When you asking a startup owner or small and intermediate company owner what is the hardest thing you faced when you make your own private business his answer will be the price.
How can a startup, small and intermediate businesses put the right price for their products and services?
When you are asking a startup owner or small and intermediate company owner what is the hardest thing you faced when you make your own private business his answer will be the price.
How can a startup, small and intermediate businesses put the right price for their products and services?
Historically, the price has been the major factor affecting the choice of buyers, price is the only element of the marketing mix (product – price – place – promotion) that makes revenues, price also the most important elements that determines a firm’s market share and profitability.
Some marketing managers see price as a big hustle. However, smart managers think that price is a key tool for creating a competitive advantage in the market and capture value in return from the customer.
Companies know that, small changes (positive) in prices can affect the profitability with a large percentage, prices also play an important role in creating the relationships with customers (the aim of marketing).
Unfortunately, sometimes companies make a price that is falling somewhere between:
- A price that is too high to create a demand.
- A price that is too low to create a profit.
Companies, must put into considerations the customer perceptions of the product’s value because, if customers perceive that the product’s price is greater that its value they will not buy the product, also if the company put a price for a product below product’s cost the company will suffer, so you can put your price between these two extremes.
There are a lot of pricing strategies in marketing such as competition pricing, value based pricing, penetration pricing…etc.
In this article we will focus on the most known pricing strategy “Cost based pricing strategy” and how we implement this strategy to put a price on a product.
Cost based pricing strategy:
Cost based pricing strategy is the easiest way to put a price for your product or services and it based on adding the costs of producing, distributing and selling the product to a profit margin at a fair rate of return for the company’s effort and risks.
But, first you should know the types of costs that you will add to your profit margin to put a price for your products:
Fixed costs: A cost that does not change with an increase or decrease in the amount of goods and services produced, Fixed costs are expenses that have to be paid by a company, independent of any business activity. (Investopedia). A fixed cost is a basic operating expense of a business that cannot be avoided, such as a rent payment.
Variable costs: A cost that varies depending on a company’s production volume. They rise as production increases and fall as production decreases. (Investopedia)
Total costs: The sum of fixed and variable costs.
See graph (1)
In this strategy, we will add a profit margin percentage to the total cost of a product (let’s see the example):
Variable cost = 20 EGP
Fixed cost = 150,000 EGP
Expected unit sales = 30,000 units
To calculate the unit cost we need to sum the variable cost per unit to the fixed cost per unit (Fixed cost / Expected unit sales):
Unit cost = Variable cost + Fixed cost / unit sales = 20 + 150,000 / 30,000 = 25 EGP
Now, suppose that the profit margin will be 30% on sales so the price will calculated as the following equation:
Cost based pricing = unit cost / 1 – profit margin = 25 / 1 – 0.30 = 35.71
That’s mean the profit per unit will be = Cost based pricing – Unit cost = 35.71 – 25 = 10.71 EGP profit per unit.
Is this the best strategy to calculate the price? Generally no, because any pricing method ignores the external factors such as market demand and competitor price is not likely to lead to the best price.
Thanks to: Philip Kotler and Gary Armstrong.
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Twitter Buy Button Now Available to All.
Twitter has just taken a big step in e-commerce industry.
Anyone can now use a buy button to sell things.
Prepare for the invasion of the “Buy” button. Twitter is now allowing anyone to sell through tweets by enlisting payments company, Stripe, to help. Stripe just launched a product called Relay, and it promises to help you sell your products through Twitter. Actually, not just through Twitter – there is a list of other apps that use Stripe.
It’s all based on the premise that we must simplify the buying and selling process by making it instant. Users should be able to “use Relay to enable instant purchases in third-party mobile apps,”. Exactly. Relay is not just about Twitter. It can be used by developers in their own apps to make simplify in-app buying as a process.
What are you think about this movement from twitter and it’s conversion in e-commerce industry?
Source of this article:
We are Social.
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After announcing the dislike button update yesterday by Mar Zuckerberg, many people have many questions about the story behind this update
Mark received question from Egypt yesterday in Q& A Conference at the headquarter about
When will Facebook add Dislike Button? ,
Mark Said that they are building new features button based on Users feedback as he believe that not every moment is a great moment ,
He also clarify that this update not to depress people for their posts and it will not have the name of Dislike
they are working on this feature name and will announce soon about the full feature update .
