Marketing Mix and Pricing Strategies

Marketing Mix

• Consists of Product, Price, Place, and Promotion.

Pricing Strategies

• Common strategies include: Cost-Plus, Competitive, Value Based, Price Skimming, Penetration, and Psychological.

Cost-Plus Pricing

• This involves determining the production cost and adding a markup to establish the selling price.

Competitive Pricing

• Prices are set based on what competitors are charging.

Value Based Pricing

• Prices are determined by the customer's perceived value of the product or service.

Price Skimming

• Involves setting a high initial price for a new product, then gradually reducing it over time.

Penetration Pricing

• Setting a low initial price for a new product to quickly gain market share.

Psychological Pricing

• Includes tactics like odd number pricing (e.g., $4.99), EDLP (Every Day Low Pricing), multiple unit pricing, and bundle pricing.

Promotion

• Encompasses marketing communication and tactics designed to inform target customers about products or services.

Distribution Strategies

• Include intensive, selective, and exclusive distribution, influencing where products are found.

Promotion Methods

• Consist of Public Relations, Sales Promotion, Advertising, and Content Making.

Public Relations

• Communication activities aimed at protecting, enhancing, or building the company's reputation.

Sales Promotion

• Includes tactics like coupons, mystery offers, clearance sales, and free samples.

Advertising

• Delivered through online channels, broadcast, print, outdoor displays, product placement, guerilla marketing, and public service announcements.

Content Making

• Involves creating social media posts, infographics, blogs, podcasts, videos, and mission-driven content.

Inbound Selling

• Customers are drawn to the business, rather than the business pushing products or services onto them.

N.E.A.T. Acronym

• Stands for Needs, Economic Impact, Access to Authority, and Timeline.

S.P.I.N. Acronym

• Stands for Situation, Problem, Implication, and Need Payoff.

Sales

• Tactical activities involved in converting potential customers into paying customers.

Marketing

• Strategic process of attracting people to the goods and services offered for sale.

Emotional Value

• How the product makes the customer feel.

Functional Value

• The problem that the product or service solves.

Types of Customers

• Include End Users, Influencers/Recommenders, Decision Makers, Economic Buyers, and Saboteurs.

End Users

• People who actually use the product.

Influencers/Recommenders

• Individuals like celebrities, journalists, industry analysts, and bloggers who influence large audiences.

Decision Makers

• The individuals who authorize the purchase of a product.

Economic Buyers

• The individuals who pay for the product.

Saboteurs

• Anyone who can veto or slow down a purchase decision.

Stages of the Buying Process

• Consist of Need Recognition, Information Search, Evaluation, Decision, and Post Purchase Evaluation.

Buyer's Dissonance/Remorse

• A feeling of regret or dissatisfaction after purchasing a product.

Technology Adoption Life Cycle

• Includes Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.

Innovators

• The first to try new technology.

Early Adopters

• Make reasoned decisions rather than being motivated by enthusiasm.

Early Majority

• Practical and risk-averse individuals.

Late Majority

• Skeptical, risk-averse, and less affluent individuals.

Laggards

• The last to adopt a new technology.

Market Segmentation Variables

• Demographic, Geographic, Behavioral, and Psychographic variables.

Benefits of Market Segmentation

• Increased brand loyalty, stronger marketing messages, differentiation from competition, identification of growth opportunities, and enhanced profits.

Buyer Persona

• Composed of lifestyles, values, backgrounds, and pain points.

Authority

• The legitimate right to give orders and make decisions.

Responsibility

• The personal obligation to perform tasks and reach certain goals.

Accountability

• The obligation of a worker to accomplish an assigned task.

Delegation

• Transferring authority and responsibility to a subordinate.

Chain of Command

• The flow of authority from the highest to lowest levels of the organization.

Departmentalization

• Can be Functional, Product, Geography, Customer, or a Combination.

Vertical Structure

• Hierarchical, with a clear chain of command, top-down decision making, and a narrow span of control.

Horizontal Structure

• A flat structure with fewer management layers and a wide span of control.

Span of Control

• The number of employees a manager is directly responsible for, can be wide or narrow.

Centralization

• Decisions are made at the top of the organization.

Decentralization

• Decision making is broadly distributed throughout the organization.

Organizational Life Cycle Stages

• Birth, Youth, Midlife, and Maturity.

Birth Stage

• A non-bureaucratic start-up with few rules and procedures.

Youth Stage

• A pre-bureaucratic firm that is growing, with more rules and procedures.

Midlife Stage

• A bureaucratic stage with sales growth, an increasing number of employees, and more rules.

Maturity Stage

• A very bureaucratic, mechanistic stage.

Competing Culture Types

• Positive, Communal, Fragmented, Mercenary, Networked, Spiritual, and Ethical.

Positive Culture

• Supports employees' strengths, rewards good work and increases morale.

Communal Culture

• Shares knowledge freely among employees; very sociable and responsible.

Fragmented Culture

• Employees keep to themselves, avoid socializing, and work as individuals.

Mercenary Culture

• Emphasizes making money as the top priority.

Networked Culture

• Characterized by a high degree of trust and willingness to share information.

Spiritual Culture

• Focuses on opportunities for employees to grow and find purpose in the workplace.

Ethical Culture

• Requires senior leaders to lead by example and offer ethics training to their employees.

Person-Organization Fit

• Matching the right personality to the right company culture leads to positive outcomes like higher job satisfaction, employee retention, and enhanced job performance.

Organizational Culture Clues

• Symbols, Practices, Rituals, and Myths.

Four Functions of Management Process

• Planning, Organizing, Leading and Motivating, and Controlling.

Four Types of Plans

• Strategic, Tactical, Operational, and Contingency.

Strategic Plan

• An organization's broadest plan, developed as a guide for major policy setting and decision making.

Tactical Plan

• A smaller scale plan developed to implement a strategy.

Operational Plan

• A type of plan designed to implement tactical plans.

Contingency Plan

• A plan that outlines alternative courses of action if an organization's other plans are disrupted or become ineffective.

Management Skills

• Conceptual, Technical, Relational, Critical Thinking, Communication, Time Management, and Decision Making.

Five Steps of the Decision-Making Process

• Define the problem, Identify decision criteria, Generate alternatives, Rate the alternatives, Implement and evaluate the solution.

Leadership

• Leaders CREATE the vision.

Management

• Managers IMPLEMENT the vision.

Leadership Styles

• Directive, Transactional, Empowering, Transformational, and Situational.

Diversity

• The differences among people including race, ethnicity, socio-economic status, religion, age, and gender.

Equity

• Ensures that processes are impartial and fair.

Inclusion

• Making people feel welcome and creating a sense of belonging in the organization.

Implicit Bias

• A set of positive/negative stereotypes that someone may hold toward a person or group.

Affirmative Action Plan

• Organizations must have a written Affirmative Action Plan if there is any discrimination/ unequal employment opportunities.

Affirmative Action

• A series of executive orders issued by the president to counteract discrimination against marginalized populations.

Benefits of Hiring Internally

• Improves employee morale by showing career growth, is less expensive.

Benefits of Hiring Externally

• Brings in new ideas, new perspectives, and can increase diversity to the company.

Performance Appraisals

• Should be achievement-orientated, fair and accurate, and developmental.

Compensation Packages

• Employers can attract and retain employees by the way they structure salary, benefits, and training programs.