Question

Short answer questions;

-How do you use chain ratios to help determine potential market size?

-One of the key tasks for marketers is to set a price for products.  How do they do that and what things will influence what might be an acceptable price to its market?

-Marketers need to use estimated margins within their channel of distribution to help set desired retail prices.  Make sure that you can do this.  

-There are three main types of growth strategies to overcome the strategic planning gap.  These are intensive, integrative, and diversification.  But within the first two of these there are multiple ways of using employing this general growth strategy.   What are they and how do they work?

-Marketers must always be aware of, but not afraid of, their competitors.  How do marketers analyze what their competitors are doing in order to gain knowledge about them and assist in creating effective strategies?

-Customer relationship management has become a key aspect in trying to have relationship marketing instead of transactional marketing.  What is this concept and how does it work?

-Marketers frequently talk about the concept of a funnel for many things.  For example, new ideas, locations, and purchase.  How is the concept of a funnel used in these areas?

-New products are the lifeblood of organizations.  What can marketers do to try and maintain innovativeness and desirability with new products?

Answer 1

1)a method of calculating total market demand for a product in which a base number, such as the total population of a country, is multiplied by several percentages, such as the number in the population above and below certain ages, the number in the population with an interest in motor sport, the number in the population with motor-cycle licences, in order to arrive at a rough estimate of the potential demand for a particular good or service (in this case, say, a new type of motor cycle helmet.)

2) How to set the price

1. Know the market. You need to find out how much customers will pay, as well as how much competitors charge. You can then decide whether to match or beat them. Simply matching a price is dangerous, though - you need to be sure all your costs - both direct and indirect - are covered.
2. Choose the best pricing technique. Cost-plus pricing involves adding a mark-up percentage to costs; this will vary between products, businesses and sectors. Value-based pricing is determined by how much value your customers attach to your product. Decide what your pricing strategy is before making a calculation.
3. Work out your costs. Include all direct costs, including money spent developing a product or service. Then calculate your variable costs (for materials, packaging and so on) - the more you make or sell, the higher these will be. Work out what percentage of your fixed costs (overheads such as rent, rates and wages) the product needs to cover. Add all of these costs together and divide by volume to produce a unit break-even figure.
4. Consider cost-plus pricing. You will need to add a margin or mark-up to your break-even point. This is usually expressed as a percentage of break-even. Industry norms, experience or market knowledge will help you decide the level of mark-up. If the price looks too high, trim your costs and reduce the price accordingly. Be aware of the limitations of cost-plus pricing, because it works on the assumption you will sell all units. If you don't, your profit is lower.
5. Set a value-based price. You'll need to know your market well to set a value-based price. For example, the cost to bring a hairdryer to market might be £10. But you might be able to charge customers £25 if this is the market value.
6. Think about other factors. How will charging VAT have an impact on price? Can you keep margins modest on some products in order to achieve higher margin sales on others? You might need to calculate different prices for different territories, markets or sales you make online. Do you need to allow for possible late payment by customers? Consider your payment terms and keep an eye on your cash flow.
7. Stay on your toes. Prices can seldom be fixed for long. Your costs, customers and competitors can change, so you will have to shift your prices to keep up with the market. Keep an eye on what's going on and talk to your customers regularly to make sure your prices remain optimal.

Factors to cosider while setting price

• Costs. First and foremost you need to be financially informed. ...
• Customers. Know what your customers want from your products and services. ...
• Positioning.
• Competitors.
• Profit.

3)

Business owners often depend on other businesses within their industry. Distribution channels, for example, are interdependent relationships, typically between manufacturers, wholesalers and retailers. If your business is a member of a distribution channel, you must collaborate with the other channel members to ensure the final selling price is attractive to consumers without overly jeopardizing your profitability.

Distribution Channels

The classic example of a distribution channel starts with a factory, which sells its products to wholesalers, who then distribute the products to retailers, who sell the products to consumers. For example, a grocery store is able to offer a wide variety of products to consumers because it is the end point of numerous distribution channels. Various food manufacturers sell their products to wholesalers, who sell the products to grocery stores, who sell the products to consumers.

Price Increases

The price charged by each successive business in a distribution channel affects all the other members of the channel. That's because when any channel member increases its price, it marginally increases the price consumers must pay.

Channel Margin

The price difference between what a manufacturer charges and what a consumer pays is called the channel margin. For example, suppose a breakfast cereal manufacturer sells its products to a wholesaler at a price of $1 per box. The wholesaler takes delivery of a large number of boxes and distributes them to various retailers across the country, charging $2 per box. Retailers then increase the price to $4 per box when selling to consumers. The total channel margin is thus $3.

Effect

Each marginal increase in price is a trade-off. On one hand, each channel member wants to make as much profit as possible, so there is always a powerful motivation to increase the price. On the other hand, high prices turn off consumers, so if any business in the chain increases its price too much, everyone loses. For example, if a grocery store increases its cereal prices too much, customers will go to other stores for cereal, hurting the future profit potential for all the channel members. In this sense, every channel member is dependent on all others and must think carefully about the ripple effects of any price increase.