Here’s the video of his response to requests for a Dislike button. At the bottom of this post you’ll find the full transcript of this answer:
So , What exactly did Mark say?
“I think people have asked about the Dislike button for many years…today is the day where I actually get to say that we’re working on it, and are very close to shipping a test of it.”
But it’s not a Dislike button
“we didn’t want to just build a Dislike button because we don’t want to turn Facebook into a forum where people are voting up or down on people’s posts. That doesn’t seem like the kind of community we want to create.”
“People aren’t looking for an ability to downvote other people’s posts. What they really want is to be able to express empathy. Not every moment is a good moment, right? And if you are sharing something that is sad, whether it’s something in current events like the refugee crisis that touches you or if a family member passed away, then it might not feel comfortable to Like that post.”
“But your friends and people want to be able to express that they understand and that they relate to you.”
Really, this makes total sense. If Facebook built a Dislike button, it would just cause confusion. If I share a post about victims of a natural disaster, and you Dislike it, does that mean you Dislike that the tragedy happened? That you Dislike the victims? That you Dislike that I posted it? It’s extraordinarily ambiguous in a way that directly conflicts with how Facebook builds products.
This way, if you share something sad, people don’t have to be apprehensive about Liking it because they might give the wrong impression. This apprehension can fool Facebook’s News Feed sorting algorithm into thinking a post isn’t interesting. An empathy button will clue the algorithm in to when a post isn’t Likeable, but it’s still important for people to see.
“But thank you for all the feedback on this over the years. I think we’ve finally heard you and we’re working on this and hopefully we will deliver something that meets the needs of our community”
Summary:
The new feature which Facebook are working on, for giving more options for users to share their right impressions in all moments Even positive or negative moments, The update not for dislike posts and sharing negativity.
So, We have to always using these features in the right way according to the different situations which we face.
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Zuckerberg said during a Q&A at Facebook’s headquarters today:
Facebook is finally working on a “Dislike” button.
He also said that he think people have asked about the dislike button for many years. Today is a special day because today is the day he can say we’re working on it and shipping it.
Here are the rest of Mark Speech about this update:
“Facebook have realized that people aren’t looking to downvote each other, but to have an option to express feelings other than “liking.” Zuckerberg cited moments like the news about the recent refugee crisis or even posts about family members who have died. Users don’t want to “like” those items, but right now, have no other option.
“What they really want is the ability to express empathy. Not every moment is a good moment,” Zuckerberg said.
“It’s surprisingly complicated to make an interaction that will be simple,” Zuckerberg said
He finish his speech that he hope to finish this update soon and Facebook team working on it .
Share with us your opinion about this move from Facebook.
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The social media is much more than the “professional” Facebook. It’s a business-oriented social networking site, that not only brings connections, but results. LinkedIn has over 380 million active users.
Today, brands both corporate and small are utilizing its tools to network and generate messages.
For us the most powerful concept behind LinkedIn is that it finds the right people and the connections you have with them. It makes the networks of the people we know visible.
LinkedIn shows us our second and third-degree networks and the paths towards them. This has tremendous value.
If you truly want to build Social Influence with your connections and become more valuable to them, dedicating time to strategically helping others can elevate your “social” status.
People want to be connected with a connector, Connectors are considered valuable resources because they’re genuinely interested and engaged in helping others succeed.
Working to connect your connections on LinkedIn not only helps you become a more influential person, you’ll also benefit from triggering the rule of reciprocity.
Before Connecting with your contacts don’t forget the following :
- Analyze Your First-Degree Connections
- Identify your 10 best business relationships from this list and jot them down. Also add the 10 most influential people you’re connected with.
- Filter Your First-Degree Search by Geography, Industry and/or Keywords
- Send Individuals & Corporate Connections a Private Message and start your communication with them
- Make every message belong to every person or company and dedicated to him / her not sending Bulk General messages to all .
- Be clear and objective oriented in your communication and show how you can add value and make win to win relation.’
