We all know that pricing a product – selecting the most appropriate price at which to sell it – is often a balancing act. There are 2 views of pricing : From producer’ s view and from consumer ‘ s view. When we look from producer’ s view, we can easily see that they try to covar organization’ s operating, administrative, research, marketing ... costs. They set price by considering these costs. But they have to keep the balance between these costs and and consumer expectation. At that point we face the view of consumer for pricing strategy. Prices must’ nt be so high that consumer must’ nt need to apply rival brand names. This is a really difficult and balancing act.
On this point kind of product becomes very important. Because from consumer’ s view, low prices usually mean ‘ Low quality’ while high prices mean ‘ High quality ‘ . So while pricing product we should consider all these factors.
That time we can ask again ‘ What about Shiraz Wine ? ‘ Before the Shiraz, we should take the general pricing strategy to the hand. When we look at Pamukkala Wine Company , we see that it is a developing company. It is getting bigger and bigger day by day. But they are not making sudden or often or dramatic cahnges on their prices. In general the prices in wine sector are high because of high tax rates ( % 63.3 Özel Tüketim Vergisi,ÖTV. % 11 KDV ). Despite these difficulties, prices of Pamukkale Brand name are not high when we compare with Doluca or Kavaklıdere. This may be an obligation of being a developing company.
On the other hand when we look at ‘ Shiraz Wine ‘ we saw that it’s prices are higher than other products. It is being sold from 15 million TL in retailer markets such as Migros, Carreaufur. Price of Shiraz is higher than others in Pamukkale; but lower than rival brand names. So we think that they are providing both quality and convenient prices.
Another point we emphasized is that although thet make big sales during Christmas, they are nor increasing prices. But during Ramadan Month they are appliyingf discounts on their prices.
To sum up; in a general view they are not applying high prices despite beina quality. But for Shiraz they are increasing prices; because they are trusting Shiraz so much that it won a golden medal. Shiraz is being produced only by Pamukkale. This may be another reason to make them trust Shiraz so much...
The most visible component of the marketing mix is promotion, which refers to techniques for communicating info about products.
Advertising is any form of paid non-personal communication used by an identified sponsor to persuade or inform certain audiences about a product. . So adverising is such expensive for componies but this does not mean that they do not use advertisements.They organize campaigns in order to introduce their products. Finally instead of advertising so much they are integrating the Promotions Mix
The elements of the promotions mix are:
Trade Fairs and Exhibitions
The Promotions Mix
Let us look at the individual components of the promotions mix in more detail. Remember all of the elements are 'integrated' to form a specific communications campaign.
1. Personal Selling
Personal Selling is an effective way to manage personal customer relationships. The sales person acts on behalf of the organization. They tend to be well trained in the approaches and techniques of personal selling. However sales people are very expensive and should only be used where there is a genuine return on investment. For example salesmen are often used to sell cars or home improvements where the margin is high.
2. Sales Promotion
Sales promotion tend to be thought of as being all promotions apart from advertising, personal selling, and public relations. For example Buy One Get One Free. Others include couponing, money-off promotions, competitions, free accessories (such as free blades with a new razor), introductory offers (such as buy digital TV and get free installation), and so on. Each sales promotion should be carefully costed and compared with the next best alternative.
3.Public Relations (PR)
Public Relations is defined as 'the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization and its publics' (Institute of Public Relations). It is relatively cheap, but certainly not cheap. Successful strategies tend to be long-term and plan for all eventualities. All airlines exploit PR; just watch what happens when there is a disaster.The pre-planned PR machine clicks in very quickly with a very effective rehearsed plan.
4. Direct Mail
Direct mail is very highly focussed upon targeting consumers based upon a database. As with all marketing, the potential consumer is 'defined' based upon a series of attributes and similarities. Creative agencies work with marketers to design a highly focussed communication in the form of a mailing. The mail is sent out to the potential consumers and responses are carefully monitored. For example, if you are marketing medical text books, you would use a database of doctors' surgeries as the basis of your mail shot.
5. Trade Fairs and Exhibitions
Such approaches are very good for making new contacts and renewing old ones. Companies will seldom sell much at such events. The purpose is to increase awareness and to encourage trial. They offer the opportunity for companies to meet with both the trade and the consumer. Expo has recently finish in Germany with the next one planned for Japan in 2005, despite a recent decline in interest in such events.
Advertising is a 'paid for' communication. It is used to develop attitudes, create awareness, and transmit information in order to gain a response from the target market. There are many advertising 'media' such as newspapers (local, national, free, trade), magazines and journals, television (local, national, terrestrial, satellite) cinema, outdoor advertising (such as posters, bus sides).
Sponsorship is where an organization pays to be associated with a particular event, cause or image. Companies will sponsor sports events such as the Olympics or Formula One. The attributes of the event are then associated with the sponsoring organization.
The elements of the promotional mix are then integrated to form a unique, but coherent campaign..
Promotion Strategies of Pamukkale Şarapçılık
We all know that Wine Sector is a developing sector. And in this sector; there are a few componies such as Dolluca Kavaklıdere; which have been for a long time indeed in this sector.
When we focus on the compony chosen by our project team, we realize that it is also a developing one; just like the sector. So it attracted our attention.
The most “visible” component of the marketing mix is promotion, which refers to techniques for communicating info about products.
Advertising is any form of paid non-personal communication used by an identified sponsor to persuade or inform certain audiences about a product. . So adverising is such expensive for them but this does not mean that they do not use advertisements.
