Are you an online marketer? Or do you simply promote affiliate programs? Marketing is truly most misunderstood word in use today on Internet. Let me see if I can clarify this issue just a bit.
In Marketing 101 at your local university, marketing is actually process of Product, Place, Price and Promotion.
No business can exist without a product or service to sell.
In a nutshell, entrepreneurs are people who believe in a product, service or idea, so much that they are willing to invest their lives into development of their dream.
Historically, every major corporation in world was started by an entrepreneur with a dream and drive to make it a reality.
However, there comes a time in life of every corporation when those who fear gambling nature of their founder, squash entrepreneurial drive that made company a viable concern in first place. The entrepreneur will either submit to careful nature of stockholders, or he will be forced to leave company he created.
The only entrepreneurs who withstand pressure to move more carefully are those who have maintained majority control over their companies.
In offline world, place is defined by location. On Internet, place is defined by domain name and web hosting service chosen.
Both online and offline, place can make or break a company without respect to quality and value of product, service or idea.
Selecting a price is determined first on a basis of whether company wants to be seen as a discount or a value company.
Take for example Wal-Mart and Staples.
Wal-Mart is lead discounter in marketplace. Staples on other hand is specialist in office supplies.
Both sell a significant number of office supplies despite fact that lowest price can usually be found at Wal-Mart. As a value dealer, Staples can afford to charge more for their products than Wal-Mart.
So question for you is whether you want to position your company as a discount or value company.
Testing has shown that products and services can be sold at any number of prices and still reach a significant number of people.
The challenge of selecting best price for your product or service will require a certain amount of testing.
UNDERSTANDING THE PRICING EQUATION
Let's assume we are selling a product. Let us also assume that we know that product can be sold for $10 or $50. Let us also assume that if price dips below $10 or rises above $50, then product sales fall off significantly.
Our challenge is to determine best rate at which to sell our product.
Testing has shown us that we can sell 1000 items a week at $10. Testing has also shown that we can sell 500 items per week at $50. And testing has shown that we can sell 650 items per week at $45.