Download Sales Promotion

ENPI MODULE 5
CREATING A PROMOTION PLAN
PRICING A PRODUCT/SERVICE
• Consider costs involved in creating your
products/services:
– Fixed costs: rent, utilities, insurance, etc
– Variable costs: cost of goods sold, promotion,
delivery, etc
SELECT A PRICING STRATEGY
• Cost Based Pricing
– Consider product costs and profit goals
– Calculate how much it costs to make
– Calculate a related “fixed cost” to apply
– Add a percentage to create a profit (your mark
up)
– You have your price!
SELECT A PRICING STRATEGY
• Demand Based Pricing
– Determine what customers are willing to pay
– Add a percentage to create a profit (your mark
up)
– You have your price!
– This strategy is used in very few situations
SELECT A PRICING STRATEGY
• Competition Based Pricing
– Determine what competition is charging a
customer
– Decide if you will be below, in line with, or
above that price
– You have your price!
– This strategy is used if your main focus is
having a competitive price
TYPES OF
PROMOTIONAL TOOLS:
• Advertising: Any paid form of non-personal presentation
and promotion of ideas, goods or services by an
identified sponsor.
• Public Relations: Any activity designed to create a
favorable image toward a business, its products or its
policies.
• Personal Selling: Any form of direct contact between a
salesperson and a customer.
• Sales Promotion: Short-term incentives that encourage
a customer to buy a product
EVALUATING
PROMOTIONAL TOOLS:
• To be successful, promotional efforts
should follow the AIDA approach:
• Increase awareness
• Attract Interest
(I)
• Arouse desire
(D)
• Initiate action
(A)
(A)
EVALUATING
PROMOTIONAL TOOLS:
Advertising
• Sender’s control over the
communication
• Amount of feedback
• Speed of feedback
• Direction of message flow
• Speed in reaching large audiences
• Message Flexibility
• Mode of communication
Indirect/Impersonal
Low
Little
Delayed
One way
Fast
None
EVALUATING
PROMOTIONAL TOOLS:
Personal Selling
• Sender’s control over the
communication
• Amount of feedback
• Speed of feedback
• Direction of message flow
• Speed in reaching large
audiences
• Message Flexibility
• Mode of communication
High
Much
Immediate
Two way
Slow
Customized
Direct
EVALUATING
PROMOTIONAL TOOLS:
Sales Promotion
• Sender’s control over the
communication
• Amount of feedback
• Speed of feedback
• Direction of message flow
• Speed in reaching large
audiences
• Message Flexibility
• Mode of communication
Moderate to low
Little to moderate
Varies
One way
Fast
None
Indirect
EVALUATING
PROMOTIONAL TOOLS:
Public Relations
• Sender’s control over the
communication
• Amount of feedback
• Speed of feedback
• Direction of message flow
• Speed in reaching large
audiences
• Message Flexibility
• Mode of communication
Moderate to low
Little
Delayed
One way
Fast
Some
Indirect
HOW TO BUILD AN EFFECTIVE
PROMOTIONAL MIX/CAMPAIGN?:
•
•
•
•
•
•
Strategies should complement one another
Advertising should create awareness
Public relations should create positive image
Sales promotion should stimulate sales
Selling should complete sale
Mix elements MUST BE coordinated