MARKETING PLAN

Marketing Plan

Introduction

Every marketing plan needs guiding principles. Based on the knowledge gleaned from the target market analysis, entrepreneurs need to position the product accordingly. Product strategies depend on purchases. When one buys a new car, the rational purchase might be a low-cost reliable car such as the Ford Aspire. However, there is an emotional element as well: People want the car to be an extension of your personality. Thus, based on your economic means and self-perception, they buy a 1965 Ford Mustang convertible because of the emotional benefits it confers. Within every product space there is room for products at different points along the continuum. An entrepreneur needs to decide where his product fits (or where he would like to position it) as this influences the other aspects of the marketing plan. Determining how to price your product is always difficult. The two primary approaches are the cost-plus approach and the market-demand approach. We advise entrepreneurs to avoid cost-plus pricing. The cost would include salaries and the payroll tax burden, computers and other assets, the overhead contribution, and so on. Since most entrepreneurs underestimate these costs, In international business planning element of pricing are overlooked majority of times. In the traditional way main emphasis placed on the development of the product, channel of distribution and advertising, least consideration given to price ultimately importance of pricing realized by companies as it determine the target market and includes the profitability element in it. It is the core decision of every business plan, and it considered as the major component of a marketing plan Ingredients of pricing (Ackerman and Tellis, 2001).

Pricing strategy is a key ingredient in how firms advertise and communicate their products and services in international markets. Communication affects pricing strategies in the following areas (Chintagunta and Desiraju, 2005):

• Sales force administration.

• Channel of distribution relationships.

• Mass media strategy.

• Customer communication of price.

Pricing strategies are of three types

1) Skimming

The process high pricing of the product relative to competitors and the product's value called price skimming .

2) Neutral

Process in which pricing neither high nor low relative to competitors called neutral pricing.

3) Penetration

Process of lowering the price relative to the product value and the price of competitors called price penetration. Companies consider price as their ultimate weapon of achieving the competitive advantage. Any of these strategies scan be associated with a variety of cost structures and can result in either profits or losses , before adapting any pricing strategy all area must be considered carefully. (Ackerman and Tellis, 2001)

Penetration Strategies are more effective

If a firm has a fixed-cost structure and each sale provides a large contribution to those fixed costs, penetration pricing can boost sales and provide large increases to profits-but only if the market size grows or if competitors choose not to respond. Low prices can draw additional buyers to enter the market. The increased sales can justify production expansion or the adoption of new technologies, both of which can reduce ...