Monday, 11 August 2014

Internal Factors of online marketing

1. Profit-oriented objective (most common strategy) :
• Focuses on current profit maximization rather than long-term performance,
• First estimate what demand and costs will be at different prices,
• Then choose the price that will produce the maximum current profit, cash flow, ROI.

2. Market-oriented objective:
1. Building a larger customer base = lower costs & higher long-run profit,
 Low prices generally build market share.
 AOL broadband Internet connection services is low to increase market share.
2. Product-quality leadership = high price to cover higher performance quality and high
cost of R&D.
3. Negotiation and bidding.

3. Competition-based pricing objective:
• Price according to what competitors charge for similar products, paying less
attention to the company's own costs or to demand.
 When one airline drops prices, its competitors usually follow suit.
 The Internet gives firms quicker access to competitive price changes. 

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