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Saturday, August 17, 2019

Using Channels to Determine Pricing Strategy

Pricing is an important part of selling products and services. Select a price too high and your product sales slack while if you are too low you can increase sales but with the risk of long-term damage to the brand. Evaluating price can get complex when we consider the multiple ways pricing strategies determine value. Common evaluation include cost, comparison, and value offered. Few people think of how the channel can have a serious impact on total price. Taking into account the channel and the target you hope to reach, it is possible to further tweak your price outcomes.

Why must you have a pricing strategy?

As a business owner you want to ensure that you are putting yourself in the most lucrative spot for maximizing your wealth. All businesses evaluate the work of their offerings in some way. For small business it might be relatively simple but for large businesses it can be increasingly complex. Having some type of strategy helps you limit your own bias while improving accuracy.

How does the channel influence strategy?

The marketing channel you use should be based on our core customer demographic. First research your customer and then find your channel. The core group of purchasers within this channel will be the one who determine your value. Such customers already are interested in the product and would raise its value. The rest of society doesn't matter much if they don't make purchases. Thus, product value and customer profile and channel influence each other.

What is the value of a product?

The value of a product is its relative worth to the consumer. Its not only about money because money is only an indirect measure of value. Instead, think of value in terms of its use to the people who need it. If it has no use or is abundant (or scarce) the value will change. A products core value is more associated with its functional value while relative value is more associated with market factors.

There is no perfect way to evaluate a product. What you essentially want to answer is "what are my customers willing to pay for this product so I can earn a profit?" The low cost option isn't always the best option. At times it may make sense to raise your value through other means such as warranties and add ons.


Tuesday, August 13, 2019

Segmentation of Populations and Strategy Based on Psychographic Motivations

Consumers are motivated by all types of needs and activities. They buy volleyball nets, order name brand clothing, purchase large houses, and much more. Their choices are often based on psychological factors about how they see themselves and the world around them. Tapping into these psychological motivations and impressions offers a glimpse into the inner world that pushes consumers to make decision on a neural/subconscious level.

Jane's Psychographic

Consider Jane a college student who loves biking. She joins biking teams, searches the Internet for biking attire, purchases bike parts off off Amazon, and tries to sneak away to bike anytime she can. She became such an enthusiastic biker that much of her life revolves around biking.

This is where psychographics becomes very important. Jane is a lover of biking and she perceives herself to be an athlete. She may actually be past her prime to professionally compete but nevertheless pushes her practices to the maximum everyday! What type of products might she be interested in?

She may need shoes, pants, knee braces, supplements, bike parts, insurance.....etc....etc.....etc... Her beliefs about herself impact where she spends her time and money. Tapping into their inner needs will give you a pretty solid indication of what they want out of life and their products.

Understanding and Segmenting Customers

You can gain insight into customer desires and beliefs by asking them what they believe. Surveys, direction discussion, complaints, etc... give you some hint into what someone wants. It is this customer feedback that allows you to align products and services to their needs.

When you are dealing with a large population of people there will be segments. Some will be Democrats and some Republicans. A few might like the Packers and others the Lions. There are people who love the outdoors and others who prefer the excitement of their televisions.

Look at Customers from Multiple Data Points

Gather as much background information about your customers as you can. You may not be able to do it all at once but you are certainly able to gather at certain points. The goal is not to overwhelm people with information gathering, or slow down transactions of sales but to instead gather over time as your relationship blossoms.

Sometimes you can gain information from face-to-face conversation (works better in small businesses), purchase history, purchase amount, zip code, etc.... Think of creating a profile that allows you to not only understand a particular customer but also your core demographic. The amount you want to collect will depend on the life-time value of that customer.

Pick the Strategies Based on Customers Needs

After you have collected enough information about customers and had a chance to analyze them you should consider using that information to make better strategy. Use the channels your customers are mostly likely to be reached and in which you are most likely able to get them to take an action. As new information becomes available you should continue to change your strategies for maximum return.



Tuesday, August 6, 2019

China Comes Close to Passing the U.S. in Doctors, Patents and Scientific Discoveries

The U.S. is losing its intellectual advantages when measured against other emerging nations like fast growing China. Intellectual capacity fuels our economy with new products and services and when this declines economic positions change. China's intellectual capacity seems to be racing at breakneck speed to match U.S. superiority in PhD candidates, scientific publications and patents. To retain the nation's current economic position there must be renewed interest in the development of educational and Ph.D programs to push innovation to the forefront of scientific discovery. Patching holes in the brain drain seems more pressing when we compared to intellectual outputs in other nations.

