Marketing & Social Media

All elements within the control of the firm that communicate the firm’s capabilities and image to customers or that influence customer satisfaction with the firm’s product and services:

• Product
• Price
• Place
• Promotion

• Product – Price – Place – Promotion
• People (Permission Marketing)
  • All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment.
• Physical Evidence and Infrastructure (digital Platform Marketing)
  • The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.
• Process (Performance - UX)
  • The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems.
• Partner (Participation - UI)
  • Services and also products included in the services process that are produced and delivered by partners in the supply chain.

A service encounter occurs every time the customer interacts with the firm and can potentially be critical in determining customer satisfaction and loyalty

Types of encounters:

• Remote encounters (e.g. webpage),
• Phone encounters
• Face to face

This is an opportunity to:

• Build trust
• Reinforce quality
• Build brand identity
• Increase loyalty

• Information reservation
• Travel
• Local info
• Catering
• Accommodation
• Transport
• Activity / animation
• Entertainment
• Departure
• After-sales support

1. Analyse the reason
   1. Lack of motivation?
   2. Know-how gap/skill?
   3. Inapt process?
2. Define actions
3. Training
4. controlling

Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues.

Elements are personal-related (verbal and nonverbal) and object-related

The servicescape is

• Facility exterior
  • Exterior design
  • Signage
  • Parking
  • Landscape
  • Surrounding environment
• Facility interior
  • Interior design
  • Equipment
  • Signage
  • Layout
  • Air quality/temperature
• Other tangibles
  • Business cards
  • Stationery
  • Billing statements
  • Reports
  • Employee dress
  • Uniforms
  • Brochures
  • Web pages
  • Virtual servicescape

Relationship marketing

• Creating positive brand awareness and growth for a business through understanding, fostering, and leveraging its relationships

Influencer Marketing

• A modern take on affiliate marketing, influencer marketing, financially incentivizes individuals with large, captive followings in specific niches, empowering them to drive awareness and revenue for brands.

Partner Marketing

• Paying a commission of fee to companies such as distributors, resellers, agencies, and other third-party firms to promote leads and sales.

Employee Advocacy

• The self-promotion of a business by its team to generate positive exposure and raise awareness for their brand.

Referral Marketing

• The practice of using rewards to motivate passionate advocates and customers to directly refer their networks to brands.

Affiliate Marketing

• A transaction between a company and an entity with a passive, financially-driven relationship where the business receives customers or leads in exchange for monetary incentives.

• Reliability
  • Providing service as promised
  • Dependability in handling customers' service problems
  • Performing service right the first time
  • Providing services at the promised time
  • Maintaining error-free records
• Empathy
  • Giving customers individual attention
  • Employees who deal with customers in a caring fashion
  • Having the customer's best interest at heart
  • Employees who understand the needs of their customers
  • Convenient business hours.
• Responsiveness
  • Keeping customer informed as to when services will be performed
  • Prompt service to customers
  • Willingness to help customers
  • Readiness to respond to customers' request
• Tangibles
  • Modern equipment
  • Visually appealing facilities
  • Employees who have a neat, professional appearance
  • Visually appealing materials associated with the service
• Assurance
  • Employees who instil confidence in customers
  • Making customers feel safe in their transactions
  • Employees who have the knowledge to answer customer question

• Supply policy
  • Product policy
    • Service/ product variety
    • Quality
    • Design
    • Features
    • Brand name
    • Packaging
    • Sizes
    • Services
    • Warranties
    • returns
  • Price policy
    • List price
    • Discounts
    • Allowances
    • Payment period
    • Credit terms
• Sales policy
  • Communication policy
    • Sales promotion
    • Advertising
    • Sales force
    • Public relations
    • Direct marketing
    • Online and social media marketing
  • Distribution policy
    • Distribution channels
    • Coverage
    • Assortments
    • Locations
    • Inventory
    • logistics

Prices are often set to satisfy demand or to reflect a premium that consumers are willing to pay for a product or service. We buy a bottle of mineral water for CHF 5, sports shoes for CHF 160 or a concert ticket for CHF 60. Some people think this is not fair pricing.

