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Pricing and Promoting
Your Product or Service
Maximize Advertising & Promotion
chapter
6
Prepared by
Ron Knowles
Algonquin College
& Jennifer Rouse Barbeau
Canadore College
Copyright © 2011 Nelson Education Ltd.
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Chapter Overview
Chapter 6 will:
chapter
6
 Price your product or service.
 Develop and refine your marketing
strategy.
 Refine your product features and
benefits.
 Develop a cost-effective promotional
strategy.
Copyright © 2011 Nelson Education Ltd.
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Learning Opportunities
Understand how to price your product or
service.
Develop a pricing strategy.
chapter
6
Understand how to communicate with
target customers using both conventional
and guerrilla marketing techniques.
Get free publicity.
Copyright © 2011 Nelson Education Ltd.
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Learning Opportunities
chapter
6
Maximize economy in advertising and
promotion.
Understand the value of personal selling.
Use creative techniques to arrive at the
right promotional mix.
Promote through networking & build
your own network.
Attach price tags to your promotional
strategies.
Copyright © 2011 Nelson Education Ltd.
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Marketing Strategy
Marketing strategy includes an analysis of
4 major elements
1.
2.
3.
4.
External market trends
Target market
Product uniqueness & competitive advantage
Marketing mix
 The first three elements were discussed in
Chapters 1 through 5
 In Chapter 6 we focus of the fourth
element – the marketing mix.
Copyright © 2011 Nelson Education Ltd.
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The Marketing Mix
The marketing mix is a blend of
Product offering
Pricing
Promotion
Place (location)
Some refer to this mix as the 4Ps of marketing
Copyright © 2011 Nelson Education Ltd.
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Pricing Your Product
or Service
Four common methods
1. Competitor-based pricing (marketbased pricing)
2. Profit-based (cost plus) pricing
3. Industry norm or “keystone” pricing
4. Ceiling or premium pricing
Copyright © 2011 Nelson Education Ltd.
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Your Pricing Strategy
 The price you charge must be acceptable to:
 you, the seller
 your customer
 the market
 Your price depends on a number of factors:
 cost of production
 the market
 competitive forces
 and so on
 Begin with a ceiling price strategy
 Follow up to ensure your price covers costs and
leads to a profit
Copyright © 2011 Nelson Education Ltd.
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Promotion
Promotion
The art or science of moving the image
of your business into the forefront of a
prospective customer’s mind.
Promotional plan
Your promotional plan must be consistent
with your image, your target market and
your business mission.
Copyright © 2011 Nelson Education Ltd.
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Promotional Mix
Promotional mix
The key to connecting with
customers
All the elements that you
blend to maximize
communication with your
customer.
Copyright © 2011 Nelson Education Ltd.
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Guerrilla Marketing &
Service and Quality
Guerrilla Marketing
An important part of your promotional mix will
be your “guerrilla marketing” promotional
strategies.
Service and Quality
Your promotional cornerstones are customer
service and quality.
Copyright © 2011 Nelson Education Ltd.
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What is
Guerrilla Marketing?
Guerrilla Marketing
Unconventional methods of getting
the customer’s attention at minimal
cost.
Copyright © 2011 Nelson Education Ltd.
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Customer Service and Quality
Some Market Facts
If you provide quality service, you can:
 Charge up to 10 % more for your
product or service
 Increase sales growth
 Gain new customers
 Make word-of-mouth advertising
work for you
AND
 Increase Profits!
Copyright © 2011 Nelson Education Ltd.
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Promotion
in
Cyberspace
Paid media
advertising
Promotional Mix
Working
visibly
Industry
Literature
Branding
Yourself
Trade
Shows
Business
Cards
Point-ofpurchase
displays
Promotional Mix
Catalogues
Discount
Coupons
Personal
Selling
Free Ink and
Free Air
Direct Mail
Money-Back
Guarantees
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Promotional Strategy:
Important Considerations
1. Select sales reps carefully
Your sales rep’s reputation becomes YOUR
reputation.
Encourage and support your reps.
Insist on sales call reports.
Write monthly sales letters.
Encourage feedback.
2. Use courtesy as promotion
Impress upon your employees the importance of
customer courtesy.
Reward employees for exceptional courtesy.
Copyright © 2011 Nelson Education Ltd.
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Networking: A Source of
Promotional Power
Networking
 Communicating through personto-person channels in an attempt
to sell or gain information.
 Talking to people with the
purpose of doing business.
Copyright © 2011 Nelson Education Ltd.
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Networking: A Source of
Promotional Power
Build Your Own Network
 Complete Action Step 33
 Everyone you know is your potential
network
 Build a couple of core groups
 Be diverse & balance your talents.
Copyright © 2011 Nelson Education Ltd.
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10 Handy Rules
for Networking
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Network for a purpose.
Position yourself and contribute.
Build relationships.
Be persistent.
Be active.
Be organized.
Evaluate your networking and be prepared to change.
Add value.
Be considerate.
Listen.
Copyright © 2011 Nelson Education Ltd.
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Plan Ahead
Plan ahead
If you fail to plan your promotion,
you’re planning to keep your
business a secret.
Brainstorm an ideal promotional
campaign.
Be creative. Don’t discard any
ideas.
Copyright © 2011 Nelson Education Ltd.
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Promotion
& Market Research
 You can’t plan your promotional strategy
without building on your market
research.
 You are selling benefits, not features.
 Your target customers are interested in
what your product or service will do for
them.
 Market research helps you clarify the
benefits.
Copyright © 2011 Nelson Education Ltd.
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Promotion
& Market Research
• Develop your core benefit
proposition:
A statement about the benefits of your
product or service to your target market
• Do primary research. Ask your
customers questions:
find out how customers perceive your
business.
listen to the answers and value the
information.
Copyright © 2011 Nelson Education Ltd.
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Your Promotional Plan:
Attach a Price Tag
Promotional Method
Yellow Pages
Window Signs
Point of Purchase Signs
Newspaper Ads
Fliers
Sales Promotions
Publicity
Personal Sales Calls
Freebies & Gifts
Networking
Thank You Letters
Copyright © 2011 Nelson Education Ltd.
Frequency
Annual Cost
Comment
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Business Plan
Building Block
Chapter 6 helps you prepare
Part D of your Business Plan:
Marketing Strategy
Copyright © 2011 Nelson Education Ltd.
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Checklist for
Your Business Plan
 What is your marketing strategy?
 What prices will you charge?
 What are your promotional mix, goals and
objectives?
 What stimulates your target market to buy
or use your product or service?
 What has your primary and secondary
research told you about promoting your
business?
Copyright © 2011 Nelson Education Ltd.
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Checklist for
Your Business Plan
 Develop a promotional strategy for your
business.
 How will you cost out your promotional
budget?
 Does your business have a unique twist for
a possible publicity story?
 Why did you select the business name you
are using?
Copyright © 2011 Nelson Education Ltd.
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Case
Study
1-800-GOT- JUNK?
Learn from the marketing strategies, pricing and
promotional tactics of Brian Scudamore and his
1-800-GOT-JUNK? success story
Answer the Chapter 6 case study questions to learn:
 What major market trends GOT JUNK took advantage of
 What Brian learned about the purpose of competitive
intelligence
 How GOT JUNK benefited from guerrilla marketing
 Which pricing strategy GOT JUNK used and why
 Promotional tactics of the GOT JUNK team
 Cyberspace promotional tactics GOT JUNK used
Copyright © 2011 Nelson Education Ltd.
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