Product Strategies in a Marketing Plan
The eventual success of a product in the marketplace begins before any marketing strategies are undertaken. Success starts with product development. And that begins with gaining an understanding of customer needs. The entire product offering -- product features and customer service -- must be tailored to provide greater benefits to customers than comparable products they are currently using or are contemplating purchasing.
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Distribution Channels
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How companies choose to distribute their products affects the sales success of the product in the marketplace. Distribution channel development is part of marketing strategy. Companies want to make certain the product is available to as many consumers as possible. An early stage consumer electronics manufacturer may find it difficult to get its product on the shelves of large electronics retailers until the sales potential for the product is proven. They may use other channels, such as direct response marketing through infomercials or having the product featured in niche consumer product catalogs. They could also private label-manufacture the product for another company that has an established relationship with retailers.
Positioning Product Versus the Competition
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Competitors may do some things well and fall short in other areas. The central focus of a company's strategic plan is deciding where it can compete most effectively, where its strengths match up against competitors' weaknesses. Customers make purchase decisions based on a wide array of factors, price being one of them. In recent years supermarket chains have begun carrying an increasing selection of gourmet products that formerly were found only on the shelves of smaller ethnic or specialty food stores. They did this because their customers responded favorably to the convenience of finding these products in one store rather than having to go to several. This creates a competitive advantage. Strategic positioning requires deciding how you want your customer to perceive your company's strengths in relation to competitors'.
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Communication Strategies
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Communication strategies build consumer awareness of the product and encourage customers to seek out the product on retail shelves. Advertising media, such as TV, radio and print, are used to the extent funds are available in the marketing budget. Because Internet communication can spread rapidly across the globe through social networking sites, companies also employ viral marketing strategies -- getting consumers to endorse their product or discuss the product online. Word of mouth marketing is highly effective. Consumers respond favorably to recommendations of their friends or peers.
Pricing Strategies
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The pricing strategy a company uses affects the gross margin earned on each unit sale and is also a determinant of the overall market size for the product -- and can affect consumer perception of the product's value. Luxury car makers don't view the hefty price tag of their vehicles as causing "sticker shock" but rather as a means of establishing exclusivity and a perception that purchasing the vehicle represents a significant financial milestone in the buyer's life, a threshold level of success. Product manufacturers may employ a lower price strategy, when introducing a product, in order to obtain the first few sales, recognizing that consumers are sometimes resistant to trying new things. As demand for the product grows, the price can be increased, and gross margins raised.
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References
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