Psychology of Pricing - Contextual Prices AND Price Anchoring

 Psychology of Pricing - Contextual Prices AND Price Anchoring

Contextual Prices

Similar to using useless prices, you can guide customers’ choices by giving them a context in which to consider the amounts.

 Let’s say you have three sizes of popcorn at your movie theater (or three subscription models or three sizes of drink at a gas station). You can influence sales to purchase at the middle price point or the higher price point.

If the medium-sized popcorn bucket is the one you want people to choose, space the prices out equally among the three choices. By nature, most customers will select the middle option.
However, if you want people to buy the highest-priced subscription, leave a large gap between the lowest-cost option and the middle-priced option. Then price the other two very close together.
For instance, a small popcorn would be $3.50. A medium-sized bucket of popcorn would be $7.50 and a large would cost $8.00. The mindset here is that “for only 50 cents more” you can get a much larger portion of popcorn. The same is true for fountain drinks at gas stations. Small = $.99. Medium = $1.49. Large = $1.59. Which sells more? Almost always the large for “just 10 cents more.”

Price Anchoring

Want to sell a $1,000 home entertainment center? Show it to customers AFTER you’ve introduced them to a $5,000 home entertainment center. Anchoring works because most of us have a tendency to compare everything else to the first prices we encounter.

The high $5,000 system makes everything else look like a real bargain. The point here is not to sell the $5,000 system, but to use it as an anchor that allows you to move more $1,000 systems.
Like most other marketing elements, choosing the right price point takes testing. Make some notes about how you could possibly use these strategies with your products/services. Then work your way through the options to see which brings the best results.


I’d love to hear what pricing tactics you use and the results you get.

Dan Ariely-Pricing the Economist   

Marketing: Branding Strategies

Marketing: Branding Strategies

Branding Strategies

When a company manages its brands it has a number of strategies it can use to further increase its brand value. These are:

Line extension: This is where an organisation adds to its current product line by introducing versions of its products with new features, an example could be a crisp/chips manufacturer extending its line by adding more exotic flavours.

Brand extension: If your current brand name is successful, you may use the brand name to extend into new business areas. For example Virgin Group extending its brand from records, to airlines, mobiles and banking.

Multi Branding: The company decides to introduce more brands into an existing category. Kellogg’s for example have a number of brands in the cereal market and the cereal bar market. Multi-branding can allow an organisation to maximise profits, but a company needs to be weary over their own brands competing with each other over market share.

New Brands: An organisation may decide to launch a new brand into a market. A new brand may be used to compete with existing rivals and may be marketed as something ‘new and fresh’.

Marketing: Forces that affect consumer buying

Marketing : Forces that affect consumer buying

Understanding consumer behavior helps you identify the most appropriate offering to fulfill consumer demands.

People decide to buy products for many different reasons. The table below shows just a few examples of the forces—cultural, social, personal, and psychological—that most influence individuals' purchasing decisions.

Forces Affecting Consumer Buying

Cultural Forces	National values, such as an emphasis on material comfort, youthfulness, or patriotism	Ethnic or religious messages or priorities	Identification with a particular socioeconomic class
Social Forces	Friends, neighbors, coworkers, and other groups with whom people interact frequently and informally	Family members, friends: parents, spouses, partners, children, siblings	Individuals' own status within their families, clubs, or other organizations
Personal Forces	Age: including stage in the life cycle; for example, adolescence or retirement	Occupation, economic circumstances, and lifestyle (or activities, interests, and opinions)	Personality and self-image: including how people view themselves and how they think others view them
Psychological Forces	Motives: conscious and subconscious needs that are pressing enough to drive a person to take action; for example, the need for safety or self-esteem	Perceptions (interpretations of a situation), beliefs, and attitudes (a person's enduring evaluation of a thing or idea)	Learning: changes in someone's behavior because of experience or study

The Psychology of Colors in Marketing

The Psychology of Colors in Marketing

Thinking about your brand and your logo? You should be thinking about colors. It's a conversation / debate I recently had with a client and a colleague in regards to our client's website design.
There are a lot of doubters in the world of marketing about the roles that colors play in buying decisions.
So let's dive right into the analysis with a question - one that's specifically geared towards the doubters.
What color is associated with Republicans? Democrats? Starbucks? Vimeo?

The Psychology of Colors in Marketing 

Six sigma - cost reduction automating organisational learning using Rapid Authoring Tool

Six sigma  cost reduction through automating organisational learning using Rapid Authoring Tool

How To Choose An Authoring Tool For Your HTML eLearning Development

Lectora11, Captivate 7, and Articulate Storyline are the top tools that come to mind for HTML elearning development. Their key strength – they are able to provide an excellent library of ready templates and resources. But do you know which one is best for your project? Read on…

Let’s begin with evaluating each of these tools on certain parameters/criteria that are important for elearning development. 

