Describe the process of marketing a product from the point of development, prici

Question

Describe the process of marketing a product from the point of development, pricing strategies used, promoting the product and deciding which distribution model to use to deliver it to the marketplace. (HINT: Pretend you are describing a complicated process to a novice. You want to make sure the receiver understands the major parts of the process by providing enough detail and examples to ensure understanding, but you do not wish to overwhelm the listeners with so much information that they become confused or lose interest.

Explanation / Answer

When a product is developed, it has to be so marketed so as to create a demand for it. For marketing the product the steps to be undergone consist of:

1. Defining the market size and behaviour.

2. The consumers aimed at have to be identified.

3. The competitors in business have to be recognized.

4. The flexibility of firms entering and existing the sector have to be considered.

5. Based on this the marketing stratergy has to be formulataed.

6. The firm has to decide whether it looks to gain market share based on cost leadership or differentiation.

7. Cost leadership has to be undertaken by firms whose product has turned into a commodity. For, such a firm, marketing should emphasis on the product's affordability in comparision to its substitutes.

8. For firm which builds a differentiated product, marketing should aim at highlighting the difference and making blatant the reasons why the said product is superior from similar ones already in the market.

9. For product that is new to the market, the developers and parent company should look to get rights issued for the intial few years to prevent new firms from entering. Thereby, they would capture the initial majority customer base.

PRICING STRATERGIES

The four broad pricing stratergies include:

Premium pricing; economy pricing; penetration pricing and skimming pricing.

1. Premium pricing: It sets prices higher than the competitors. This form of pricing can be used if a product is new in the market and doesn't have any immediate substitutes. For, creating a demand for such a product the value has to be created from the customer's perspective.

2. Economy Pricing: By keeping marketing and production costs low, the prices of commodities are kept low. Though this is an effective stratergy for businesses with large scale production, it might not work for small businesses as they donnot have effective amount of sales.

3. Penetration Pricing: It is the application of cost leadership strategy. Firms try to attract customers through low prices. It might lead to initial losses but through capturing the market profits can be made.

4. Skimming Pricing: It involves setting high rates when the product is new to the market to generate high profits. Then as competition increases the prices are dropped. Hence, it gives an initial momentum to the business profits.

PROMOTING THE PRODUCT:

The means to promote the product can include:

1. Television advertisements

2. Social media and youtube advertisements

3. Social media contests can also help create a buzz

4. Sponsoring popular events or shows can help grab eye balls

5. Share customer reviews and interviews to help attract new customers

6. Try giving free samples with any popular product as a means to introduce it to people

DISTRIBUTION MODEL:
It deals with simulating the decisions involved in the distribution channel.

The model should be decided on by considering: the means to transfer from manufacturing to delivery end; cost saved through the strategy and the competitive advantage build through it.

1. INDIRECT DISTRIBUTION: The chain is long. The product reaches the customer by passing through several channels.

2. DIRECT DISTRIBUTION: The company sells directly to the customer. E-commerce site with the comapany directly selling to the customer can be an example.

3. INTENSIVE DISTRIBUTION: When there is a mass distribution of the product. Example- FMCG

4. SELECTIVE DISTRIBUTION: When the product is to have selective outlets.

5. EXCLUSIVE DISTRIBUTION: Distributors will be limited. This will indicate at a product's exclusivity and is the case for luxury products and cars.

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