The Importance of Investing in Mutual Funds

One of the biggest challenges that usually face prospective retirees is the question of most appropriate investment of retirement benefits. Very few ever think about mutual funds yet they are very effective means of investing your retirement money.
Mutual funds allow you as the investor to take advantage of investing in stock of larger companies which would require minimum block purchases. Since mutual funds have large buying power, you can benefit from this type of stock purchase.
Investing in mutual funds also allows you as the investor to take advantage of professionals in the industry whose job it is to know about and deal with stock markets. You therefore do not have to be a financial expert in order to invest in the stock market.
You stand a chance of choice as an investor to place your money in certain themed categories without having researched all the particular companies. For example, if you want your money in banks or resources or want all eco-friendly companies in your portfolio all you need to do is look down the list of the mutual funds to find what you are looking for. The fund managers have done the job for you of finding companies with your particular area in mind.
Mutual funds will additionally provide you with unlimited opportunities for hands off approach to investing. If you managed your own money you would have to keep track of the stock prices daily and know when to buy and sell to achieve an overall good return on your money. With mutual funds, a fund manager does this for you as their full-time job, taking the onus from you for daily monitoring and the decision making process of when to buy and sell.
However, it is worthwhile to note that there are also several risks that usually characterize mutual funds investments. Not all mutual funds report profits yearly and sometimes not even for several years. You as the investor still need to set some goals as to what you expect form you investment in terms of a yearly return. If this is not met each year and your criteria are not too outlandish then you need to find a new investment, either a different mutual fund or a different mutual fund investor.
One final note, as an investor, you must also look at your bottom dollar amount from year to year. Your statement may say that your fund made an overall return of a percentage which you are quite happy with but if the management fees and taxes you need to pay yearly take away all your gains, then you actually have not made any money. Be aware of your actual dollar gain on your account rather than the advertising from the mutual fund company reporting the growth of your mutual funds in general.
Happy investing and don't forget the old adage "Never put all your eggs in one basket." So, don't put every dollar you are investing in one mutual fund or invest all your money in mutual funds. Diversify your investments and guarantee your future.

Pricing: The Importance of Sticking to the Rules

Many business entrepreneurs always face difficulties of determining the prices for their products or services yet pricing is a very important element of the marketing paraphernalia. Pricing as a key component of an entrepreneur’s marketing options plays both strategic and tactical roles aimed at achieving greater sales volumes. It is a generally acknowledged fact that pricing decisions are potentially amongst the most difficult that small business owners are required to make. This difficulty is influenced by the underlying factors that characterize the complexity of interactions that summarize the relationships between consumers, the trade and competitors as well as the constant need to take these interactions into account while either setting or changing a price. Further complexities are attributed to the need to make pricing decisions quickly and without testing, regardless to the fact that they will almost invariably have a direct effect on profits. Because of such impediments to pricing, many small business owners strive to reduce the relative importance of price by, for example, giving far greater emphasis on a product’s distinctive values and image through other forms of marketing and advertising. In some production and service industries however, the pricing decision is taken out of the hands of the marketing strategists by a combination of market-related factors. Prominent among such factors is the presence of a large and aggressive competitor who in effect determines the prices for the industry as a whole and whose path, with the exception of a few niche players, all other organizations are obliged to follow.

Pricing is undoubtedly a significant strategic variable and in many markets, despite a growth in the importance of the non-price factors, it is still the principal determinant of consumer choice. Its significance is further emphasized by the fact that pricing is the only element of the marketing mix that generates revenue – the others produce costs. It is therefore understandable that many marketing strategists treat pricing decisions with an extra degree of caution.

Worldwide studies have indicated that setting of prices and dealing effectively with price competition is one of the biggest challenges faced by small business entrepreneurs. Therefore relatively few entrepreneurs handle pricing well if the series of common mistakes committed by most of them is anything to go by. One of the most common mistakes that is usually committed is biasing pricing decisions towards cost structures thereby failing to take sufficient account of either competitors’ or customers’ probable response patterns. The other weakness involves setting prices independently of other market mix elements such as advertising strategies and sufficient market positioning. Quite often, there are usually tendencies of taking too little account of the opportunities to capitalize on product differentiation. There is also a general lack of price variations among different market segments. A keen observer can easily attest to the fact that most organizations set prices that largely reflect more of defensive rather than offensive posture.

Sales Promotion as a Marketing Strategy

According to the Institute of Sales Promotion, sales promotion refers to a range of marketing tactical techniques designed within a strategic marketing framework to add value to a product or service in order to achieve specific sales and marketing objectives. In simpler terms therefore, sales promotion refers to marketing communications other than personal selling, advertising and PR.

Like other forms of sales and marketing campaigns, Sales promotions activities do come with additional costs to the business. It is therefore advisable that such initiatives should be adopted by well established business enterprises only. Research has shown that the tremendous increase in expenditure on sales promotion relative to advertising over the last decade can be accounted partially by its efficacy. Certain forms of sales promotions such as incentive schemes and exhibitions lend themselves to cost-benefit analysis to a greater extent than advertising. For instance, the sales effect of a precise markdown and the number of redemptions in prize incentives can be calculated with a high degree of accuracy as can the amount of orders taken in a particular exhibition.

Most companies dealing in consumer goods and services run fully established sales promotion departments or sub-departments which are often subjected to procedural audit just like the other elements of the marketing mix. The sales promotion audit should cover at least the following items:

· The effectiveness of sales promotion activities in total
· A review of the extent to which various types of sales promotions are used relative to competitors
· Costs of the various types of sales promotions employed, together with trends
· Results of individual sales promotions against objectives set

The benefits of sales promotion can therefore be seen in terms of the way in which it helps to maintain a high level of awareness of the supplier and of the brand in several ways that include: packaging impact at the point of sale; other point-of-sale display materials; strategic positioning in retail outlets; special offers and other incentives; advantageous exhibitions; and use of sponsorship.

It is therefore evident that apart from maintaining patronage of customers, sales promotions build the goodwill of dealers, and distributors who enjoy increases in store traffic and rates of stock turn. Sales promotion further encourages the trial and repeat purchases of goods and services.
However, it is important to note that while sales incentives such as price markdowns are used to boost sales of a product line, it should be remembered that the majority of the boost can only be temporary. Buyers may switch loyalties only for the period of promotional offer and then revert back to their normal brand purchases. The real challenge of a good promotion is to convert some of the brand switchers to loyal repeat purchasers of a brand.