An Assignment

On

Creating products and pricing strategies

to meet customers needs.
Coures coad-BUS 113

Course titel-Introduction to Business

Department: Bechelor of Business Administration

Batch: 55th

Session: Summer 2020

Submitted to

Anwar Ahmad Arif

Assistant professor

Buisness Administration

Submetted by

MD. Hasin Masud

Student id: 2021010003

Date of submission: 14th September 2020

Introduction:
Behind every successful product there is a clear strategic vision that takes both market and
customer needs into account. Essentially, strategy is the set of choice a company makes in
order to achieve its objects. This choices include which products to develop, which market
segments to focus on, how to differentiate, how to prize, how to position and more. Product
leaders are the guardians of a company strategy. Why many people and teams can contribute
to developing a strategy, product leaders need to articulate it an ansure that its done in a way
that is applicable for day to day decision making. This course lays how to develop an effective
product strategy. .

Marketing strategy:
A marketing strategy refers to a business's overall game plan for reaching prospective consumers and
turning them into customers of the products or services the business provides. A marketing strategy
contains the company’s value proposition, key brand messaging, data on target customer demographics,
and other high-level elements.

Marketing Strategies vs. Marketing Plans:

The marketing strategy informs the marketing plan, which is a document that details the specific
types of marketing activities a company conducts and contains timetables for rolling out various
marketing initiatives.

Marketing strategies should ideally have longer life spans than individual marketing plans
because they contain value propositions and other key elements of a company’s brand, which
generally hold consistent over the long haul. In other words, marketing strategies cover big-
picture messaging, while marketing plans delineate the logistical details of specific campaigns.

Academics continue to debate the precise meaning of marketing strategy, therefore multiple
definitions exist. The following quotes help crystallize the nuances of (modern) marketing
strategy:

"The sole purpose of marketing is to sell more to more people, more often and at higher prices."
(Sergio Zyman, marketing executive and former Coca-Cola and JC Penney marketer)

"Marketing is no longer about the stuff that you make, but about the stories you tell." (Seth
Godin, former business executive, and entrepreneur)

"The aim of marketing is to know and understand the customer so well the product or service fits
him and sells itself." (Peter Drucker, credited as founding modern management)
“Marketing’s job is never done. It’s about perpetual motion. We must continue to innovate every
day.” (former vice chair and chief marketing officer, GE)

"Take two ideas and put them together to make one new idea. After all, what is a Snuggie but the
mutation of a blanket and a robe?" (Jim Kukral, speaker and author of "Attention!")

The Creation of Marketing Strategy :

A carefully-cultivated marketing strategy should be fundamentally rooted in a company’s value

proposition, which summarizes the competitive advantage a company holds over rival
businesses. For example, Walmart is widely known as a discount retailer with “everyday low
prices,” whose business operations and marketing efforts revolve around that idea.

Whether it's a print ad design, mass customization, or a social media campaign, a marketing asset
can be judged based on how effectively it communicates a company's core value proposition.
Market research can be helpful in charting the efficacy of a given campaign and can help identify
untapped audiences, in order to achieve bottom-line goals and increase sales.

Developing a Marketing Mix:

Once a firm has defined its target market and identified its competitive advantage, it can create the
marketing mix, which is based on the 5Ps discussed earlier, that brings a specific group of consumers a
product with superior value. Every target market requires a unique marketing mix to satisfy the needs of
the target customers and meet the firm’s goals. A strategy must be constructed for each of the
5Ps, and all strategies must be blended with the strategies of the other elements. Thus, the marketing
mix is only as good as its weakest part. For example, an excellent product with a poor distribution
system could be doomed to failure. An excellent product with an excellent distribution system but an
inappropriate price is also doomed to failure. A successful marketing mix requires careful tailoring. For
instance, at first glance you might think that McDonald’s and Wendy’s have roughly the same marketing
mix. After all, they are both in the fast-food business. But McDonald’s targets parents with young
children through Ronald McDonald, heavily promoted children’s Happy Meals, and in-store playgrounds.
Wendy’s is targeted to a more adult crowd. Wendy’s has no playgrounds, but it does have flat-screen
TVs, digital menu boards, and comfy leather seating by a fireplace in many stores (a more adult
atmosphere), and it has expanded its menu to include more items for adult tastes.

