DESCRIPCION DE LA ACTIVIDAD : Facturación en Puntos de Venta:

This constituent of the marketing mix involves a description of the product or service to be produced or marketed in the new venture. This product or service characterization may consider more than the physical characteristics.

For example, a company’s product is personal computers, which may not distinctive from many other existing competitors’ computers. Nevertheless, what make the difference in such PCs being offered making the computers distinctive is the fact that they may be assembled from off the shell components and are marketed with direct marketing techniques promising quick delivery and low prices.

Hence, the computers are more than their physical components. In essence, the areas of distinction in such product are as follows:

• Packaging,

• The brand name

• The price

• Warranty

• Image

• After-sales Service

• Delivery time

• Features, and

• Style.

In consideration of market strategy, the entrepreneur will need to give cognizance of all or some of the above issues relating to products. Above all, the entrepreneur will also need to keep in mind the basic goal of satisfying customer needs.

Self Assessment Exercise 1:

What are the areas of distinction that an entrepreneur can introduce in a product?

112 3.3 PRICING

One of the more difficult decisions to consider in respect of the marketing strategies is determination of the appropriate price for the product or service.

There are fundamental factors to consider in fixing appropriate price for a new product such as identified below:

• The product quality

• Nature of the components (expensive or cheap)

• Costs of production or procurement

• Cost of promotion

• Freight or transportation cost

• Desired mark-ups

• Competitors’ prices

• Discounts involved

• Cost of service

• Cost of distribution

Furthermore, the entrepreneur will consider pricing strategies such as penetration strategy and scheme-the-cream strategy in setting price for the product. The choice of the entrepreneur in pricing strategy will affect the final price at which the product will be offered to the consumers.

The procedure of estimating price is often associated with the difficult task of estimating costs. This is because they are often reflected in demand, which in itself is difficult to project. Nevertheless, marketing research can often assist the entrepreneur in determining a reasonable price that consumer would be willing to pay.

Self Assessment Exercise 2:

Mention the various factors to consider in fixing appropriate price for a new product.

113 3.4 DISTRIBUTION

The distribution of product normally provides utility to the consumers. By implication, distribution makes the product to be available where it is needed, at the time it is needed, and at the right quantity. Hence, distribution makes a product convenient to purchase when it is needed.

Distribution as a marketing variable must also be consistent with other marketing mix variables. For example, a high-quality product will not only carry a high price, but it also should be distributed in outlets that have a quality image and at strategic places that can attract the attention of the target consumers.

There are many options for the entrepreneur to consider in distributing the product.

Issues such as type of channel, number of intermediaries, and location of channel members should be described in this section of the marketing plan. In a new venture, it may be appropriate to limit the channels to a few ones, because of the cost implications.

In recent time, direct mail or telemarketing as a means of distributing the product or services has become commonplace. Such means of reaching the target consumers is very applicable to some products.

The recent success of direct-marketing techniques can be attributed to changes in composition of household. Furthermore, the growth in dual-income families, the increased interest in time saving, and the acceptance of this method has all contributed significantly to its success.

In addition, working class men and women have also grown in importance as direct-marketing customers. Marriages are occurring later and single ladies are achieving successful professional careers that with them good salaries and an interest in time saving ways to shop for such products, to name but just a few.

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In the Western world, mail order catalog shopping have been one of the fastest growing segments of retailing in the past few years and has led to many successful mail-order businesses. The catalogs business appeals to unique market segments and tries to meet their needs with fast response, good prices, and quality merchandise.

Empirical evidence portrays that direct mail marketing is one of the simplest and lowest in entry cost for an entrepreneur to launch for a product. In order to run a mail marketing the entrepreneur needs a good mailing list, a catalog or a brochure with products described, and a toll-free number for customers.

The growth and expansion in computer technology has made mailing lists not only inexpensive, but they can be directed to a very narrowing defined target market.

Moreso, mailing lists can be easily purchased at very reasonable costs from mailing list brokers, who are listed in the yellow pages.

The problem is that direct-marketing techniques are not guarantee for success.

Therefore, the entrepreneur should evaluate all possible options for distribution before making a decision in the marketing plan. Essentially, both marketing research and networking among business associates and friends can often provide helpful insights in direct mailing marketing.