Take a position: Prices should reflect the value that consumers are willing to pay versus prices should primarily just reflect the cost involved in making a product or service.

Price is the only marketing instrument with a direct impact on the profit not on the costs.

Synonyms for price: rent, tuition, fee, fare, rate, toll, premium, honorarium….

Earnings = (Price * Sales) - Costs

Price is not yet optimized

Sales there are not that much possibilities left due to saturation and market share

Costs are more or less optimized. There are variable and fixed costs

• Sales and price pressure have further increased.
• Transparency and comparability of prices have further increased.
• Successful "Price warriors" have established themselves (Aldi, Dell, Sixt, Fielmann, Ryanair etc.).
• Sales Discounts, special sales, coupons etc. became „a drug“.
• Consumer acceptance for prices decrease: Smart Shopper, Cherry Picker, Discount buyers.
• Highest/premium prices are spend on convenience (comfort), experiences, speed, innovation and quality: Gas station shops, overnight-delivery, cinema/theatre, fun cars, pharmaceuticals.

1. Price is a profit driver
   1. Direct impact on profit
   2. Direct impact on sales volume -> indirect influence on fixed costs
2. Price is the strongest profit diver
   1. Assuming a typical cost structure of big businesses - a 1% increase of price may result in a 12 % increase of profit
3. Price is a strong marketing instrument
   1. Price elasticity is ten times higher than advertising elasticity
   2. Immediate reaction of consumers and competitors on price changes

Price is the only element of the marketing mix that produces revenues!

Setting a price based on the buyers’ perceptions of product values rather than on the cost. Underlying principle is to offer the right combination of quality and good service at a fair price.

• Determine costs and take traditional industry margins
• Failure to revise price to capitalize on market changes
• Setting price independently of the rest of the marketing mix
• Failure to vary price by product item, market segment, distribution channels, and purchase occasion

The 4 C model influences the price of a product

• Capacity
• Costs
• Customer Perceived Value
• Competition

Other aspect is going to answer three questions to define the selling price

1. Define perceived value
2. Compare value with the value of your competition
3. Are you able to produce for this costs with the available capacity?
4. = selling price

Price has a larger impact on profits than any other lever. Price changes affect margins, unit volumes, costs, and customer perceptions. In setting prices, the firm should consider perceived customer value, costs, competition, and strategic objectives. Excessive focus on a single element leads to suboptimal pricing decisions.

• Product-quality leadership
• Maximize long- or short-run profit
• Increase sales volume (quantity)
• Increase market share
• Maintain price leadership
• Discourage new entrants into the industry
• Match competitors' prices
• Enhance the image of the firm, brand, or product
• Discourage competitors from cutting prices

• Price sensitivity
• Estimating demand curves
• Price elasticity of demand

• Inelastic demand
  • Decreased price sensitivity
  • Small volume change by changing prices
  • Set favourably higher prices
• Elastic demand
  • Increased price sensitivity
  • Great volume change by changing prices
  • Set favourably lower prices
•  

Objective

Based on buyers' perceptions of value.

Determination of demand function

( price elasticity of demand)

Methods

• Real market data
• Data from pilot markets
• Pricing experiments
• Auctions
• Customer surveys
• Expert consultation

Based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk

Methods:

• Break-even pricing: Setting price to break even on the costs of making and marketing a product, or setting price to make a target return
• Markup pricing: Adding a standard markup to the cost of the product

Pricing strategies:

1. Static pricing: setting the optimal price at a given point in time
   1. Customer-value-based pricing
   2. Cost-based pricing
   3. Competition-based pricing
2. Dynamic pricing: changing prices as the product passes through its life cycle
   1. Capacity-based pricing
   2. Price skimming
   3. Penetration pricing
   4. (freemium)
3. Price differentiation: accounting for differences in consumer segments and situations
   1. Discount pricing
   2. Segmented pricing
   3. Psychological pricing

High price: ( no possible demand at this price)

Ceiling price: customers' assessment of unique product features.

Orienting point: competitors' priices and prices of cubstitutes

Costs

Floor price

Low price (no possible profit at this price)