We live in a complex society that insists on increasing amounts of technology and knowledge to manufacture new products.  According to the article Do We Need More Scientists? in National Affairs there was a serge of investment into science in the 1950's when the USSR launched Sputnik, (Teitelbaum, 2003).  In the 1970's and 80's research institutions warned of the consequences of not having enough scientific capacity. The Dot.Com boom of 1990's again saw shortages of U.S. scientific ability widen and we began to recruit heavily from overseas to narrow that gap.

The U.S. is in a difficult era where significant amounts of our manufacturing shifted to cheaper international locations. Compounding the problem further, our schools are wobbly and don't consistently produce the skill levels needed to foster adequate scientific development. Attracting investment in manufacturing and development rests in part on our ability to develop useful intellectual capacity.

To more clearly discern if we have enough intellectual capital we can look at a couple of markers that include the hiring of doctors from overseas, Ph.D. graduates, scientific publications and patents.

H-1B Visas

Intellectual capital and our ability to general new ideas has always been central to innovation. New ideas are build from study and research that converts into knowledge of the past and ideas on how to solve problems for the future. The U.S. imports intellectual capital through a visa program based business skill needs. H1-B visas, while not always Ph.D. levels, do provide an indication of need for further scientific and technology oriented skills.

According to the Pew Research Center, since 2009 the demand for H-1B Visas have skyrocketed and meet quotas within the first weeks of application dates (Ruiz, 2017). From 2000 to 2018 the U.S. saw business submit work visa applications increase from around 110,000 to 200,000 respectively. Approximately 90% of applications are from the STEM related fields such as computer, math, science, engineering, etc...  Of these applicants 5% are Ph.Ds and 4% are Master Degree holders.

Work visas are a strong indicator that we have such a high demand for certain types of skill and knowledge that we import it.  While many of these recruits have something of value to provide our country they should be used more as a cushion between increased demand and lack of supply. Chronic short-falls in talent should concern stakeholders of industry-education misalignment.

Ph.D. Graduates

OECD reports 68 thousand U.S. PhD (.03 % of population) candidates graduated in 2014 out of 214 million citizens (Gray, 2017; OECD, 2016).  In the same year, Germany had 29k Ph.D. graduates (.035% of population) divided by 81.2 million population.  In contrast, in 2014 China is way behind the long curve by graduating 53,853 new Ph.D graduates (.004% of population) out of 1.364 billion people (Mei, 2018).

When we compare Ph.D graduates of the two countries over a given time-frame we can gain a deeper insight into the nature of the problem. China has a large population of relatively uneducated low-skilled workers. They have increased their PhD. institutions. We can see this change in comparing graduated during a certain time frame. The U.S. graduated 47K Ph.D students in 1998 and 67k in 2014 (OECD, 2016)  China over the same time frame  graduated 7.5 K in 1998 and 53K in 2014 (Mei, 2018).
Scientific Publications

Another way to look at growing innovation is through the eyes of scientific publications. Doctors often publish much more than any other educational group and indicates the presence of scientific activity. Reviewing publications will tell you a lot about which countries are creating and developing some of the most thought provoking advancements. It is those advancements that make the biggest difference.

 The Organization for Economic Cooperation and Development indicates that U.S. is growing in scientific publications but China is increasing its intellectual capacity at a much higher rate (OECD, 2016). Between 2003 and 2012 China went from 90K to 400K (+77.5%) highly cited papers. Comparatively the U.S. went from 390K to 590K (+51%) highly cited publications during the time period.

You can see from the chart that it is possible China may have surpassed the U.S in scientific publications. If not yet it wont be long! It is important consider that scientific publications lead to scientific discovery. It also provides some understanding of intellectual and innovative capacity. Much will depend on the quality of the publications for development. 



Patents

Patents help gauge improvement in the protection of intellectual discoveries and innovative products. They often include new products, additions, technologies, and discoveries. In 2014 The U.S. had 615,243 patent submissions and out of these 326,032 patents were granted as original (U.S. Patent and Trade Office, 2016). Comparatively, China in 2014 submitted a whopping 964,859 patent applications and was awarded 246,895 patent grants (WIPO, 2019).

