Tag Archives: marketing

Power of Word-of-Mouth (WOM) Marketing– Its All About Buzz: Holy Grail of Any Organization…

Word-of-mouth (WOM) is the holy grail of marketing. It’s a source of easy promotion and it comes from the most credible source possible; a super-satisfied customer. According to Nielsen; 92% of consumers said they trust friends and family above all other forms of marketing when it comes to recommendations about products, services. According to Word of Mouth Marketing Association; personal word-of-mouth drives 54% of purchase decisions, but it cuts both ways: According to Seth Godin; word of mouth happens when a customer is delighted, or when they are disappointed, angry… It’s the latter scenario that brings most troubling consequences for this form of marketing. 

The core principle of effective marketing is to create things worth talking about, e.g.; unleash word-of-mouth, which is then amplified by the internet, social media… It stems from a real emotional connection with a product or service– it’s meaningful… Whereas the concept of ‘buzz’ is just ‘hype’ usually based on superficial realities, and they don’t last very long… It’s not that buzz is bad; there simply is not enough substance… Effective marketing is about– truth and value, not just buzz…

In the article Why Word-Of-Mouth Is The Best Marketing Tool by Jon Tan writes:  Word-of-mouth is immensely powerful, in fact, before making a purchase, consumers tend to listen to what others have to say. That’s why 90% of consumers tend to search for reviews before purchasing a product… In fact, 59% of consumers enjoy telling others about their experiences, both good and bad…

Surveys show that customers that purchase through word-of-mouth spend 200% more than the average customer and also make 2x as many referrals themselves… A consumer is up to 50x more likely to buy a product or service if it’s recommended by close friends or family. The greatest thing about word-of-mouth is that it keeps spreading, and it can go viral… It takes just 1000 customers to generate half a million conversations about a brand…

In the article Disadvantages of Word-of-Mouth Marketing by Angela Ogunjimi writes: Word-of-mouth happens both when a customer is delighted or disappoint… It’s the latter scenario that bring about the most troubling disadvantages of this form of marketing… Simply put, your customer’s rave reviews about your product or service comes at that customer’s good will… Unlike paid advertising, through which you choose the channel, audience, timing… of messages, word-of-mouth marketing is largely a product of chance, but you can control the way you treat customers…

However, word-of-mouth marketing has its downsides when a single unsatisfied customers or competitors takes to air waves– internet, social media, blog… with negative messages. Satisfied customers may peg you as being the greatest, affordable… which can help influence the ‘story’ about your organization: Or, not…

However, word-of-mouth only works well when it supplements a full-scale marketing effort that tells complete the story through multiple outlets… And it’s only effective when the customers have a positive experience, and not trickery or abuse. Spark the ‘buzz’ by exceeding the customer’s expectations every time…

In the article Word-of-Mouth: Building a Strategy That Really Works by yotpo writes: The power of word-of-mouth recommendations is huge, but for it to be effective marketers must create something worth talking about and then actively encourage people to talk about it… Word-of-mouth marketing essentially seeks to kick-start an exponential referral chain that drives continuous traffic, leads, sales for the brand…

However, word-of-mouth often has a negative side… There’s no quicker way to destroy a brand than by dissatisfied customers who promote negative commentary… These unhappy customers are much more likely to post public warnings about bad experience than satisfied customers making positive recommendation... Hence take note; upset customers can be perilous!

In the article Measure Word-of-Mouth Marketing by Jacques Bughin, Jonathan Doogan, Jørgen Vetvik writes: Word of mouth influence is greatest when consumers are buying a product for the first time or when products are relatively expensive… factors that tend to make people conduct more research, seek more opinions and deliberate longer than they otherwise would…

And be assured that this influence will grow; the digital revolution and social media have amplified and accelerated their reach to the point where word-of-mouth is no longer just an act of ‘one-to-one’, but also ‘one-to-many’ and ‘many-to-many’ communications, e.g.; reviews are posted, opinions disseminated through social networks. Customers even create websites or blogs to praise or punish brands…

The starting point for managing word of mouth is understanding which dimensions of brand equity are most important to a product category, e.g.; the Who, the What, the Where... For example; in skin care, it’s the What. In retail banks, it’s the Who… Word-of-mouth-equity analysis can detail precise nature of a category’s ‘influentials’ (people who make a difference), and pinpoint highest-impact messages, contexts, networks…

Clearly word-of-mouth marketing is an effective tool, particularly with ‘mobile apps’ for smartphones… Think about it for a moment: How many apps have you recommend to friends, family, colleagues? How many apps have you started to use because somebody told you about them? Let’s face it, word-of-mouth marketing for mobile apps is a game changer… There are millions of mobile apps available on the market but you cannot try them all, so you rely on the experience of friends, family… and they rely on you…

It’s contagious, people communicate– one-to-one’ and ‘many-to-many’ everywhere; at home, commuting, on the street, at the office, at parties… on social networks, on forums, blogs, emails… According to Elif Çetin; if you have product, service, app, widget… to show the world; whether an   organization or solo entrepreneur… spreading the word through word-of-mouth marketing is an imperative…

Golden Rules of Brand Value– Get Relevant, Get Focus, Get Edgy… or, Get Lost in Competitive Noise…

Brand value; everybody wants it; many struggle to achieve it… Few brands truly attain it… According to Seth Godin; brand’s value is merely the sum total of how much customers will pay extra, or how often they choose– the expectations, memories, stories, relationships of one brand over alternatives… And opposite of value is when an item or service has little or no perceived value… which means customers are not seeking it out and when they do, it’s merely one of the many choices… so, very likely, the cheapest offering will get the sale…  

An organization’s ‘brand value’ is promise of reputation, experience, quality… It encompasses everything about an organization, which is sometimes good, sometimes bad… and it all depends on the consumer’s perception. Brand value is progressive– it  gets multiplied every time a consumer chooses a specific brand over other brands… Hence, a clearly defined brand value gives consumers something to connect to, something to stay loyal to, something to stand-up for…

In the article Core Brand Values  by Julia Melymbrose writes: Value stand at the very core of a brand. Value is the center from which everything radiates, including; brand’s look (design), message (voice), relationships (customer service)… A brand is much more than a simple logo; a brand consists of two main ‘external’ aspects– Visual Identity, i.e., logo, colors, typography… Voice Identity, i.e., tagline, tone, styles…  Plus, a very important third ‘internal’ aspect: Brand Value... Brand value captures the three Ps of brand: Purpose, Proposition, Personality… 

