Hi everyone, we have put together a list of marketing strategies. Read on to learn how to successfully market your products. Decoy EffectDecoy effect is the pricing of an item/option to make the other item/option look more attractive, so that consumers will choose that item/option. In short, the goal of the decoy effect is to lead consumers to buy that target product. These target products are usually the most expensive or the most profitable ones. Companies could also use this tactic to clear stocks. Here is how it works:Without Decoy Effect: Clients are presented with 2 options Option 1: Small popcorn cost $3.5 Option 2: Large popcorn cost $7 Which to choose? That will depend on individual preference. With Decoy Effect: Option 1: Small popcorn cost $3.5 Option 2: Medium popcorn cost $6.5 Option 3: Large popcorn cost $7 It just cost $0.50 more to purchase the large popcorn as compared with the medium popcorn. So the 2nd option, medium popcorn, is acting as a decoy to make the purchase of large popcorn look more favourable.
Attention SpanWe have memory limitations, and so we are not able to remember everything. Given a list of items, most of us could only remember the first and the last few items. The middle items will be quite difficult to recall. Why? As we are most likely to pay attention to the beginning and at the end of the lists, and so the first and last few items are more likely to be remembered. However, the middle items will mostly be neglect or forgotten completely. So, if we will to have any advertisements, we shall plan our product's list in the way the best value buys are at the top and bottom of the list. Able to remember the first few items is known as the primacy effect, and remembering the last few items is known as the recency effect. Now that we know these effects, we can also apply them in our sales speech. The starting and ending part of a product introduction will greatly affect the consumers' purchase decision. This tactic can also be applied to any lecture, presentation, or even job interview where you can place the most important points at the beginning and end of your speech so that the audience will remember what you said. Variety And ComplexityWhen it comes to selecting items, consumers prefer to have more options. As an example, consider an ice cream stand, more ice cream varieties will attract more customers. But when it comes to making a final decision, consumers will find it hard to choose from these varieties. This overload of choices will cause consumers to postpone or even avoid making purchases. We have covered this choice overload phenomenon in our earlier blog; understanding consumer minds. So we need to find a balance between variety and complexity. We can have a wide range of options, but we will only recommend a few choices to customers. These will assist them in making their decision. This could be done with the assistance of the salesperson on the ground, or we could have a poster showing the recommended choices. Buying ice cream, is quite an easy task. But how about purchasing mobile phones? Not asking the salesman to rush to close sales, but we also can't just drag the whole sales progress for a long time. These recommendations shall eventually narrow down to one item, the purchased one. The sales personals had to lead the consumers to finalise their decision and make the purchase. While writing these blog, remind me of this phrase: So remember to address the client's needs (solution) but not add on to their frustration. Avoid Long DescriptionAs we know, consumers have a limited attention span, so we should avoid long product descriptions. Who will enjoy reading a heavy content article on a shopping trip? Pictures will help us in our explanation. A long product description will also bring up another problem: complexity. We all love mental shortcuts, so pictures and bullet points will help consumers to understand the content faster and easier.
Editor's Note
0 Comments
Hi all, we have some negotiation tips to share. But firstly, what is negotiation? Put it simple: Negotiation is a bargaining process; A tug of war between demands and offers. Before we begin our quest to be successful negotiators, let's examine the different negotiation outcomes: Win-lose SituationWhen one side won, while the other party lose, we have a win-lose situation. This type of negotiation is known as distributive bargaining. The loser won't voluntarily accept this outcome, so there will be no true cooperation. Win-Win SituationThis is the best outcome of a negotiation. As both parties have won, both parties will, of course, truthfully accept the outcome. They will be willing to cooperate with each other and therefore a greater benefit can be achieved. This type of negotiation that aims for a win-win outcome is known as the integrative bargaining. Lose-Lose SituationThis might seem as if both parties don't see eye-to-eye. Yes, this could be a case where both parties fall out totally. However, these lose-lose situations can also happen when both parties willingly want to share the losses fairly. In this case, a cooperation pact is still formed between both parties, which is still considered a desirable outcome.