Step by step to download your linkedIn Connections:
1: Go to connections tab.
3: Go to the right side and click on Advanced setting and export LinkedIn connections
4: Export your connections in the type you want :
a) Microsoft outlook , csv file.
b) Outlook express , csv file.
C) Yahoo mail.
D) Mac OS , Address book
E) VCard , VCD
5: Enter your Security code.
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Friskis&Svettis Stockholm – Case study On Instagram
We will see also how they integrate between Digital Channels and Offline Channels?
In January 2013 all gyms and health clubs in Sweeden advertise to catch everyone who made the classic New Year’s resolution — start exercising. Friskis&Svettis is no exception.
Friskissthlm mission was to create a campaign on behalf of 16 branches of Friskis&Svettis in Stockholm, to get more people to discover the various forms of exercise at Friskis&Svettis.
Friskis & Svettis is a non-profit association, owned by the members.
They know their gym better than anyone.They let the members to be part of the campaign and inspire others to join the community?
They created the hashtag #friskissthlm on #Instagram and called on the members to work out, photograph and tag their pics and by doing so; become a part of the campaign around Stockholm.
They used billboards and put their members photos on through the campaign , Which made exposure in Sweeden ,
Photos of Friskis members was on these Billboards , Those members take selfie also with their billboards photo and publish it on Instagram.
Results:
- +2000Pictures
- +54.000 Likes
- +8.000.000 Displays
- +4.000 Comment
The Campaign Video :
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Update :
Instagram allowed Advertising for all countries and give new opportunities for companies to reach their audience .
IMFND team received today Full guide for instagram advertising step by step in 5 main pillars.
Here are the 5 main pillars :
1) Ads Specs.
2) Ads Creative Requirements
3) General Best Practice
4) Video best practice
5) The Fine Print.
1) Ads Specs :
> Images Ad Specs :
A) Format
1.1 Aspect ratio
File Type: JPG -PNG
B) Dimensions :
Minimum: 640 x 640
Maximum: 1936 x 1936
C) Captious:
Maximum four lines of copy 175 characters
D) File Size:
10 MB
> Carousel Ad Specs:
A) Format
1.1 Aspect ratio
File Type: JPG -PNG
B) Dimensions :
- Minimum: 640 x 640
- Maximum: 1936 x 1936
C) Captious:
Maximum four lines of copy 175 characters
D) File Size:
10 MB
E) Carousel Links:
Open in Instagram browser for IOS , and default browser for Android
F) Carousel Unit:
Maximum :
- 4 images
- 1 link
- 1 caption
- Note that the link display as the learn more button ” Carousel ads only avaliable via insertion order .
> Video Ad Specs:
A) Format:
1.1 aspect ratio
File type: MP4
B) Playback:
Autoplay with sound off , Autoloop at end of video by default
C) Dimensions:
- Minimum:640 x 640
- Maximum: 1936 x 1936
D) Allowed codes:
Audio : H264
Video: AAC , Vorbis
E) File size:
10 MB
F) Video length
Minimum: 2,5 Seconds
Maximum: 15 Seconds
G) Captions:
Maximum four line of copy 175 character
H) Call to actions:
Avaliable CTA:
- Book now
- Download
- Learn more
- Shop now
- sign up
2 ) Creative Requirements:
A) Format:
Ad images , Videos and videos cover frames must be optimized for square format ( 1.1 Ratio Full Frame)
B) Limit text overlay:
While the caption should be your primary means of delivering consise message , It’s sometimes helpfulto include text in your image in your image , if you don’t include a text overlay make sure it covers no more than 20 % of your image.
Addional requirements:
C) Minimize caption length captions will be capped at 175 character including hashtags, mentions , and spaces,
D) Using video thumbnail :
All photos ads requirements also apply to video thumbnail .
E) Valid Instagram account:
All instagram advertisers must have a valid instagram account.
F) IG Brand Refrences:
Any use of the instagram or any warriation ( Including insta or Gram ) must be according to instagram Brand guidlines.
Ads may not use the logos such as the instagram camera icon , the instagram glyph and the instagram script logo of instagram without permission.
