Promotional Planning Advertising Types of Advertising Chapter 14 Promotion and Pricing Strategies Overview The Promotional Mix promotion informing persuading and influencing a purchase decision integrated marketing communications IMC coordination of all promotional activities to produce a unified customer focused message promotional mix combination of personal and nonpersonal selling techniques designed to achieve promotional objectives personal selling interpersonal promotional process a seller s face to face presentation to a buyer nonpersonal selling advertising sales promotion direct marketing and public relations advertising Objectives of Promotional Strategy provide info print and describing features and availability of a new product differentiate product TV ad comparing performance of two leading products increase sales end of aisle displays to encourage impulse purchases stabilize sales promote low rates during slow sales periods accentuate product value warranty programs make a product more attractive than competitors product placement pay fees to have products showcased in various media guerilla marketing innovative low cost marketing efforts to gain attention in unusual ways YouTube advertising paid nonpersonal communication delivered thru media to inform persuade an audience product ad messages designed to sell a particular good service institutional ad messages that promote concepts ideas for industries organizations cause ad promotes a specific viewpoint on a public issue advocacy ad Advertising and the Product Life Cycle informative ad build initial demand for a product in the intro phase of the cycle persuasive ad attempts to improve the competitive status of a product in the growth maturity stages comparative ad compares products directly with their competitors reminder oriented ad maintain awareness of a product in the decline stage TV newspaper radio magazines direct mail outdoor billboards internet sponsorship infomercials Advertising Media Sales Promotion sales promotion nonpersonal marketing activities other than advertising personal selling and public relations that stimulate consumer purchasing and dealer effectiveness Consumer Oriented Promotions Premiums Coupons Rebates and Samples o Premiums items given free or at a reduced price with the purchase of another product o Coupons small price discounts when they purchase the promoted products o Rebates cash back off to consumers who mail in required proofs of purchase o Sample gift of a product distributed Games contests and sweepstakes Trade Oriented Promotions Specialty advertising gift of useful merchandise carrying the name logo or slogan of a business trade promotion sales promotion geared to marketing intermediaries rather than to consumers point of purchase POP advertising displays demonstrations that promote products when and where consumers buy them trade shows promote goods services to members of their distribution channels Personal Selling Sales Tasks order processing salesperson identifies customer needs and processes order creative selling promotes a good service whose benefits are not readily apparent or whose purchase decision requires a close analysis of alternatives missionary selling representative promotes goodwill for a company or provides assistance to the customer telemarketing personal selling conducted by phone provides marketers with a high return on expenditures Sales Process 1 prospecting qualifying identify potential customer 2 approach prepare for sales interview 3 presentation tell the product s story 4 demonstration involve the customer in the presentation 5 handling objectives answer the prospect s questions 6 closing ask for the order 7 follow up thank customer maintain relationship public relations organization s communications and relationships with its various audiences publicity stimulation of demand for a good service place idea person or organization by disseminating news or obtaining favorable unpaid media presentations Pushing and Pulling Strategies Pricing Objectives in the Marketing Mix Pricing Strategies pushing strategies personal selling to market an item to wholesalers and retailers in a company s distribution channels cooperative advertising marketers share the cost of local advertising of their firm s product with channel partners pulling strategy attempts to promote a product by generating consumer demand for it thru ads and promotions price exchange value or a good service profitability objectives volume objectives pricing based on decision on market share percentage of market controlled by a certain company prestige pricing establishes a high price to develop an image of quality and exclusiveness cost based pricing adding a percentage mark up to the base cost of a product to cover overhead costs and generate profits breakeven analysis pricing technique used to determine the minimum sales volume a product must generate at a certain price level to cover all costs o breakeven point units total fixed costs contribution to fixed costs per unit o breakeven point dollars total fixed costs 1 variable costs per unit price Alternatives Pricing Strategies skimming pricing sets an intentionally high price relative to the prices of competing products penetration pricing sets a low price as a major marketing weapon everyday low pricing EDLP maintaining continuous low prices rather than relying on short term price cutting discount pricing dropping prices for a set period of time competitive pricing matching other firms price and concentrating their own marketing efforts on elements on marketing mix
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