Product Strategy:

Marketing strategy typically starts with the product. Marketers can’t plan a distribution system or
set a price if they don’t know exactly what product will be offered to the market. Marketers use
the term product to refer to goods, services, or even ideas. Examples of goods would include
tires, MP3 players, and clothing. Goods can be divided into business goods (commercial or
industrial) or consumer goods. Examples of services would be hotels, hair salons, airlines, and
engineering and accounting firms. Services can be divided into consumer services, such as
lawn care and hair styling, or professional services, such as engineering, accounting, or
consultancy. In addition, marketing is often used to “market” ideas that benefit companies or
industries, such as the idea to “go green” or to “give blood.” Businesses often use marketing to
improve the long-term viability of their industries, such as the avocado industry or the milk
industry, which run advertising spots and post social media messages to encourage consumers
to view their industries favorably. Thus, the heart of the marketing mix is the good, service, or
idea. Creating a product strategy involves choosing a brand name, packaging, colors, a
warranty, accessories, and a service program.

Pricing Strategy
Pricing strategy is based on demand for the product and the cost of producing that product.
However, price can have a major impact on the success of a product if the price is not in
balance with the other components of the 5Ps. For some products (especially service products),
having a price that is too low may actually hurt sales. In services, a higher price is often equated
with higher value. For some types of specialty products, a high price is expected, such as prices
for designer clothes or luxury cars. Even costume jewelry is often marked up more than 1000
percent over the cost to produce it because of the image factor of a higher price. Special
considerations can also influence the price. Sometimes an introductory price is used to get
people to try a new product. Some firms enter the market with low prices and keep them low,
such as Carnival Cruise Lines and Suzuki cars. Others enter a market with very high prices and
then lower them over time, such as producers of high-definition televisions and personal
computers.

Pricing Strategy:
Pricing strategy is based on demand for the product and the cost of producing that product.
However, price can have a major impact on the success of a product if the price is not in
balance with the other components of the 5Ps. For some products (especially service products),
having a price that is too low may actually hurt sales. In services, a higher price is often equated
with higher value. For some types of specialty products, a high price is expected, such as prices
for designer clothes or luxury cars. Even costume jewelry is often marked up more than 1000
percent over the cost to produce it because of the image factor of a higher price. Special
considerations can also influence the price. Sometimes an introductory price is used to get
people to try a new product. Some firms enter the market with low prices and keep them low,
such as Carnival Cruise Lines and Suzuki cars. Others enter a market with very high prices and
then lower them over time, such as producers of high-definition televisions and personal
computers.

Place (Distribution) Strategy:

Place (distribution) strategy is creating the means (the channel) by which a product flows from
the producer to the consumer. Place includes many parts of the marketing endeavor. It includes
the physical location and physical attributes of the business, as well as inventory and control
systems, transportation, supply chain management, and even presence on the web. One aspect
of distribution strategy is deciding how many stores and which specific wholesalers and retailers
will handle the product in a geographic area. Cosmetics, for instance, are distributed in many
different ways. Avon has a sales force of several hundred thousand representatives who call
directly on consumers. Clinique and Estée Lauder are distributed through selected department
stores. Cover Girl and Coty use mostly chain drugstores and other mass merchandisers.
Redken products sell through hair salons. Revlon uses several of these distribution channels.

Promotion Strategy:
Many people feel that promotion is the most exciting part of the marketing mix. Promotion
strategy covers personal selling, traditional advertising, public relations, sales promotion, social
media, and e-commerce. These elements are called the promotional mix. Each element is
coordinated with the others to create a promotional blend. An advertisement, for instance, helps
a buyer get to know the company and paves the way for a sales call. A good promotional
strategy can dramatically increase a firm ’sales.