For example; When you say brand value, you usually think about a monetary sum, e.g.; no-name pair of jeans could be worth $19, while Levi’s branded pair of jeans could be worth $119… Clearly there’s a difference in value based on the brand. A brand’s value is not simply how much people pay extra, e.g.; $100 more for pair of Levi’s over a unbranded pair, but also how often they choose the brand and the reason(s) they choose it… remember repeat business is tightly tied to value…

In the article How Much Are Brands Worth? by Paul Hague writes: A brand clearly has value to an organizations, because the value of the brand leverages the organization’s position in the market… Also the monetary value of a brand (worth in dollars) has become part of an intangible ‘asset’ known as ‘goodwill’, which is the extra worth of an organization over and above the value of physical assets… This means that many major brands are capitalized with monetary (dollar) value, and included as an ‘asset’ on the balance sheet of the organization…

According to ‘BrandZ Global Top 100 Most Valuable Brands 2016′ Report; the brand value is defined as the dollar amount that a brand contributes to the overall value of an organization… In 2016, the value of the world’s 100 biggest brands saw a high growth of 133%, totaling $3.4 trillion... According to the Report; these organizations tend to leverage ‘innovation’ as their key differentiator for brand success… and that meant improved consumer experiences, greater revenue.

In the article How to Calculate Brand Value by Laura Lake writes:  What is a brand really worth? There are various ways to approach the valuation of a brand but since the concept of value means something different for different people, it’s difficult to get a consensus on one  methodology. However, it’s probably fair to say that brand valuation is more of an art than a science… But it’s important for organizations to identify, develop value for their brand, as well as, a value proposition for the brand. There are various methods for valuing brands and here are a few:

  • Cost-Based Brand Valuation: This method of valuation uses the accumulation of costs that were incurred to build a brand since its inception, and it includes items such as; historical advertising expenses, promotion expenditures, cost of campaign creation, licensing, registration… While costs can be collected and used, the total dollar amount does not necessarily represent the current value of a brand… The brand value using this method may be equal to historical or replacement costs for a brand, but not necessarily its market value…
  • Market-Based Brand Valuation: This method of valuation uses a comparison of an organization’s brand to other similar brands that were valued… It uses comparable market transactions like a specific sale of a brand, comparable company transactions, and/or stock market quotations… It’s the market-based value that a brand can be sold for on the open market… The brand value is equal to market transaction price, bid, or offer for identical or reasonably similar brands, but not necessarily its replacement value…
  • Income-Based Brand Valuation: This method of valuation is often referred to as the ‘in-use’ approach. It considers the valuation of future net earnings that directly attribute to the brand to determine the value of the brand in its current use… The brand value is equal to present value of income, cash flows, or cost savings actually or hypothetically due to the asset…

Brands are psychology and science brought together as a promise of value… Brand value conveys– quality, credibility, experience… Many companies assigns a monetary value to the brand as an asset on the balance sheet, and it becomes part of the overall value (net worth) of the company… Branding is fundamental, it’s basic, it’s essential… and without a brand with value, it’s probably a good indication that the organization is valueless… According to Scott Goodson; brand value inspires millions of people to join communities… brand value activates passions that can change the fortunes of organizations…

The greatest brand value is built on a strong idea… an idea that an organization can hold on to, can commit to, and can deliver upon. But brand value needs to permeate the entire organization. When the entire organization is clear on the value of a brand and delivers on the promise of a brand– it fuels increased customer awareness, loyalty… and greater revenue growth.

Marketing Authorities and Economists Think Differently: How They View– Market Structure Vs. Market Segmentation…

Market structure: Many companies look to market structure and market segmentation to better understand the composition of markets and to identify and profile groups of people (i.e., potential customers) to grow their business… but is  ‘market structure’ the same as ‘market segmentation’ or do they differ?

Market structure is often defined as interconnected characteristics of a market, such as; relative strength of buyers and sellers, degree of collusion, types of competition, differentiation, barriers of entry… Whereas, market segmentation is defined as process of subdividing, targeting a mostly homogenous market into clearly identifiable segments having similar need, want, characteristic, demand… In segmentation the objective is to design a market mix that precisely matches the expectations of the customers…

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According to Jeanne Grunert; economists and marketing people each define the terms a bit differently: Economists look at the overall market structure with the goal of defining and predicting consumer behavior… Whereas, marketing professionals seek to define the market structure to create competitive strategies as part of their overall marketing plan…

Economists examine market structure to help with decision-making and they seek to analyze broad trends in order to better understand consumer motivation… While marketers also look at trends, but they defer in that economists tend to focus more on the big picture… The economist want to know more about how this information affects large segments of various populations. Whereas, marketing is keen to understand the information, but apply it to their company’s specific marketing strategy…

Economist define market structure according to how an industry– that’s serving a market– is organized, and these structures typically include:

  • Monopolistic competition: Type of imperfect competition such that companies sell products, services… that are not identical with each other, but competitive… they are differentiated from each other by branding, pricing, quality… hence, they are not perfect substitutes…
  • Oligopoly: Market is controlled by small number of companies that together have the majority of market share… Duopoly: Special case of oligopoly with only two controlling the market.
  • Monopsony: Only one buyer in a market…
  • Oligopsony: Many sellers but meet only a few buyers…
  • Monopoly: Only one seller of a product, service…  Natural monopoly: Serves the entire market demand, typically at lower cost than any combination of two or smaller, and more specialized companies…
  • Perfect competition: No barriers to entry, an unlimited number of sellers and buyers, and a perfectly elastic demand curve…

Marketing, in contrast, defines market structure a little differently, when they know that an industry is organized as describe as one of the above restructures, i.e.,  oligopoly, perfect competitive… typically they will dig deeper into industry, searching to better understand other factors, such as; nature of competition, vulnerability, customer behavior, price sensitivity… Understanding the market structure and landscape helps marketers develop relevant and effective marketing strategies… Hence, defining a structure from marketing perspective tends to seek answers to questions, such as:

  • What are the key motivational drivers that determine how, why, what… consumers buy?
  • How do product, service… packaging, features, brand, pricing… and other factors play into the consumer decision to buy?
  • What and where are the opportunities for growth in an industry through major innovation?
  • What are the key market differentiators and competitive factors?
  • Where are the key market opportunities, threats, risks?

Defining market structure isn’t always easy. Definitions remain fluid and subject to change even among various functions-groups within a company…  and it’s common that different companies view the same market structure differently… As may be observed, both marketing and economists confuse the terms; segments and structures, so much so that the line between the two is nearly obliterated. You can have a conversation with some of these people and, at the end, not only will you not know what they are talking about, but you feel completely confused about both subjects…

In the article What Can Economics Learn From Marketing Market Structure Analysis?  by Charles Fischer writes: The concept of market structure is central to both economics and marketing. The problem for economists and marketing professionals is that a meaningful operational definition of market structure is elusive… Each discipline takes a different methodological approach toward the definition… and each has its own strengths, limitations.

