Network Effects

The network effect causes a good or service to have a value to a potential customer dependent on the number of customers already owning that good or using that service. Metcalfe's law states that the total value of a good or service that possesses a network effect is roughly proportional to the square of the... Continue Reading →

What is Pricing?

Pricing is an important strategic issue because it is related to product positioning and affects other marketing mix elements. According to McKinsey, companies habitually charge less than they could for new products, especially with revolutionary offers. Underestimating a product©s value can be a costly mistake since the introductory price often fixes its worth in the... Continue Reading →

What is STP?

S-T-P refers to the fundamental strategy of Segmentation-Targeting-Positioning. The deadliest sin of marketing is trying to mean all things to all people. Marketers must understand the composition of the market, and exactly who their target customer is. Thereafter, they must position their product, lest (as Sergio Zyman says) the competition does it for them by... Continue Reading →

McKinsey’s Brand-building Matrix

Being the same as everyone else is useless. But being different is not the same as being better. We can promote a brand's tangible attributes, such as low prices or assorted flavors, or its intangible attributes, such as the image. The interplay is complex, but statistical techniques can help us home in on the appeal... Continue Reading →

BCG’s Growth-Share matrix

BCG’s Growth-Share matrix provides a framework for analyzing a firm’s product portfolio.Products that have a high market-share in a high-growth market are, obviously, star products that any firm would like to have. High growth typically means low market-size, and these star products are, thus, not huge current-revenue earners. Stars are where the firm should invest... Continue Reading →

Product Life Cycle

A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product lifecycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. Introduction Stage In the introduction stage, the firm seeks to build product awareness... Continue Reading →

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