How to obtain higher prices: Many firms reduce prices since the experience curve, increasing competition and rising customer price sensitivity stimulate such actions. The other side of the coin is that inflation, stock market expectations for growing profits and the difficulty of finding enough products to replace established ones create pressure to increase margins. There are six ways to increase prices: 1. Influencing the psychology of the sales team The sales training would focus on: Profit rather than orders The benefits rather than the price. Instil courage in the sales force to take risks in pushing for a justified price increase Salesforce incentives to encourage a focus on prices Professional negotiating skills 2. Contracts and terms The shift towards long-term relationships favours such an approach and can have an enormous influence on profit margins. The common type of contract is that which has an escalation clause built in. The cost-plus formula also protects the margins. A reduction in discount acts as a price increase. 3. Demonstrating values rather than products. The aim is to demonstrate how the product differs from others in the market rather than selling a product. Sell packages that include services, technical support, terms and guarantees. Show the economic value to the customer. Build the brand to reduce the risk and confidence involved in buying a well-known brand. 4. Segmentation and positioning Recognise that customers differ greatly in the levels of price sensitivity. For some, it's the dominant criterion whilst, for others, it's the service, quality and image....

How to change prices To change prices once the product has been established is a very important strategic decision as inevitably the brand loses market share through consumer resistance to the price increase. The main determinants of price changes are: The price paid by the customer: an increase for the dealers' margin budget for advertising and promotion an increase in fuel and inflation adds to the cost of selling and distribution carrying extra inventory costs in the hope of selling more over holidays, i.e. Christmas Price received by manufacturer: ability to buy bulk raw materials increase in manufacturer margin marketing paid by the manufacturer for selling and advertising to double the awareness for the brand research and development is ongoing with new capital search other suppliers for procurement possibilities How to increase prices There are four ways in which your company can increase total profit:             Increase sales volume through aggressive advertising and promotion             Cutting costs - economies of scale             Raising prices for the market - a market leader can increase prices without jeopardizing market share             Raising prices for resellers - increase prices or reduce reseller mark-ups, discounts and allowances To increase internet marketing prices: Identify supply and demand imbalances. To take full advantage of the Internet's flexibility, companies need to spot the shifts in supply and demand that could trigger profitable price changes. Many companies already collect this information for operational purposes, but it's rarely passed along to the pricing group quickly enough to be useful. There...

Most companies today are structuring their new product development process to accelerate results and control costs. Step 1 Corporate strategy and innovation A corporate plan should make provision for the research and the development of new ideas. The innovation will be orchestrated by senior management and will dictate the resources made available to new development. Step 2 New product ideas Lots and lots of ideas are needed. After 50 new ideas maybe number 51 will be the winner. Many innovations are small improvements and line extensions and not complete breakthroughs. The team should focus on projects that are consistent with the overall strategy. New ideas can originate from: * Employees - front line people are the closest to the customer. Toyota receives 2 million suggestions per annum. * Customers - innovative customers are opinion leaders who are generally willing to talk about their requirements. * Research and Development - scientists play a pivotal role in hi-tech business. * Competitors - systematic comparison of products and a search for best practices. * Distributors - They know the end-user and competition which can be valuable allies. * Psychologists and market researchers - to find new gaps in the market * Outside sources - ideas are bought Step 3 Screening To select the maximum available number of ideas that are compatible with the firms' objectives. Step 4 Concept development The idea is developed as a consumer proposition and tested on potential customers. Customers buy solutions to their problems and not products. It is important...

Brief your staff - have a policy, especially for crisis situations. If you court press attention makes sure your staff are aware of your positions and policies. Ideally, make someone in charge of press contact, so that other staff are not forced to comment. All newspapers need press releases to help fill their pages. Local papers particularly need news submitted by the local community or they have to pay more for journalists to go out and get news. Look through your local papers and magazines to spot the PR material submitted by commercial organisations. This will encourage you as to how easy it is to provide 'news' stories for the press. Local TV and radio are also amenable to PR, but they're a bit more choosy. Nevertheless bear TV and, certainly radio, in mind for anything going on in your business of local interest or 'novelty value. Get the local editorial contact names and numbers. PR 'news' must be submitted to the news department (editorial department if it's a magazine) of the publication concerned. They like faxes in preference (it's more current) to post material that is notoriously unreliable, so don't be put off if your success rate in getting material published is a lot less than 100%. Be aware that the journalists will alter your copy, so don't agonize over the precise wording, but do enough to make it interesting and newsworthy. Generally, journalists prefer to deal directly with organisations rather than their PR agencies, so don't be shy. Remember...

Anyone visiting a typical supermarket cannot fail to notice the variety of displays used to attract their attention. There are many benefits for POP merchandising: Benefits for the marketer - Keeps the company and brand name/s visible to the consumer - Reinforces brand image - Calls attention to special offers - Stimulates impulse purchases   Benefits for retailers - Attracts consumers' attention and direct them to product/s featured - Increases consumer interest in shopping - Extends the number of time consumers spend in the shop •    Helps optimize space utilization •    Benefits for the consumer •    Provides useful information that often assists in the purchase decision •    Simplifies the shopping process Not a lot of imagination is needed to realize that all these benefits lead to increased sales. A wide variety of POP materials are available, one is only limited to one's imagination. They can be temporary or permanent, static or moving, interactive with the consumer and video merchandising centres. A sample of the items that can be used would include a wide variety of signs, posters, mobiles, plaques, banners, shelf tapes/talkers, mechanical mannequins, lights, mirrors, plastic reproductions of products, check-out units, dump bins, racks of various literature, flags, bunting (string flags) etc. POP materials perform four very important marketing functions: •    informing, •    reminding, •    encouraging and •    merchandising. For POP displays and materials to be effective they should conform to a few requirements: •    be the right size and format (in proportion to the location in which they are...