Economics is concerned with broad socio-economic,  micro-economic issues, e.g., competitive fairness, predatory pricing… Whereas, marketing is more concerned about the managerial aspects of market structure… Although, each discipline touches on the primary domain of the other, the primary distinction between the two is just a matter of relative emphasis… 

In economics, markets are classified according to the structure of the industry serving the market… Industry structure is categorized on the basis of market structure variables which are believed to determine the extent and characteristics of competition… In the traditional framework, these structural variables are distilled into the following taxonomy of market structures:

  • Perfect Competition: Many sellers of a standardized product, service…
  • Monopolistic Competition: Many sellers of a differentiated product, service…
  • Oligopoly: Few sellers of a standardized or differentiated product, service…
  • Monopoly: Single seller of a product, service… for which there is no close substitute…

These four market structures each represent an abstract (generic) characterization of a type of real market… Market structure is very important because it affects business outcome through its impact on the– motivations, opportunities and decisions of economic players participating in the market… A key element of the economic market structure is product substitutability, which is strategically linked to market definition… however, this also complicated by the fact that consumers have their own perceptions of product substitutability…

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In the article Market Structure Analysis by Steven Struhl writes: Some of the confusion surrounding market structures arises from the fact that two contrasting traditions of– marketing and economics– have embraced it… Comparing and contrasting the marketing vs. economic methods are briefly summarized as:

  • Marketing approach: Basic elements– analyze the relationships among– target markets and segmentation, potential customers, competing brands, risks, opportunities, business strengths and weaknesses, pricing strategy…
  • Economic approach: Basic elements– analyze the trends of buyers and sellers, extent to which products, services… are substitutable, analysis of comparative costs, market barriers to entry, extent of mutual interdependence– extent to which buyers and sellers depend on each other…

One important point that the economists have in common with marketers is that they include demand elasticity and cross-demand elasticity (or words meaning the same thing) in market structures. Also, how economists get to their answers is usually very different from marketing practices, for example; economists can do much of their work without ever talking to an actual person, and some even act as if asking people what they do or think is, in fact, superfluous to understanding what is happening in a marketplace.

This may seem slightly ridiculous, but we should remember that these people win ‘Nobel’ prizes, while humble marketers and market researchers do not, but perhaps they are onto something… The basic consideration in market analyses is reaching a definition of exactly what constitutes the market… Traditionally this is done by focusing on these factors:

  • Degree to which products, services… can substitute for each other, based on consumer perceptions…
  • Extent to which products, services… are intended to serve similar purposes…
  • Impact of products, services… on each other and as measured by elasticity of demand and its effects on each other, as well as cross-elasticity

In typical marketing approaches, it always start with the consumers… but, to reach an overall market structure, the needs of each consumer must be aggregated… This is an aggregated list of each consumer’s– behaviors, perceptions… The  two main aggregation methods are:

  • Behavioral aggregation; (linked to studying market impact)…
  • Subjective aggregation; (linked to the extent to which products, services… can substitute for each other, ratings, opinions, and perceptions)…

Aggregation is problematic: One question often asked is– what happens when aggregation consists of many idiosyncratic consumer opinions; in other words, how do you meaningfully aggregate all the individual consumer choices or opinions when these often reflect great diversity?  Since most marketing authorities do not consider market structures to be the same as market segments, hence finding segments almost always is taken to mean looking for groups that fit these following criteria:

  • Defined product, service… related needs different from those of all other groups…
  • Characterized or identified specific customer– needs, wants…
  • Reachable selectively (or targeted) through communications and marketing efforts…

Different segments of a market, may structure a market differently, since their needs are different… A clear understanding of a market’s structure and segmentation is paramount to understanding it’s– needs, buying processes, preferences, value perceptions, revenue potential… but then, as important, translating these insights into an actionable strategy is precursor to developing a successful business…

New Rules of Branding in Business– Golden Rules: Get Edgy, Get Relevant… or, Get Lost in the Competitive Noise…

Branding is a promise of quality, reputation, value– It encompasses everything about a company– sometimes good, sometimes bad, depending on public’s perception… branding is what you do– not what you say… it’s a promise to deliver on– what’s wanted, desired, expected… branding is the sum-total of all customers ‘experiences’… branding is about shaping perceptions…

Branding is the idea that anytime, anyone hears the name of the business, product… they will know exactly what it stands for… branding, simply put, is a ‘promise’, which is derived from– who you are, who you want to be, who people perceive you to be…

According to Frank Strong; branding isn’t a company name… it’s not a tag line… it’s not a logo… it’s an expectation of an experience… The company tag line, logo, colors… only exist to call that experience to mind… The essence of a brand lies within its meaning– words have meaning but ‘actions’ create the brand… According to Beau Phillips; brand is the identity– it’s what people say about you… the value of the brand changes daily– nurture the brand, care for it… Live up to the brand promise every day…

According to Steven Donaldson and Michael Zinke; if you do anything, realize that the company (brand) has to stand out against the vast expanse of competitive– brands, options… Know and understand your competition, but don’t do what they are doing– be different, be relevant! You’ll get noticed… This is the mantra of the ultimate marketing guru, Seth Godin, who says– be a Purple Cow… The more truly unique (but still real) the brand is, the more interesting it will be…

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According to Jonathan Salem Baskin; Steve Jobs was a magician capable of casting a ‘reality distortion field’ on anyone in his presence… he ruined branding as we knew it… Jobs blew up the rules of branding simply because he didn’t recognize them… he didn’t follow the approved checklist… he knew that someone else’s success wouldn’t be his own, not because of his ego, but because it’s a fact that imitating others has never resulted in great successes…

Jobs’ insight was that you can never connect emotionally, meaningfully with customers by conceiving great marketing… no segmenting, strategy, technology, psychological… insight delivers a great brand… But, in fact, you must deliver a ‘great business’. The brand will be the words, emotions people use to narrate it… Jobs focused on the ‘cart’, yet even today, most marketers confuse it for the ‘horse’…

According to Drypen; branding takes place in minds of customers not in the real world. And whatever the mind perceives to be true is true. You may object but that’s the way it is: Perception is reality… No body likes Schizophrenic brands. That’s why the brand must be absolutely consistent in how it behaves, delivers… If it’s erratic, customers will be confused and will move to opposite camps… To build strong brands, businesses must provide a reason for its existence, and justify why it deserves to live…

