It is very important for a successful marketing program that targets consumers to receive messages about a product. Many of such messages are aimed to change or shape attitudes, they should lead to short- or long-term actions. The message must make a potential buyer purchase the product.
Marketing messages can be divided into two groups. Those that are delivered through a personal medium (shaking hands with a customer, smiling while talking, etc.) and those that are introduced via advertising media (television, radio, Internet) (Clow & Baack, 2007). The combination of these delivery approaches should be applied to provide outstanding sales.
According to Clow & Baak (2007),
Effective message strategies invoke feelings or emotions and match those feelings with the good, service, or company. Such ads are prepared to enhance the likeability of the product, recall of the appeal, or comprehension of the advertisement. Affective strategies elicit emotions that, in turn, lead the consumer to act, preferably to buy the product, and subsequently affect the consumers reasoning process.
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P&Gs products are a great example of an effective value messaging policy. The company with more than 60 years history demonstrates market flexibility. Its consumers research mission resulted in new ideas that correspond to the actual women needs and attitudes. They have produced some remarkable consumer insights, for example, women are rather emotional about their clothes, style and self-expression, which resulted in the ads Tide knows fabrics best and Style is an Option. Clean Is Not. The P&G products take care of the clothes that are associated with pleasant memories and give consumers a sense of dignity as they know that their wearing is clean (Armstrong & Kotler, 2012).
MCI Communication Corp. also demonstrated a skillful implementation of marketing messaging policy by launching the Friends & Family sales promotion discount program. The program offered 20 percent discounts to groups of MCI customers who phone one number. In 18 months period, the market share of the company and its revenues significantly grew. MCI managed to outflank the rivals by achieving customer satisfaction. They provide services to three target groups that increase organizational flexibility thereby localize the marketing effort by segments for maximum effect (Paley, 2006).
The Ayds products were not supported by effective value messaging, and as a result, they disappeared from the market.
After strong sales showing in the appetite suppressant market during the 70s, the Ayds brand had the unfortunate circumstance of trying to find an audience right around the time AIDS was scaring people across the world. Considering that AIDS was, at the time, a disease that withered its victims away to nothing, the fact that Ayds was sold as a weight loss product created a negative effect for the marketing campaign.
The Ayds brand being a homonym for a deadly disease failed to change its message. Consequently, because of ethics incompliance, the relationships with customers were destroyed, and sales dropped (Media Assassin, 2008).
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One of the most vivid examples of a profit-enhancing pricing policy (skimming pricing strategy) is the Sony release of worlds first high definition television to the Japanese market in 1990 the high-tech sets that cost $43,000. These televisions were purchased only by a customer who could afford to pay the high price for the new technology. Sony rapidly reduced the price over the next several years to attract new buyers. By 1993, a 28-inch HDTV cost a Japanese buyer just over $6,000. In 2001, a Japanese consumer could buy a 40-inch HDTV for about $2000, a price that many more customers could afford. In this way, Sony skimmed the maximum amount of revenue from the various segments of the market (Armstrong & Kotler, 2008).
Skimming approach fitted well to this product introduction as its quality supported the higher price and competitors were not able to undercut it.
The buyers of a profit-enhancing pricing policy production are well acknowledged about its brand, price, value and convenience. Such items are considered to be number one in a particular industry segment.
The IKEAs (Swedish retailer) success in Chinese market is a remarkable example of a profit-destroying pricing policy (penetration pricing strategy).
The first IKEA store in China was opened in 2002. At the very beginning, they were not profitable as the Chinese are thrifty and gave preference to local shops.
Thus, to lure the Chinese customers, IKEA slashed its prices in China to the lowest in the world, which is the opposite approach of many Western retailers there. By increasingly stocking its Chinese stores with China-made products, the retailer pushed prices on some items as low as 70 percent below prices in IKEAs outlets outside China. The penetration pricing strategy resulted in success for IKEA as today, ir captures a 43 % market share of Chinas fast-growing home ware market alone (Armstrong & Kotler, 2012).
The buyers of a profit-destroying pricing policy production have low consumer involvement and significant brand difference as such items are low cost, frequently purchased products.
In a neutral strategy, the prices are set by the general market, with your prices just at your competitors prices. The major benefit of a neutral pricing strategy is that it works in all four periods in the lifecycle. The major drawback is that your company is not maximizing its profits by basing price only on the market. Essentially, neutral pricing is the safe way to play the pricing game (Meissner, 2010).
Norwich Theatre Royal in the UK has deliberately pursued a solidly neutral pricing policy for many years.
The theatre is located in a relatively small city in the middle of a sparsely populated rural region with poor transport links. This means that it has a very limited market, and it relies heavily on repeat attendance. It is also a market with relatively low incomes where rising house prices are putting further pressure on discretionary expenditure. To respond to these market conditions, the Theatre Royal has adopted a consistent neutral pricing policy and focused on providing value to its customers. Prices are set as low as costs allow, and the theatre will turn down productions that would mean setting prices too high. The theatre also offers a wide range of prices and ensures that there are low price seats (?5-?6) available for every performance (including musicals such as Spamalot). They will also not adopt a skim pricing strategy even where the opportunity arises as the focus is on engendering long-term loyalty from a relatively limited market and consequently the theatre has on an excess of 10,000 members of its Friends scheme. The very significant income from the Friends also provides a financial cushion that helps the theatre to avoid having to adopt a more aggressive pricing strategy (Richards).