Other Pricing Techniques

Let's GO!

1. Promotional Pricing
- Companies used as they temporarily sell products below their normal price.
- Often done to introduce new or revamped product (Which means let the product alive again! if i'm not mistaken).
- For example, 0 air fair offered by Air Asia

2. Product Bundle Pricing
- Used when a company combine several of their products to promote them as a package.
- For example, Tours offers in packages

3. Discriminatory Pricing
- Allow an organization to sell a product or service at two or more prices with the product cost are the same.
- For example, Local and International Tourist

4. Price Spread and Price Point
- Price Spread is where the price of the product that suit the budget of all markets.
- Like it is affordable to everyone.
- For example, Parking tickets fees

- Price Points is where the price setting in between of lowest and highest priced item.
- For example, price of dishes at RM5 to RM10 or RM10 to RM20

5. Discounting
- Offering a special price to attract customers
- For example, Airline or hotels will offer discounted rates in low season.

6. Yield
Don't care about this la. lol

NOTE: Most of the explanation are same as what stated in the notes. You know why? Because I can't find any of these in the marketing book that on my hand.

And! I think probably the lecturer will ask for 5 answers from here.
So, forget about Yield. BUT I'M NOT SURE! DON"T BLAME ME AHH!! hahahha


Good luck!

Pricing Strategies for New Product

There are three Pricing Strategies for New Product
1. Prestige Pricing
2. Market Skimming
3. Market Penetration

Now let's see which I should explain...

Anyway, the Market Skimming and Market Penetration is the same as which you had included in the Product Life Cycle. Remember when in the "Introduction Stage"? It carries the same meaning. So, no need to worry about those two.

1. Prestige Pricing
- Setting high prices to position a product at the upper or luxury end of market
- Producing a high quality and charging the highest price.
- For example, Mercedes Benz and Rolex

Why they are considered as Prestige Pricing strategies?
This is because both brands are branded goods which have high quality and standards.
That is why you won't find them selling in Putatan. LOL.
Mostly you will find it in where? Town area.

2. Market Skimming
- Setting high prices at the launch stage and lowering slowly as the product becomes mature. (Same in PLC right?)
- Most product are in high demand in the early stage of the life cycle.
- That is why using Market Skimming may lead to profit maximization.
- For example, Handphones

3. Market Penetration
- Setting at lower price to get maximum sales and market share.
- Increase price slightly in the future.
- For example, (ehhhh...... ) haha!


Happy Reading!

Functions of the Distribution System

There are 6 Functions of the Distribution System
1. Acquiring Information
2. Promotion
3. Contact
4. Negotiation
5. Physical Distribution
6. Financing

Let me introduce ^.^

When you see the word ‘function’, straight away you think in your mind of the word “WHY?”
Or else, remember the “5W1H” or in the other way round which is 1 husband have 5 wives. (like Zul. Lol.)
You know what this means?
1 H is How
5 W is Who, What, Where, Why and When

Ask yourself, “Why Distribution system needed in a company?” or “What is the use of it?”
Then you’ll know how to answer and elaborate all of these.

Distribution - Direct and Indirect

Distribution is considered as ‘Place’ in marketing mix.

There are 2 types of distribution, which are…
1. Direct Distribution Channel
2. Indirect Distribution Channel

Now let us go into these two distribution channels

Direct Distribution Channel
It is a channel which a company delivers its product to the consumer without the outside assistance of any intermediaries. For example, Bed and Breakfast.
This means that, if a company uses Direct Distribution Channel then they deliver the company’s product or service without any middle man. They do everything on their own without any help from the outsiders.

Indirect Distribution Channel
It is a channel which a company delivers its product to the consumer with the assistance of independent intermediaries. For example, Travel agents, Tour Operators, and Travel Specialists.
This means that, if a company uses Indirect Distribution Channel, they will need the help of middle man as to attract consumer to the product, service, or destination. You can give more explanation by saying that “Travel Agents help a company to...”

Good luck!

Tips for Marketing

Chapter 3
Tourism Marketing Environment

Chapter 4
Marketing Information System
Marketing Research

Chapter 7
New Product Development (NPD)

Chapter 8
Product Life Cycle (PLC)

Chapter 9
7 Factors Determining Pricing Decision
3 Pricing Strategies used in Positioning
3 Pricing for New Product
6 Other Pricing Strategies

Chapter 10
2 Types of Distribution
6 Functions of Distribution System
4 Marketing Intermediaries
4 Functions of Travel Agent

Chapter 11
5 Types of Advertising
Word of Mouth - 1o reason of word of mouth
Note: There will be a question which include the whole topic of Chapter 11. So Read all Chapter 11 better.

Characteristic of Service Marketing

Unit 2

Can I just type? LOL..

