only site to offer a particular product to offer next day delivery and to offer gift wrapping. It could also be something very simple such as having a quicker and easier site to use than your competitors
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Is there demand for the products you are going to offer, or more importantly sufficient demand at the price you can offer to break even? New products can be particularly difficult as can your own products to predict without carrying out research. A lack of competition can be good but can also indicate a lack of demand. Another potential pitfall is to research and find that there is demand for a product but not check what people are willing to pay and find your unable to make sales at a profitable price.
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How will you promote yourself? Will you depend purely on online promotion? Bricks and Mortar stores with an online store as well will have an advantage against purely online stores because of the reassurance this will give customers but offline promotion can help purely online stores seem more reputable. Also offline promotion will help you reach a slightly different audience. Your decision should depend partly on your target market and of course your budget, online promotion can be very good value if you use it effectively and much of it is purely effort driven.
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Will you hold stock or depend on Direct Despatch where suppliers will send products directly to your customers? (at a cost). Most suppliers don’t offer Direct Despatch and issues of Direct Despatch include the charges which can be expensive, you have to rely on suppliers keeping you up to date on low stock and product discontinuation, you may be unable to send out products on next day delivery, you will need to rely on your suppliers to send products out quickly and be easy to contact. However there are of course many costs in holding stock especially if you only have an e-commerce site,the main costs being space and having money tied up in stock there will inevitably be an opportunity cost to this and a risk that your stock may not sell or will lose value.
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Will you offer a high level of customer service for at least 9 to 5 Monday to Friday or try to get away with shorter hours or relying on e-mail? Having a customer service number gives security to shoppers online and you may lose sales where customer have questions they want answered quickly.
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Will you sell to your country only or sell continent or world wide? Of course many e-commerce stores start aiming at one country and then expand often starting with big markets such as the United States or countries with the same language. In the UK many e-commerce stores will also send to Ireland where the proximity means that postage costs don’t make products uncompetitively expensive.
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Will you use an off the shelf website or have one designed to your needs? The most obvious difference is the price, bespoke websites can be very expensive but some level of bespoke design can be bought for less than you might think from designers who reuse some of their code but can add to it. A bespoke site can give you some uniqueness and be designed to suit your target market, for example if you are aiming at a group who are likely to be less experienced web users you may want a very simple website. Off the shelf sites do often have the advantage of free upgrades to the software and generally follow accepted web design concepts meaning the site will work in a way that customers are used to from other sites, for most customers this is a good thing of course and usability should be top of your priorities in almost any case.
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Which payment provider will you you use? Paypal is simple, a well recognised and trusted brand but also fairly expensive plus transfers to your bank account are slow and you are likely to have to keep a reserve in your Paypal account. Your Bank is unlikely to provide you with web payment services unless you have some history of trade with them. Worldpay is another option as is Google Checkouts which is similar to Paypal.
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Who are your competitors? Some of your competitors may be very obvious, people with the same or similar products. However these competitors may not be as important as you think if they are aiming at a different market, for example you may be aiming products at the gift market where a competitor may be aiming at the homewares market, they are a competitor but then so is a site selling different products but also aimed at the gift market especially if they are at the same price, using similar promotion or suitable products for the same end user.
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Are your products suitable for sale online? This breaks down into three main questions, firstly will it be practical to post them? They may be fragile, heavy or large making postage very expensive, though from experience some products surprise you, consider the potential postage cost as a percentage of the retail price, products that are cheap but expensive to post are the biggest problem. Secondly consider whether they are products where there is likely to be a large number of returns such as clothes, especially shoes, you may have to refund costs including postage costs and you may end up with excess stock especially after Christmas when items have been returned. Thirdly how easy is it to view the product online; some impressive products may not appear as impressive online and some products may have more of the value in tactile rather than visual qualities. Using multiple pictures, videos and interactive 3D images can help here. Descriptions can help but often if the main images doesn’t impress: people will not consider the product any further.
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Also make sure you are aware of the Distance Selling Regulations in the UK or the equivalent for your country or area and understand what they require of you. Your duty to accept returns for example may effect your potential costs.
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Pricing Strategies from the multinationals that can be used in your business and any business
1, Price Skimming using a Premium product: Hardback Books.
Price skimming is a strategy used by many producers and retailers, as is charging a premium for a premium version of a product and the two are often used together. This is the case with book publishing and a way to avoid under-charging those who will pay more.