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In the article Rules for Branding in New World by john k. grace writes: There is a basic shift in culture… a ‘new world’ is emerging in brand strategy for building relationships– with customers, employees, media, financial community, and other important audiences… Corporations have become places where employees are uncertain about messages from leadership– knowing that there is different agenda than their words often indicate…

In traditional times, two things can occur: First, brands tended to amplify and exaggerate the ‘brand promise’– in order to have their voices heard above the crowd. This amplification of claims are often filled with over-promise, which can become unbelievable to customer audiences… Second, brand marketers become insecure about their strategy and begin making random promises wishing that some will resonate with someone, somewhere…

These sit of the pants actions creates an atmosphere of uncertainty, wariness… For success in the ‘new world’, the rules for branding must be shaped in new ways: These new rules are ‘filters’ used to create, evaluate… brand communications, behaviors…  Here are a few rules for consideration:

  • Rule 1: Value must be communicated… Today, customers have much larger magnifying glass to evaluate price/value comparisons and they will find it hard to justify purchase without a very strong reason– why. So value becomes a very important filter…
  • Rule 2: Functional performance is more important than ‘benefits’... Each are looking for more communication about the functional value that brands bring to them…
  • Rule 3: Transparency, honesty are mandatory. There are two aspects to transparency – being transparent, communicating transparency… Questions; a) is the company/brand being transparent? b) how is the transparency communicated? This is a new filter for many companies…
  • Rule 4: Messaging must be simple, clear… brands must shed multiple claims, over-promises, implied benefits… and bring a new simplicity and clarity to messaging. It means creating new filters to evaluate messaging, and developing communications strategies to isolate what is important and what can be shed…
  • Rule 5: Express confidence, optimism through identity. An identity is visual expression of a brand, it should reflect a company’s core beliefs and strengths, and also signal an optimistic and positive attitude…
  • Rule 6: Communities are critical to brand acceptance. The evolving shift from top-down to bottoms-up brand influence is being further accelerated. ‘Communities’ have become the place where we can find– information, validation, security, new types of partnerships… social networks are part of larger concept of the integration for specific audiences to– bond, evaluate, determine, share…
  • Rule 7: Customer service can be a brand-defining attribute. Successful brands embrace the importance of this interaction… think about building world-class customer service rather than adequate, competitive levels of service…

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In the article Building Brands from Inside by Michael Dunn and Scott Davis write: There’s a trend in the making: Companies across the board are beginning to take a broader view of ‘branding’ as it shifts from its traditional role, as part of the marketing function, to play an integral part in the overall business strategy. To fully integrate brand strategy throughout the organization, companies must take a hard look at what the brand stands for and put internal structures in place to deliver on ‘brand promise’…

Essentially, this means moving the brand’s role, influence… well beyond the marketing department so it becomes an integral part of  company’s way of doing business… Total alignment between business and brand strategy is a crucial starting point… Think about it: Strategies about customers, distribution, pricing, communications… are crucial links between business and brand strategy. Business strategy cannot be developed in a vacuum; neither can brand strategy. The connection between them must be aligned, strengthened…

In today’s increasingly competitive environment, businesses need to find a way to stand-out from the rest of the pack… One sure way is to take a hard look at the brand, what it stands for, and then make sure that the structure is in place to deliver-on that ‘promise’– across entire organization… This realignment pays-off, big time, by creating a stronger brand but, more important, a stronger business…

In the article New Rules for Branding by kordell writes: The biggest enemy of business these days is being ‘average’… With mass customization, free information, and a tight economy, you must drive the branding image to be ‘exceptional’… Here are a few new rules for exceptional branding are:

  • It must have a plot or a storyline: Think Disney… Chipotle has it’s brown bags with stories on them… Harley is about terrorizing small towns…
  • It must be unique to stand out: Unless you have a BHAC (Big Hairy Audacious Concept) you have– beige, average, pedestrian…
  • It must fill a need or create a new mind-set for the customer:  Columbus fought the flat world with a round world idea… Dyson killed the vacuum bag…
  • Rabid fans must be able to ‘join’: Think Blue Man Group…  These fans will experience the brand again, again… and ‘tell others about it’…
  • Repeatable: There are Harley fans who motorcycle between locations just to get a ‘local’ Harley shirt… Another way to see this consumable– or– such a great experience that you just-want-to-do-it-again!
  • Once it’s in place it’s either re-created, destroyed, rebuilt (isn’t that the same thing?):  Just when the McMuffin is copied by everyone else, you have to recreate it in a new format/recipe…

In the article New Rules of Branding by Simon Williams writes: A few simple rules for the new age branding; Brands that influence ‘culture’ sell more; culture is the new catalyst for growth… A brand with no point of view has no point; full-flavor branding is in… vanilla is out… Today’s consumer is leading from the front; it’s a smart generation… Customize wherever, whenever you can; customization is tomorrow’s killer whale. Forget transaction, just give me an experience; the mandate is simple: Wow the customer every day, every way...

Deliver clarity at point of purchase; be obsessive about value… You are only as good as the weakest link; know where you’re vulnerable… Social responsibility is no longer an option; know the cause, prepare your contribution… Pulse, pace, passion… really make a difference… Innovation is the new boardroom favorite…

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Branding is the core of any business… According to Ananth; Be very clear on what you tend to achieve from your ‘branding’ campaign… Clearly define ‘goals’: What must the  ‘brand’ achieve, across which audience… Websites don’t define a branding strategy… Success of a branding campaign depends on the sincerity with which your content reaches across a larger audience, regularly, with clear intention to add real-value to the end users.

Branding is not one time process, its a constant effort to make a positive difference… It’s solution to problems– do it with a ‘face’– ‘humanize’ the brand… According to Kevin Lane Keller; a strong brand is a promise to customers and a means to set expectations and reduce risk… the power of a brand resides in the minds of its customers and it could go away very quickly…

A strong brand is also more than consumer-facing… it gives direction and purpose to its employees– strong brand is one of a firm’s most valuable intangible assets… According to Ashley I; churn out boring, repetitive stuff… and the brand will suffer… Modern brands must allow for– leeway, fun, surprise, playful… even flirtation… A contemporary brand must take leaps of faith, abandon self-obsessions, be flexible, embrace risk … Without such grounding, a brand loses what it’s supposed to be in the first place; a shape-shifter…

According to Jakk; perfecting a branding strategy is more than just having– a logo, attractive slogans… Today, enthusiasts play by a fresh set of guidelines…The fresh rules for business branding are now focused on engagement, interaction, less on presentation… Defining the brand is more like a journey of business discovery… in today’s highly competitive marketplace, a strong brand is really all about relationships, trust, value…

 

 

Word of Mouth (WOM) Marketing– Create, Harness… Power of Buzz: Leverage WOM to Grow Business– Its Honest Marketing…

Word of mouth (WOM) marketing is the most effective, powerful… form of marketing. Word of mouth means the passing of information from person to person… storytelling is a common form of word of mouth communication where a person tells a story about a real event, or even a falsehood…

According to the Word of Mouth Marketing Association; 76% of consumers say they don’t believe companies tell truth in advertising... It’s interesting that only 24% of the population actually believes that advertisers are truthful.

