Marketing Plan: Systematic Business Transformation

1) There are 4 steps followed to makeup cost-plus pricing formula:

Determine how much it costs to produce a product,

determine how much margin it costs to produce a product and

determine how much margin you want to make,

then calculate the final price by combining these two figures.

Eg- you have produced a lipstick, and the production costs you Rs. 70. You want to make a 50% margin, so you’ll add Rs.5 as a markup to the item on the market. So, the selling price would be Rs.75. There could be other lipsticks in the market which are marked up at higher pricing thus making yours the lowest, so this could enhance your sales.

2) Suppose the tractor manufacturer has invested 2 million in his venture and he expects to earn 20% as an ROI. Therefore, he will set the price accordingly. The cost and sales expectation are:

Unit cost: 20
Expected sales: 50,000 units

3) That means they are selling products at a lower profit. For example, you mark down the price of a jam jar by $10 from the market price of $30. The jam jars were initially bought at $10 per unit.

You are still making a $10 profit by selling the jam jar at $20. Markdown strategy will help you to sell your stock fast but at a lower profit.

Differential Pricing

The companies can charge different amounts from different customers considering the following basis:

§ Customer-Segment pricing: Different cohorts of people pays different prices for the same kind of product on the basis of a segment they belong to.
E.g., In any government examination, the form fee varies for the general category people and the other backward class people.

§ Image pricing: The companies can charge different prices for the same kind of product on the basis of an image, a product enjoys in a market.
E.g., cosmetics and clothing brands are the best examples.

§ Product-form Pricing: Different prices charged for different variants of the same product.
E.g., The price of the same type of car may vary because of different colors and add-on features.

§ Location Pricing: The companies charge different prices for the same product on the basis of different locations where it is offered.
E.g., In movie theaters, the customer pays different amounts for the different locations from where they can watch movies.

§ 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. Also, the movie tickets for the matinee show are less as compared to other show timings.

The companies can apply this pricing method by following any of the strategies viz. Charging a separate price to customers on the basis of their intensity of demand, Charging less from the buyers who consume in bulk, or charging different prices for a different class of buyers

Promotional Pricing

Definition: Promotional Pricing is a sales promotion technique, wherein the firm reduces the price of a product drastically, but for a short period.

Companies adopt several promotional pricing schemes, some of them are listed below:

1. Special-Event Pricing: Businesses allow discounts and rebates on special occasions or during the off-seasons with the intention to pull as many customers as possible.

2. Cash Rebates: The consumer goods companies viz. Automobile sector, electronics industry, cellular industry, etc. offers the cash rebates on their items if purchased in a particular period of time.

3. Loss-Leader Pricing: Often the big retailers or supermarkets reduce the price of a well-known brand with the intention to have additional store traffic. Through this strategy, the retailers try to compensate their margin loss from the additional sales achieved from additional customers. Generally, this type of strategy is opposed by the manufacturer because this can dilute the image of his brand; which is being sold at the list price by the retailer.

4. Low-interest financing: Nowadays, especially cellular companies are offering an easy EMI scheme with less rate of interest, so as to boost the sale of their mobile sets.

5. Warranties and service contracts: The companies offer extended warranties and free services of the product to the customers.

6. Psychological Discounting: This type of promotional pricing is very much visible these days. Under this strategy, the companies artificially set the high price of the product and then offer it at substantial savings, such as an item was of RS 359, but now it is available at just Rs 259.

Packaging and labeling

Marketers will use the packaging and labeling to entice prospective customers to purchase the items. The packaging is often used for material transmission and comfort. The instructions for how to use, transport, recycle, or dispose of the package or substance are written on the package or mark.

Purpose of packaging

· Physical protection: The objects enclosed in the package may require protection from, among other things, mechanical shock, vibration, electrostatic discharge, compression, temperature, etc.

· Information transmission: Packages and labels communicate how to use, transport, recycle, or dispose of the package or product.

· Marketing: The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package graphic design and physical design have been important and constantly evolving phenomenon for several decades.

• Distribution, handling, stacking, show, selling, opening, re-closing, usage, dispensing, reuse, recycling, and ease of disposal are all attributes that can be added to packages.

  
  

  A barrier against oxygen, water vapor, dust, and other pollutants is frequently needed. Permeation is an important consideration in architecture.

• Security: Packaging can play an important role in reducing the security risks of shipment. Packages can be made with improved tamper resistance to deter tampering and also can have tamper-evident features to help indicate tampering

Packaging Considerations/Functions

Package design and development are often thought of as an integral part of the new product development process. Alternatively, the development of a package (or component) can be a separate process but must be linked closely with the product to be packaged

With some types of products, the design process involves detailed regulatory requirements for the package. With packaging foods, for example, any package components that may contact the food are considered food contact materials

Packaging processes likewise, labeling, distribution, and sale need to be validated to comply with regulations and to ensure they have the well-being of the consumer in mind.

· Product Labeling

Labels help to draw shoppers' interest while also offering valuable knowledge about the items.

Labels are used to attract a customer's attention to a commodity. The use of catchy terms can entice passers-by to pause and consider the product. The label is likely to be the first thing that new buyers see, giving them an overall view of the product.

Labels are useful for describing items.

A label is a carrier of information about the product. The attached label provides customers with information to aid their purchase decision or help improve the experience of using the product. Labels can include:

1. · Care and use of the product

2. · Recipes or suggestions

3. · Ingredients or nutritional information

4. · Product guarantees

5. · Manufacturer name and address

6. · Weight statements

7. · Sell by date and expiration dates

8. · Warnings

Symbols Used in Labels

Many forms of symbols for package marking are standardized on a national and international basis. There are symbols for product certifications, logos, and proof of procurement on consumer packaging. To convey facets of customer use and protection, certain specifications and symbols exist. The approximate symbol, for example, states conformity with EU weights and measures accuracy regulations. Examples of environmental and recycling symbols include the recycling symbol, the resin identification code, and the “green dot.”