4)

Intensive growth strategies are business plans designed to improve the business performance of a company, bringing the highest gains with the least amount of effort and risk. They include strategies for market penetration, product development and market development.

Strategies for market penetration are one of the core elements of any intensive growth plan. Businesses look for ways of adding extra appeal to their existing products. This might be by offering value packs, such as selling a 6-pack set of socks instead of one, or offering a different use for a product. Product development is another approach commonly used in intensive growth strategies. It involves creating new products for the target market. Developing a new process carries with more risk but offers greater rewards if successful.

An alternative approach to a growth plan is to integrate the existing company with other businesses. For instance, companies may increase their business performance by buying competing companies that offer great potential. Acquiring companies allows the parent company to grow quickly. Another approach used by businesses is buying suppliers to better control their supply chain. Companies can also buy distributor companies. This not only allows them to position their products better in the market, but also allows them to stifle the growth of their competition.

Integrative growth: A growth strategy in which a company increases its sales and profits through backward, forward, or horizontal integration within its industry. A company may acquire one or more of its suppliers to gain more control or generate more profits (backward integration). It might acquire some wholesalers or retailers, especially if they are highly profitable (forward ration). Or finally, it might acquire one or more competitors through acquisition (horizontal integration).

5)

A competitive analysis is a critical part of your company marketing plan. With this evaluation, you can establish what makes your product or service unique--and therefore what attributes you play up in order to attract your target market.

Evaluate your competitors by placing them in strategic groups according to how directly they compete for a share of the customer's dollar. For each competitor or strategic group, list their product or service, its profitability, growth pattern, marketing objectives and assumptions, current and past strategies, organizational and cost structure, strengths and weaknesses, and size (in sales) of the competitor's business. Answer questions such as:

• Who are your competitors?
• What products or services do they sell?
• What is each competitor's market share?
• What are their past strategies?
• What are their current strategies?
• What type of media are used to market their products or services?
• How many hours per week do they purchase to advertise through the media used in this market?
• What are each competitor's strengths and weaknesses?
• What potential threats do your competitors pose?
• What potential opportunities do they make available for you?

A quick and easy way to compare your product or service with similar ones on the market is to make a competition grid. Down the left side of a piece of paper, write the names of four or five products or services that compete with yours. To help you generate this list, think of what your customers would buy if they didn't buy your product or service.

Across the top of the paper, list the main features and characteristics of each product or service. Include such things as target market, price, size, method of distribution, and extent of customer service for a product. For a service, list prospective buyers, where the service is available, price, website, toll-free phone number, and other features that are relevant. A glance at the competition grid will help you see where your product fits in the overall market.

6)

Customer relationship management (CRM) is the combination of practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving customer service relationships and assisting in customer retention and driving sales growth. CRM systems compile customer data across different channels, or points of contact between the customer and the company, which could include the company's website, telephone, live chat, direct mail, marketing materials and social media. CRM systems can also give customer-facing staff detailed information on customers' personal information, purchase history, buying preferences and concerns.

Components of CRM

At the most basic level, CRM software consolidates customer information and documents into a single CRM database so business users can more easily access and manage it.

Over time, many additional functions have been added to CRM systems to make them more useful. Some of these functions include recording various customer interactions over email, phone, social media or other channels; depending on system capabilities, automating various workflow automation processes, such as tasks, calendars and alerts; and giving managers the ability to track performance and productivity based on information logged within the system.

• Marketing automation: CRM tools with marketing automation capabilities can automate repetitive tasks to enhance marketing efforts at different points in the lifecycle. For example, as sales prospects come into the system, it might automatically send the prospects marketing materials, typically via email or social media, with the goal of turning a sales lead into a full-fledged customer.
• Sales force automation: Sales force automation tools track customer interactions and automate certain business functions of the sales cycle that are necessary to follow leads and attract and obtain new customers.
• Contact center automation: Designed to reduce tedious aspects of a contact center agent's job, contact center automation might include prerecorded audio that assists in customer problem-solving and information dissemination. Various software tools that integrate with the agent's desktop tools can handle customer requests in order to cut down on the time of calls and to simplify customer service processes.
• Geolocation technology, or location-based services: Some CRM systems include technology that can create geographic marketing campaigns based on customers' physical locations, sometimes integrating with popular location-based GPS apps. Geolocation technology can also be used as a networking or contact management tool in order to find sales prospects based on a location.

TECHTARGET

CRM tools specifically for social media platforms help companies foster customer relationships and monitor customer sentiments around their brands.