Sales promotion is a blend of marketing activities and promotional items to intensify the efforts of your sales force, induce your intermediaries to stock and sell your products, and persuade your customers to purchase the offering within a specified, limited time period. Why do customers respond to sales promotions? * They have a positive feeling about your brand which is linked to an unconditional stimulus such as a discount * Reinforced reward - in-pack discount voucher and once tried, they keep coming back. * Their attitude changes after trial - repeat purchase. * Foot in the door' technique - sample is tried to gain a larger order. * Salesforce promoting benefits to alter customers perception of the offering. * Price perception - the perceived benchmark by customers. Used by quoting the reference price and sales price to assist the customer to calculate the savings. * Decision-making process - end of isle items trigger recognition to purchase or seeing a machine in a magazine and it reminds them to place an order for a service or part. Type Of Sales Promotion Objectives * Encourages sales force to move slow-moving items * Challenges sales force to locate and qualify new prospects * Set up more store displays * Train more distributor salespeople * Induce wholesalers to carry a new product line * Persuade distributors to promote (push) a brand in their promotional activities * Persuade retailers to give a particular brand shelf space * Encourage retailers to support sales promotion campaigns by carrying...

According to a study performed by the Association of Sales Executives, 81% of all sales happen on or after the fifth contact. But what if you only follow up with your prospects and customers 2-3 times, or worse, not at all? Imagine all the business growth opportunities you would be missing. Smart marketers know that follow-up is one of the most important keys to growing a successful business. You've heard the old adage, 'Out of sight, out of mind.' It applies directly to your sales opportunities. If your prospects or customers don't hear from you on a regular basis, they can easily forget about you.At that point, your competitors have an ideal opportunity to come in and escort your prospects and customers over to their businesses. Now you see them - now you don't.If you want to successfully grow your small business, effective follow-up is crucial.Here are a few follow-up tips to get you on the right path: 1. Who should you follow up with?You want to follow up with both your Prospects (people who have responded to one of your past marketing messages but who haven't purchased yet), and Customers (People who have purchased from you in the past). 2. How often and how long?You want to follow up with them on a consistent basis so that they don't forget about you and your offerings. That may be once a quarter, once a month, or even once a week.You should follow up with your lists for as long as it...

Case Study: Acme Screens - Part 2 In Part 1 of this case study I shared the following problems with a follow-up letter Dan, owner of Acme Screens, was sending to his recent customers. Problem 1: Too much WE-ME. Not enough YOU-YOUR Problem 2. Too many thoughts and offers for one letter Now let's continue with Problem 3. Problem 3. Discount Certificate for a Future Purchase Side-Bar Comment: Dan was asking his recent customers to keep a discount certificate for R25 off their next purchase of replacement screens, until a future date when they were ready to purchase again. My advice to Dan: Any time you ask your prospects or customers to take some action, you are going to be met with resistance. People are busy. They are easily distracted, forgetful, and they love to procrastinate - and that's with activities for themselves. They will take even less effort for someone else, especially a business.' - R250 DISCOUNT CERTIFICATE: You are asking your customers to consider purchasing additional screens in the future and to file and remember this certificate. They won't do that. Your certificate will probably be lost or tossed within a day or two. Solution 3 If you want your customers to apply a R250 Discount Certificate to a future purchase of replacement screens, then you must send them the Certificate later, at the time when they may be ready for another purchase.  Then you can follow up with a phone call a few days later. When you mail...

Hi all, I read an article written by Joe Garcia which I thought is most informative. A follow-up letter needs a special way of writing to your customer. These letters are normally sent by email without the marketing department having a look at it before it's sent. I would like to share this with you over the next 2 newsletters. I know it's a bit long but it's worth it! Case Study - Follow-up Letters - Part 1 Here's a case study from my files that I thought you might find interesting.A few years ago I was asked by Dan (not his real name) to critique his follow-up letter to his newest customers. His business, Acme Screens (not the real name) sold a special screen for open doorways that would allow you to enjoy a cool breeze and let you walk in and out of the doorway without letting bugs in. It was a unique idea and a quality product. He was very disappointed in the results he was getting from his follow-up letter to his recent new customers. He wanted the letter to accomplish three things: help him sell backend replacement screens,get some referrals from these recent customersand get some testimonialsThere were a number of problems with the letter that were preventing him from getting the kinds of results he was hoping for. Here's what I told him. Problem 1: Too much WE-ME. Not enough YOU-YOUR People get bored and distracted VERY easily. If you talk about your product, your...

Here are 7 low-cost but highly effective marketing tips to help any small business find customers and generate sales quickly. 1. Don't advertise like a big businessBig businesses advertise to create name recognition and future sales. A small business can't afford to do that. Instead, design your advertising to produce sales ...now. One way to accomplish this is to always include an offer in your advertising - and an easy way for prospective customers to respond to it. 2. Offer a cheaper versionSome prospective customers are not willing to pay the asking price for your product or service. Others are more interested in paying a low price than in getting the best quality. You can avoid losing sales to many of these customers by offering a smaller or stripped down version of your product or service at a lower price. 3. Offer a premium versionNot all customers are looking for a cheap price. Many are willing to pay a higher price to get a premium product or service. You can boost your average size sale and your total revenue by offering a more comprehensive product or service ...or by combining several products or services in a special premium package offer for a higher price. 4. Try some unusual marketing methodsLook for some unconventional marketing methods your competitors are overlooking. You may discover some highly profitable ways to generate sales and avoid competition. For example, print your best small ad on a postcard and mail it to prospects in your targeted market....