Intangibility:
Service products cannot be tasted, felt, seen, heard or smell. Prior to boarding a plane, airline passengers have nothing but an airline ticket and a promise of safe deliver to their destination. To reduce uncertainty caused by service intangibility, buyers look for tangible evidence that will provide information and confidence about the service.

Inseparability:
For many service, the product cannot be created or delivered without the customer's presence. The food in a restaurant may be outstanding, but if the server has a poor attitude or provides inattentive service, customers will not enjoy the overall restaurant experience. In the same way, other customers can affect the experience in service settings.

Variability:
Service delivery quality depends on who provides the services. The same person can deliever differing levels of service, with a marked difference in tolerance and friendliness as the day wears on. Lack of consistency is a mojor factor in customer dissatisfaction.

Perishability:
Services cannot be stored. Empty airline seats, hotel rooms, restaurant covers; all these services cannot be sold the next day. If the services are to maximize revenue, they must manage capacity and demand since they cannot carry forward unsold inventory.

Marketing Management Philosophies

Remember:
There are only 5 concept of Philosophies
1. Manufacturing Concept aka Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept
5. Societal Concept

Let's begin shall we?

1. Manufacturing Concept aka Production Concept
Manufacturing = Processing
Company who uses this concept will think that the final customer will love products that are available and highly affordable. In this case, when they use this concept, they should focus on improving production and distribution efficiency.

But bare in mind that, this will not be perfect because if the management only focuses on the production, they will tend to forget about what the customer wants.

Lecturer's example:
Henry Ford's Model T.
"You can have any colour you want as long as it is black", he said.
In this situation, he can't improve it's productivity for the choices of colours because the product's cost is too high in making thousands of cars. More to say, they only provide one colour which is black. This means, they didn't think of the customers. Take yourself as the customer, what colour do you want? Green, Blue, or White?

2. Product Concept
With this concept, the consumer prefer existing products and products forms.
The management will only improve the product's features, functions, colours, design, quantity, and so on.

Lecturer's example:
The Mouse trap = Product
The management's existing product are mouse traps. So, they have this idea of product and they wanted to improve it. Year passes by, the mouse trap are more and more high standards. The bad thing is, they never thought new ideas of product like "Ridsect" or "Ubat Mati Tikus".

3. Selling Concept
You did the assignment. So I asume you know.


4. Marketing Concept
You did the assignment. So I asume you know.

5. Societal Concept
Societal = Social
So, it's open to public.
Societal marketing is link to some walfare like WWF, in doing charity, fund raising or donation.
In this case, when a company is applying societal marketing, part of the money that earn, will donate to WWF as a charity. Therefore, it is not only company and the society walfare who are satisfied but customer also satisfied for this society marketing because they also want to be part of this.

Chloe's example:
Body Shop, is a company that against animal testing (anti animal testing). So, the customer buy Body Shop's product because they also want to anti animal testing.

Core Marketing Concept

Unit 1

Core Marketing Concept
1. Needs, Wants and Demands
2. Products
3. Value, Satisfaction, and Quality
4. Exchange, Transactions, and Relationship
5. Market

The 1st one "Needs, wants, and demand"
Needs, is something that we learnt in our TMG103 Fundamental of Management.
You can take the Hierarchy as on example of "Needs". So, refresh back to your studies.
For example:
Basic needs= Foods, Shelter, Clothes

Wants, is something that human get from different culture and personality.
This can be say "Human wants is to satisfy their needs". How? Let's see..
For example:
Foods is our "needs".
In this case, you can choose to have Chinese cuisine, Italian cuisine, Indian cuisine and so on. This is your "wants".

Demand, is from the human wants that are backed by the buying power.
Have in mind that, "buying power" is a disposal income. Which means, if you have RM2k and you have to settle all your bills including car loan, house loan, insurance and so on. After you settle your bills which cost you RM1,200.
You left RM800 right? That is your disposal income.

Clear now? Ok.. continue.

For example:
When you have save up your disposal income, you have additional money.
Now, choose between two places. France and Kuala Lumpur, which you rather travel? (This is your "wants" because you have choices to choose.)
If you really have disposal income, of course you rather go France. Kuala Lumpur just nearby.. can easily go. So, this is part of your lifestyle as well.

The 2nd one, "Product"
Think this widely. Product is not only a physical stuffs like a bottle, a car, or anything which also known as "object". Product also can be say as anything capable to satisfying a need and want. No matter it is Tangible (can see can touch) or Intangible (cannot see cannot touch). There are many products, which are experiences, persons, places, organizations, information and ideas.
For example:
Experiece (Intangible) is a product. Why?
When you get an experience, it actually satisfied your needs and wants.
You had gain your experience in travelling to France.

The 3rd one, "Value, Satisfaction, and Quality"

The 4th one, "Exchange, transaction, and relationships"

The 5th one, "Market"
I bet you guys know!