PRODUCT ,PRICE ,CHANNEL

& PROMOTION
STRATEGY
Unit 6
Product Strategy
◦ Product strategy is defined as the road map of a product. This road map outlines the end-to-
end vision of the product. The product strategy enables the company to focus on a specific
target market and feature set, instead of trying to be everything to everyone
◦ The product strategy determines all the steps which a brand will have to take to make the
product a success.
Product Strategy is comprised of 3
parts
◦Vision
◦Goals
◦Initiatives
Vision
•A good vision describes who the customers are, what
customers need and how you plan to deliver a unique offering.
• The vision includes details on the market opportunity, target
customers, positioning, a competitive analysis and the go-to-
market plan.
Goals
Goals define what you want to achieve in the next quarter,
year or 18 months.
• E.g. Increase revenue by 30%, Expand into 5 countries,
Increase mobile adoption by 100%,etc.
Initiatives
Initiatives are the high level efforts that will help
you to achieve your goals.
• E.g. Performance improvement, Better
reporting
Components
 Perceived Quality
 Relationship Marketing
Perceived Quality:

• It can be defined as the customers’ opinion about the overall quality or image of the product or
service or the brand itself with respect to its purpose of use as against its alternatives.
If its a product, the customers consider the following 7 features for evaluation –
(1)Performance,
(2) Features,
(3) Specifications,
(4) Reliability,
(5) Durability,
(6) Serviceability
(7) Fit and Finish.
E.g. Let’s consider the example of a washing machine:
1. Performance: how good the washing machine washes the
clothes.
2. Features: does it have an eco-mode of washing clothes.
3. Specifications: how frequently the defects happen.
4. Reliability: will its performance vary after 2-3 years of
continuous use?
5. Durability: what is its average life span?
6. Serviceability: is the service system efficient?
7. Fit and Finish: is the product stylish or does it have a smart
look?
Relationship Marketing

Relationship marketing is about forming long term relationships with

customers.
Rather than trying to encourage a one-time sale, relationship marketing
tries to foster customer loyalty by providing exemplary products and
services
Implementing a Relationship Marketing
Strategy
1. Prioritize Customer Service in Your Relationship Marketing Strategy
2. Promote Engagement Through Content Marketing
3. Match Your Social Media Approach to Your Audience
4. Keep Email Marketing Top of Mind for Greater Customer Retention
5. Implement a Loyalty Program
6. Use Relationship Marketing to Learn About Your Audience Through
Surveys.
Pricing Strategy
◦ A pricing strategy is a model or method used to establish the best price
for a product or service.
◦ Pricing strategies help you choose prices that maximize profits and
shareholder value while considering consumer and market demand.
Setting Prices to build Brand Equity
◦ There are many different approaches to setting prices, and the choices depend on a number of
considerations.
1. Value Pricing - Value-based price is a pricing strategy which sets prices primarily, but not
exclusively, according to the perceived or estimated value of a product or service to the
customer rather than according to the cost of the product or historical prices. Its objective is
to uncover the right blend of product quality, product cost and product price that fully
satisfies the needs and wants of consumers and profit targets of the firm. Following are three
components:
a. Product Design & Delivery – The first key is proper design and delivery of the product.
Consumers are willing to pay premiums when they perceive added value in products and
services. Some companies actually have been able to increase prices by skillfully
introducing new or improved value added products.
 b. Product Costs – The second key is to lower cost as much as possible. Meeting cost
targets requires finding additional cost saving through productivity gains, outsourcing,
material substitution, product reformulations and process changes like automation or factory
improvements.

c. Product Prices – The final key is to understand exactly how much value consumers perceive
in the brand. A number of techniques are available to estimate these consumer value perceptions
Setting Value Based Pricing
Focus a single segment
Compare with the next best alternative
Understand the differentiation worth
Put the differentiation value in rupee
◦ 2.Everyday Low Pricing (EDLP) – It is the pricing strategy used
by retail stores that provides low prices to the customers every
single day without any special pricing discount, sale, comparison
shopping etc. EDLP strategy helps to convince the consumer that
they will get better and low prices than other competitive stores
everyday even though the promotions of competitors at regular
intervals might provide lowest prices but they will not be available
everyday.
CHANNEL STRATEGY
What do you mean by Marketing Channels?

