Download Pricing: Project Contents

Pricing and Promotion: Project Contents
Course: BUS 101
Lecturer: NNA
Pricing
• The amount of
money charged for
a product or
service; the sum of
the values that
customers exchange
for the benefits of
having or using the
product or service.
Ch 10 -2
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Walmart, the world’s largest retailer, and
Amazon.com, the world’s largest online
merchant, are at war over the hearts and
dollars of online shoppers. The weapon of
choice? Prices. However, although price can
be a potent
Customer Perceptions of Value
Value –Based Pricing
Value-based pricing uses the buyers’
perceptions of value, not the sellers cost, as the
key to pricing. Price is considered before the
marketing program is set.
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Customer Perceptions of Value
Value-Based Pricing
Good-value pricing offers the
right combination of quality
and good service to fair price.
Existing brands are being
redesigned to offer more
quality for a given price or the
same quality for less price.
Good-value pricing
example: Ryanair appears
to have found a radical new
pricing solution, one that
customers are sure to love:
Make flying free!
Customer Perceptions of Value
Value-Based Pricing: Value-Added Pricing
•Value-added pricing
attaches value-added
features and services to
differentiate offers,
support higher prices,
and build pricing power.
Ch 10 -5
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Value-added pricing example:
Rather than dropping prices for its
venerable Stag umbrella brand to
match cheaper imports, Currims
successfully launched umbrellas
with funky designs, cool colors, and
value-added features and sold them
at even higher prices.
Company and Product Costs
Cost-Based Pricing
•Cost-based pricing involves setting prices based
on the costs for producing, distributing, and
selling the product plus a fair rate of return for
its effort and risk.
Ch 10 -6
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Company and Product Costs
Competition-Based Pricing
• Setting prices based on competitors’
strategies, prices, costs, and market offerings.
Pricing against larger, low-price
competitors: Independent
bookstore Annie Bloom’s Books isn’t
likely to win a price war against
Amazon.com or Barnes & Noble.
Instead, it relies on outstanding
customer service and a cozy
atmosphere to turn booklovers into
loyal customers.
The Promotion Mix
Marketing Communication Mix
•The promotion mix or
marketing communication
mix is the specific blend of
advertising, public
relations, personal selling,
and direct-marketing tools
that the company uses to
persuasively communicate
customer value and build
customer relationships.
Ch 11 - 8
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The Promotion Mix
Major Promotion Tools
Advertising is any paid form of non-personal
presentation and promotion of ideas, goods, or
services by an identified sponsor.
• Broadcast
• Print
• Internet
• Outdoor
Ch 11 - 9
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The Promotion Mix
Major Promotion Tools
Sales promotion is the short-term incentives to
encourage the purchase or sale of a product or
service.
• Discounts
• Coupons
Ch 11 - 10
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The Promotion Mix
Major Promotion Tools
Public relations involves building good relations
with the company’s various publics by obtaining
favorable publicity, building up a good corporate
image, and handling or heading off unfavorable
rumors, stories, and events.
• Press releases
• Sponsorships
• Special events
Ch 11 - 11
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The Promotion Mix
Major Promotion Tools
Personal selling is the personal presentation by
the firm’s sales force for the purpose of making
sales and building customer relationships.
• Sales presentations
• Trade shows
Ch 11 - 12
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The Promotion Mix
Major Promotion Tools
Direct marketing involves making direct connections with
carefully targeted individual consumers to both obtain an
immediate response and cultivate lasting customer
relationships—through the use of direct mail, telephone,
direct-response television, e-mail, and the Internet to
communicate directly with specific consumers.
• Catalog
• Telemarketing
• Kiosks
Ch 11 - 13
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