How To Choose An Authoring Tool For Your HTML eLearning Development

Brand Strategy Key Concepts & Steps

Brand Strategy Key Concepts & Steps

Before you begin

Before working on your brand strategy, make sure you’ve identified your competitive positioning strategy – your brand strategy will bring it to life.

If you have a brand strategy, make sure it’s as effective as possible

• Poll your customers, employees and vendors. Are their impressions consistent with your strategy? If not, work on the elements you can improve.

Develop your brand around emotional benefits

• List the features and benefits of your product / service. A feature is an attribute – a color, a configuration; a benefit is what that feature does for the customer.
• Determine which benefits are most important to each of your customer segments.
• Identify which benefits are emotional – the most powerful brand strategies tap into emotions, even among business buyers.
• Look at the emotional benefits and boil them down to one thing that your customers should think of when they think of you. That’s what your brand should represent.

Define your brand personality, story and positioning statements

• Think of your brand as a person with a distinct personality. Describe him or her, then convey these traits in everything you do and create.
• Write positioning statements and a story about your brand; use them throughout your company materials.
• Choose colors, fonts and other visual elements that match your personality.
• Determine how your employees will interact with prospects and customers to convey the personality and make sure your brand “lives” within your company.

After Brand Strategy

Together with your competitive positioning strategy, your brand strategy is the essence of what you represent. A great brand strategy helps you communicate more effectively with your market, so follow it in every interaction you have with your prospects and customers.

hypothesis testing is of fundamental importance for market research.

hypothesis testing is of fundamental importance for market research.

Hypothesis Testing & ANOVA - marketing research

This chapter's learning objectives

• The logic of hypothesis testing.
• The steps involved in hypothesis testing.
• What test statistics are.
• Types of error in hypothesis testing.
– Common types of t-tests, one-way and two-way ANOVA.
• How to interpret SPSS outputs.

Introduction

we use descriptive statistics to compare groups. For example, we might be interested in investigating whether men or women spend more money on the Internet. Assume that the mean amount that a sample of men spends online is $200 per year against the mean of $250 for the women sample. Two means drawn from different samples are almost always different (in a mathematical sense), but are these differences also statistically significant?

To determine statistical significance, we need to ascertain whether this finding is attributable to chance or if these findings are likely due to significant differences. If the difference is so large that it is unlikely to have occurred by chance, we call this statistical significance. Whether results are statistically significant depends on several factors, including variation in the sample data and the number of observations.

In this chapter, we will introduce hypothesis testing which allows for the determination of statistical significance. As statistical significance is a precursor to establishing practical significance, hypothesis testing is of fundamental importance for market research.

hypothesis testing is of fundamental importance for market research.

Marketing Automation - Nurturing: Urgency Email Campaigns

Marketing Automation -  Nurturing: Urgency Email Campaigns

Marketers that tightly align with Sales have an opportunity to further their nurture strategy and reach individuals that have progressed into the later stages of the Sales & Marketing funnel. An Urgency Campaign targets individuals that are typically within the Justify phase of the buying cycle. Marketers need to partner with sales to address the sense of urgency that there is in the later stages of the individual's path to purchase.

To help Sales close deals faster, you should consider adding an Urgency campaign to your Nurture Strategy. Let’s get started with creating Urgency campaigns.

Be a (Sales) Hero | Nurturing: Urgency Campaigns

Marketing Automation - The 4 Ps of a Successful Marketing Automation Program

Marketing Automation - The 4 Ps of a Successful Marketing Automation 

At the heart of the myth, is that marketing automation technology will boost your sales and save your business. In fact, marketing automation platforms are only 25% of the equation, if that. I’ve outlined four “P”s of a successful marketing automation program to help set the record straight.

Marketing Automation - The 4 Ps of a Successful Marketing Automation Program

Marketing Excellence - Go to Marketing

Marketing Excellence - Go to Marketing

Marketing

Customer Event Maps – Customers reach out to your firm in many ways. Often, much of this data is lost, even though this data is crucial to keeping profitable customer relations. Customer event maps that identify all opportunities to:

Improve data capture at point of contact
Analyze that data for opportunities
Close the loop with improved cross-sell and up-sell at point of contact

Marketing Support Process Excellence – Behind every great campaign or sales effort is a lot of marketing logistical and process work. What is also behind these campaigns is a large dollar spend and cycle times that reduce speed-to-market. Process excellence in support functions is not glamorous, but represents a multi-million dollar improvement effort for most organizations

Marketing - Engagement Model for Social Media Strategy

Marketing_Designing an Engagement Model for Social Media Strategy

10 Smart Tips to Transform Your Contact Center into a Sales Center of Excellence (CoE)

10 Smart Tips to Transform Your Contact Center into a Sales Center of Excellence (CoE) 

Service and Sales are two very diverse organizational functions. Traditionally, each function needs a different set of core competencies.

The new-age contact center breaks this convention. It has the unique ability to equip and empower a contact center agent with selling skills and techniques that enables him to cross- sell and up-sell products in addition to handling a service call efficiently.

