Discussion Topic 7
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Chapter13.pptxPromotion and Pricing Strategies http://www.wileybusinessupdates.com
Chapter
13
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Discuss integrated marketing communications (IMC).
Describe the different types of advertising.
Outline the tasks in personal selling.
Name and describe sales promotion activities.
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Learning Objectives
Discuss publicity as a promotional tool.
Discuss pricing objectives and strategies.
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Promotion is informing, persuading, and influencing a purchase decision.
Integrated marketing communications (IMC) is the coordination of all promotional activities—media advertising, direct mail, personal selling, sales promotion, and public relations—to produce a unified, customer-focused promotional strategy
Promotion
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Create unified personality and message for the good, service, or brand.
Elements include personal selling, advertising, sales promotion, publicity, and public relations.
Integrated Marketing Communications
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Objectives of Promotional Strategies
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Pushing strategy- personal selling to market an item to wholesalers and retailers in a company’s distribution channels.
Companies promote the product to members of the marketing channel, not to end users.
Pulling strategy- promote a product by generating consumer demand for it, primarily through advertising and sales promotion appeals.
Potential buyers will request that their suppliers—retailers or local distributors—carry the product, thereby pulling it through the distribution channel.
Most marketing situations require combinations of push and pull strategies
Pushing and Pulling Strategies
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Promotional mix- combination of personal and nonpersonal selling activities designed to meet the needs of their firm’s target customers and effectively and efficiently communicate its message to them.
Promotional Mix
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Components of Promotion
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Advertising- paid nonpersonal communication usually targeted at large numbers of potential buyers.
Advertising expenditures are great– spending on global advertising is expected to reach $518 billion as the economy grows stronger
Consumers are bombarded with many messages.
Firms need to be more and more creative and efficient at getting consumers’ attention.
Different Types of Advertising
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Product advertising- messages designed to sell a particular good or service
Product placement- marketers pay placement fees to have their products showcased in various media, ranging from newspapers and magazines to television and movies.
Types of Advertising
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Institutional advertising- messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities
Cause advertising- institutional advertising that promotes a specific viewpoint on a public issue as a way to influence public opinion and the legislative process
Types of Advertising Continued
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Informative advertising- builds initial demand for a product in the introductory phase
Persuasive advertising- attempts to improve the competitive status of a product, institution, or concept, usually in the growth and maturity stages
Comparative advertising- type of persuasive advertising; compares products directly with their competitors either by name or by inference
Reminder-oriented advertising- appears in the late maturity or decline stages to maintain awareness of the importance and usefulness of a product
Advertising and the Product
Life Cycle
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Advertising Media Pie
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Television
Easiest way to reach a large number of consumers
Internet Advertising
Search engine marketing, display ads, classified ads
Changed nature of advertising
Newspapers
Dominate local advertising
Relatively short life span
Radio
Commuters in cars are a captive audience
Internet radio offers new opportunities
Types of Advertising
Magazines
Consumer publications and trade journals
Can customize message for different demographics of readers
Direct Mail
Average American receives 550 pieces annually
E-mail is a new lost cost form of direct mail
Outdoor Advertising
$6.4 billion annually
Majority billboards, but marketers are exploring new technology
Sponsorship
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Online and Interactive Advertising
Viral advertising creates a message that is novel or entertaining enough for consumers to forward it to others, spreading it like a virus.
Sponsorship
Providing funds for a sporting or cultural event in exchange for a direct association with the event.
Benefits: exposure to target audience and association with image of the event.
Types of Advertising
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A person-to-person promotional presentation to a potential buyer
Many companies consider personal selling the key to marketing effectiveness.
A seller matches a firm’s goods or services to the needs of a particular client or customer.
Today, sales and sales-related jobs employ about 15 million U.S. workers.
Businesses often spend five to ten times as much on personal selling as on advertising.
Personal Selling
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Order Processing
Identifying customer needs, pointing them out to customers, and completing orders; mostly at the wholesale and retail levels
Creative Selling
Persuasive type of promotional presentation
Missionary Selling
Indirect form of selling in which the representative promotes goodwill for a company or provides technical or operational assistance to the customer
Telemarketing
Personal selling conducted entirely by telephone, which provides a firm’s marketers with a high return on their expenditures, an immediate response, and an opportunity for personalized two-way conversation
Sales Tasks
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The Sales Process
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Prospecting, Qualifying, and Approaching
A good salesperson varies the sales process based on customers’ needs and responses.
Prospecting- identifying potential customers
Qualifying- identifying potential customers
Approaching- analyzing available data about a prospective customer’s product lines and other pertinent information
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Presentation and Demonstration
Presentation
Salespeople communicate promotional messages. They may describe the major features of their products, highlight the advantages, and cite examples of satisfied consumers.
Demonstration
Reinforces the message that the salesperson has been communicating.
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Handling Objections and Closing
Use objections as an opportunity to answer questions and explain how the product will benefit the customer.
The closing is the critical point in the sales process.
Even if the sale is not made, the salesperson should regard the interaction as the beginning of a potential relationship.
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Follow-Up
An important part of building a long-lasting relationship.
May determine whether the customer will make another purchase.
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Sales promotion- consists of activities that support advertising and personal selling, such as samples, coupons, displays, trade shows, and dealer incentives.
Sales Promotion Activities
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Premiums, Coupons, Rebates, Samples
Nearly six of every ten sales promotion dollars are spent on premiums—items given free or at a reduced price with the purchase of another product
Coupons persuade customers to try a new or different product with small price discounts
Rebates increase purchase rates, promote multiple purchases, and reward product users.
A sample is a gift of a product distributed by mail, door to door, in a demonstration, or inside packages of another product
Consumer-Oriented Promotions
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Trade Promotion - sales promotion geared to marketing intermediaries rather than to consumers
Encourage retailers:
To stock new products
To continue carrying existing ones
To promote both new and existing products effectively to consumers
Trade-Oriented Promotions
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Public relations- an organization’s communications and relationships with its various audiences.
Is an efficient, indirect communications channel for promoting products. It can publicize products and help create and maintain a positive image of the company.
Publicity- nonpersonal stimulation of demand for a good, service, place, idea, event, person, or organization by unpaid placement of information in print or broadcast media.
Good publicity can promote a firm’s positive image.
Negative publicity can cause problems.
Publicity as a Promotional Tool
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Price- exchange value of a good or service.
Market Based Pricing
Economic theory assumes price where the amount of the product demanded the amount supplied are equal
In these instances, consumers choose products based on attributes rather than price
Firms set their prices higher or lower than this market price to achieve specific business goals.
Volume objectives
Base pricing decisions on market share, the percentage of the market controlled by a certain company or product.
Pricing Objectives
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Prestige Pricing
Establishing a relatively high price to develop and maintain an image of quality and exclusiveness.
Recognition of the role of price in communicating an overall image for the firm and its products.
Pricing Strategies
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Everyday low pricing (EDLP)
Maintaining continuous low prices rather than relying on short-term price-cutting tactics such as cents-off coupons, rebates, and special sales
Skimming pricing
Setting an intentionally high price relative to the prices of competing products
Helps marketers set a price that distinguishes a firm’s high-end product from those of competitors
Penetration pricing
Setting a low price in effort to enter competitive markets
Often used with new products
More Pricing Strategies
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Formulas that calculate total costs per unit and then add markups to cover overhead costs and generate profits.
TOTAL COSTS PLUS MARKUP
Cost-Based Pricing
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Breakeven analysis- pricing technique used to determine the minimum sales volume a product must generate at a certain price level to cover all costs.
Break-Even Analysis
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Break-Even Analysis
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