Definition: A trade name used by an enterprise to name their products or services.
The brand name of this product is sWaP, which stands for smart Watch and Phone.
The customers would be:
People interested in technology
Business Minded People
People who want more features on their watch for a lower price
Would like a fashionable watch
People who like a conversation starter
Want a phone as well as a watch
Do not want to pay a £1000 for a watch
Importance of Customers
The customers are very important to the business because if they don’t buy the product not many others will. They are also important because if they recommend the product, they will get more customers and public awareness. With customer feedback they will find out new ways to develop their product and if customers are pleased with the product.
Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is important to maintain a high customer satisfaction as it enables a higher number of sales leading to profit. Keeping in contact with the customers is key to identify what the typical consumer thinks of your product. They can provide you with tips and assistance to develop your product even more. sWaP watches have listed a host of emails on their website allowing the consumer to contact them with enquiries and tips. They also provide an address and telephone number on their website to contact them in other alternative ways.
The Marketing Mix
Definition: “The combination of factors which help a business sell their product/service (GCSE Edexcel Business Studies textbook)
Product : A material object or an intangible service that is mass produced
If the customers are pleased with the product and recommend it the company can charge a higher price for their product
Furthermore, if the product is of a high quality, they can charge a higher price.
Place (Distribution channel )– Place represents the location where a product can be purchased.
It can include any physical store as well as virtual stores on the Internet.
Pricing- The amount of money customers have to give up to acquire a product.
The price of a product must reflect the value that customers place on the product. The price must be high but reasonable so that the product reflects for what the customers are prepared to pay for this quality. Price, quality and how customers perceive the product are all interlinked. It is also important that you conduct research to identify the suitable price for the product. In this case, I believe that the watches are worth their price because of the many uses of it providing all the specifications are true.
There are many factors that can affect the price these are called pricing strategies. These options include cost-plus, competition, penetration, skimming and promotional.
Cost-plus is when a business adds plans how much profit they want and add it on to the actual price. This also includes added value. This is effective as it ensures that a profit is made and shows that the business have planned out financial objectives. Sometimes this can mean the price is too high leading to the consumer not buying the product.
Competition is when a business charges a similar price to the price what competitors offer. An advantage of this is that the price will be competitive but the price you sell the product at may not be profitable.
Penetration is when a business starts with a lower price to attract customers and then gradually increase. An advantage is that it encourages people to buy but on the other hand this may not be profitable and cannot last long. Once the price is high again there is a possibility of a rapid decrease in sales.
Skimming is when a business starts with a high price as it is unique. This allows extra profits to be made which can be paid towards start up costs. But the price has to be reduced if there is competition.
Promotional is when there is a special price for a planned limited time. This is useful to get rid of old stock but it is also useful for new but reduces the profit received from sales. It is only useful for a limited time.
I would suggest cost-plus or skimming, because I think these will provide reasonable prices for the watches and will attract customers to buy the product. Cost-plus is effective especially if you keep it at a low percentage profit. It is effective because a profit is definitely on the cards and charges the customers close to the manufacturing costs enabling more customer satisfaction. Skimming, the better of the two selected, is effective as it is vastly unique. Staying on the subject of unique I suggest SWAP WATCHES to patent their unique product disabling other companies to copy their product. This is unique but can be problem depending on the target market which has to be in the slightly higher income category. Charging a little higher for the quality is good especially when the product’s quality is extremely good.
Definition: Consumer purchase of the same brand purchased on the previous purchase occasion. It is also called repurchase.
sWaP WATCHES hope to ensure repeat purchases of the brand by providing a unique range of products and by promoting each one of these products. They also hope to maintain reasonable prices for each watch which is also an effective way to get the customer to purchase again.
Definition: Provides information on the product to the public and tries to persuade the public to consume a particular product
4 main types of promotion: advertising; public relations; word of mouth; point of sale
Advertising: above the line - advertising in the media, e.g. the company pays an advertising company to spread their product
Public relations: Below the line – subtle advertising such as product placement and press releases, e.g. featured on the Gadget Show
Word of mouth: increasing awareness of a product through human communication.
Point of sale: the point where the product is intended to draw attention in the place where it is being sold, e.g. offers on the supermarket
Which part of the Marketing Mix is emphasised the most?
We feel that the Product is emphsised the most. We think this because as it is a technological piece the company would be more focused on having a fully developed product so they are ahead of their competitors. If they made promotion, place and price the main focus we think that the product will not be as good and customers will not be satisfied.