According to Journal of Advertising Research; 75% of all consumer conversations about brands happen face-to-face, 15% happen over the phone and just 10% online… This is backed up by WOM specialists, Keller Fay, who claim that TV advertising creates the majority of brand related ‘word of mouth’ followed by PR… for many consumers, word of mouth is perceived as impartial, unbiased… and they acknowledge that they are attentive to what people say before making a purchase… 

Many companies focus on creating what’s known as marketing ‘buzz’, or simply ‘buzz’… a term that is used in word-of-mouth marketing– it’s the interaction of consumers that serves to amplify the original marketing message… Many people describe buzz as simply ‘hype’… a vague but positive association, excitement, anticipation… about a company, product, service… creating positive ‘buzz’ is an important marketing goal.

According to survey by Nielsen; 92% of consumers said they trust friends and family’s recommendations, above all other forms of marketing… According to ‘Word of Mouth Marketing Association’ (WOMMA); personal connection drives 54% of purchase decisions… word of mouth is the most influential factor in driving a consumer purchase decision… both in physical and digital channels. Despite advancements in technology and traditional brand interaction; conversation is the significant factor influencing consumers.

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The principles of word-of-mouth marketing are simple… There are four steps to create a successful word-of-mouth campaign… First, company should give consumers something to talk about. This means providing a quality product-service and highlighting its key features… Next, company should decide where this conversation will happen–research what media its consumers use the most, and then place the marketing materials for the campaign in those media…

However, simply starting the conversation often isn’t enough. The company must give consumers reason to talk about the product–that’s buzz. Lastly, company must make sure that the conversation continues– use of  multiple marketing channels is essential. According to Erica DeWolf; in today’s world of social media, instant message,  mobile phones, word of mouth marketing is more alive than ever. It’s a better and more effective way to market and advertise products, services…

Now let’s differentiate the terms ‘word of mouth’ marketing from ‘viral’ marketing, since they are often confused or even used interchangeably. The terms overlap and are subject of debate… various marketing professionals define them much differently, for example; Seth Godin says; word of mouth is when a marketer does something and a consumer tells five or ten friends… but over time, word of mouth is a decaying function...

Whereas, viral marketing takes the phenomenon a step further, for example; a marketer does something and then a consumer tells five or ten people; then they tell five or ten people… it repeats… and grows and grows. Like virus spreading through population… As a general rule, word of mouth marketing takes place mostly offline (although social media is a key facilitator, as well)…

In this process, for example; a company person (usually marketing, sales, company executive…) does something to impress a consumer (or others…) who in turn tells a few friends about it… then, these people pass the message to more friends… this third group may or many not pass on the message, and eventually, the word of mouth message dies off– It’s a downward funnel… The message begins large and trickles down…

Whereas, viral marketing works in the opposite way– the message begins small and grows as more people– ‘announce’, ‘shout’… the message to larger groups of people… It’s also important to point out that a viral marketing campaign is more ‘purposeful’- it’s designed to attract attention, spread… whereas word of mouth marketing is more ‘accidental’. When people have an incredible– company, product…  experience (good or bad), they will share it– this is word of mouth… Word of mouth and viral marketing are very similar, often overlap…

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In the article Disadvantages of Word-of-Mouth Marketing by Angela Ogunjimi writes: Word of mouth happens both– when you delight a customer and when you disappoint or angered one. It’s the latter scenario that bring about the most troubling disadvantages of this form of marketing… Simply put, your customer’s rave reviews about your product or service comes at that customer’s good will… Unlike paid advertising, through which you choose the channel, audience, timing… of messages; word-of-mouth marketing is largely a product of chance…

You can’t control or censor what customers say… With innumerable outlets for both positive and negative experiences, especially social media and online review websites; word-of-mouth marketing shows its downsides when a single unsatisfied customers with choruses from your ruthless competitors, take to the air waves to bash the product, service. Even with positive word-of-mouth marketing, you have little control over key marketing pillar, such as: Positioning… Satisfied customers may peg you as being the greatest, affordable… supplier of a product, service, which can help influence ‘the story’ about the business…

However, word-of-mouth marketing can’t be relied upon as a primary source of marketing… Once the buzz stops… the interest and knowledge of the product can come to a complete standstill. Rather, word of mouth works well when it supplements a full-scale marketing effort that tells a complete story through multiple outlets… Good ‘word of mouth’ comes from good products and services, not trickery or abuse… Spark the ‘word of mouth’ by exceeding the customer’s expectations every time. There’s no substitute for a job well done…

In the article Social Media Amplifies Power of Word-of-Mouth by David Howell writes: The power of word of mouth (WOM) has taken on completely new, far-reaching persona in the shape of social media networks. Today, B2B organizations realize that WOM can be a powerful tool for their marketing activity. An astonishing 91% of B2B purchasers said that their buying decisions were influenced by WOM, making this form of engagement vital for many organizations to get it right…

According to research from McKinsey; WOM is firmly in the digital channel as one of the most important to cultivate whether in the B2C, B2B… and is a primary factor behind 20 to 50% of all purchase decisions. According to Hubspot; any WOM strategy should contain these elements: Know the audience, develop personas that are so specific they’re bordering on the obsessive! Know everything there is to know about the industry, products, services.

Build a very close social media community… in the networks that resonate with the target audience. Identify who the influencers are in the community and other social media spaces where you’d like to get noticed. Find out what influences the ‘influencers’ and where. You can’t restrict what people can say, but try to guide it... WOM is a powerful and vital marketing technique, and together with social media its power is amplified…

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Word-of-mouth is a natural phenomenon, and it’s as old as human communication… there is a strong link between word-of-mouth and storytelling… The key elements of successful word-of-mouth marketing are; value, relevance, excellent service, content, stories… and, listening to stories is just as important as having them shared. Word-of-mouth marketing requires a customer-centric mindset of sharing and focusing on what is valuable for people and networks we hope to involve. It’s certainly not about paying people to ‘get the word out’ nor about simply ‘joining the conversation’. It’s about real value both for the business, customers…

Conversations have no business value, if they don’t focus on mutual benefits and are not monitored, measured, or used to improve the overall customer experience, efficiency… The components of an effective word of mouth marketing campaign, include; engage advocacy groups without destroying ‘credibility’ and ‘trust’… ensure participants are: Unpaid–cash messes with opinions! Unscripted–people should say what they really feel, no matter how good or bad! Open–if someone is involved in an organized word of mouth program, the people they talk to should be aware of it!