What if negotiation failed?We can't guarantee that we will fully get what we want or the other party will just accept our offers as it is. We need to be prepared for the worst scenario and get ready our backup plan, a bottom line agreement that we are willing to accept. This backup plan, our bottom line agreement, is called the Best Alternative To a Negotiated Agreement (BATNA). What is Best Alternative To a Negotiated Agreement (BATNA)1. This is the backup plan when negotiations fail. 2. The baseline of our demands and offers 3. It is an alternative agreement if our request fails 4. It gives us a clear direction for bargaining during negotiations 5. The stronger our BANTA is, the smaller the room for discussion. Points to Take Note in negotiation1. Begin by asking the 5W-1H diagnostic question (Who, What, When, Where, Why, and How). 2. Rather than trying to win it all, aim for a win-win situation. 3. Always keep in mind your BANTA and, if necessary, make changes. 4. When a discussion fails, we may reveal our BANTA in order for the other party to consider making a concession. Be truthful about your BANTA as it is unethical to lie, and if the other party finds out, there goes the trust. 5. Do not agree to the other party's counter offer right away. An immediate acceptance of the counter offer may imply that we had initially treated the other party unfairly or that we could be taken advantage of. 6. Make a counter offer to the other party's offer to test the other party's base line. 7. Appear to accept the other party's offer as a sign of good faith. Take this chance to ask for something in return. 8. Learn to make reasonable concessions. But do not keep making concessions or larger concessions.
To better understand the win-lose situation (also known as zero-sum), we will look at the following example: Nash Equilibrium - The Prisoner's dilemma. Nash Equilibrium - The Prisoner's dilemmaTwo robbers, A and B are arrested for robbery. The police only have circumstantial evidence to arrest at least one of them. The police officer then offered them a term. These two robbers have no way of communicating with each other. As a result, they had to make their own decisions without consulting each other. Here are what the officer had offered them:
So, thinking on behalf of Robber A, should he admit? Remember, he doesn't know the other suspect's decision. 1. If he admits and the other robber admits too, he will serve 1 year in jail. 2. If he admits, while the other robber deny, he will serve a 4 years jail term. 3. If he will to deny, while the other robber admitted it, he will be set free. 4. If both of them deny, both of them will locked up in jail for 2 years each. From individual's point of view, he will choose to deny, as he wishes to be set free. However, it is unlikely he will be set free. In fact, both of them will imprisoned for 2 years each. Why? Because, thinking from their own perspective, both of them will deny it, and so both of them will be locked up for 2 years each (See condition 3 above). Now let's view this jail term as a group, instead of as an individual: 1. Both to admit, the total jail term is 2 years 2. One to admit, while the other doesn't, the total jail term is 4 years 3. Both of them deny, the total jail term is 4 years The optimal choice is scenario 1, where both of them admit it. This will be the group's shortest jail term, with a total of two years in prison. Each of them will be imprisoned for a year. Though this is just an illustration, not present in real life, we can see that cooperation between the 2 robbers will produce a more favourable outcome than thinking as an individual. When thinking as an individual, naturally one will hope for the best outcome for himself or herself, but most likely it won't come truth. In real life situations, there is more room for discussion (various types of scenarios/conditions), so why not think about it and cooperate? Contradict theory - Mind GameWhat if one of the robbers thinks from his own (individual) perspective, while the other thinks from the perspective of the group? The robber who thinks from his own perspective will choose to deny, whereas the robber who thinks from the group perspective will choose to admit. Isn't it safer to deny, as there are still chances of being released? As I mention, this is just an illustration, not present in real life. This example is just to show that cooperation will produce a more favourable outcome for the group. Editor's Note:
Habitual BuyingHabitual buying or habit buying is the buying behaviour of consumers when they repeatedly make their purchases with little thought or decision making. When consumers repeatedly buy the same product, it could be the product best suits their needs, or they just don't bother to look for alternatives. These products are usually low priced items or meant for daily use. One of the reason why they stick to the same brand or product could be that there aren't many differences between the comparable items. This habitual buying behaviour could also be developed through constant marketing.
