Choosing the right price to charge is among the most complex of all marketing decisions. As we note in our Pricing Decisions tutorial, setting price is complicated because marketers must take into consideration both internal factors, which are those largely controlled by the marketer, and external factors, which are outside their control. For external factors, what their competitors charge is the most obvious one marketers will consider. This is especially crucial if the target market does not see much difference between competing products. In this type of market, constant monitoring of competitors’ marketing activity is needed, including watching what happens with their price.

One industry in which response to competitors’ pricing seems to be increasing can be found in higher education. For instance, many may be under the perception the price of tuition at colleges and universities seems to be always increasing. However, competition to attract students is forcing most institutions to become more aggressive in their marketing efforts, including becoming more competitive on price. While the published tuition on a university’s website is essentially the list price a college is charging, increasing competition is forcing schools to offer price adjustment that reduce the actual price. These adjustments usually appear in the form of scholarships, grants, and other incentives that can substantially lower what a student will pay.

Another example of how the higher education market is changing in response to price can be seen with college textbooks. Historically, what has been somewhat unique about the textbook market is the lack of competition for textbooks. At most institutions, professors choose the book they want to use, and students pay whatever price the school’s bookstore charges for the book. In this situation, there is no competition for the book (i.e., professors generally do not give a choice of different books that students can select), consequently students must pay whatever the price may be, which can be steep.

However, as discussed, in this Bloomberg story, businesses have responded to the high cost of textbooks by offering other options, such as short-term rental and digital versions. The result is that students' spending on course materials has been dropping for several years, even though the price of textbooks has risen.

From a marketing perspective, this is probably not a good sign for textbook publishers unless they fight back by offering less expensive options or providing more value for the prices they do charge.

In our What is Marketing? tutorial, we summarize what marketing is about with a single sentence consisting of just 28 words. However, a clearer picture of marketing can be found in our dissection of the key terms found in our definition. In particular, for this post we want to focus on just one word found in the definition - “create.” An essential characteristic of nearly all marketers is that they must be creative in all aspects of marketing. This is especially the case for product decisions. Marketers need to be constantly on the lookout for new ideas that can lead to goods and services that will be of interest to current customers or, better yet, to customers they do not currently serve.

Considering the importance placed on launching new products, some may wonder why companies are ever late to a market when there are potentially great rewards for those who are early. Of course, there are many reasons including lack of research to identify new trends, lack of money to invest in new ideas and, possibly the most common reason, executives are happy with how things are going and do not see a need to explore new ideas.

Of course, the last reason is probably the thing that will eventually lead to problems. Being content with where a company stands in terms of marketing decisions is almost always a bad idea. Creating products is one of the most important aspects of what marketers do while not changing or innovating is almost always going to lead an organization to troubled times.

An example of the importance of innovation can be seen in this story from Fortune. It discusses how fast food chain Chick-fil-A, a company that is not necessarily known for innovative ideas, caught its competitors off guard last year when it added iced coffee to its menu. Chick-fil-A has found being early, to what is now a rapidly growing market for iced coffee, has been met enthusiastically by customers and is a key reason coffee sales have doubled. Naturally, Chick-fil-A’s success has brought competition from other major fast food outlets, which means company executives can’t afford to sit back and gloat about their success. Instead, with the speed at which competitors are introducing their own iced coffee products, Chick-fil-A will need to come up with another innovative idea in the very near future.

The Need to Understand Changing CustomersStaying on top of consumer trends is a necessary task for all marketers. By watching what is happening among current and potentially future customers, marketers can gain insights that may affect their marketing decisions. However, while it is very easy to say this, actually having the time and, most importantly, the money to keep up can be a tough task. It is especially challenging for organizations that do not have a dedicated research staff, whose job includes collecting such research. Fortunately, while a marketing organization may not have the time to undertake their own research or the funds to support their own researchers, other options exist.

One way is to tap into inexpensive research sources. As we note in our Low-Cost Secondary Research tutorial, there are many alternatives for finding affordable research, such as information produced by industry trade groups, government sources, corporate white papers and academic research centers. Another option is to find information provided by cause-related groups, in particular, non-profits that focus on specific issues. Many of these not only conduct excellent research, they often offer their results for free. For instance, for information on how consumers use technology, one of the best free resources is the Pew Research Center.  Pew offers unbiased research on many areas including studying consumers’ usage of the Internet, mobile communication and other technologies for many years.

A really good example of the valuable information provided by Pew can be found in their latest report titled, Mobile Messaging and Social Media 2015, which asked questions of nearly 2,000 U.S. residents. Results provide a demographic view, including gender, age, ethnicity, education, income and residential location, of mobile messaging and social media usage.

For marketers, the report should serve as additional evidence consumers have adopted new behavior. Consequently, marketing strategy for nearly all organizations must consider the impact of these behavioral changes. This is especially important for smaller organizations, such as mom-and-pop companies run by people who are not particularly involved in these technologies. Whether smaller organizations understand it or not, consumer interaction is changing, and organizations need to adapt or face a potentially difficult future.

The impact social media is having on the field of marketing is inescapable. KnowThis.com is certainly part of a large crowd that has advocated the need for marketers to be fully engaged in social media. This can be seen from our post a few weeks ago in which we discussed how understanding social media has grown to be such a critical component of marketing that, in some ways, it has become as essential as understanding how to use Excel.

While social media is an undeniable force across all marketing areas, it would be a mistake to conclude it has had an equal impact. The fact is, while those responsible for such areas as distribution and personal selling may use social media in a general way, such as sending out announcements, there are other areas of marketing where social media has significantly transformed how things are done. And maybe the most impacted area is public relations (PR).  For instance, as we discussed back in February, social media is changing the goals of PR, such as moving it away from being primarily a relationship building function to taking on a more promotional role.

This story from the Philadelphia Inquirer provides even more insight on the ways social media is impacting PR. As the story title suggests, social media has forced PR to change media relations strategies. Before social media, efforts in media relations were primarily directed at print, television, radio and a few online news sites. Now, the influence of bloggers and other persuasive individuals is changing who PR views as being important.

Additionally, PR is now becoming much more involved in creating content and strategies for a company’s or client’s own social media platforms, such as Facebook, Twitter, and Instagram. And this has led to PR careers for people with not just communications, graphic design, and journalism skills but also Internet technology and research expertise. This is evident in the need for people who can interpret the information provided by online “social media listening” tools PR professionals are using to monitor what is going on in the social media world.