To the consumer electronics industry they are known as ‘early adopters’, those who want a product as soon as it comes out and are not very Price Sensitive, meaning they are less affected in their buying decisions by price. They exist for publishing as well and probably do for your products, in publishing there will be those people who want a book as soon as it comes out and often this will be the hard back version., for example many Harry Potter fans will buy the book when it comes out without considering the price.
Which may be 15.99 for the Hardback with the soft back coming out later at between half and two thirds of the price.
The fact that they are buying a premium version of a book, the hard back rather than the later released and cheaper soft back, has two main advantages. Firstly it helps the buyer justify the extra price for buying the product early whereas if they could get exactly the same thing six months later at a lower price they might not be able to justify it. Secondly charging a high price for a product at launch and then drastically dropping it can make a consumer feel they have been coned and affect their feelings towards a brand the extra perceived value of the Hard Back means they consider it worth more than the cheaper paperback, although the extra costs to the publisher will be a few pence.
With the skimming strategies used elsewhere, for example with electronics prices for the same or very similar products can drop drastically for example early flat screen TVs could cost amounts in 5 figures whereas now you can pay less than £500 for a comparable or better product. This stops many being early adopters who wait for the same TV to come down in price. Offering a slightly different product, even if it is just a cheap to manufacturer hard cover, a limited edition colour variant or a free goody bag, can avoid this problem.
If you are launching a new product think about using price skimming where those who are not price sensitive pay more for being early adopters, this obviously works best for products with some uniqueness to them, for example if you have a product such as a piece of software which can save time for those using files on different computers, some professionals may see the value instantly and be early adopters who will not be concerned by a high price, others may expect the price to come down or expect competitors to offer similar software cheaper in the near future, by making the initial product a premium version with extra features and showing a normal version to come soon this may negate this problem.
This strategy can work for services as well, for example if a Tanning shop has a new spray tan booth and it is the first of its type in town many customers will want to be among the first to try it for prestige reasons as well as out of interest. With the tanning lab you could offer an extra to make it seem more attractive at a high price such as a free robe for every user during the first month.
Please let me know your thoughts on this article. Next time:
Offering great value prices without damaging your brand with lessons from Pizza Express.
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Pricing Strategies from the multinationals that can be used in your business and any business
Article 4 Penetration Pricing: Not for everyone the inherant risks and what to consider
This Series of articles has been aimed at showing how small businesses can use some of the same pricing strategies as the big multinationals, in all cases the strategies may not work for everyone but this is particularly the case with this Pricing strategy: Penetration Pricing.
Penetration pricing though certainly is used by those who can afford it and if you are competing against much bigger companies it may be as well that you are aware of this tactic and can keep an eye out for its use.
Penetration pricing is an offensive strategy and I don’t mean that it offends people, though it might, but that it is about attacking a market and carving out a share usually at the expense of competitors sometimes even to specifically remove competitors, at which point it becomes predatory pricing which the office for Fair Trading may have something to say about.
As a new company or with a new product or service in a new market Penetration pricing may be right for you, you see it all the time, often as an introductory offer and this shows Penetration pricing in its simplest form, a company launches a product and sets the price to say 99p to make it cheaper than its competitors though its normal retail price may be say £1.99 and this is usually shown, partly to show that it is a more expensive product and to show people that they are getting a good deal, this is often enough to make people switch from their usual brand at least to trial the product which they may also have seen advertised backing up its credentials. The hope is that people will prefer the product and continue to buy it when it goes back to a normal price therefore taking market share away from people’s previous preferred brand. So the first thing to consider if following this method of using a short-term introductory price is whether your product is good enough that people will switch to it long term otherwise it can become an expensive failure if people buy your product while you’re making a loss on it and then don’t continue to buy it once the price goes back up.
However there is another advantage that shouldn’t be ignored, getting distribution, shops particularly big supermarkets will expect some kind of special offer before they will give you shelf space and may expect regular offers to keep your products on the shelves, they will also expect you to absorb most of the costs so they still get a good margin though you may be making a loss; again if you have done your research and know that people will continue buying your goods then the supermarket will probably continue stocking it if having your products on the shelves is bringing in a better profit than a competitor’s, it is most obvious with supermarkets who have tremendous power but the same goes for a local cornershop looking to make as much profit as they can from their limited space.
