A strategic partner refers to a different business with which anorganization enters agreement, which is intended at assisting bothorganizations become successful (Jeschke, 2008). The benefit ofhaving strategic partners is that the organization shares thebusiness risks with their partners. It is better to work with othersthan to work alone. This is especially the case when introducing anew product, because the market is unpredictable.
The department store chain can form strategic partnerships that makeit possible to promote its high-range-priced products as well asexpanding in the west coast. One form of partnership is strategicmarketing partnership (Jeschke, 2008). Effective marketing is crucialto ensuring people become aware of the product and buy. On its own,the store chain may be incapable of effectively marketing to thetarget market. However, by strategic partnering with a marketingcompany, it becomes possible to extensively market the product. Thepartner promotes the product, while referring customers to the chainstore. Another form of strategic partnership is with complementarybusiness.
Although it is difficult to form agreement with complementarybusiness since they are the competitors, partnering with thecomplementary can be beneficial. Once companies become partners theyrefer clients among each other (Jeschke, 2008). This benefit thecompany, which is introducing the high-end products as it gets tomeet new customers and market its products. The partners manage toincrease sales yet at the same time save on money that may have beenused in advertisement. In order to expand to the west coast,strategic partnership with companies already established in theregion is advisable. It ensures that the company gets clients throughreferrals from the partner company, which helps in building acustomer base from the new region.
The company must strategically manage the high-ranged product brandsin order to ensure their successful introduction in the targetmarket. Product management is very important. The strategy guides theteam on what they should do about a product (Zahid, 2013). Theseinclude issues like how they should market the product, how tocompete with partners and how to increase product awareness amongother factors. Management of a product concentrates on themaximization of the business worth of the product.
A strategy for management of the high-ranged brands is productdifferentiation. Product differentiation is defined as the procedureof differentiating a product from other similar products in thesimilar market. This involves making the product more appealing toits specific target market. The strategy will involve differentiatingthe product from those of competitors as well as from its low-pricedproducts. The clothing and jewelry industry is highly competitive.There are many companies selling the same products and at the sameprices. Most of the individuals buying expensive jewelry and clothingare those more concerned about the quality over price. Hence, suchindividuals are highly likely to seek products that are unique fromall others in the market. Product differentiation thus sets apart thehigh-ranged products in the market and ensures that they arerecognized by customers.
The reason for the strategy is because the product being introducedis one where there is stiff competition in the market. Customers havealready established themselves with the products of competitors. Inorder to draw these loyal customers from their product providers tobuying the high-ranged products, then the brands must be unique. Suchuniqueness is possible to achieve via the strategy of productdifferentiation.
The high-ranged products are expensive. There are numerous factorsto consider when creating a pricing strategy for the products. First,the products are new in the market. Although the company haspreviously sold similar products, there is a clear disparity inpricing. This can only mean that the new prices means the productshave a better quality. Second, there are already establishedcompetitors. The competitors have been in business for a long timeand target customers already know their products. Hence, it is notpossible to ascertain how the high-ranged products will perform.
The pricing strategy selected is premium pricing. It involves usinga higher price in order to increase the competitive advantage. Theprice is normally set to be higher than that of other premiumproducts in the market (Rao, 2009). The product is being sold toindividuals that have money. The target consumer is less likely to bedrawn away from a product because of a higher price. Instead, theywill be attracted to the high-ranged products because they associatehigh prices with more quality. Premium pricing attracts customers tobuy and explore the new products despite the high competition. Oncecustomers begin buying from the company, they become loyal.
The reason for selecting premium pricing is to set apart theproducts from those of competitors, increasing the competitiveadvantage. The high prices attract customers who presume that theproducts are better. Higher pricing also means that the products areof a better quality, which ensures that the products marketthemselves. Also, premium pricing makes it possible to differentiatebetween the quality and target market for low-priced products withthat of those that are high-priced.
Sales Promotion and Advertising
The proposed ideas for sales promotion and advertising are freetrials and use of media to increase awareness about the high-rangedproducts. Free trials are a method of sales promotion where targetcustomers are allowed to try a product without paying for it. Forinstance, when a company introduces a new perfume, it can choose togive free trials to customers as they buy other products. Thecustomers are able to use, test and rank the new product.
Once the customer feels that they like the product, then it is highlylikely that they will purchase it. The advantage of free trial isthat it enhances the customer’s trust. Target customers do notmerely depend on word of mouth from the seller that the product isgood. Rather, they depend on their own taste and the extent to whichthey liked the product. Free trials may be an expensive approach tosales promotion at first. This is because the customer gives outcostly products for free. However, in the end, the company enjoyslasting benefits through developed customer loyalty.
The media is an effective way of advertising, in specific televisionand social media. Advancements in technology are changing the waypeople do business. More customers have busy schedule and choose tobuy products online. Supposing that a product has been advertised ontelevision and a link to the products website provided, it becomespossible for the target customer to see the product and follow upabout it from the website. Since the product is new, it is moreeffective to use advertising that is visual. The target customersmust see the new product in order for them to like it.
An effective digital strategy for marketing the high-ranked productsinvolves creating social media accounts to market the products. Inaddition to company websites, customers consider the views of otherindividuals prior to buying a product. Company websites are veryimportant to target customers. It is through the website that anindividual is able to learn about the prices and uses of newproducts. Since the website is controlled by the company, customersonly depend on the company’s view of a product.
However, other platforms like face book and twitter make it possiblefor different individuals to comment about a product. The company canopen a face book and twitter account for its products. The socialmedia sources act as a channel for communication amid the company andcustomer, or customer to customer. Once a customer purchases aproduct, the company may ask them to comment about it on eitherplatform. The comment involves stating whether the customer liked theproduct or not. Some customers might even recommend their friends touse the product. Using face book, the company can introduce a methodof rewarding all individuals that share their page to others. Hence,more viewership for the product develops, which enhances thepossibility for more customers.
The increase use in social media means that conventional methods ofmarketing are no longer as effective as before. Thus, using digitalstrategy aligns with changing society trends. Also digital strategieslike face book and twitter make it possible to market a product assoon as it is available. It has made the process of customers toview, rate and buy products online providing the convenience theyseek.
Measuring the performance of a marketing strategy is significant asit makes it possible to determine if the strategy is working. Itimplies that the strategy supports the goals of the company. is expensive, as it results in additional costs for thecompany. When the marketing strategy is ineffective, it is alsoindicative of a waste of resources that cannot be recovered.
In this case, marketing performance is measured through social mediaanalytics. The digital media platforms used, company website, twitterand face book, provide a form of analytics. It is not possible todetermine the number of individuals that like a product throughadvertisement or free trials. For instance, in the case of freetrials people may merely be taking advantage of the offer and end upnot buying the product. However, people are active on social media,which makes it probable to measure effectiveness. By using metricssuch as the level of traffic on the sites it becomes possible tounderstand how actively people are reviewing the products. Also, thenumber of new followers on twitter or face book may indicate thatmore and more individuals are becoming aware and interested in theproducts hence, signifying that the marketing has been effective.
The rationale for using the measure is that it provides directfeedback on marketing effectiveness. By simply comparing the increasein the number of followers, the increase in site traffic means targetcustomers are more aware of the products. It also makes it easier todetermine if individuals are interested in products via their socialmedia comments.
Jeschke, N. (2008). Gaining competitive advantage throughstrategic partnerships in the supply chain. New York: GRINVerlag.
Rao, V. R. (2009). Handbook of pricing research in marketing.Cheltenham: Edward Elgar.
Zahid, I. N. (2013). Product management: The art and science ofmanaging network and communications industry products. Indiana:Xlibris Corporation.