Holiday Work

Don't forget to complete the past papers for Buss1 and Buss2 Jan 2010!

See link Jan2010 past papers

Remember to practice chunky paragraphs!

MAKE CONNECTIONS USING EXAMPLES (DATA!)
USE CONNECTIVE STATEMENTS E.G. THIS MEANS THAT.........,, HOWEVER.....
MAKE LOGICAL ARGUMENTS USING STEPPING STONES

Scary Marketing Budget!

As predicted the internet went wild as Samsung unveiled its latest flagship handset, the Galaxy S4, at a glitzy event in New York. While the phone itself is certainly an improvement on its predecessor, it’s the marketing push behind it that will prove to be the mega blockbuster.

The marketing onslaught already began way ahead of launch, with the brand posting a series of teaser videos and graphics and even “leaks” online to build up excitement ahead of the big day.

And the big day certainly was big - it made Apple’s signature events look like a morning coffee meeting about paper by comparison. Samsung’s announcement was held at the humungous Radio City Music Hall, with the overspill crowd herded towards Times Square, where the company had erected an equally massive billboard. The day before, Samsung also assembled a smartly-dressed flash mob to perform for the New York City masses.

Of course it will be the next few days, weeks and months where Samsung really flexes its marketing muscle. Samsung spent about $401m to market its products in the US alone last year, compared with the $333m spent by Apple, according to Kantar Media.

Samsung will continue spending heavily on marketing in 2013 - it’s a strategy that helped the company overtake Nokia to become the biggest phone manufacturer in the world in 2012 and register record profit throughout the year.

Kantar predicts Samsung will spend $150m in advertising the S4 alone globally this year, compared with the $108m spent by Apple on marketing the iPhone 5.

Geoff Blaber, mobile device software research lead at CCS Insight, says its Samsung’s forthcoming “unrivalled” marketing campaign that will “deeply concern” the competition, rather than the actual device itself.

Marketing Mix (Place)

Distribution (Place) - Introduction

Source: www.tutor2u.net

Place (or its more common name “distribution”) is about how a business gets its products to the customers. 

It is one thing having a great product, sold at an attractive price.   But what if:

• Customers are not near a retailer that is selling the product?
• A competing product is stocked by a much wider range of outlets?
• A competitor is winning because it has a team of trained distributors or sales agents who are out there meeting customers and closing the sale?

Distribution matters for a business of any size – it is a crucial part of the marketing mix.

The objective of distribution is clear.  It is to:

To make products available in the right place at the right time in the right quantities

Distribution is achieved by using one or more distribution channels, including:

• Retailers
• Distributors / Sales Agents
• Direct (e.g. via e-commerce)
• Wholesalers

A distribution channel can be defined as:

"all the organisations through which a product must pass between its point of production and consumption"

Looking at that definition, you can see that a product might pass through several stages before it finally reaches the consumer.  The organisations involved in each stage of distribution are commonly referred to as “intermediaries”.

Place (Distribution) Powerpoint

Easyjet pricing

The low cost carriers have both penetrated and grown these markets, principally by garnering a consumer perception that the fares offered are very low.  This perception has been developed in no small part by extensive advertising and effective use of public relations.  For example, Ryanair has offered fares as low as one penny (plus taxes), and therefore it is not surprising that there is great media coverage of these carriers, which in turn generates more interest in the services.   Both Ryanair and EasyJet have been very effective in using media coverage of their legal wrangles with traditional carriers such as British Airways and Lufthansa to promote their services and low fares.  

Easyjet presentation

Pricing Strategies and Tactics

 

Posted in Business studies, The marketing mix

Businesses use a range of pricing methods when pricing a new product. Pricing strategies are used to achieve long term objectives for the business. Pricing tactics are used in the short term to achieve a specific objective.

Pricing strategies

There are 4 key pricing strategies commonly used by businesses

Price skimming

A product which is the first to enter a new market or new technologies will often use price skimming. This method involves pricing the product at a high price at launch, doing so allows companies to cover their research costs quickly. DVD players, XBOX and Plasma TVs are all examples of products which have used this strategy.

Penetration pricing

Penetration pricing is used typically used for products new to a well established market. Such a method involves pricing the product very low in order to gain market share and attract customers. New magazines will use this pricing strategy.

Premium pricing

A product which has a no or few competitors because the product has significant advantages may be priced artificially high in order to maximise profits. For example a flight on Concorde would have cost a lot more than a normal aircraft.

Price takers/Market price

This is where a product is priced at the same price as other products in the market. This strategy is used most commonly in food markets where all the products are the same

Pricing tactics

There are two key pricing tactics you need to be aware of:

Loss leaders

This is where a business will sell one of its products at a very low price, sometimes even at a loss. This is done in order to increase sells in other products which are being sold at a profit. This tactics is often used by supermarkets in order to attract customers into the store.

Psychological pricing

This involves pricing a product at a price which may seem lower than it really is. For example, car dealers usually sell cars at £15,999 or retail stores will sell products for £13.99.

Pricing

Pricing - introduction

Author: Jim Riley  Last updated: Wednesday 24 October, 2012

Marketing - What is price & pricing?

You come across the concept of price every time you buy something – whether it is in a shop, on the move or surfing online.

Price is:

• The money charged for a product or service
• Everything that a customer has to give up in order to acquire a product or service
• Usually expressed in terms of £ per unit

You can see from the above that price is not the same thing as cost.  

The price is the amount customers pay for a product.  The cost is the amount spent by a business making the product. However, as we see later, a firm needs to take account of the cost of production when setting price to ensure that it is making a profit on the products it offers.

The price a business charges for its product or service is one of the most important business decisionsmanagement take. 

For example, unlike the other elements of the marketing mix (product, place & promotion), pricing decisions directly affect revenues rather than costs.  

Pricing also has to be consistent with the other elements of the marketing mix, since it contributes to theperception of a product or service by customers.

Setting a price that is too high or too low will - at best - limit the business growth. At worst, it could cause serious problems for sales and cash flow.

So pricing is important, but it is really tough to get right.  There are so many factors to consider, and much uncertainty about whether a price change will have the desired effect.

Promotion

What it is
The ‘promotional mix’ is a term used to describe the set of tools that a business can use to communicate effectively the benefits of its products or services to its customers.
The promotional mix includes the following tools –

• advertising
  
• public relations
  
• sales promotion
  
• direct marketing
  
• personal selling
  
  Read the following article:
  promotionalmix.pdf