They organize campaigns in order to introduce their products. Finally instead of advertising so much they use publicity mostly.
Here are their specific Promotıon Strategies:
The priority for them is “Customer Satisfaction” That’s why they aim to get profit through satisfacton; not through volume. So we can say that they are applying Matketing concept, instead of Selling Concept.
As they are a new developing compony, their other aim is to “position” their brand name.
Also they give great importance to keeping their old customers through creating long-lasting relationships. “Diverting customers into clients”
They achieve these conditions by:
Taking part in International Fair- İzmir and presenting their wine through tadım????
Participating in Festivals such as “Şirince Bağbozumu Şenlikleri”
Having face to face communication with their custumers. Such as: Remebering their birthdays. Sending special messages and etc.
Creatig good relationships with their customers, then those actual customers act as “Walking Advertisements” and attract the attention of your potential customers.
Being more flexible in collection of taxes.
“Thinking Global not Local” is their action point. They promote their products to other countries. 45 % of their sales are from European Countries. That’s a really good amount.
Some of those contries are: France, Netherland, Denmark, Austria, but mostly to Germany.
Differentiating the position of their products in Hyper Markets such as: Carreofur, Kipa, Migros and etc. They pay extra money to those markets in order to locate their products.on the first shelters.
Advertising in local newspapers. They can not give advertisements to televisions because it is illegal. İnstead they use Magazines such as GUSTO (It is a special magazine which is specifically based on Wine Sector. There are informations and commends about:
How to serve a wine.
Thoughts of experts on wine.
Special Brand names and critics on them
New develpments in the sector and etc..
Giving extra products with their product. Such as Wine glass.
Giving recommends on how to consume their wine. For example: Shiraz Wine goes well with spicy and strong dishes as well as dishes covered with thick sauce. Also it should be consumed at 16-18 degrees celcius.
Contributing to understanding of Wine Culture through informing their customers about :
İmportance of Wine( especially the red one) on health.
Evolution of wine
Its production process.(Fermantation)
Even about the grapes of which each Wine is made. For example: Shiraz Wine is made of grapes from Denizli Güney.
They do not use a different promotion strategy for each product. But they differentiate their wine Shiraz from the others. And recomend it to thier special customers.
Also they present Shiraz as the best Wine among others both in this sector and in their product line.
We can see that they are right on their claims, because Shiraz has taken the “Golden Medal”.That is an important proof for both the Quality and taste of Shiraz.
PLACE, DISTRIBUTION AND INTERMEDIARY
Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer.
There are six basic 'channel' decisions:
Do we use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a wholesaler)
Single or multiple channels
Cumulative length of the multiple channels
Types of intermediary
Number of intermediaries at each level (e.g. how many retailers in Southern Spain).
Which companies as intermediaries to avoid 'intrachannel conflict' (i.e. infighting between local distributors)
Selection Consideration - how do we decide upon a distributor?
Market segment - the distributor must be familiar with your target consumer and segment.
Changes during the product life cycle - different channels can be exploited at different points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold via a few specific stores.
Producer - distributor fit - Is there a match between their polices, strategies, image, and yours? Look for 'synergy'.
Qualification assessment - establish the experience and track record of your intermediary.
How much training and support will your distributor require?
Types of Channel Intermediaries
There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. The main modes of distribution will be looked at in more detail.
Channel Intermediaries – Wholesalers
They break down 'bulk' into smaller packages for resale by a retailer.
They buy from producers and resell to retailers. They take ownership or 'title' to goods whereas agents do not (see below).
They provide storage facilities. For example, cheese manufacturers seldom wait for their product to mature. They sell on to a wholesaler that will store it and eventually resell to a retailer.
Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service costs, or sales force costs.
A wholesaler will often take on the some of the marketing responsibilities. Many produce their own brochures and use their own telesales operations.
Channel Intermediaries – Agents
Agents are mainly used in international markets.
An agent will typically secure an order for a producer and will take a commission. They do not tend to take title to the goods. This means that capital is not tied up in goods. However, a 'stockist agent' will hold consignment stock (i.e. will store the stock, but the title will remain with the producer. This approach is used where goods need to get into a market soon after the order is placed e.g. foodstuffs).
Agents can be very expensive to train. They are difficult to keep control of due to the physical distances involved. They are difficult to motivate.
Channel Intermediaries – Retailers
Retailers will have a much stronger personal relationship with the consumer.
The retailer will hold several other brands and products. A consumer will expect to be exposed to many products.
Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel agents.
Products and services are promoted and merchandised by the retailer.
The retailer will give the final selling price to the product.
Retailers often have a strong 'brand' themselves e.g. Ross and Wall-Mart in the USA, and Alisuper, Modelo, and Jumbo in Portugal.
Channel Intermediaries – Internet
Needles to say the internet offers a new "Place" to many business sectors. It has enabled many middlemen to be bypassed resulting in a price advantage to be offered to the customer followed by the inevitable increase in volume for the seller.This could be selling direct to your consumer and missing out the retailer, or it could be direct to your retailer, missing out the wholesaler.
The Internet has a geographically disperse market.
The main benefit of the Internet is that niche products reach a wider audience e.g. Scottish Salmon direct from an Inverness fishery.
There are low barriers low barriers to entry as set up costs are low.
Use e-commerce technology (for payment, shopping software, etc)
There is a paradigm shift in commerce and consumption which benefits distribution via the Internet