Presentation on

Marketing Management

Presented By:
Group “C”
 Contents
1. Developing Pricing Strategy and program

2. Designing and Managing Value Network

3. Developing Marketing Strategy and Plan

4. Identifying Market Segmentation and Plan

1. Developing Pricing Strategy And Program
 Pricing Strategy
• Price is the value that is put to a product or service and is the result of a
complex set of calculations, research and understanding and risk taking
ability.
• A pricing strategy takes into account segments, ability to pay, market
conditions, competitor actions, trade margins and input costs, amongst
others. It is targeted at the defined customers and against competitors.
 Four Basic Pricing Strategy
• Premium pricing: High price is used as a defining criterion. Such pricing
strategies work in segments and industries where a strong competitive
advantage exists for the company. Example: Porche in cars and Gillette in
blades.
• Penetration pricing: Price is set artificially low to gain market share
quickly. This is done when a new product is being launched. It is
understood that prices will be raised once the promotion period is over and
market share objectives are achieved. Example: Television and Internet
providers are notorious for penetration pricing.
• Economy pricing: no-frills price. Margins are wafer thin; overheads
like marketing and advertising costs are very low. Targets the mass
market and high market share. Example: Friendly wash
detergents; Wheel; local tea producers.
• Skimming strategy: High price is charged for a product till such time as
competitors allow after which prices can be dropped. The idea is to
recover maximum money before the product or segment attracts more
competitors who will lower profits for all concerned. Example:
Apple uses it.
 Consumer psychology and pricing
• By using psychology you can present a
perception of value or discount that will help
you to sell your product.
• For example; KTM CTY a Nepali
brand often gives you two products at one
pricing.
 Three key points
• Reference pricing: Pricing information consumer retain in memory that is
used to interpret & evaluate new price.
• Price-quality interference: Many consumers use price as an indicator of
quality.
• Price endings: Sellers believe pricing end in odd numbers.
• Price cues: Any marketing tactics used to persuade that prices offer good
value compared to competitors' prices, past or future prices.
 Setting the price
1. Selecting the pricing objective:
• Survival: if companies are plagued with overcapacity, intense competition,
or changing consumer wants.
• Maximum current profit: the price that produces maximum current
profit, cash flow, or rate of return on investment.
• Maximum market share: They set the lowest price, assuming the market
is price sensitive.
• Maximum market skimming: Companies unveiling a new technology
favor setting high prices to maximize market skimming.
• Product quality leadership: A company might aim to be the
product-quality leader in the market.
2. Determining the demand: Demand and price are inversely related: the
higher the price, the lower the demand & vice-versa
• Price sensitivity: where the demand for a good moves up and down in
variation with the prices going up or down
• Estimated demand curves: Most companies make some attempt to
measure their demand curves using several different methods like
statistical analyses, price experiments, surveys.
• Price elasticity of demand: Marketers need to know how responsive,
or elastic, demand would be to a change in price.
3. Estimating Costs: Demand sets a ceiling on the price the company can
charge for its product while costs set the floor. The company wants to
charge a price that covers its cost of producing, distributing, and selling the
product, including a fair return for its effort and risk.
4. Analyzing Competitors Price Mix: Within the range of possible prices
determined by market demand and company costs, the firm must take
competitors' costs, prices, and possible price reactions into account.
5. Selecting a Pricing Method:
• Markup pricing: Lawyers and accountants typically price by adding a
standard markup on their time and costs.
• Target return pricing: In target-return pricing, the firm determines
the price that would yield its target rate of return on investment.
• Perceived value pricing: Perceived value is made up of; buyer's image
of the product performance, the channel deliverables, the warranty
quality, customer support, and softer attributes such as the supplier's
reputation, trustworthiness, and esteem.
• Value pricing: Companies win loyal customers by charging a fairly
low price for a high-quality offering.
• Going rate pricing: Firms base its price largely on competitors' prices.
The firm might charge the same, more, or less than major competitor(s).
• Auction type pricing: There are over 2,000 electronic marketplaces
selling everything from pigs to used vehicles to cargo to chemicals. One
major purpose of auctions is to dispose of excess inventories or used
goods. Companies need to be aware of the three major types of auctions
and their separate pricing procedures. These are English auctions, Dutch
auctions, SealedBid auctions
 the Final Price: In selecting the final price, the company
6. Selecting
must consider additional factors, such as;
• Impact of other marketing activities
a. Brands with average relative quality but high relative advertising
budgets were able to charge premium prices. Consumers apparently
were willing to pay higher prices for known products than for
unknown products.
b. Brands with high relative quality and high relative advertising
obtained the highest prices. Conversely, brands with low quality and
low advertising charged the lowest prices.
c. The positive relationship between high prices and high advertising
held most strongly in the later stages of the product life cycle for
market leaders
 7. Company pricing policies:
a. Gain and risk sharing pricing: Buyers may resist accepting a seller's
proposal because of a high perceived level of risk. The seller has the
option of offering to absorb part or all of the risk if it does not deliver
the full promised value.
b. Impact of prices of other parties: Management must also consider
the reactions of other parties to the contemplated price. (How will
distributors and dealers feel about it? If they do not make enough
profit, they may not choose to bring the product to market. Will the
sales force be willing to sell at that price? How will competitors react?
Will suppliers raise their prices when they see the company's price?
Will the government intervene and prevent this price from
being charged?)
 Adapting the price
Companies adapt the price to varying conditions in the marketplace.
There are the following price adaption strategies:
• Geographical pricing: where the company decides how to price to distant
customers.
• Price discounts and allowance: where the company establishes cash
discounts, quantity discounts, functional discounts, seasonal discounts, and
allowances.
• Promotional pricing: where the company decides on loss-leader pricing,
special-event pricing, cash pricing, low-interest financing, and
psychological discounting.
• Discriminatory pricing: where the company establishes different prices
for different customer segments, product forms, brand images, places,
and times.
• Product-mix pricing: where company decides on the price zones for
several products in a product line and on the pricing of optional features,
captive products, byproducts, and product bundles.
 Differentiated pricing
1.Price Discrimination:
• Price discrimination is a selling strategy that charges customers different
prices for the same product.
• The seller charges each customer the maximum price he or she will pay.
• Example of price discrimination can be seen in the airline industry.
Consumers buying airline tickets several months in advance typically pay
less than consumers purchasing at the last minute.
2.Customer segment Pricing:
• Price segmentation is simply charging different prices to different
people for the same or similar product or service.
• Price is depend on customer segment.
• For example: student prices at movie theaters, senior prices for coffee at
McDonald’s, people who use coupons and many more.
3.Product Form Pricing:
• Different versions of the product are priced differently but not
proportionately to their respective costs.
• It is one of the pricing techniques used when a company wants to get
maximum benefit for its brand name.
• For example: The price of the same type of a car may vary because of
different color and add-on features.
4. Image Pricing:
• The companies can charge different prices for the same kind of a
product on the basis of an image, a product enjoys in a market.
• E.g., cosmetics and clothing brands are the best examples.
5. Time Pricing:
• The price of a product varies with the time, such as the price charged is
less in the off-season as compared to the season time.
• For example: seasons
 2. DESIGNING AND MANAGING MARKETING VALUE
NETWORK
• Value networking: A network which creates partnership and value in
purchase, production and selling of products is referred to as value
network.
• Marketing channel: it is the people, organization, and activities necessary
to transfer the ownership of the goods from the point of production to the
point of consumption.
Channel design decisions

