I went to see the new Harry Potter movie this weekend and the theatre was absolutely packed. At a time when the movie theatres are clearly in trouble due to piracy and free downloads, it was amazing to see so many people lined up to see this new movie.

Because of the association with the books by J.K. Rowling by so many people, the Harry Potter movies are one of the rare occasions where people such as myself who would normally not pay much to go see a movie finally decide that it’s worth it to go see a movie on the big screen.

Consumers need to be convinced of the value of a product and that they are receiving a benefit that either matches or exceeds the cost of that benefit.

I felt that the value I received was far greater than the price(cost of the ticket, popcorn, driving to the theatre and searchiing for a parking spot, searching for a seat) was well worth it.

For those of you who haven’t seen it yet, please make the effort. It was very well done.

Since we just finished talking about the price P in our class, I figured I’d talk a little bit about how companies use different formulas to come up with their final price.

There are several methods companies can use to come up with their selling price. I wanted to just outline a few.

Markup on Cost Method

Often used by resellers who acquire their products from suppliers. A percentage is put on top of the cost of the product to arrive at an initial price. In addition, companies could use a target such as their ROI(e.g. 20%) and use that as a markup tool.

Markup on Selling Price Method
A clever method used by retailers in order to advertise that they receive only a 5% markup. However, consumers most times do not know that this markup could be on selling price rather than the cost. Since the markup on selling price is always lower than the markup on cost, it is very easy for retailers to say they “make a little while customers save a lot”

Cost Plus Pricing
Using a fixed amount to add onto the cost of a product.

Break-even Pricing
A forecasting tool used by marketers to see how much of a product needs to sell before the company can break even. Unfortunately, this kind of pricing does not account for how much demand there is in the market which can make it inaccurate at times.

Market Pricing
One of the most common methods for pricing. Consists of aiming to find out what consumers in a target market are willing to pay for any given good. This method of pricing also seems to be the most logical since marketing is focused around the consumer.

Backward Method
A method where a price is first set, and then from there a product is developed as well as the promotion and distribution of that product. Can help when a price for certain kinds of products has already been established in the market.

Competitive Pricing

Setting prices that are based on the prices that competitors are setting. A company can either set their prive below competitive pricing to achieve more sales, above competitive pricing to establish a brand, or use parity pricing so that it is in line with other competitors.

Bid Pricing
Pricing goods using a case by case method in terms of which consumers is willing to pay the highest price for the product.

Although this doesn’t cover all pricing methods, this definitely summarizes the most common ones used in the market today. As you can see, price setting doesn’t just stop at cost markups. Marketers use several methods depending on the product and the objectives that a company wants to achieve.

Till next week.

https://blogs.ubc.ca/kimmmn/

I thought that Kim Nguyen’s post about Frito Lay’s noisy chip bags was quite creative. In her post, she talks about Frito Lay’s switch to eco friendly bags and the negative response it was getting. Rather than recall the product, Frito Lay stuck with the design of their new bags and made an educational campaign out of the product. The big push that Frito Lay was making for sustainability has obviously outweighed the negative response of noisy bags.

Great post Kim.

Till next week.

http://markettingblog.blogspot.com

Looking at some marketing blogs this week, this one sort of got me thinking. This post talks a lot about how the push for Christmas marketing has already begun. I guess I have to check my calendar because the last time I checked, Christmas was in December.

However, this seems to be a regular trend that we tend to see, especially around a lot of shopping malls and outlet stores. Recently in 296, we talked about consumers and their temporal state. Based on how a consumer is feeling at a given point in time, their chances of making a purchase can be affected.

How can companies use this knowledge to better market their goods/services? Seems like it would be a good idea to take advantage of a holiday that is coming around the corner. Maybe a holiday that is all about being happy and king to one another? Perhaps.

When consumers are in the holiday mood, it is a safe assumption to make that people want to shop be it for themselves or loved ones. Therefore, an opportunity arises for marketers to build their strategies around the holiday season. The earlier this strategy is in place, the more time there is for it to effect.

