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Jose Mendoza, Paul Baines and Lynette Ryals, Warc Best Practice, July/August 2013, pp. 44-45
This best practice paper outlines five tactics that marketers of alcoholic drinks can employ to differentiate themselves in market and achieve a premium price positioning.
This best practice paper outlines five tactics that marketers of alcoholic drinks can employ to differentiate themselves in market and achieve a premium price positioning. These include the use of: trendy ingredients; celebrity endorsement; engagement via events and social media; stylish packaging; and exclusivity.
Value pricing for B2B: Maximise B2B profitability
Dr Andreas Jonason and Richard Greenwood, Admap, January 2013, pp. 42-43
Selling profitably to business-to-business companies has become more challenging for vendors as globalisation has dramatically increased sourcing options for buyers.
Selling profitably to business-to-business companies has become more challenging for vendors as globalisation has dramatically increased sourcing options for buyers. Added to this, the rise in importance of professional procurement departments has restricted sellers' ability to capture value from their products. However, there are cases where sellers have successfully countered this trend by moving negotiations away from product price and into discussions about the unique value their offer creates. And others have constructed innovative charging models to better capture value. Using examples from the mining industry and Michelin tyres, the authors outline five critical steps involved in achieving value extraction.
The game has changed: How consumer companies can win back the US market
Nicholas Keuper, Steve Matthesen, Jeff Gell and Drake Watten, Nielsen, December 2012
This article discusses how large FMCG companies can regain market share in a US market transformed by recession and innovation.
This article discusses how large FMCG companies can regain market share in a US market transformed by recession and innovation. Large companies have recently been outpaced by niche brands and retailers' private labels. The most successful large companies have increased marketing spend and focused on cost-conscious consumers, convincing them not only of value for money, but that their products are of a high quality. Successful companies have also invested in product innovation and partnered with retailers that best access their target consumers.
Warc Tech Trends Snapshot: Dynamic Pricing – How Big Data is fragmenting pricing and promotional models
Warc Trends, Snapshot, October 2012
Brand owners varying prices for individual consumers has been made possible by the digital revolution in general and the rise of Big Data in particular.
Brand owners varying prices for individual consumers has been made possible by the digital revolution in general and the rise of Big Data in particular. Previously, this trend was online-only, and disrupted the travel and sports categories; but now the trend is going offline and mainstream, with big FMCG retailers leveraging loyalty card data for dynamic discount couponing. This Snapshot includes examples of brands ahead of the curve, and lists the general implications of the trend for the industry.
The power of brands in the retail environment - and the role of television
Cat Groombridge, Research on Warc, July 2012
The New Zealand retail advertising environment is dominated by price-led messages from retailers. This paper describes research by TVNZ, a national TV broadcaster, to determine the role of brand perception on consumers' choice of retail store when purchasing goods from three sectors of differing levels of involvement.
The New Zealand retail advertising environment is dominated by price-led messages from retailers. This paper describes research by TVNZ, a national TV broadcaster, to determine the role of brand perception on consumers' choice of retail store when purchasing goods from three sectors of differing levels of involvement. The results suggest the power of a strong retail brand in improving price inelasticity and TV's power in building strong pre-demand brand preceptions.
Managing customers profitably
Lynette Ryals, Warc Best Practice, January 2012, pp. 42-43
When making an offer to your customers, make sure they are worth it over the length of the offer and won't end up costing your company a lot of profit.
When making an offer to your customers, make sure they are worth it over the length of the offer and won't end up costing your company a lot of profit. The most powerful metric that the board can use to measure marketing effectiveness is customer profitability, in particular, potential profitability, or customer lifetime value. Many companies are alarmed to discover that some customers cost them money, not just in the current period but as far forward as they can see.
Price impact: The advertising premium
Charles Young, Admap, January 2012, pp. 20-21
Marketing mix models represent a behaviourist conception of the marketplace. If you lower the price, sales go up as more people buy your product, if you raise it, sales go down.
Marketing mix models represent a behaviourist conception of the marketplace. If you lower the price, sales go up as more people buy your product, if you raise it, sales go down. Similarly, if you advertise, sales go up as you draw in new users or sell additional products to current users and if you stop advertising, sales go down as consumers revert to baseline behaviour. However, analysis shows that price is not simply a rational variable in the marketing mix. It has a strong emotional component that can be directly influenced by high-quality advertising.
Shopper marketing: Retail in recession
Tim Eales, Admap, December 2011, pp. 36-37
In the continuing uncertain global economy, FMCG brands need to be more savvy in their price promotions and find new ways to stimulate purchase.
In the continuing uncertain global economy, FMCG brands need to be more savvy in their price promotions and find new ways to stimulate purchase. The trend to spend more carefully is likely to stay but in spite of this, the value on a shopping basket of everyday items increased during 2010 and continued to do so in 2011. This is for a number of reasons. In some countries, more people are choosing to stay home and cook instead of eating out, which adds to the value of the weekly supermarket shop. Equally, however, increases in sales tax rates and the price of many raw materials has also added to that basket value. But consumers are still planning more carefully and resisting the impulse purchase. A 'buy it at the best price when I need it' attitude is leading to changes in retail deals, as shoppers prefer single-item discounts rather than multi-buys.
How to create an effective price promotions strategy
Rod Street, Warc Best Practice, October 2011
Promotional activity is at record levels in many geographies and industries. In the FMCG sector, promotions have risen in most countries in the last three years.
Promotional activity is at record levels in many geographies and industries. In the FMCG sector, promotions have risen in most countries in the last three years. This explosion has created a challenge for brand owners to manage both the volume of promotions and the price reductions attached to them. It is well established that almost none of these promotions will deliver long-term growth. However, they are clearly useful in delivering many goals such as securing distribution, increasing penetration, driving trial and taking or defending market share, for instance. An effective promotional strategy must be built on three steps: defining the role and goals for the strategy; creating a baseline of the business, and its competitors, current activity and impact from promotions; and setting clear goals for each of the business's brands and categories and for its portfolio as a whole.
Lynette Ryals, Warc Best Practice, September 2011, pp. 46-47
The value proposition is a statement of value that a company, product or service offering provides to a customer.
The value proposition is a statement of value that a company, product or service offering provides to a customer. The stronger the proposition, the more value, customers perceive that they get, and therefore, the more willing they are to buy. The value proposition should contain statements of three things: capability, impact and cost but what are the stages involved in developing it. Why do some companies find it easy to articulate what they are good at and price their offering accordingly, while others do not have the same impact and fail to boost the bottom line?
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