Word of mouth can be bad as well as good: There’s no quicker way to destroy a brand than by negative word of mouth advertising. Dissatisfied customers are much more likely to post public warnings about a bad product than a satisfied customer is to recommend it… Upset people are at your peril! According to Martha Spelman; you can’t depend on word-of-mouth forever. If  primary form of marketing is word-of-mouth, you need more ‘mouths’…

Incorporating other marketing efforts into the overall business strategy is imperative. Establishing a plan to increase visibility with broad-based program, including; website, email marketing, networking, speaking, events, blogs… and being active on social media platforms like– LinkedIn, Facebook, Google +… should all be on the radar…

There’s no right or wrong way to execute word of mouth marketing; if it works for you, then it’s right… According to Patrick Galvin; creating a word of mouth campaign focused on building customer loyalty that boost referrals, then the business thrives… According to Allan Dib; word of mouth marketing is powerful, but it’s extremely slow and unreliable way for building a business… it can take many years, even decades, to build a successful business on the back of word of mouth alone…

By being solely reliant on word of mouth you’re putting the fate of the business in the hands of others ‘hoping’ they, remember you often enough to regularly, send new business your way… This is an extremely dangerous path to be on… However, by creating multiple marketing channels including word of mouth you take back control, which then enables you to build a solid foundation for rapid business growth…

LinkedIn– Real Value, Tangible Business Benefits– Or, Big Waste of Time: Craft LinkedIn Strategy That Yields Results…

Does LinkedIn provide– ‘real value’, ‘tangible business benefits’… or, is it just a ‘big waste of time’? As of June 2013, LinkedIn reported more than 238 million acquired users in more than 200 countries and territories. The LinkedIn site is available in 20 languages, estimated 65.6 million monthly unique U.S. visitors and 178.4 million globally…

The membership grows by approximately two new members every second. About a third of the members are in the U.S. and 11 million are from Europe. With 20 million users, India has the fastest-growing network of users as of 2013. The Netherlands has the highest adoption rate per capita outside the U.S. at 30%. LinkedIn recently reached 4 million users in UK, 1 million in Spain, and nearly 1 million in Pakistan. In January 2013, countries with most LinkedIn users were: U.S. with 74 million members, India with 20 million members, UK with 11 million members, Brazil with 11 million members, Canada with 7 million members, Australia with 4 million members, UAE with 1.3 million members…

But, is LinkedIn a big waste of time; well maybe… According to Paul Lange; an early adopter of LinkedIn, says LinkedIn has become less relevant… it was a great way of finding people, it was like an online Rolodex but it has gradually become less effective and relevant in the business landscape… According to Jason Alba; don’t waste time on LinkedIn– don’t dabble, tinker, or wait for reward. Get in there, do it right, set up your ‘profile’, be proactive, make networking connections… Use the tool! 

According to Tara Alemany; No, LinkedIn is not a waste of time, when focus on the power parts of it! Although ‘endorsements’ are a joke; people are endorsing me for skills I don’t even have. But, ‘recommendations’ are gold! Also, ‘groups’ can be great if people use them properly, and ‘direct contacts’ when done tactfully are priceless…

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In the article Is LinkedIn a Waste of Time? by Kate Jones writes: Is LinkedIn anything more than a resource for recruiters and job seekers? Is LinkedIn really linking you in? With more than 238 million members, including 4 million in Australia, a ‘profile’ on LinkedIn is like the modern-day equivalent of a business card. But how many of those users have benefited from LinkedIn? A common complaint among LinkedIn members is the proliferation of spam, fake users, and untruthful credentials on profiles…

According to Tudor Marsden-Huggins; it’s becoming increasingly common for people to lie about or exaggerate their skills and experience on their ‘profile’… people are a bit more flexible with the truth… LinkedIn just doesn’t have the rigor… According to Danielle Di-Masi; my estimate is that 95% of Australian LinkedIn members are not using the networking site effectively… there’s a lot of set-and-forget…

There are two different camps of people using LinkedIn: The first group is people who will only connect with people they know, and the other group will connect with anyone, because they want to reach out, expand numbers… According to Tara Commerford; it’s still the best place for business people to build their professional brands, increase online visibility and grow their networks… Top five tips for using LinkedIn: Maximize your ‘profile’. Set up a company page. Grow your network. Find the right people. Be part of the conversation…

In the article Don’t Waste Your Time on LinkedIn by Alison Doyle writes: If you’re not going to do it right, there is no point wasting your time (and everyone else’s) on LinkedIn. LinkedIn is ‘the’ site for professional networking. Everyone, for example; must have a full LinkedIn ‘profile’, must connect with everyone they know, must join LinkedIn ‘groups’, and must use LinkedIn for job searching when they are in the market for a new job…

That said, LinkedIn is not going to work if you don’t identify yourself… I’ve received several invitations to connect, in the last week, from people who didn’t identify themselves (i.e., anonymous)… Now, asking me to connect with someone who has a LinkedIn ‘profile’ with ‘private’ or ‘human resources manager’ instead of their name– isn’t going to work. I have no clue who they are, and I wasn’t going to try to figure it out.

Most people, including; prospective employers, wouldn’t be interested in connecting either. LinkedIn is for ‘real’ people to connect with each other– that’s what makes it so successful and such a terrific networking tool… If confidentiality is a concern simply be careful: Connect with only people you know, well…

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In the article LinkedIn Is a Waste of a Sales Person’s Time! by Lee B. Salz writes: There are many misconceptions about LinkedIn. It’s not just for job searches or networking. It’s a unique lead generation platform… I continue to be amazed at the number of sales people who feel that LinkedIn doesn’t provide any value to them. Yet, these same people spend countless hours on Facebook telling people– what they ate for breakfast, when they are leaving for work…

LinkedIn provides sales people ‘unique’ lead generation opportunities; the operative word is unique, which means the approach must be geared to the business network… For starters, you must be positioned as thought leader in your industry, i.e., an expert that provides real value… So review your LinkedIn ‘profile’ and than ask: What message is being conveyed by your ‘profile’? This is where many sales people get stuck; they try to use the LinkedIn ‘profile’ for multiple purposes, for example; networking with friends, leaving the door open for a job search, business development…

The ‘profile’ has no clear message, and that approach doesn’t work. You must ask yourself: Why are you on LinkedIn and what are you seeking to accomplish? If your plan is to use LinkedIn for lead generation or business development, then your approach must be linear. Your ‘profile’ and ‘recommendations’ should clearly position your role in your industry… Remember, your ‘profile’ serves as the foundation for everything you do on LinkedIn: All roads lead back to this page… With your ‘profile’ developed then next join ‘groups’. Again, the goal is to be linear… Once you are accepted into a ‘group’ there is a number of things you can do. But remember, your mission is to provide real value first and not just seek to get buyers. Resist the temptation to hawk your product, service… Give real value first!