While the U.S. is still producing the most patents in the world, the Chinese are trending up quickly. For example in 2008 the U.S had 185,224 patent approvals and in 2014 that number increased to 326,032 (U.S. Patent & Trademark Office, 2016). Comparatively, China in 2008 had 2,329 patent approvals and in 2014 earned a whopping 246,895 patent approvals (Wipo, 2019).
How can we Improve U.S. Intellectual Capital?

1. Rethink Education. Education is vital to today's success as an individual and as a nation. We are not graduating enough people with STEM skills and must rely on importing that talent from overseas. The need to use education to prepare Industrial Era factory talent has been replaced by Big Data Era demand for higher order thinking skills. Our schools will need to set the preparation work in the early stages of life and foster them throughout people's lives.

2. Cultural Adjustments. We should think of science as an essential aspect of our lives. Move scientific thinking from the periphery of learning to its center. Exposure brings awareness of the influence of science to the general public. When people are exposed to science in popular media, formal education and within their daily lives more critical ways of viewing the world occur.

3. Adjust the Labor Market and Incentives. Most students don't like math, logic, and all the different components that make their way into fields of science. While we may not be able to control how people feel we can better ensure that those with science degrees can find jobs. Companies that import new talent through the H1-B visa programs should first consider American talent before engaging in international recruitment.

Mei, Y. (2018). Transformation and trend of doctoral education in China and Poland (1980s-2010s) A comparative study. 21st Century Pedegogy, I (47-60). https://www.degruyter.com/downloadpdf/j/ped21.2018.1.issue-1/ped21-2018-0008/ped21-2018-0008.pdf

OECD (2016). OECD Science, Technology and Innovation Outlook 2016.  Retrieved June 27th, 2019 from https://read.oecd-ilibrary.org/science-and-technology/oecd-science-technology-and-innovation-outlook-2016_sti_in_outlook-2016-en#page149

Ruiz, N. (April, 2017). Key facts about the U.S. H-1B visa program. Pew Research Center. Retrieved https://www.pewresearch.org/fact-tank/2017/04/27/key-facts-about-the-u-s-h-1b-visa-program/

Teitelbaum,, M. (Fall 2003). Do We Need More Scientists? National Affairs, Retrieved
https://www.nationalaffairs.com/public_interest/detail/do-we-need-more-scientists

U.S. Patent and Trademark Office (2016). U.S. Patent Statistics Chart Calendar Years 1963 - 2015. Retrieved
https://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm

WIPO (2019). China-Statistical Country Profiles. World Intellectual Property Organization. Retrieved July 1st, 2019 https://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=CN

Permission to republish with proper attribution. Dr. Murad Abel








Saturday, August 3, 2019

Your Marketing Plan Will Break---or Make Your Business!

The marketing plan is like a compass that helps you navigate the marketing world to a destination where higher Return on Investment and increased performance is realized. It is difficult to have much improvement without understanding the market and the internal resources of the company. One of the reasons why you conduct a solid marketing plan is that it helps YOU understand the market in a way that improves decision making.

In terms of investment and money it is not wise to put money where you don't know how to obtain a return. Conducting research helps you find methods of creating value but doesn't often go into how precisely that is going to happen. A thorough business plan will help understand the particulars and reduce the risk of loss.

Common marketing plan sections include.....

  • Section I: Executive Summary
  • Section II: Situation Analysis
    • Background on Organization
    • Market Needs
    • The Market
      • Market Demographics
      • Market Trends
      • Market Growth
      • Macroenvironment
    • The Company
      • Mission
      • Product/Service Offering
      • Positioning
      • SWOTT Summary:
        • Strengths
        • Weaknesses
        • Opportunities
        • Threats
        • Trends
      • Historical Results
    • Competition
      • Direct Competition
      • Indirect Competition
  • Section III: Marketing Strategy
    • Value Proposition
    • Critical Issues
    • Financial Objectives
    • Marketing Objectives
    • Target Market Strategy
    • Messaging
    • Branding
  • Section IV: Marketing Mix
    • Product
    • Pricing
    • Promotion
      • Advertising
      • Promotion
      • Direct Marketing
      • Public Relations
      • Social Media
    • Place
    • Service
    • International Markets
    • Implementation Schedule
  • Section V: Financials
    • Sales Revenue
    • Product Sales Revenue
    • Channel Sales Revenue
    • Profitability
    • Return on investment
    • Break-Even
  • Section VI: Controls
    • Implementation
    • Keys to Success
    • Market Research
    • Contingency Planning
  • Section VII: References
  • Section VIII: Appendices 
  • Section IX: Tables 
  • Section X: Figures 