Getting into penetration pricing can turn into a price war with competitors so know who your competitors are and know how deep their pockets go, of course if you are only looking to grab a small part of a big market you may be ignored but if you are competing directly with a competitor consider what will happen if they can keep their prices lower for longer, this is most likely to happen in a oligopoly or duopoly, for example lets say that in a small town there is one fish and chip shop with a monopoly they can therefore charge prices that give them a good margin and are making great profits (known in economics as supernormal profits), a local businessman becomes aware of this and opens a second fish and chip shop and charges 50% of his competitor’s prices to encourage people to try his fish and chip shop if his product is just as good then in theory everyone will come to the new shop though there may be some less price sensitive customers who find the first shop more convenient or are loyal to the owner, either way though the first shop’s owner has to drop his prices to the same or lower than the other shop even if this means making a loss and soon you have a price war where each shop owner is desperate to put the other out of business before they are put out of business themselves so if you really want to start a price war make sure you can finish it, of course if you can then the supernormal profits of a monopoly may await you as may a review by the OFT if your big enough to be noticed. In some cases a price war can end in a draw, with the Supermarket bread-wars of 1999 Bread sold as a loss leader got to as cheap as 7p per loaf as supermarkets battled to get customers through the doors but eventually this came to an end and prices slowly began to rise again.
In the US Wal-Mart aimed to get people into their store by selling a gallon jar of Pickles for $2.97 but it was the pickle manufacturer Vlasic who suffered as Wal-Mart pushed their margin down further and further. Having become reliant on Wal-Mart they had no choice but to carry on supplying and came out the other end with a devalued brand and later, with other contributing factors, ended in Bankruptcy proceedings; so be aware that penetration pricing may get you the distribution you crave and a deal with a major retailer but are they going to be happy when you double the price and force them to slash their margin or put up the retail price.
At this point you may be wondering why I am even telling you about Penetration Pricing seing as I seem to have such a low opinion of it I do hope to protect you but you may be well suited to using penetration pricing, as I mentioned if you are entering a market where you only need a small share then it may work for you and not lead to a backlash from competitors as long as they don’t see you as a major threat. Short Term Penetration pricing which is marketed as such is also less likely to rile competitors as it is only a short term problem for them and it may be the quality of your product they are more concerned about.
Free samples are in a way a type of penetration pricing and unlike with changing the price of a product it is alot easier to control the quantity of free samples, people won’t expect you to have an endless supply, though using a limited time offer for a product or service at a lower price can also help control your exposure to loss. Free samples are easy to try and withdraw whenever you like as long as you don’t make a commitment to a certain number of free samples, though this is a good call to action, if its not working for you and people are just getting what they can for free then stop it. Free samples work great for services as well often when there is little opportunity cost, e.g. free consultations at a time of year when business is slow and you have lots of time to spare.
Penetration pricing isn’t purely for new market entrants, established companies may bring out new brands or variants and use penetration pricing on them, for example a washing Detergent maker may have a product which has a new formula and penetration pricing may be used to encourage people to try the new version more often than not this, a reason why a product or service is worth giving a try when you haven’t before or have moved away from it before plus a low price can be a winning combination you may even be able to get some PR off the back of it so think about how your products or services can be easily improved, be it better materials, quicker delivery or turnaround times or the fact that you or your staff have just been on a course and can now offer a better service.
Penetration pricing is about quickly getting a foothold in a market, so what if it is a brand new market with no competitors? if you have unique products or services then you may be able to set your prices high if the benefit is obvious, try reading more about price skimming in my other articles, however it may be that you still need to get people to try a product, Calgon tablets help to avoid limescale build up in your Washing Machine and Dylon’s Colour Catchers stop your colours running in the wash but both used introductory prices to get people to try the product and give them the chance to see that they worked but with a lower risk. With unique products you must also remember you are still competing for a customer’s limited cash against other unrelated products particularly if it is a luxury it may be that you are offering a new fun but non-essential gadget then you may be competing against other gadgets aimed at similar demographics or even against things like a night out which people could spend their disposable income on. Think about limited time offers and other calls to action to encourage people to make the most of your cheap price and try and make your offer seem like good value.