◦ Marketing Channels are defined as ‘sets of

interdependent organisations involved in the process of
making a product or service available for use or
consumption.’
◦ Channel Strategy includes the management of
intermediaries such as wholesalers, distributors, retailers,
etc.
Types of Marketing Channels

. Direct Channel
1

2. Indirect Channel
Direct Channel

In a direct channel, a producer sells the product directly to a

consumer without the help of intermediaries (middlemen).
In a direct channel, a manufacturer tries to reach the
consumers through the following:
a. Company owned stores
b. Online retail
c. Telemarketing
◦Direct channel of distribution eliminates the costs of
sales commission and discounts which have to be
offered to the intermediaries to generate business.
◦ It also allows the manufacturer to have direct contact
with the consumer and the ability to answer questions
and provide better customer service.
Indirect Channel

◦ In an indirect channel, there are one or more middlemen

(intermediaries) between the manufacturer and the
consumers.
◦ Indirect channels may be classified as the following:
1. Manufacturer – Retailer – Consumer
2. Manufacturer – Wholesaler – Retailer – Consumer
3. Manufacturer – Agent – Wholesaler – Retailer -Consumer
PULL STRATEGY

• When a consumer makes effort to get a product from the

retailer, it can be said that the manufacturer has applied the
Pull Strategy.
• A pull strategy motivates the customers to actively seek out a
specific product.
• It is best suited when a manufacturer has a strong and
visible brand.
In a pull strategy, a firm increases the demand for its products
and pulls the consumers
towards it.
• In a pull marketing strategy, the goal is to make a consumer
actively seek a product and
get retailers to stock the product due to direct consumer
demand.
• E.g. mobile phones, medicines, etc.
PUSH STRATEGY
Push marketing is a promotional strategy where businesses
attempt to take their
products to the customers.
• The term push stems from the idea that marketers are
attempting to push their products at consumers
Common sales tactics include trying to sell merchandise
directly to customers via company showrooms and negotiating
with retailers to sell their products for them, or set up point-of-
sale displays (exhibitions, fashion shows, trade shows)
• Often, these retailers will receive special sales incentives in
exchange for this increased visibility.
PROMOTION STRATEGY

◦ Promotion strategies are necessary to get the brand noticed by

the public and attracting new customers.
◦ There are numerous ways to promote a product or a service.
Some of the ways of promoting a product are:
1. Advertising –
a.Magazines/newspapers
b. Television
c. Radio
d. Outdoor ads
2. Public Relations –
a. Media introductions
b. PR Events
c. News/media releases
3. Personal Selling –
a. Salesmen
b. Showrooms
c. Exhibitions
d. Trade shows
4. Digital Marketing –
a. Company websites
b. Social media – Facebook/Twitter
c. Blogging
d. Mobile phone promotions
e. Youtube
5. Sales Promotion –
a. Coupons
b. Discounts
c. Referral Programmes
d. Loyalty incentives
6. Direct Marketing –
a. Mail orders
b. E-mail
c. Telemarketing
d. Point of sale displays and signs
Criteria For IMC Program

Coverage
Contribution
Commonality
Complementarity
Conformability
Cost
Coverage
Proportion of the audience reached by each communication option, as
well as how much overlap exists among communication options.
Contribution
Inherent ability of a marketing communication to create the desired
response and communication effects from consumers in the absence of
exposure to any other communication option.
Commonality
Extent to which common information conveyed by different
communication options shares meaning across communication options.
Complementarity
Describes the extent to which different associations and linkages are emphasized
across communication options
Conformability
Extent that a marketing communication option is robust and effective for different groups
of consumers.
Types of conformability
◦ Communication conformability - Ability of the mode of communication to effectively
communicate with the diverse group of customers.
◦ Consumer conformability - Ability of the communication option to inform or persuade
consumers who vary on dimensions other than communication history.
Cost
To arrive at the most effective and efficient communication program evaluations of
marketing communications on all of the preceding criteria must be weighed against their
cost.
◦ Thank you