In the article Is Social Media a Complete Waste of Time? by Drew M Edwards writes: It’s no secret that social media has been one of the biggest developments in marketing for business over the past decade. Make no mistake about it if you want to dominate your market, then social media is just one of the tools you need to utilize and master… But if what you’re doing now isn’t generating any leads…then ‘stop’!

Then ask yourself; how do you make it work? The answer is a simple but critical, you must have a shift in mindset: You must ‘stop’ thinking of social media as a place to network and ‘start’ thinking of it as a marketing tool, first and foremost… It’s a subtle distinction but a huge difference… To generate leads from social media you must shift from talking about yourself– to asking and listening on how you can help your customers achieve results… In other words, as with all effective marketing you must focus on ‘benefits’ for the customer, rather than ‘benefits’ for you…

Now, don’t get me wrong– some prospects-customers are interested in what you do in your spare time, and what you’ve done in the past– so adding a human touch gives credibility and makes you more likeable. But, that must be a comparatively small percentage of what you ‘post’. So rather than talking about what you do in your spare time; talk about how you can help your customers get results… Talk about your experience and results that you have already delivered to your other customers…

Many people use LinkedIn the way the Vikings invaded Europe. The Vikings weren’t very interested in networking or building professional relationships. Their main prerogative was to loot-pillage until they got tired and went home. So how is that related? According to Paul Crompton; picture this: a recent graduate is looking for a job and sets up a LinkedIn account with a vague idea that it’ll help. They upload a picture, and copy-paste chunks of their CV into the boxes provided. They write their phone number-email address and wait for the calls to come flooding in. Except, they hardly ever do. Why? Because this approach just doesn’t work…

According to Anna DiTommaso writes: LinkedIn ‘group’ is an excellent tool, in theory. Active involvement with the right ‘group’ has lead to some of my largest and best relationships… However, like many things in theory, it doesn’t take much to ruin what could be a great networking tool. You probably have joined a LinkedIn ‘group’ and you have good reason, for example; you’re looking to connect with like-minded people who share your professional interests. Or, you want an impressive ‘group’ listed on your ‘profile’ for status. Or, you want to find channels for getting new worthwhile information…

However, once you’re in the seemingly promising ‘group’, it appears that other people join the LinkedIn ‘group’ for entirely different reasons, for example; shameless plugging-selling of their own products, services… Or, one more place to spam the world. Or, an impressive ‘group’ that’s listed on their ‘profile’ increases status! (i.e., not so different from you)… According to Mike Morrison; LinkedIn is a waste of time, if you are inconsistent, don’t have a marketing plan, and invest the wrong amount of time and effort…

The top proven strategies for ensuring that LinkedIn adds value to your business are: Relevancy– ad hoc just doesn’t work; relevancy is everything… Consistency– information that’s clear, concise; people know the subject that you are talking about and expect it… Transparency–being honest, if you are promoting your materials say so, and if it’s an affiliate say so… but, just promote things, ideas… which are of value to your group: The ‘wrong strategy’ can hurt you even more than ‘no strategy’.

Remember; if you are attracting people who are not interested in what you are doing, then this is worse than useless– you are just wasting time, energy, effort… not to mention opportunity! ‘Done right’ you can quickly double the effectiveness of your LinkedIn presence; it’s all about– regularity, relevancy, consistency, transparency. But most important, you must develop a well crafted and effective LinkedIn strategy, plan… with timely execution.

Pricing Strategies– Think Thru Your Price Model: Change Irrational Guesswork to Rational Analysis and Relevance…

Pricing strategies, price models– One of the secrets to business success is pricing products properly and it’s probably the toughest thing there is to do…. Price correctly and that will enhance how much you sell and create the foundation for a prosperous business. Get your pricing strategy wrong and you may create problems that the business may never be able to overcome.

According to Charles Toftoy; it’s part art and part science– there’s no one surefire, formula-based approach that suits all types of products, businesses, or markets. Pricing usually involves considering certain key factors, including; pinpointing target customers, tracking how much competitors are charging, understanding the relationship between quality and price… The good news is that there’s a great deal of flexibility in how you set your prices, but that’s also the bad news… adopting a better pricing strategy is a key option for staying viable-relevant.

Merely raising prices is not always the answer, especially in a poor economy: Many businesses have been lost sales because they priced themselves out of the marketplace but on the other hand, many businesses and sales staffs leave money on the table because they price too low. One strategy doesn’t fit all– adopting a pricing strategy is a learning curve that can only be mastered by studying the needs and behaviors of customers, competitors, markets…

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In the article Time to Rethink Your Pricing Strategy by Andreas Hinterhuber and Stephan Liozu write: Companies differ substantially in their approach to price setting but most fall into one of three buckets: Cost-based pricing; Competition-based pricing; Customer value-based pricing. According to Warren Buffett; the single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you must have a prayer session before raising the price by 10%, then you’ve got a terrible business. Yet pricing receives scant attention in most companies.

According to Professional Pricing Society; fewer than 5% of Fortune 500 companies have a full-time function dedicated to pricing… According to McKinsey; fewer than 15% of companies do systematic research on this subject… According to Association to Advance Collegiate Schools of Business; only about 9% of business schools teach pricing… This neglect is puzzling, as numerous studies have confirmed; pricing has a substantial and immediate effect on company profitability.

Studies have shown that small variations in price can raise or lower profitability by as much as 20% or 50%. Over the past 18 months, we interviewed 44 managers in 15 U.S. based industrial companies. These companies varied in size from about 50 to more than 2000 employees and dramatically different pricing capabilities. In the course of research, we found that pricing power is not destiny, but a learned behavior.

The companies we found that achieved better pricing all had top managers who championed development of skills in price setting (i.e., price orientation) and price getting (i.e., price realization). Regardless of their industry, the degree to which managers focused on developing these two capabilities correlated to their companies’ success in achieving a better price for their product than their competitors. Without managerial engagement, companies typically use historical heuristics, such as cost information to set prices, and yield too much pricing authority to the sales force.

