Archive for December, 2008

Marketing: Promotion is fun

Monday, December 1st, 2008

Promotion is the most fun of the four Ps of marketing. Traditional business models use print advertising and television commercials to promote their products. E-commerce provides you more flexibility than a 30 second air spot or an add in a newspaper or magazine. Promotion is where you need to start thinking outside traditional marketing.

Internet marketing is perfect for letting people know about your product. Remember in the initial post when I mentioned the Internet is about content? Promotion is about creating interest in your product to the point customers want to purchase your product. Online promotion is very easy when you consider the costs of traditional advertising.

Television advertising can cost your organization a nice sum of capital (remember you need to consider this cost in your break-even analysis). However, with a digital camera, a simple movie editor and a free online social network account you can create your own commercials and embed them on your web site. We have a simple 30 second spot on our Relax, Enjoy the show web page.

Another promotion method is through special discounts on your web site. You can incorporate coupon deals, buy-one-get one free deals and manipulate the price in accordance to supply and demand. Your lower overhead will provide you with the room to manipulate pricing through promotion. Once you have developed your web site to provide the utmost promotion of your product you need to expand your promotion.

Once you have your web site promotion established you will need to expand your product promotion. This is accomplished using global advertising and affiliations. Affiliations are the least expensive when you consider you are paying an advertiser with a percentage of the sales their web site generates. Global advertising generally consists of pay-per-click advertising. Pay-per-click can be quite profitable as an advertising tool when you consider people will be directed to your web site to view your promotions.

Promotion can be fun. You need to consider how new mediums can be used to your advantage in promoting your product without drastically increasing your break-even point. Remember to use many of the promotions you see in print, like discounts and coupons, along with global and affiliate advertising. To cap your product promotion, enjoy yourself and make your own commercials for you web site.

Mike Kniaziewicz, MIS

Marketing: Price is relative

Monday, December 1st, 2008

Price is not easy to grasp whether in a traditional marketing environment or e-commerce. In terms of economics price is set based upon supply-and-demand. If no one wants our product then we are forced to either reduce the price, eliminate the product or redefine the product’s purpose. No one wants to reduce their prices; however, there are methods we can use online to obtain a good pricing structure.

Search engines are one method for determining price. We can look for our product online and see what others are charging for similar items. The search query will need to encompass several aspects pertaining to our product. Examining the number of query returns can be a good indication whether the product is in demand or not in demand. If the query results are low you will need to consider that your product might be unique, which will effect your pricing.

Auction web sites are another good place to examine prices. Auction sites enable us to see exactly what people are willing to pay for our product. If your product is only selling on an auction site for $5, do not expect people to pay more than that amount through your web store. Remember, the overall price of an item is what customers are willing to pay for the item.

Do not forget one very important aspect of pricing: a break-even analysis. You need to associate all costs of the item to pricing. This is where e-commerce has a slight edge in regard to pricing. The pricing edge occurs due to the lack of overhead associated with e-commerce as opposed to traditional store front environments. You will need to know your break-even point not only for pricing, but for marketing activities.

Pricing is not easy to grasp, but is a major component of the marketing model. Examine the prices your competition is selling the product for through search engines and online auctions. Knowing the basic supply-and-demand as well as conduction a break-even analysis will aid in determining your price. The next area we will examine will be promotion and how you can manipulate the price through various methods of promotion.

Mike Kniaziewicz, MIS