Ad may show the instagram appinuse such as taking a photo of product , Ads must not imply an instagram endorsement or partnership of anykind .
G) Addional Requirements:
In addition to the requirements outlined here , Ads on instagram must also comply wit facebook advertising guidlines find here:
https//www.facebook.com/ad_guidelines.php
in the case of a conflicting Ads policy , the guidelines outlines outlined here will take presedent.
3 ) Best Practice:
A) Make your design simple.
B) Keep your Frame balance
C) Focal Point:
Pay attention to what you want , the viewer to remember about the image and focus their attention there,
Avoid using image that is complex in composition.
D) Inspire emotion.
Take advantage after extended reach of sponsored campaign to leave alasting impression .
people remember images that make them feel something.
E) Lighting & Texture
Every Pixel is critical when publishing to an audience with high resolution screens.
F) Post Graduation:
The development of high quality , well composed creative is important.
G) Don’t use borders.
H) Communicate through images
M) Keep it Personal.
N) Capturecontent in the moment
L ) Organic posting will convert also withing your campaign.
4) Videos Best Practice:
A) Craft Your content
B) Having motion
C) Editorial pacing
Pacing throgh editorial is at the heart of creative expression through sight , sound and motion
D)Frame rate
You can take advantage from slow motion , time lapse and hyper lapse to have better impact
E) Camera Perspective
can have a significant effect on a fil.
F) Camera movement
The movement of the camera tracking through a your shot , can have powerful effect the energy and tone of your film
5) The Final Print
A) General :
The Ad policies as well as your privacy policy on instagram and terms of use.
Apply to all ads comomercial content (ads ) serving or appeaing on instagram.
B) Content Rights:
No data collected , divided or obtained from or in connection with an instagram ad ,
Including deliver of the ad and users interactions with the ad ( Such as information dvided from targeting criteria )
Instagram advertising data may be recieved or used by entity not acting on behalf the advertiser.
You may not directly or indirectly transfare or sell any data to , or use such data in connection with any ad network , ad exchange , data broker or other party .
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Following your competitors and aiming only for being online is not the right way you miss a lot of things.
You must have a clear vision and what you are aiming to do before being online.
Here are 6 Steps to do before start your E-Commerce company:
1) Market research
Before taking any step, you should know where you are stepping. Studying the market is an essential step, not an optional like some people think.
You can make a qualitative or quantitative research over the Internet either by a freeway or by simple gifts to motivate people to join your research.
2) Set clear strategy
Have a clear vision: where you want to go? and how you are going there?
First you have to identify your company strategic direction
A- you have existing products and existing markets, so you need to follow market penetration method.
B- if you are offering new products in existing market, you need to follow new products and services method.
C- existing products and targeting new market, you follow market development method
D- new market and new products, you use conglomerate diversification
Once you identify the direction, you put clear simple strategy that understood by everyone in the company.
- Know your target customers well
- Make a persona for your customers imagine: what they like, how they wear, where they like to go.
- Study your target customers’ behaviors online.
What languages they are using, how they talk, how they spend their time over the net, what kind of pages they like, and what tone of voice you should use (talk to them).
- You can use some tools to follow your customers’ behaviors, for example, Facebook gave us many tools to know our customers better and what kind of pages they are interested in.
For example, you can target girls between18 and 20 years old who are interested in IT pages. Other analysis, you should do manually like your customers’ comments and interactions.
- Social baker and Google also are making our life easier; every day they offer more features.
- Study well where your customers spend more time over your website and analyze why.
3) Build your website
Now you have determined your strategy, know your customers and how you are going to handle them, and build a good website.
- There are a lot of websites offering free templates and very easy to build your websites, like WordPress and magneto.
- It is important to build the website architecture before you start.
- Simply, Website architecture is the chart for your website, how many pages, what pages will lead to where and how many clicks for your customers to reach their distention.
- Your website colors and themes should be the same as your brand identity.
- Brand identity is very important to use same colors, font and logo on every single media, so your customers can know you from the colors or the font.
- The content website is not only about specs, pictures, and prices but also how you are going to present your product and service.
- After you know now the right tone of voice to use with your target customers, you write the content in a way and language that they like to read.