Highest Price = Better?When deciding which product to purchase, we will do some assessment on the product value for money. A high-priced item supposedly means the product is of a better quality, but that is not always true. That is just based on an assumption. Many researches and tests show that consumers assume that highest-priced item will be of the highest quality as well. Here is an example of a test carried out: Participants are invited to try two similar cakes and give a rating. Cake A is priced at $55 Cake B is priced at $15 All the participants had chosen Cake A as their preference. Beside pricing, the flavour, shape and ingredients are all the same. The cakes are even baked in the same oven. So why do these participants chose Cake A? When these participants realised that both the cakes are of the same quality, they find it hard to believe. Their reply was that they genuinely felt that Cake A taste better. The conclusion derived was that it was just their own misperception of price and quality. Social Proof / ConsensusHumans are social animals, which means we like to be part of a group. While in the group, we learn to follow the group's collective decisions. So this behaviour trait has led us to look at others' experiences and opinions to guide us in our purchase. Many of us will do our research on the net before purchasing any products, especially when purchasing expensive items. We will first find out more about the product's features, follow by what others think of it. I am sure no one will like to buy from a company full of negative reviews.
Following the crowdWe are often looking for guidance to help us in our decision making. This is one of the trails of social animal. When we saw a long queue at a food stall, we assumed that the food must be good. It couldn't be that so many people make the wrong judgement, right? In this sense, following the crowd does sound logical. Sometimes, we do also follow others so as not to appear as weird and be outcasted. We want to be accepted by others. Following the crowd is similar to submitting to peer pressure but the latter uses more pressure to compel one to follow. Regardless of whether it is to follow the crowd or submitting to peer pressure, we should always make our own final decision. At the end of the day, you will be the one answering for your own actions, not others. And sometimes, even after a thorough discussion, a decision made by a group can still be wrong, let alone by strangers who happen to be in the same place. So we must always make our own final judgment. Following the crowd can only serve as guidance. Do not blindly accept what is presented and follow suit. Cognitive BiasOur brain tends to look for mental shortcuts to speed up our reactions. Thus, our brains are wired to quickly make sense of what we see. This is known as cognitive bias. When consumers see an advertisement, they will focus on the first few wordings (known as primacy effect) or some big catching words to grab hold the meaning of the ads. The rest, or most of the details, will be neglected by the consumers. We often see advertisements with Big Wordings such as "Warehouse Sales", "Discount 50%", or "Buy 1 get 1 free" with small fine prints below. Did you even read those fine prints? Maybe, you do. But how many consumers do that? Besides using big wordings, the colour choice plays a part too in leading the readers to the focus point. Did the above red wordings catch your eye? Choice OverloadHaving more choices seems to be a favourable scenario. But more choices also open the door to regret. When faced with many choices, we will have a difficult time making a decision. Why? Naturally, we wanted to choose the best choice out of all the available ones. We are afraid of making the final call, as we worry that we will be losing out on something better. This phenomenon is known as choice overload or the paradox of choice. So, with more choices, consumers will need more time to make their decisions.
Editor's Note
Principles of InfluenceHoping to get more leads? Hoping to close more sales? Learn these 5 principles of influence to convince others to buy your products or ideas. 1. ReciprocityGiving back to society and donating to charity will earn us good reputation. Though we shall not ask for anything in return for doing charity, it is obvious that the charity act itself will naturally build up our image. With a good character, others will trust us more, presuming our products to be good as well. Giving away free samples, sponsoring events, and providing excellent customer service are all examples of reciprocity. All of this will generate publicity for your company or products, which will eventually lead to an increase in sales. 2. ConsistencyFor any organisation or company, building public trust is extremely important. We need to be consistent with our beliefs and be firm in our convictions. Flip-flopping our policy will affect our credibility. Trusting the company policy is equivalent to trusting their products. Once we gain the reputation of being trust-worthy, closing sales or gaining support for our ideas will be much easier. So how do we achieve that? Firstly, we will need to state our goals or commitments clearly. And to make sure all the members or staffs in the organisation commit to that too. We will likely to commit to our conviction if we will to say it out loud. If possible, make the commitment public. This will add a level of accountability and unlikely anyone will go back on their words. All this has to be done voluntarily. If we will to force someone to commit, then the agreement is not sincere at all, and of course, the outcome won't be positive. For example: We pledge to go green or reliable delivery of our products on time, etc,.. 3. Social ProofWe love to look at others' experience and opinion to guide our decision. Many of us will do a research on the net before we purchase any products, especially when come to purchasing of expensive stuffs. We will first find out more about the product features and then we will read on to find out what others think of it. I am sure no one wants to buy from a company with a lot of negative feedback. This is why many people regard Facebook "likes" as proof of a company's or organization's credibility.