• Push strategy
• Pull strategy
Step of designing a channel system:
• Analyzing customer needs
• Establishing channel objectives
• Identifying major channel alternatives
• Evaluating major channel alternatives
 Importance of channel
• They just not serve markets, they make market.
• They create exchange efficiency by reducing the number of contacts needs.
• They can perform many function like transportation, storage, scale of
operation and advertising better then the manufacturers.
• Reduces the cost and time required of the manufacturing company.
• Offers promotion and financial support.
Type of distribution through channels
 3. Developing marketing strategy and plan
• Marketing strategy is the comprehensive plan formulated particularly for
achieving the marketing objectives of the organization. It provides a
blueprint for attaining these marketing objectives.
 STEPS TO DEVELOPING MARKETING STRATEGY PLAN
1)Set business goal: Before you create a marketing plan, you must have a
purpose for it. Goal should be SMART ( Specific, Measurable, Attainable,
Realistic and time bound) .
2) Conduct situation analysis: A SWOT analysis can give you a snapshot of
the situation you face as you market your business. Your strength are what
make your business unique, while your weakness are what you can improve
on, intense competition is threat, expansion and growth is opportunities for
your business.
3) Define Target market: A target market is group of potential customers to whom a
company wants to sell its products and services. Consumer are segment in different
category including geographic, demographics, behavior and psychological aspect.
4) Develop marketing strategies and plan: List your target market and set strategies
to attract and retain them. An example goal could be to increase young people’s
awareness of your products. Your strategies could be to increase online social media
presence by posting regular update about product on Facebook, Twitter.
5)Evaluate performance and make adjustments: Review your plan periodically by
comparing your progress with the implementation schedule. By regularly monitoring
and evaluating each action, you can always change and try new approaches.
 4.IDENTIFYING MARKET SEGMENT AND PLAN
• Market segmentation is the research that determines how an organization
divides its customers into smaller groups based on characteristics such as,
age, income, personality traits or behavior.
• According to a study by Bain & Company, 81% of executives found that
segmentation was crucial for growing profits.
• Organizations with great segmentation strategies enjoyed a 10% higher
profit than companies whose segmentation wasn’t as effective over a 5-year
period.
 STEPS IN MARKET SEGMENTATION
1.Conduct Research :
a. Interview customers
b. Refer to business data
c. Research audience interests.
2.Determine How To Segment Market:
Decide which criteria you want to segment your market by.
3.Research your potential segment:
Research to see what competition exists and if audiences are interested in your
new market.
4.Test and Iterate:
Evaluate your segments by ensuring they are usable and helpful. If they aren’t,
try segmenting based on other criteria.
 TYPES OF MARKET SEGMENTATION
• The four types of market segmentation
1. Demographic segmentation
2. Psychographic segmentation
3. Behavioral segmentation
4. Geographic segmentation
 Demographic Segmentation
• Demographic segmentation is one of the most popular and commonly used
types of market segmentation. It refers to statistical data about a group of
people.
• Examples:
Age Gender
Income Location
Family Situation
Annual Income
Education Ethnicity
 Psychographic Segmentation
• Psychographic segmentation is a method used to group prospecve, current
or previous customers by their shared personality traits, beliefs, values,
attitudes, interests, and lifestyles and other factors.
• Examples:
Personality traits
Values Attitudes
Interests
Lifestyles
Psychological influences
Subconscious and conscious beliefs
Motivations
Priorities
 Behavioral Segmentation
• While demographic and psychographic segmentation focus on who a
customer is, behavioral segmentation focuses on how the customer acts.
• Examples:
Purchasing habits
Spending habits
User status
Brand interactions
 Geographic Segmentation
• Geographic segmentation is the simplest type of market segmentation. It
categorizes customers based on geographic borders.
• Examples:
ZIP code
City Country
Radius around a certain location
Climate Urban or rural
Thank You!!