Creating Products that Deliver Value:

Building (or improving on) great products and services is a process of constant discovery. As
competition moves, so do the expectations of customers. When technology evolves, so do the
expectations of customers. As your ideas develop, so do the expectations of customers.
Customers (or, in cases where they’re not a buyer – the users) are at the heart of the discovery
process.

Whether or not the solution you’re creating is about rolling out an internal change, or creating a
new product or service, or building a new piece of software, you are working on a Value
Proposition that is for a customer somewhere.

A Value Proposition has four major parts:

1. A Need – the reason for the work. This can be described as a pain, a desire or gain or
as a specific job for one or more types of users or other constituency.
2. Your Approach – a solution to solve the Need. This is something that might (or should)
be unique to you.
3. Some Benefits – the results of someone using your solution and the return on the cost
outlay in time, money or any other resource. It should be compelling, and it should also
alleviate the Need.
4. The Competition – a view on alternatives that might be solving the same need or be
quite similar to your approach. Ultimately, you need to answer why you and only you?

Each piece of the Value Proposition can (and will) shift over time. What it looks like at the start
of the process won’t (or shouldn’t) be what it looks like at the end. Change is part of the
process. It’s customers that will give us the insight as to how well the Value Proposition works.
The Product Life cycle:
The product life cycle is the process a product goes through from when it is first introduced into
the market until it declines or is removed from the market. The life cycle has four stages -
introduction, growth, maturity and decline. While some products may stay in a prolonged
maturity state, all products eventually phase out of the market due to several factors including
saturation, increased competition, decreased demand and dropping sales. Additionally,
companies use PLC analysis (examining their product's life cycle) to create strategies to sustain
their product's longevity or change it to meet with market demand or developing technologies. 

4 Stages of the Product Life Cycle:

1. Introduction

Once a product has been developed, the first stage is its introduction stage. In this stage, the
product is being released into the market. When a new product is released, it is often a high-
stakes time in the product's life cycle - although it does not necessarily make or break the
product's eventual success. 

During the introduction stage, marketing and promotion are at a high - and the company often
invests the most in promoting the product and getting it into the hands of consumers. This is
perhaps best showcased in Apple's (AAPL) - Get Report famous launch presentations, which
highlight the new features of their newly (or soon to be released) products. 

2. Growth

By the growth stage, consumers are already taking to the product and increasingly buying it.
The product concept is proven and is becoming more popular - and sales are increasing. 

Other companies become aware of the product and its space in the market, which is beginning
to draw attention and increasingly pull in revenue. If competition for the product is especially
high, the company may still heavily invest in advertising and promotion of the product to beat
out competitors. As a result of the product growing, the market itself tends to expand. The
product in the growth stage is typically tweaked to improve functions and features.

3. Maturity

When a product reaches maturity, its sales tend to slow or even stop - signaling a largely
saturated market. At this point, sales can even start to drop. Pricing at this stage can tend to get
competitive, signaling margin shrinking as prices begin falling due to the weight of outside
pressures like competition or lower demand. Marketing at this point is targeted at fending off
competition, and companies will often develop new or altered products to reach different market
segments.
4. Decline

Although companies will generally attempt to keep the product alive in the maturity stage as
long as possible, decline for every product is inevitable.

In the decline stage, product sales drop significantly and consumer behavior changes as there
is less demand for the product. The company's product loses more and more market share, and
competition tends to cause sales to deteriorate. Marketing in the decline stage is often minimal
or targeted at already loyal customers, and prices are reduced.

Conclusion:
In terms of new product development, marketing personnel are usually concerned with making
the most of market opportunities by choosing the right price and understanding ‘consumer
needs’, while engineering personnel may be concerned only with ascertaining whether the
engineering requirements can be met satisfactorily. Product designers are concerned with the
product characteristics and appearance of the new product while manufacturing personnel are
mainly concerned with the manufacturing process design, quality of manufactured products, and
manufacturing time and cost. Therefore, they have different notions about the drivers of
success, the optimization variables, and the nature of constraints for new product design. This
book has presented and discussed several methodologies for incorporating the concerns of
marketing, engineering and manufacturing personnel into new product development.