4. AuthorityStudy your field well. When you are perceived as an expert, others will more likely to show you the respect and listen to you. By expressing your intelligence, might sound cocky. An easier and safer way to showcase your abilities is to display your certificates in your office and also update your social profiles, such as LinkedIn and Facebook. Write down your skills, knowledge, and achievements on these platforms. 5. ScarcityAs the Chinese saying goes 物以稀为贵 – Objects that are rare are precious. There are few ways we can make use of scarcity to persuade others: 5. 1 Offers Time LimitedOffers time limited is referred to a short time frame of promotion. Once the promotion is over, consumers will need to purchase it at usual price. Unwillingly to miss a good bargain, consumers will most likely act fast and make the purchase. 5.2 Supply LimitedExample of supply limited product is commemorative or special edition items. 5.3 Speech / ToneHow you present your speech can weight on the value of the item/ideas you are selling. Focus on what one will lose out if he/she doesn't make the purchase rather than what one will gain if he / she does. Pay attention to your tone too. Many hosts will like to create jokes to make their speeches more interesting. But when it comes to the main core of your speech; the product features, be serious.
5.4 Exclusive OffersAn exclusive sales launch limited to VIP clients or members will also give the impression that the items are of certain great value. This will also make those VIP clients or members feel valued by your company as they are being offered a special deal that the public won't get to have. Editor's Note:
Marketing Strategy - Key AreasTo have a good marketing strategy, we must consider these 4 areas (4P) and they are the product, price, place and promotion.
ProductA product refers to the goods or services that a company offers. No one will manufacture a useless product or offer a meaningless service. Every product or service has its own selling point. Some products' popularity is determined by the season, such as Christmas or Chinese New Year, while others have a short shelf life.Once the trend is over, the product value drops dramatically. Understand your products' characteristics and plan/market accordingly. PricingPricing of a product is the selling price of a product. However, in the eyes of the consumers, the listed price is their cost price. A high-priced item may turn away many potential buyers. Lower priced products will be much easier to sell as more consumers will have the spending power. But then a lower price may make the company or the product look less impressive. See Branding. Cost Price (manufacturing) + Profit (desire) = Selling Price How much to earn? Of course, profit should be as high as possible, but that will bring up the selling price. So the question will change to "Who will buy?" To determine the right pricing, we will need to consider the following factors:
To earn more profit, besides raising the selling price, we can look into reducing the production cost. PlacePlace refers to where your clients can buy your product. Choose a good shop location to sell your products: 1. Basically, it means getting a place where there are many shoppers. 2. Corporation with other megastores, through placing your products in their store And not forgetting, the online platform. In this digital era, how could a company not have any foot print on the web? Unless you are only dealing with neighbourhood clients, perhaps, then an online presence is not that essential for your business. But, as the world becomes more digital, who knows if, one day, everyone who runs a business will be required to be online? PromotionPromotion is to make your product well known to the consumers, increase/maintain it's popularity. The goal of promotion is not always about profit-making. On contrast, some companies might even spend a huge amount on promotion campaigns. Looking at long-term benefits, getting the brand well known is more important than a short period of sales boost.
