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14. Promotion & Pricing Strategies

14. Promotion & Pricing Strategies. Topics. Promotion The promotion mix Promotion planning Developing the promotion mix Pricing objectives Setting prices. Promotion. One of marketing’s four P’s Informs, persuades, reminds May be direct Face-to-face May be indirect Through media.

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14. Promotion & Pricing Strategies

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  1. 14. Promotion & Pricing Strategies

  2. Topics • Promotion • The promotion mix • Promotion planning • Developing the promotion mix • Pricing objectives • Setting prices

  3. Promotion • One of marketing’s four P’s • Informs, persuades, reminds • May be direct • Face-to-face • May be indirect • Through media

  4. The Promotion Mix • Advertising • Personal selling • Sales promotion • Public relations

  5. Advertising • Classification methods: • Purpose classified • Product (brand) advertising • Institutional advertising • Sponsor classified • National advertising • Local advertising • Cooperative advertising • Target classified • Consumer advertising • Industrial advertising • Media • Social/legal considerations

  6. Personal Selling • Most expensive method of promotion • Salespersons • Field selling – Telemarketing • Over-the-counter selling • Sales support • Missionary salespeople – Trade salespeople • Technical salespeople • Personal selling process • Prospecting & qualifying – Answering objections • Approaching prospect – Closing sale • Making presentation – Following up • Demonstration

  7. Sales Promotion • Inducements to customers or salespersons • Supplement other promotional methods • Factors affecting choice of sales promotion methods: • Product characteristics • Target market characteristics • Distribution channels • Competitive & regulatory forces • Important methods: • Rebates – Contests – Trade shows • Coupons – Specialty advert. – Buying allow- • Samples – POP displays ances • Premiums – Frequent user incentives

  8. Public Relations • Public relations tools • Written materials • Corporate-identity materials • Speeches • Event sponsorship • Publicity • Always free • May be positive or negative • Most widely used type: press release • PR enhances reputation, creates image, reduces unfavorable effects of negative events

  9. Promotional Planning • Promotional campaign • Including product placement & guerilla marketing • Integrated marketing communication (IMC) • Promotion objectives: • Providing information • Increasing market share (i.e., sales volume) • Positioning the product • Stabilizing sales

  10. Developing the Promotion Mix • Begins with objectives: Identify target market • Focus on middlemen: Push strategy • Focus on end users: Pull strategy • Further steps in promotion planning process: • Review marketing strategy – Develop IMC prog. • Conduct environ. assessment – Implement IMC prog. • Establish objectives – Assess effectiveness • Develop budget

  11. Pricing Objectives for Products • Profitability-related – Target return on investment – Maximize profitability • Market share growth • Status quo maintenance • Positioning-related

  12. Setting Prices • Methods: • Demand-based pricing • Strong demand  high price • Weak demand  low price • Cost-based pricing • Breakeven analysis • Breakeven quantity • No. of units sold at which total revenue = total cost • Fixed vs. variable costs • Competitive-based pricing • Below, same, or slightly above competitor prices • Price skimming, penetration pricing, EDLP

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