The marketing concept provide assistance to the companies to do focus on the requirements of consumers. It consists of three basic elements a customer orientation, a goal orientation, and the systems approach.
The small firms can identify the persons and firms in order to buy the goods from the targeted market and meet the market needs. A target market can be choose by studying the external factors which are as follows:
The company will do survey related to the population patterns in the particular area where they want to open the company. The population can be based on that how much number of males, females, children's, new born babies, youngsters, adults and old persons are living in that target market. They will do one survey on population patterns and produced their products as per criteria.
The company should do survey on age groups of the persons while selecting a target market. The company can make one table in which they can mentioned the age groups.
The company should do survey on income levels of the persons while selecting a target market. The company can make one table in which they can mentioned the persons earning annual income. The table will be helpful for the company to choose a target market.
Pricing of the product is important but it is different from the price. Pricing means the art to translate something into quantitative terms. It is considered as a pricing strategy where byproducts get sold separately at a particular rate.
The three main considerations in pricing product are as follows:
Product Life Cycle
The product life cycle have four main stages which are as follows:
It is the first stage when the product get appears in the market for the first time. In this stage, the price of goods are more in this stage, sales are less. The profits are negative because of more promotion, distribution costs and high development. It helps to do communication with the products features, its uses to the buyers and consumers.
In this stage, the prdocuts sales get rise and profits are at its peak. When competitors get enter into the market, they want to develop the best designs of product. The marketing strategy helps to motivates the brand loayalty. The benefits of goods get identified in the market.
The competition get more aggressive in the maturity stage. The prices and profits get decreased in this stage. The promotion costs of the company get increases. The rivals decrease the prices of the goods in order to attract new consumers. The new companies get entered and it maximizes the competition between the firms.
The sales may get decreases mainly when the new technology get involved in the market. The owners of the company considered the pruning goods from the product line in order to decrease the unprofitable factors. The company don't prefer to do prmotion of the product at this stage.
Meet the competition
The coampnay shuodl set the prices of their goods and services after meeting their business competitors. They have to set the price of their products by following the pricing practices of other competitors, which can lead into severe losses when the cost and sales volumes don't taken into account. Every company prepared their product in a different manner and bear different product costs.
Cost Oriented Pricing
It is the basic pricing policies related to costs. Total costs may provide a floor which is less than its prices. These rates are not suitable for long-run. The cost-oriented prcing may get by adding a markup cost of the particular goods.
The company use cost-oriented pricing policy to fix the prices of their goods and services. This pricing policy contains the profit of the company and its production costs. This policy is used by retailers to set the price of goods by adding the fixed markup percentage to the amount which is paid by the retailer for every product.
Markup means the difference in the selling price of cost and goods or services. It can be shown as a percentage which is over the cost. It is the amount which get added to the product cost in order to determine the selling price. It can be shown in dollars, cents or in percentage.
In this era of growing competition customer is the first preference of every business. Thus a company reshuffles their sales policies, target segments, products features to keep the customers and to attract new customers. But in spite of all these efforts sometimes they failed to churn up the minds of the target market as a whole for their products. Thus they give privileges to their existing customers by various trade secrets which are not revealed to the actual market. This creates artificial sales volumes for the companies and that crowd attracts the original customers. Such secrets are never revealed to the market but hiring customers used as a very powerful tool for the organization at the time of crisis. In simple words it is investing money for earning money.
The process of hiring customers in the market to generate an artificial volume of business is effective when customers follow the trends. These types of markets are generally found in the interior regions of the places. There is several advantage of this process. Firstly this proved to be a most powerful tool to churn out the market within short span of time. Secondly, this helps to attract the customers while other strategies have failed so far. Thirdly, applying such strategies helps the small business to reach break- even of the business and thus they remains free to compete the market through various pricing strategies.
This process of hiring customers has dis-advantages too. First of all, it may hamper the company reputations if rumored in the society of such activities by the company. Secondly, competitors are aware in the market and always searching for the hidden threats. So considering high sales volumes within a very short time span may mark suspicious to them. Thirdly, this artificial sales process affects the financial positions of the company's especially small business. So they should allocate a budget for such activity before starting operations. Fourthly, if marketers failed to study the consumer behavior of the target market, operations may go in vain after lifting the artificial operations which may prove a huge loss for the small organizations.