We can have another 2P. They are people and presence. People refer to the staff and sales personnel. Actually, it is about customer service and rapport. Presence refer to the placement of your product in the department store. Show your product at a prominent place, if not your consumer might choose your competitors brand. Presence also refer to the brand/product advertising. Location of the signage are important so as to draw attention. Traditionally, we rely heavily on signage for advertising. Today, we advertise online too. To promote your online presence, we need to look at the following: SEO, SMO, SEM and SMM. So what are they? Hopefully, we will get the chance to cover them in our future post. Stay tune. Editor's Note:
What is Branding?Branding is a procedure to define the company and is tied closely with her marketing strategy. 1. What is the quality of the products or services being offered? 2. Was the pricing of the products or services high or low? 3. What are the top values the company emphasises? Of course, we want to have all the good values. But then we are talking about the top values that we emphasise. 3 qualities should be good enough. How Are Your Company VS Your Competitors?Compare the quality and pricing of your products or services with your competitors. From there, you will know your company's market position. This concept is known as positioning in marketing. SWOT AnalysisWe can use the SWOT analysis to help in creating our branding and discover our brand position. There are four parameters to examine in this analysis: Strengths, Weaknesses, Opportunities, and Threats. Internal environment: Strengths: The advantage of the company and it's products over its competitors. Weaknesses: The disadvantage of the company and it's products over its competitors. External envrionment: Opportunities: Ways to develop the company or it's products. Threats: Anything that could hinder the success of the company.
Memory LimitationWe can't expect consumers to read our manifesto and remember one whole list of values. A few good points will create a better impression than a list of points. Those few good points will be what others remember your company for, which is your brand. Pattern RecognitionOur daily routine will be like this: waking up, cleaning ourselves, drinking a cup of coffee, going to work, returning home, and going to bed again. Our brains recognise these daily patterns. These patterns are also known as mental shortcuts. Our brains are constantly looking for mental shortcuts so that they can process information easier and faster. In other words, our brains store previous experiences to help us deal with future tasks. You might say these are just habits. We sat at our favourite spot to watch television programs, drinking coffee instead of tea... Yes, branding is kind of developing habits. Branding- Creating Pattern Recognition For ConsumersA successful brand is when we think of certain services, products, or events, we immediately think of that particular company. This is how branding should work. If this direction is set up right, the company will be on their way to brand themselves perfectly.
Brand = Identity + ConnectionConnect your brand identity to certain activities or objects, so as to make your brand name catchy. Important Points For Brand BuildingTo Do List
Singlish Dictionary: Prata - Roti Prata, a popular Singapore dish in which the dough is flipped several times. In this context, it refers to the act of flip-flopping. Don't Do List
Example of Good BrandingExample 1: Coffee Culture ConnectionConsumers can relate Kopi 'O' with Chinese Kopitiam and Cappuccino as Western Cafe. Branding is connecting the company to certain values, products, or services. Some may like to include as many products as possible to increase revenue. How about combining these 2 beverage shops? Having both Kopi 'O' and Cappuccino sounds like an awesome idea, offering clients with more choices.But the shop will lose both the authentic Nanyang Kopi and the "Ang Mo" feel. It is not totally impossible to combine the east and the west, but it is difficult. This may even end up backfiring. Anyway, my point here isn't about blending cultures. I am talking about not blurring the focal point of your company's direction. Singlish Dictionary: Kopi 'O' - Black Coffee, basically is just coffee with sugar, no milk. Kopitiam - A place that sells Singapore's local beverages and foods. Ang Mo - Westerner
Example 2: Antique ShopSpecialisation Vs "Have It All"An antique shop at China Town sells genuine antiques. Over the years, they have gained public trust that they do really sell historical, memorial items. Hoping to increase revenue, the shop owner decided to sell replication at low prices. All items' details are clearly stated with their respective prices. An honest boss indeed. But he might still lose the public trust. Doubts might still arise. Does he really selling antiques? Is it worth trusting him? With lower priced products in his shop, buying from him will no longer have the royalty feel. High pricing of the real antiques, don't seem to be as justified as before. "Don't Run Your Business Like A Provisional Shop Unless it is --- Alan Lee" Lets Sum UpFrom the coffee example, we see that culture can be part of a brand. The antique example shows us that product and pricing affect the brand too. There are lots more things that affect a brand, such as logo design, packaging ... In short, anything that identifies your company is your brand. Need Further HelpThere are professionals who can help you through the branding process. Their pricing are usually high. But looking at the bigger picture, branding can help your company grow gradually, bringing in returns in no time. Therefore, it is still worth investing in your brand. Anyway, this is a one-time charge for decades. No one will like to keep on rebranding. Editor's Note:
|
Details
We will sharing tips on sales, marketing and many business strategies, so join us for some serious business talk.
|