- Updating your website is not an option; it is a long going process.
4) Logistic
Having e-commerce website is not an online process only.
- You have to build your logistics and offline process before you start.
- Be sure you are going to achieve what you promise your customers.
- Be sure of products quality in your inventory good documentation of quantity to avoid sales without having stock
5) Control and monitoring
Put clear KPIs for every step in the selling process and draw a work process cycle which is clear and be shared with all team members.
For example, how you are going to update the content.
What shall your team do after receiving an order?
Confirmation process with customers.
Order handling and logistics process.
What is the process for returns and cancelation?
Documentation is very important, make your own manual, write down all the process, the correct action you took towards the problems and how you solve them
6) Measuring and analysis
This step also neglected by many people. How are you going to know that you have made it or not?
Measure how many you sold, what items, and why these items are more than others
What days and what time purchases are made? What are their demographic and areas of residents?
Google is a good tool in collecting information but you cannot depend on this tool only till now you have to do some manual work.
Collect all these information and start to analysis, hear and observe your customers behaviors and take the corrective actions
By the End of the Day Before starting your Company Don’t miss to :
- Study your targeted market & Audience well
- Set clear vision and strategy
- setting smart objectives for your business and achievable plan
- Start Building your embassy ” Your website”
- Act from point of Project management in your logistic
- Always Measure and analysis to be always in the right track
- In all your process don’t miss control over all your plan and activites.
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Which ad units perform best for their objective
-
Whether brand and direct response ads work better to achieve the objective than brand ads or direct response ads on their own
-
What value mobile ads are driving
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Whether lifestyle creative or product-focused creative best accomplishes their goal
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A campaign that isn’t live yet and will have sufficient statistical power for meaningful and accurate results
-
Accessible conversion data, either through a Facebook pixel, App Events or email addresses or phone numbers for offline conversions.
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If you ask many Arab parents if they want to buy a doll for their children what they will choose Barbie or Fulla (they are the same with different attitude and culture) they will say “definitely Fulla”:
With thick black hair and large dark eyes, Fulla is the physical antithesis of Mattel’s blonde, empty-eyed icon of Western consumerism.
And when she steps outdoors, she hides beneath a white hijab scarf and modest ankle-length coat, or even an all-enveloping black abaya cloak, Many Arab parents are happy to see a local girl take on and defeat the might of Western myth-making.
Black-haired Barbie doll that wore a black abaaya and a hijab replacing a western appropriate children’s doll.
Fulla is said to be a “role model” not only because she dresses “appropriately,” but she also comes along with a prayer mat and women-appropriate careers such as Medicine or Education.
Fulla represents a live example for localization, the creators of Fulla NewBoy say the doll represents Arab and Islamic values such as modesty, respect and piety that’s why Arabic children are now choosing Fulla over Barbie.
Fulla was introduced to the MENA market in 2003, within two years of its introduction 1.5 million dolls had been sold.
Compared with Barbie’s improbably pneumatic curves and lanky legs, Fulla’s assets are modest, and never officially on display. Although she is marketed with a range of funky clothes, furniture, jewellery and grooming equipment, to avoid offending Muslim modesty, she has no swimwear.
She wore mini-skirts in a country where women’s clothing was restricted in the most conservative states, and she had a boyfriend in a society that highly appreciated marriage.
NewBoy (The creator of Fulla) see that Arab parents won’t accept Barbie doll because it’s not reflecting what they live, and that’s an external factor.
External factor: is the outside factor that can affect the business like culture, economic environment and legal environment.
In this case we can see the relationship between marketing strategy and planning, marketing communications and marketing research, how?
The marketing strategy and planning take a decision that they will enter the Arab countries and they give a marketing research a Commissioning to make a market research on Arab countries.
The research feedback was included the culture as an external factor so, the marketing planning and strategy named the doll “Fulla” and make a lot of changes to pursuit Arab parents.
Marketing planning and strategy gives the new name and new style to the marketing communications to start making a campaign on the new way.
Conclusion:
Don’t ignore the power of external factors in marketing.
Thanks to:
- Islamic branding and marketing book. Click here.
- Forbes Click here.
- Published in Uncategorized