Marketing strikes yet again.

‘Till next week.

Found this old commercial from the 90’s about Sensodyne Toothpaste. Positioning statements have been around longer than we have, that’s for sure. Check it out.!

Was going through the blogs of  some of my classmates and I came across one that really caught my attention.

Negar Amiri’s blog post entitled “Advertising at the wrong time” (http://negamiri.wordpress.com) was something that I hadn’t really though about before. For many non profit organizations, funding comes from their sponsors. How else are they supposed to get funding right? But Negar brought up an excellent point in her post which was that there is a point where an organization has too many sponsors and takes the attention away from what the non profit organization is actually setting out to do. In addition, she talked about how many of the sponsors do not even relate to the organization whatsoever. It seems as though many companies see non profit organizations as an opportunity to advertise and therefore their strategy is to market their own company through organizations that need funding. It doesn’t even matter what the organization is all about. A goal for companies to work towards is to sponsor companies that share similar values and mission statements. This would help to indicate to the general public that they are not all about getting their name out there and actually share something with another organization.

Great blog Negar! Keep up the good work 🙂

Till next week.

As a regular watcher of the Simpsons, I was thinking about  how marketing applies to one of the characters on the show.

For people who have no clue what I’m talking about, one of the characters on the Simpsons named Ned Flanders decides to give up his career as a pharmacist and open up a store just for left handed people. He named this store “The Leftorium”.

There was obviously some STP in this decision. He segmented his market down to his geographic area firstly which was the town of Springfield. Even further down, there was a very specific group of people that he had in mind as his target market. Seeing as how only 10% of the world is left handed, there was a very specific need that Ned was addressing with this idea for a store.

To Ned’s surprise, there was more of a need for this store than he thought. There were many cases where people wish they had a product suited for left handed people from scissors to can openers. These customers were more than happy to buy products from Ned because of the value that they were getting.

Ned did a good job of identifying a need, marketing through word of mouth, and providing value to customers. This just goes to show that marketing truly is everywhere, even in your favorite cartoon.

It has come to my attention that just because your target market is a certain age group, there’s no reason that you can’t target other age groups at the same time. Think about all ages events for nightclubs. It’s a great way to introduce the nightclub environment to kids while they are underage. It gives kids an incentive to attend these events because it will be part of an experience that they are not supposed to have until the age of 19 (or 21 in the States). It also helps that these events are often promoted by youth who have a large social network and can easily approach people of their age group.

These events are an effective, but somewhat controversial method of promotion that has really seemed to have taken off with no end in sight.

Till next time.

https://www.youtube.com/watch?v=6lZMr-ZfoE

The biggest selling point of the IPhone is its versatility. In the commercials above, the IPhone is used for a number of different tasks: looking up restaurants, movies, music, surfing the web, , checking email, playing games, and of course the phone feature. It is also advertised as a very user friendly phone that is simple to operate and performs a number of tasks. The Iphone would be perceived as a product of great value to people who want one device that allows them to do all of the things listed above and more. Therefore, the price would not be an issue for people who feel they would get a lot out of the phone. The product is also easy to find which means that the product is in the places where consumers can get ahold of them. The target market seems to be students and young professionals who are always on the go and need to be mobile. There are also a lot of fun applications that would be intended for a younger group of people as well. Apple caters to this market and makes the Iphone seem like a necessity for people in this market.

Mcdonald\’s Commercial

My first post is going to be about the breakthrough McDonald’s made when marketing their  new drinks including the cappucino, latte, and mocha. The link posted above is for a commercial that McDonald’s released in 2008. Up until then, consuming these drinks made people feel like they had to go to a coffee shop and become somebody they were not. McDonald’s saw the opportunity to market these drinks to everyday people who wanted to have a mocha without having to listen to jazz music and pay outrageous amounts for a drink. A desirable product with a reasonable price that is available at any McDonalds and promoted to the right people is a winner in any market.

That is all.