When choosing a Price for market penetration you will not want to set it any lower than necessary but remember that you need to make it worth while for a customer to switch to you because if your product or service turns out to be worse they can loose out you need to lower their exposure to risk sufficiently, test marketing can help you set a price in some cases and there are many reasons to test a product or service on a small market before a full launch. It may be that you don’t actually have to make a loss on your products or services when setting a penetration price at least not on the cost of goods but if you do it is best to consider them as Promotional costs and consider if the money would be better spent on advertising, or another area of Marketing spend.
Fishman.C(2003) http://www.fastcompany.com/magazine/77/walmart.html
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Article 3 Using Multiple Brands at different Price Points: with examples from Sony, Ford and Tesco
This article is mainly concerned with using different brands or sub-brands at different Price Points in order to capture different sectors of a market.
Within a company there are often various brands: some of which may be related and some of which may have little relation such as at Procter and Gamble who have diverse brands including Pringles, Duracell and Gillette, there may also be sub brands such as with Nivea which includes Nivea for Men and Nivea Lip Care ranges.
Separating brands out within a company’s range has advantages but there are also advantages to having a number of brands associated or using the company’s name as a brand covering all the different brands it has.
Which option to use depends a lot on the similarity of the products, the different brands that Procter and Gamble have don’t necessarily benefit from the same brand values. Many of the brand values associated with Pampers nappies may have no value or become negative when associated with Pringles crisps. A company such as Heinz on the other hand which just produces food has brand values associated with the Heinz brand which add positively to the whole range.
One area of a brand can be the associations with quality and value that it has and therefore the brand can affect the perceived value and quality of a product upon launching a new product; for example a range of Heinz sauces, can by using the Heinz brand instantly communicate to the customers that the sauces will have the same high quality as the rest of the brand and they can therefore command a higher price. This strategy works very well assuming that this new product is as good as the rest of Heinz’s products however if the quality was lower than customers expected this could damage the entire Heinz range of products as people would start to loose the assumption that all Heinz products were good quality.
In some cases a company may want to have some products which are lower quality on offer and different companies approach this in different ways in terms of how they brand their product.
Our first example is from Sony, the Sony brand is known for being very high quality and all products branded as Sony are kept at a high quality to maintain this brand value, they therefore can continue to ask premium prices for Sony products. However the premium end of the market for electronics is only a certain size and is competitive; the middle and cheaper end of the market is valuable so when Sony took over Aiwa which was already more of a volume producer they kept it aimed at a different point in the market, the products weren’t as good quality and weren’t usually as advanced and featured, they tended to be of a good quality still though, and were aimed towards the middle of the market in terms of price points and quality. In the 2000s Sony’s own brand started to be less defined in order to be more competitive across more sectors of the electronics market and Aiwa suffered from poor sales it is likely that a more overt association with Sony would have boosted sales of Aiwa products but Sony avoided this worrying that it would damage the Sony brand and also perhaps cannibalise sales.
Ford Motor Company uses a similar strategy and owns several car brands; in the United States Ford has three separate brands: Mercury, Ford and Lincoln.
Mercury was setup in 1939 when Ford had already bought Lincoln which had become its luxury brand with Ford in the middle and Mercury originally as an entry level brand, their separate marketing aimed them at different market sectors. Since the 30s and 40s each brand has developed to some extent separately keeping separate brand identities with Mercury becoming a ‘near luxury’ brand with Ford aiming more at a lower priced area of the market.
Supermarkets such as Tesco take a different approach to having brands at different price points and use their main brand across all own brand product but also have sub-brands with different associations in terms of the price and quality customers expect from these brands.
Tesco have three main sub-brands aimed at different price points they are the Tesco Value range at the cheaper end of the market, the Tesco Finest range at the high end of the market and then standard Tesco products which have no specific brand name but simple carry the Tesco brand name. All three are established and regular Tesco customers know what to expect from each range, often there will be products with three variants one in each range. Tesco carefully manage all brands to avoid damage to the main Tesco brand where one major brand value is ‘Value for money’ therefore products in all ranges must be good value as well as meeting a minimum level of quality even within the Tesco Value range, where the product will be fit for purpose and aimed to meet the expectations of the purchaser who will be conditioned by the price they have paid.
Supermarkets such as Tesco with their value and finest ranges and Sainsburys with their basics and Taste the Difference ranges mean that customers are now used to having options from the same business but at different price points, this means that if within your business you market a ‘Simple Quality’ or ‘Cut above the rest’ range customers will know what to expect therefore the customer can easily select the product they want based on what they need and can afford, a customer coming to your shop and looking for, lets say in this example, high quality velvet curtains upon seeing basic cotton curtains marked up as ‘our value range’ will understand that that is at a separate price point rather than assuming than the shop they have walked into offers poor quality items at low price, likewise the customer looking for basic cotton curtains won’t walk into a shop and assume it is aimed at people looking to spend more than them if they understand that the expensive velvet curtains are part of a more expensive range.