Looking closely at the categories you will notice the many different aspects of the market covered such as local and/or international markets all the way through to contingency plans. Completing a solid plan will tell you an awful lot about what you should be doing and what you should not be doing. The detail and in-depth investigation will often make the difference between millions of dollars earned and millions of dollars lost!

Sunday, July 14, 2019

Changing Your Business Structure for Online Success

Online businesses and ground based businesses have some similarities but are not the same. One focuses on moving physical products to local customers while the other deals more with information. Depending on the type of business both may utilize physical systems but one conducts most of the transactions online and that naturally adjusts business structure.

Online businesses must utilize outside pay vendors to create their shopping carts and handle online payments effectively. Most of the interactions with people are virtual. No cash, little face-to-face, and lots of shipping.

You will also find that virtual businesses use storage in much the same way as physical businesses but may or may not have these products present. They could be shipping them from a remote Amazon storage facility instead of having them on hand for visiting customers.

If you have a brick-n-mortar business you will need to be realistic about what you want to accomplish. If your businesses is small you may at a minimum require a website with your contact information. Adding product descriptions and e-commerce can make a difference.

Any plan to move online should consider the logistics of your business and who your core customer is. As an example, if you are a neighborhood store being online beyond a simple web page and on Google maps may not be helpful. If you are a large super center you may have additional options.

One of the best ways to determine your online business model is to look at other businesses that have done well. If you are moving online look at businesses that have done the same thing. Starting a new business? Consider being completely online. Design your business for a virtual presence.



Saturday, July 13, 2019

2 Factors that Influence Writing for Online Channels

Keep Your Messages Short and Simple
Advertisement is critical to businesses survival and emerging media impacts the success of marketing campaigns. People believe that the same writing that works within a print advertisement will work equally well with online media. The technology changes the message and thus writing specifically for the channel and its followers is vital for sales success.

There are two major components that we should look to 1. the media limitations and 2. group language. Media has natural limitations on word length and picture size that can impact the overall message. Likewise groups have differences in perceptions that impact their language. Tapping into both will improve your ads substantially.

Have you ever tried to post something on Linked-In and found out part of your message was cut out? The same can be said for Facebook and Twitter. There are limitations and each media type will need a special written advertisement to maximize its benefits.

Not learning how to simplify can be costly as messages are cut off, jumbled on a cell screen or seem too complex to be read quickly. Writing specifically for the abilities and limitations of each media channel can make a big difference in whether someone reads the advertisement and takes some form of action.

Imagine if you are reading a lot of text on an older cell phone. You may just skip right over most of the relevant stuff because of the cost of effort and jump to the easy to comprehend information. You are leaking customers unless you ensure that the information can be easily understood.

Likewise, as the online world becomes increasingly complex people gravitate toward groups that of similar interest. Make sure you understand what language these groups use and in what context. Doing so allows you to look like you have genuine interest in the topic and can speak with some authority to group members.

Thursday, July 11, 2019

Poem: Nature of Sight

Printed pictures can be purchased and profits go to orphanage.
Most under $40 depending on size/quality. Free Shipping!
Contact if interested muradabel@gmail.com or text 619-540-0501
PayPal for Donations (muradabel@gmail.com)
Venmo for Donations (@muradabel)

Poem: Nature of Sight

Little places out in the woods off of the beaten trail, 
Mix of green and brown. 
Birds chirp and critters play, 
From night and into the day. 
Its the last few places of midnight black,
from the darkness into the light,
Nature has its sight.
Printed pictures can be purchased and profits go to orphanage.
Most under $40 depending on size/quality. Free Shipping!
Contact if interested muradabel@gmail.com or text 619-540-0501
PayPal for Donations (muradabel@gmail.com)
Venmo for Donations (@muradabel)






Sunday, July 7, 2019

Attracting Customers Through Explosive Online Branding!