In the article How to Price Products by Elizabeth Wasserman writes: The first step is to get real clear about what you want to achieve with your pricing strategy: The biggest mistake many businesses make is to believe that price alone drives sales. The ability to sell is what drives sales and that means– the right sales people and adopting the right sales strategy. At the same time, be aware of the risks that accompany making poor pricing decisions.

There are two main pitfalls you can encounter; under pricing and over pricing. According to Laura Willett; many businesses mistakenly under price their products attempting to convince the consumer that their product is the least expensive alternative and hoping to drive volume; but more often than not it’s simply perceived as being– cheap. Remember that consumers want to feel they are getting their money worth (i.e., value) and most are unwilling to purchase from a seller they believe to have less value.

On the flip side, over-pricing a product can be just as detrimental since the buyer is always going to be looking at competitors’ pricing… There are many methods available to determine the right price, but successful firms know that the key factor to consider is always the customer– first. The more you know about your customer, the better you’ll be able to provide what they value and the more you’ll be able to set your price higher… know the segments you’re targeting, and price accordingly…

The key is to be brutally honest in your evaluation: One size does not fit all. You can only go so far by pricing based on a fixed markup from cost. The price should vary depending on a number of factors including, for example: What the market is willing to pay. How the brand is viewed in the market. What competitors charge. The estimated volume-quantity you can sell. But as important, you must constantly review cost and continuously monitor price and the underlying profitability…

Remember: Listen to customers. Keep an eye on competitors. Have an action plan in place… Be relentless in managing pricing; how you set prices may very well be difference between success and failure of the business.

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In the article Pricing Strategy by Scott Allen writes: The most difficult yet most important issue in business is pricing– how much to charge for product, service… Pricing is tricky, but you’re certainly entitled to make a fair profit and even a substantial one, if you create value for customers. But remember, something is ultimately worth only what someone is willing to pay for it…

While there is no one single right way to determine  pricing strategy, fortunately there are some guidelines that will help with the decision. Here are some basic factors that should be considered:

  • Positioning: How are you positioning in the market? Is pricing going to be a key part of that positioning? The pricing has to be consistent with positioning. People really do hold strongly to the idea that you get what you pay for.
  • Demand Curve: How will pricing affect demand? You must do some basic market research to find this out, even if it’s informal. Get a good sample of people to answer a simple questionnaire, asking them: Would you buy this product/service at X price? Y price? Z price?
  • Cost: Calculate the fixed and variable costs associated with the product, service… determine the cost of goods, fixed overhead… Remember that your gross margin (price minus cost of goods) has to amply cover your fixed overhead in order to turn a profit…
  • Environmental factors: Are there any legal or other constraints on your pricing? For example, for doctor’s insurance companies and Medicare will only reimburse a certain price… Also, what possible actions might competitors take?  Find out what external factors may affect pricing.

The next step is to determine pricing objectives. What are you trying to accomplish with pricing?

  • Short-term profit maximization: This approach is common in companies that are bootstrapping, as cash flow is the overriding consideration. It’s also common among smaller companies hoping to attract venture funding by demonstrating profitability as soon as possible.
  • Short-term revenue maximization: This approach seeks to maximize long-term profits by increasing market share and lowering costs through economy of scale. For a well-funded company or a newly public company, revenues are considered more important than profits in building investor confidence.
  • Maximize quantity: There are a couple of possible reasons to choose this strategy. It may be to focus on reducing long-term costs by achieving economies of scale. Or it may be to maximize market penetration– particularly appropriate when you expect to have a lot repeat customers…
  • Maximize profit margin: This strategy is most appropriate when the number of sales is either expected to be very low or sporadic and unpredictable.
  • Differentiation: At one extreme being the low-cost leader is a form of differentiation from the competition. At the other end, a high price signals high quality and/or a high level of service…
  • Growth: In growth situations you must be flexible in pricing, such that– all costs are covered and the business can still sustaining the growth trajectory…

Once you’ve considered the various factors involved and determined your objectives for the pricing strategy, here are four basic ways to calculate prices:

  • Cost-plus pricing: Set the price with the production cost, including; cost of goods, fixed costs… plus a certain profit margin. So long as you have costs calculated correctly and accurately predicted sales volume, you will always be operating at a profit.
  • Value-based pricing: Price based on value created for the customer. This is usually the most profitable form of pricing, if you can achieve it. The most extreme variation on this is pay for performance pricing, in which you charge on a variable scale according to the results achieved.
  • Psychological pricing: Ultimately, you must take into consideration the consumer’s  perception of price, figuring things like: Positioning— If you want to be the low-cost leader, you must be priced lower than your competition. If you want to signal high quality, you should probably be priced higher than most of  your competition. Popular price points– There are certain price points at which customers become much more willing to buy a certain type of product… Fair pricing– Sometimes it simply doesn’t matter what the value of the product is, even if you don’t have any direct competition: There is simply a limit to what customers perceive as fair. A little market testing will help determine the maximum price customers will perceive as fair.

In virtually every facet of business, companies develop strategies based on the truism that customers differ from each other. Diverse customers are courted with a variety of products (e.g., styles, colors, add-ons…), mix of marketing strategies, multiple distribution points… However, when it comes to pricing, companies behave as though customers are identical by just setting single prices. However, an epiphany to better pricing is to understand and actually to embrace the same insight that companies use to create strategies and profit in other areas of their business…

The strategy of pricing involves acknowledging customers have different pricing needs and making efforts to profit from these differences. According to  Mat Marquis; Strategic pricing comes with practice and skills will grow over time. Pricing is a discipline that anyone can learn: But, first and foremost– do customers a favor–  charge  customers what you’re worth that’s proportional to your value  (i.e., don’t over or under price) and you will both be happy…

According to Tejvan Pettinger; optimal pricing strategy will depend on the type of business… For example, for premium brands– cutting price could be perceived as disastrous– as you lose brand image and fail to increase sales… For normal goods, with businesses looking to increase market share and gain more market dominance, it’s more important to offer competitive prices, and using strategies such as; penetration pricing, loss leaders…

According to Nick Wreden; crafting the right strategies will not only strengthen the business, today; but it will also prime it for sustained growth…. Remember the big picture– profitability is not the only prism through which you should view pricing. Other important perspectives include: Impact on customer relationships, impact on the industry…  Also, don’t fight today’s sales wars with yesterday’s pricing strategies– review pricing strategies and models, and make adjustments, now… Pricing is life blood of profitability– it must be monitored, adjusted, kept relevant…