Having different ranges then works well if your primary brand value is Value for money but if your brand is all about low cost or is all about very high quality and high costs but you want to move into another section of the market then having separate brands may work for you though you may not benefit from the same economies of scale and some costs such as promotion can double. If you have a shop or other retail establishment it may be necessary to have two premises for two different brands.
In Eastbourne, Sussex, where Trig-Point Marketing is based, there are two restaurants next door to each other: both Italian restaurants, one aims at the lower to middle of the market in terms of price the other is more up market however both have the same owners and a shared kitchen. The clientele are different however expecting different quality food at different prices, there is therefore in this case little cross over or cannibalisation of sales between the two and the two brands can share costs still, therefore this strategy works well for them. Having two separate brands would also be likely to work well for manufacturers who can produce similar products in the same factory but aim them at different points in the market using different brands at different prices.
In the case where there is little saving in having two brands under one company the case for using this strategy is diminished but can still be a good strategy if you are an expert in a field and would like to help yourself to more of the total market without damaging what you already have.
This article was written by Dave Cousin of Trig Point Marketing Consultancy-helping you take a step back and look at where your marketing strategy is taking you.
Next time: Pricing low and charging for the extras: with examples from Easyjet.
Pricing Strategies 2, Mass market pricing for Premium Brands: With examples from Pizza Express
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Pricing Strategies from the multinationals that can be used in your business and any business
2, Mass market pricing for Premium Brands: With examples from Pizza Express
Price affects people’s opinions of brand often they won’t be aware that they are making the connection but they are. Low prices generally mean low quality in the consumers mind, often price is the only way a consumer has to gauge what the quality of a product or service is.
Businesses spend huge amounts building brand values and having their products or services sold at a low price can damage this. As such many businesses won’t sell to businesses which they think will offer low prices and so won’t supply for example people selling on ebay or to Supermarkets. Levi refused to supply Tesco with their Jeans fearing they would cut prices using them as a loss leader, Tesco bought Levi jeans on the Grey Market instead (from excess stock from another business), and sold the Jeans at £30 compared to an RRP of £ 55 Levi took legal action against Tesco [1].
There are many ways around the problem of having a premium brand but wanting to compete on price with competitors, constant or frequent special offers for example, consumers will be aware of the normal or recommended retail price and gauge the quality of the product on this however the discounted or offer price will mean that there is little difference in price between it and other lower quality brands meaning most consumers will buy the better quality brand at the same price or only slightly more than another brand therefore feeling they have got better value for money.
Pizza Express use these kind of strategies almost to perfection. Pizza Express have a premium brand when compared to places such as Pizza Hut, Pizza Express is seen as a ‘proper restaurant’ with decor and service to match, this does have an extra cost compared to Pizza Hut and the quality of the ingredients will also be slightly higher, however these costs are fairly negligible.
If you look at the Pizza Express menu the prices are higher than Pizza Hut and reflect the brand values, this also allows for Price Skimming as those who are not Price Sensitive will pay these prices. However Pizza Express almost constantly have offers available that bring prices down to a level where they are similar to the prices of Pizza Hut etc. Consumers are now getting to use a premium restaurant for the same price as what they perceive to be a lower quality restaurant. Furthermore the fact that many of the offers are available through quality newspapers such as the Times gives further positive associations to the brand and the fact that the offer is available to the consumer only through having bought the newspaper means they feel they have in fact paid for this offer so that they feel more inclined to use it and are less likely to assume that if Pizza Express are giving an offer they must be making too much profit, many will assume the newspaper has had to pay Pizza Express for this offer for its readers.
So if you own a restaurant the way to use this strategy is quite clear, if you have the one restaurant or a localised chain you may want to use offers in local newspapers, varying the offer and discontinuing for periods of time will help stop consumers becoming wise and associating your business with being a discount brand. Similar strategies can work for other services as well though from Dry Cleaning to Car Servicing.
