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Unit 10: Marketing Considerations
A set of strategies found quite commonly in smaller businesses are growth strategies. One way Notes
to look at strategies to grow your business is through the way you will use products and
markets or customers:
Current product/current market: Market penetration is a strategy of increasing your share
of existing markets. You might achieve this by raising customers’ awareness of your
products and services or finding new customers. For further information on planning
effective marketing communications see the Related Items section below for a link to the
Factsheet: Planning marketing communications.
Current product/new market: Market development is a strategy of finding and entering
new markets with your current product or service range. The new market could be a new
region, a new country or a new segment of the market. For further information on selecting
and entering new markets see the Related Items section below for a link to the Factsheet:
Entering new markets.
New product/current market: Product development is a strategy for enhancing benefits
you deliver to customers by improving your existing products and services or developing
new ones.
New product/new market: Diversification is a strategy that usually carries high costs and
high risks. It often requires firms to adopt new ways of doing business and so has
consequences far beyond simply offering new products/services in a new market. It is
therefore usually a strategy to be adopted when other options are not feasible.
Self Assessment
Fill in the blanks:
5. Small Businesses can gain a competitive advantage over larger competitors by
………………. their products or services.
6. Market ……………….. is a strategy of increasing your share of existing markets.
7. Market development is a strategy of finding and ……………… new markets with your
current product or service range.
8. …………………… is a strategy that usually carries high costs and high risks.
10.3 Pricing Strategies and Marketing of Services
Pricing is an important function of marketing. Price is the exchange value of a product. It is the
amount of money or other products needed to acquire a product. Barter is the exchange of
products for other products. When developing a marketing program, an organization can compete
on the basis of price and non-price factors.
10.3.1 Pricing Method
1. Mark up Pricing: The most elementary pricing method is to add a standard markup to the
product’s cost. Construction companies submit job bids by estimating the total project
cost and adding a standard markup of their costs.
Example: Toaster Manufacturer-
Variable cost per unit ` 10
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