This article underlines some key tips and techniques that can convert the contact center into a Sales Center of Excellence.

Transforming the regular contact center into a revenue generating Sales Center of Excellence (CoE) requires a methodical and a well-planned approach. The  approach to building a Sales Center of Excellence involves:

• Understanding the customer lifecycle
• Helping the client identify the sales maturity model of the contact center
• Suggesting ways and means and charting out a well-defined roadmap to convert thecontact center into a Sales Center of Excellence and reduce the Total Cost of Ownership considerably.

Here are 10 tips that can transform the regular contact center into a Sales Center of Excellence:

10 Smart Tips to Transform Your Contact Center into a Sales Center of Excellence 

30 Shocking Marketing Automation Stats for 2014

30 Shocking Marketing Automation Stats for 2014

If there’s one area of sales and marketing technology that’s en vogue for 2014, it’s hands-down the marketing automation software industry. While those of us in the B2B software marketing space might think marketing automation is old news, that’s because we’re actually the early adopters of this massive market that’s just beginning its growth trajectory. The marketing automation stats we’ve uncovered show that there’s plenty of room for expansion, and that the industry is prime for even more growth and attention in the coming year, as new industries and B2C companies jump on board.




30 Shocking Marketing Automation Stats for 2014

What is Six Sigma… and Why Should Marketing and Sales Managers Care?

What is Six Sigma… and Why Should Marketing and Sales Managers Care? - See more at: http://salesperformance.com/what-is-six-sigma-and-why-should-marketing-and-sales-managers-care#sthash.ll9bbEMc.dpuf

What is Six Sigma… and Why Should Marketing and Sales Managers Care?

What is Six Sigma… and Why Should Marketing and Sales Managers Care? - See more at: http://salesperformance.com/what-is-six-sigma-and-why-should-marketing-and-sales-managers-care#sthash.ll9bbEMc.dpuf

We all know that good marketing and selling gets other people to take the actions we want them to take. The challenge is in figuring out how to do it better.

The way to get other people to take actions is to show them the value to themselves or their company. Whether you do it in person, over the phone, in a letter, in a newspaper, on the radio, or with a webpage makes no difference. Prospects and customers need communications in all those ways and more.

Unfortunately, innumerable variables make marketing and selling challenging. For example, some direct mail campaigns generate a 1% return, others generate 1.5%; some salespeople close 20% of their deals, others close 30%. Wouldn’t you like to know why some mailings get a 50% greater response rate and why some salespeople have a 50% higher close ratio?

Six Sigma helps to identify the causes of variations like these so you can make better decisions on what needs to be change

We all know that good marketing and selling gets other people to take the actions we want them to take. The challenge is in figuring out how to do it better.
The way to get other people to take actions is to show them the value to themselves or their company. Whether you do it in person, over the phone, in a letter, in a newspaper, on the radio, or with a webpage makes no difference. Prospects and customers need communications in all those ways and more.
Unfortunately, innumerable variables make marketing and selling challenging. For example, some direct mail campaigns generate a 1% return, others generate 1.5%; some salespeople close 20% of their deals, others close 30%. Wouldn’t you like to know why some mailings get a 50% greater response rate and why some salespeople have a 50% higher close ratio?
Six Sigma helps to identify the causes of variations like these so you can make better decisions on what needs to be change
- See more at: http://salesperformance.com/what-is-six-sigma-and-why-should-marketing-and-sales-managers-care#sthash.ll9bbEMc.dpuf

INTRODUCTION TO SIX SIGMA FOR MARKETING PROCESSES

INTRODUCTION TO SIX SIGMA FOR MARKETING PROCESSES

Marketing executives seek new ideas to bolster their success rate. Applying Six Sigma to marketing may be a new approach, but it comes with an “insurance policy.” 

Six Sigma has a proven track record in other parts of the business. Six Sigma concepts can provide additive elements to increase the competitive advantage marketing needs to act proactively, sustain its positive momentum, and keep pace with the ever-changing landscape

INTRODUCTION TO SIX SIGMA FOR MARKETING PROCESSES

Apply Six Sigma To Sales and Marketing

In 50 Words Or Less

• Six Sigma offers a problem solving roadmap that
can be applied to any business function.
• Its lack of success in sales and marketing comes
from an unwillingness of leadership of those functions
to fully embrace the methodology.
• Applying Six Sigma requires altering both
processes and attitudes.

apply six sigma to sales and marketing article

About Agile Marketing

About Agile Marketing

Agile Marketing is an approach to marketing that takes its inspiration from Agile Development and that values:

Responding to change over following a plan
Rapid iterations over Big-Bang campaigns
Testing and data over opinions and conventions
Numerous small experiments over a few large bets
Individuals and interactions over target markets
Collaboration over silos and hierarchy

The goals of Agile Marketing are to improve the speed, predictability, transparency, and adaptability to change of the marketing function.