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Chapter 13 : Promotion & Pricing
Transcript of Chapter 13 : Promotion & Pricing
Promotion is the function of
informing, persuading, and
influencing a purchase decision.
Integrated Marketing Communications
IMC: the careful coordination of all promotional messages
(traditional advertising, direct marketing, social media, public relations, sales promotion, personal selling)
for a product or service to assure the consistency of messages at every contact point where a company meets the consumer
a basic, long-term pricing framework that establishes the initial price for a product and intended direction price movements over the product life cycle.
The Goals of Promotion
- Informative promotion seeks to convert an existing need into a want or to stimulate interest in a new product
- Persuasive promotion is designed stimulate a purchase or an action
-Reminder promotion is used to keep the product and brand name in the public's mind
- The idea behind social media is to form relationships with customers and potential customers through media platforms such as Facebook and Twitter
Exchange value of a good or service
Steps in Setting the Right Price on a Product
Establish pricing goals.
Estimate demand, costs, and profits.
Choose a price strategy to help determine a base price.
Fine-tune the base price with pricing tactics.
Results lead to the right price.
The Promotional Mix
consists of personal and non personal selling.
marketers combine the two to meet the needs of their firm's target customers and effectively and efficiently communicate it message to them.
is the most basic form of promotion
a direct person-to-person promotional presentation to a potential buyer
*ex) face-to-face, via telephone
Non Personal Selling
consists of advertising, sales promotion, direct marketing, and public relations
Advertising - paid non personal communication that's targeted to larger numbers of people
*Outlets: television, internet, direct mail, magazines, newspaper, radio, and outdoors (ex: billboards)
Sales Promotion - consists of forms of promotion such as coupons, product samples, rebates, contests, and sweepstakes.
Direct Marketing - techniques used to get consumers to make a purchase from their home, office, or other non-retail setting
Public Relations - refers to an organization’s communications and relationships with its various public audiences, such as customers, vendors, news media, employees, stockholders, the government, and the general public.
*ex) telemarketing, direct mail, catalogs, mail orders, electronic retailing
Everyday Low Pricing
(EDLP) is a strategy devoted to maintaining continuous low prices rather than relying on short-term price cutting tactics such as cents-off coupons, rebates, and special sales.
With discount pricing, businesses hope to attract consumers by dropping prices for a set period of time.
*ex) CVS and JC Penney
strategy that tries to reduce the emphasis on a price competition by matching other firms' prices and concentrating their own marketing efforts on the product, distribution, and promotional elements of the marketing mix.
Consumer Perceptions of Prices
Marketers must consider how consumers perceive the price–quality relationship of their products.
Consumers may be willing to pay a higher price if they perceive a product to be of superior quality.
Marketers often use odd pricing to convey a message to consumers.
pricing method using uneven amounts, which sometimes appear smaller than they really are to consumers.