• Workflow automation: CRM systems help businesses optimize processes by streamlining mundane workloads, enabling employees to focus on creative and more high-level tasks.
• Lead management: Sales leads can be tracked through CRM, enabling sales teams to input, track and analyze data for leads in one place.
• Human resource management (HRM): CRM systems help track employee information, such as contact information, performance reviews and benefits within a company. This enables the human resource department to more effectively manage the internal workforce.
• Analytics: Analytics in CRM help create better customer satisfaction rates by analyzing user data and helping create targeted marketing campaigns.
• AI: Artificial intelligence (AI) technologies, such as Salesforce Einstein, have been built into CRM platforms to automate repetitive tasks, identify customer buying patterns to predict future customer behaviors and more.

Types of CRM technology

The four main vendors of CRM systems are Salesforce, Microsoft, SAP and Oracle. Other providers are popular among small to midmarket businesses, but these four tend to be the choice for large corporations. The types of CRM technology offered are as follows:

• On-premises CRM: This system puts the onus of administration, control, security and maintenance of the database and information on the company using the CRM software. With this approach, the company purchases licenses upfront instead of buying yearly subscriptions from a cloud CRM provider. The software resides on the company's own servers and the user assumes the cost of any upgrades. It also usually requires a prolonged installation process to fully integrate a company's data. Companies with complex CRM needs might benefit from an on-premises deployment.

• Cloud-based CRM: With cloud-based CRM, also known as SaaS (software as a service) or on-demand CRM, data is stored on an external, remote network that employees can access anytime, anywhere there is an internet connection, sometimes with a third-party service provider overseeing installation and maintenance. The cloud's quick, relatively easy deployment capabilities appeal to companies with limited technological expertise or resources.

  Companies might consider cloud CRM as a more cost-effective option. Vendors such as Salesforce charge by the user on a subscription basis and offer the option of monthly or yearly payments.

  Data security is a primary concern for companies using cloud-based systems, as the company doesn't physically control the storage and maintenance of its data. If the cloud provider goes out of business or is acquired by another company, an enterprise's data can be compromised or lost. Compatibility issues can also arise when data is initially migrated from a company's internal system to the cloud.

  Finally, cost may be a concern, since paying subscription fees for software can be more costly over time than on-premises models.

7)

A marketing funnel describes your customer’s journey with you.

From the initial stages when someone learns about your business, to the purchasing stage, marketing funnels map routes to conversion and beyond.

With careful analysis, a marketing funnel lets you know what your company must do to influence consumers at certain stages. By evaluating your funnels, you can potentially drive greater sales, more loyalty and stronger brand awareness.

The Evolution of the Marketing Funnel

At the end of the 20th century, Elias St. Elmo Lewis created a model highlighting the stages of a customer’s relationship with a business. The “AIDA” model indicates that every purchase involves:

• Awareness: The prospect is aware of their problems and possible solutions for them.
• Interest: The prospect shows interest in a group of services or products.
• Desire: The prospect begins to evaluate a certain brand.
• Action: The prospect decides whether to purchase.

Defining the Marketing Funnel

The basics of the marketing funnel have stayed the same since the 1900s. However, no single model is universally accepted by all companies. Some prefer to keep their model simple, using the “TOFU-MOFU-BOFU” strategy which refers to the top of funnel, middle of funnel, and bottom of funnel as distinct elements.

Others believe that adding “loyalty” and “advocacy” stages to the funnel improves the marketing strategy. After all, businesses lose up to $1.6 trillion a year when customers leave them.

Strategies for Each Stage of the Marketing Funnel

The marketing funnel works as a unified whole. This means that every section needs to work perfectly for the journey to be successful. There are many things that reduce friction in their marketing funnel. For instance:

• Awareness: Branded content strategies appeal to audiences and make them receptive to future interactions.
• Consideration: Brand advocates and social proof assist customers when they’re comparing you against competitors.
• Conversion: A simple purchasing process reduces the risk of buying.
• Loyalty: A loyalty program with regular discounts, email interactions and social media maintains customers.
• Advocacy: Receptive individuals in your loyalty program support your future marketing funnels.

The Benefits of Marketing Funnels

Marketing funnels simplify the customer journey and make it easier for companies to follow. These solutions map out each stage of their client’s decision process and plan the steps they want to take in each.

A marketing funnel applies to almost any customer interaction. Whether you’re looking for online sales, generating traffic for your brick and mortar store or collecting clicks as an affiliate, you need a marketing funnel. The funnel is powerful way to bring visibility to every stage of connecting with your customer.

The biggest benefit of marketing funnels is their measurability. Your funnel shows you where you’re losing customers, to help you pivot your strategy. For instance, if you lose customers before they ever get to the second stage, you need a better brand awareness campaign.

The Difference Between B2B and B2C Marketing Funnels

Marketing funnels often change depending on your customer base.

• B2C customers often navigate the funnel alone or with trusted advisors like family and friends. B2C clients may never interact directly with a company representative.
• B2B customers have larger, more focused buying groups. B2B consumers interact directly with sales representatives in the lower stages of the marketing funnel.

Adjusting your funnel to suit your user personas instantly makes it more effective.