Online Branding sparkles of a winning cocktail of content, placement, and need. As the Internet expands and becomes increasingly diverse it creates a universe of its own. Little 1's and 0's become the building blocks of a misty virtual world. Despite its complexity the "net", as it is fondly called, offers data beyond our wildest imagination. That data is used to understand the inner most desires of your customers and provide them the products they need at the time they need it.

Developing an explosive brand is more about continuous improvement to reach people through impact. Successful campaigns are built on a lot of experience. Yes...you need a great campaign to start but you still need to improve on it to attract new interest and avoid being a "one hit wonder".

One of the best ways to keep your brand growing and developing is Analyzing your E-Market Approaches. Review your metrics and understand what your customers are saying and which channels experience the most "chatter".

Metrics are almost useless unless you can take a broad view and Evaluate your Campaign. Think of metrics like a feedback loop that tells you how any particular activity is working. Page visits, time spent on each page, clicked links, comments, customer review ratings, etc... all make their way into the analysis.

As information comes back from the market make sure you use that information to determine a better price, product, promotion and place. People assume that promotion is the most important P in marketing but all of the other factors are part of the sale.

You will have the best time selling if you have the best campaign but your price is non-competitive. Likewise, you will also flounder in your efforts if the channels you place your product are not aligned to the the need of your customers. Keep everything connected and associated with each other in a way that leads to product brand explosion. Start "out of the gate" with a well designed campaign and you will do fine in your efforts.




Friday, July 5, 2019

Pictures that Put People's Peepers on Your Product

Hooking your customers in seconds is possible with the right pictures. Pictures aligned with thinking styles, feelings, and contextual information makes quick sales possible. Its all about gaining their focus. Our brains naturally move toward information that is easiest to understand and then move onto more complex information. That grey mass easily deciphers pictures in a way that is nearly instantaneous when compared to other forms of communication. Within a split second we either connect or don't connect with the material!

Thinking in Terms of Images:

This quick decipher occurs because our unconscious thinks in terms of images and symbols from our birth. We seem to assume it is language in which we think but this is only formal thinking. As a species we didn't develop written language until much further in our evolution. We are thus visual creatures that have the capacity to process information: specifically threats quickly!

Sharing Feelings:

When pictures relate directly to the main message they should say the story that wouldn't be possible in written text alone. If you are selling vacationing supplies the pictures should show people using those supplies to further embed the feeling with the message. For example, a picture of people having fun on a beach and smiling might help sell a vacation to someone in need of some RR.

Summing up the Information:

Pictures provide a quick summary of what the information will cover. That is why it is important to have pictures match in terms of message with the content. If it is too different people will have message confusion and leave. Let the pictures sum up the content quickly to attract the customer.

Provides Context:

Pictures can enhance and influence the main message. Images that provide additional contextual information to statements within the message are helpful. Consider when the practical use of a product like organizers is match with a man working in an organized garage. The organization and all the elements of the picture relate to the main message.

Pictures are not just pretty but need to match the main messages. It can be quickly understood, change mood, sum up information and provide context.  A few things to keep in mind.....
  • Use pictures related to your message (pet supplies and dogs).
  • Easy and simple to understand pictures.
  • Messages that tap basic emotions.
  • Put the product as the center of the piece but not necessarily "in the center" of the picture (Primary versus Secondary scan of information).
  • Stay cautious of medium capacity.
  • Relate the pictures to the product's core value. 
  • Ensure picture elements can be quickly understood.



Fear of Drowning While Diving----Sit back and relax buddy!


Trust me when I say that going under the water is not the most comfortable feeling until you get used to it. People assume you should just jump in and dive under the water to 60 feet right away. It is better to habituate because that is a lot of water you have to deal with and your brain must be comfortable in a situation that isn't really wired for. Take your time, on each dive go another 10 feet, eventually it will feel like nothing and deeper horizons can be crossed.

On my dive the other day at Fortune Pond in Crystal Falls Michigan I went down to a pretty deep level. Maybe for serious divers it isn't but for me an amateur its very different. Everything is a new experience and your brain isn't sure what it all is. 

The water was freezing but almost perfect view 30 or so feet. There isn't a lot down there but some toys people left behind (5 inch ship wreck").

If you get down far enough you can see some mining structures and other items you can check out. It is a little deeper than I am comfortable with. However, I did reach a new depth that I am not familiar with so I learned to sit back and relax. I'm not 100  percent comfortable but I'm getting there when you have a mass of water over you.