Also try using offers that aren’t so obvious half price and buy one get one free can work but consumers associate them with the constant special offers in supermarkets. Special offers such as a free starter or desert with any main course or get four tyres and only pay for three are still discounts but without negative associations joined to them.
These strategies can work for products as well and for retailers, a shop which has a premium brand can use exactly the same strategy to compete on price with competitors, for example an independent butchers with a premium brand will have to compete with the supermarkets, the products the butcher offers are likely to be more expensive and the level of service will be higher so there will be limitations so they may need to focus on offers for products where they can afford to drop prices or offer different but comparable products at low prices, it is also important to remember that the premium brand may not need to drop prices quite as low as the lower quality brand: many consumers will choose based on value rather than price, so the butchers rump steak at £15 per kilo reduced from £18 per kilo may be seen as better value than Tesco’s rump steak at £13 per kilo.
Please contact me, Dave Cousin with any thoughts and queries via my website at www.trig-point.co.uk
Next time I will be looking at using multiple brands at different price points with examples from Tesco and Sony.
[1] Information on Levi and Tesco taken from: Brassington ,F. and Pettitt,S(2003) Principles of Marketing. 3rd Ed. Lombarda, Italy : Prentice hall
Blogpost: A desk covered in brands
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Making the most of B2B promotional Items
I have been doing some work with promotional items recently including being at some tradeshows where I have both looked at and received a large amount of Promotional freebies.
I do agree that the idea of being able to give someone something they then see and use every day is fantastic but it can be difficult to stand out: inevitably it costs more usually for something a bit more impressive and a bit different.
If you are selling something that people may choose from their desk or where they are likely to go online to look for more info then stationary and desk items are the best perhaps.
This can be for both B2C and B2B but mainly it is for B2B brands and especially services.
My desk though has a multitude of drinks mats, none of which are able to get the message across well enough that I could tell you what they are for: except the one for Guinness. My Mousemat though is good the extra space means the brand have been able to do more and the yearly planner on it means I do actually look at it.
What about pens though? Brands love them because they are cheap but I have fifteen branded pens in my pen pot: mainly for lawyers it seems but there is no room for extra information to tell me more: for reinforcement they could work but not for brands I don’t understand the values of or what they do. At least if you give out a branded parker pen instead of a biro it says your brand is classy and high quality.
I am not saying give out branded toys and knick-knacks instead: they often get given away to someone not being targeted or simply thrown. Do if possible give away something somehow related to your business though with a big enough surface area to get some extra information on what you do across. Mugs are among the best I would have to say, though you can often get across your message much better with a slogan, a joke or even a cartoon than sales copy upon one.
Price Skimming Video Podcast
Self promotion: a one day hands-on, on-site course or attend a half day seminar ,
Taught by Dave Cousin this course will show your entire organization how everyone can get involved in promoting your business cheaply and effectively on a daily basis.
Dave can either spend a day with you at your company giving you specific advice to suit your business or we will be holding a seminar in the near future where Dave will aim to give you the information you need to go back to your organisation and roll out a culture of everyday promotion by all.
As a marketer we must not assume the objective is always profit
Richard Branson has been whipping up some PR by talking about how businesses should work to create jobs rather than focusing purely on profit. That is a nice idea if you can afford it and I am sure he is mainly aiming at big multinationals: however it is important to remember that a business’ marketing objectives aren’t always profit.
Many SME owners setup a business to be a lifestyle business; I find they often tend to have too little consideration for profit and have no flexibility if things go wrong. As long as you do consider making a profit first but worry less about how much of a profit though you can potentially build a nice business that you don’t have to work too hard at.
Turnover is sometimes more the objective than profit, often this is the case when you are building a business to sell and customers and volume of custom are what is going to be valuable to a buyer more than profit.
Increasing volume in order to employ more people or have a bigger more valuable business though is another slightly different objective that is common in medium sized businesses and shouldn’t be ignored.
Different marketing objectives first and foremost need a different approach to price and in turn a different approach to a business’ entire value chain.
Repositioning an offering as a mass market low cost option may make a business less profit but increase volume. Moving the other way may give businesses a premium brand that they feel proud of and allows them to follow philanthropic objectives such as giving a percentage of sales to charity or ensuring that they buy from ethical providers.
It is important for marketers to make sure they are clear on the marketing objectives of a business before doing work for them; it may also be necessary to help a client become clear what thier objectives are and make sure marketing objectives aren’t so disparate that it is impossible to achieve both at the same time.