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- 2. Content 2 1. Product/ Service Design 2. Promotion and Branding 3. Pricing Strategies 4. Distribution
- 4. “ The process of creating a new product or service is called product design. It involves the generation and development of ideas through a process that leads to new products/services. 4
- 5. Example When designing the new travel iron they may take into consideration: 1. The shape and appearance of the iron 2. Whether its fit the intended need 3. How easily and cost effectively it can be produced from the design 4. The dimensions and preferred materials to be used 5. The image it gives when displayed 6. Corporate identity 5
- 6. Function 1. Does it do what supposed to do? 2. Extra features? 3. USP > Rival product? Design Mix Aesthetic 1. Appearance of product 2. Includes packaging 3. Does it fit the segment 6 Cost 1. Do the economics make sense? 2. Compare intended price vs variable cost per unit
- 7. Design Mix & Social Trends 7 Design for Waste Minimisation ● Design product that more durable and last a lifetime ● Design smaller and lighter ● Design could be discouraged from designing single use Design for re-use ● Design packaging which can be re-used. ● Component of product easily re-used. ● Use recycled materials ● Use waste discarded by other businesses in their designs Design for recycling Business only use materials, components, and services from suppliers that respect the environment, trade with honesty, treat their workforce well Ethical Sourcing
- 9. Above the line promotion ● Informative advertising ● Persuasive advertising ● Reassuring advertising 9
- 10. Below the line promotion 10 DIRECT SELLING EXHIBITIONS SALES PROMOTION MERCHANDISING & PACKAGING PUBLIC RELATIONS DIRECT MAILING Free gifts, Coupons, Loyalty cards, Competitions, BOGOF offers, Money-off deals Press release, press conference, Sponsorship, Donations Product layout, display material, Stock Businesses mail out leaflets or letters to households selling products directly to consumers in a non-retail environment. Business attend trade fairs to promote their products and services
- 11. Choosing Methods of promotion 11 Cost Market Type Product Type Competitors promotion Stage in the product life cycle
- 12. Ways to build a brand 12 1. Exploiting Unique Selling Point (USP) 2. Advertising 3. Sponsorship 4. Using Social Media 5. Emotional branding
- 14. Pricing Cost Plus Pricing Adding a markup to total cost Penetration Pricing Competitive Pricing Pricing strategies based on the price charged by rivals, ex: Grab, Gojek, Traveloka Skimming Setting a high price initially and the lowering it late Setting a low price to start with in order to get established in the market, price may be raised once established Psychological Pricing Set the price slightly below a round figure, charging $ 999,99 instead of $100 Predatory Pricing This practice is illegal, because it can lead to a lack of competition in the future
- 15. Price consideration Differentiation and USP A business can generally charge a higher price if its product has a USP or is sufficiently differentiated from those of its rivals Price elasticity of demand If the demand for a firm’s products is price inelastic, there will be scope for price increases. Amount of competition If there is very little competition in the market, a business can charge much higher prices because consumers cannot switch to a rival. 15 Strength of the brand A business with a strong brand can generally charge a higher price than those with weaker brands. Stage in the product life cycle Product pass through a number of stages over their lifetime. As a product passes through the different stages of this life cycle, a business may adjust the price charged Costs and need to make profit In the long term, price must cover all the costs of production and generate a profit. Businesses need to consider the value of their products in addition to costs if they are to extract the most from consumers
- 16. Distribution 4
- 18. 18 Wholesaling Wholesaler usually buy from manufacturers and sell to retailers. A wholesaler stocks goods produced by many manufacturers Retailing Retailer buy large quantities from manufacturers and wholesalers and sell small quantities to customers (breaking bulk) Agents or brokers Travel agents sell holidays and flights for holiday companies, airlines and tour operators. Estate agents sell properties on behalf of vendors. Agents are also used to sell insurance and other financial product. Manufacturers may also use agents when exporting.
- 19. Consideration 19 1 The nature of the product Services will sold directly to customer, fast moving consumer goods will sold directly by manufacturer to consumers, exclusive product will sold in special outlet, and technical product will sold by expert salespeople 2 Cost Business will choose the cheapest distribution channels and prefer direct channels and minimize the intermediaries. 3 The market Producers selling to mass markets are likely to use intermediaries. In contrast, businesses targeting smaller markets are more likely to target customers directly 4 Control Some producers need to fully control over distribution. Ex: Producers do not want to see their exclusive product in less prestigious outlets as this might damage their image
- 20. 20 THANKS!
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