Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Pricing and Promoting Your Product or Service chapter 6 Chapter 6 Prepared by Ron Knowles Algonquin College Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-1 Business Plan Building Block chapter 6 Chapter 6 Chapter 6 will help you: Price your product or service. Connect with the customer Develop and refine your marketing strategy. Refine your product features and benefits. Develop a cost-effective promotional strategy. Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-2 Learning Opportunities Understand how to price your product or service. Develop a pricing strategy. Understand how to communicate with target customers using both conventional and guerrilla marketing techniques. Get free publicity. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-3 Learning Opportunities Maximize economy in advertising and promotion. Understand the value of personal selling. Use creative techniques to arrive at the right promotional mix. Develop a customer list. Promote through networking and build your own network. Attach price tags to your promotional strategies. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-4 The Marketing Mix • The marketing mix is a blend of Product offering Pricing Promotion Place (location) • Some refer to this mix as the 4“Ps” of marketing Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-5 Product • Product Product, Service, or Combination • Focus on Quality Customer Service Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-6 Customer Service and Quality Some Market Facts If you provide quality service, you can: • Charge up to 10 percent more for your product or service Increase sales growth Reduce costs Gain new customers Make word-of-mouth advertising work for you AND • Increase Profits! Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-7 Service and Quality Tips Set a new standard for your industry Don’t make customers pay for your mistakes Measure the service you provide Provide speedy service Relieve your customer’s stress Use feedback to stay in touch with your customer’s needs Surround your product with customer benefits Source: Adapted from Rick Spence, Secrets of Success from Canada’s Fastest-Growing Companies (Toronto: Wiley & Sons Canada, Ltd., 1997), pp. 143-144. Copyright © 2007 by Nelson, a division of Thomson Canada Limited. Chapter 6 6-8 Your Pricing Strategy • The price you charge must be acceptable to you, the seller, your customer and the market • Your price depends on a number of factors including 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 Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-9 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. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-10 Promotional Mix • Promotional mix The key to connecting with customer is your promotional mix—all the elements that you blend to maximize communication with your customer. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-11 Promotion in Cyberspace Promotional Mix Working visibly Paid media advertising Industry Literature Branding Yourself Trade Shows Business Cards Point-ofpurchase displays Promotional Mix Catalogues Discount ChapterCoupons 6 Personal Selling Free Ink and Free Air Direct Mail Money-Back Guarantees Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-12 Promotional Strategy Two Important Considerations Select sales reps carefully • Interview potential buyers • Ask sales reps about their customers, geographic area, and so on. • Provide encouragement and support to your reps. • Insist on sales call reports. • Write monthly sales letters. • Encourage feedback. Use courtesy as promotion • Impress upon your employees the importance of customer courtesy. • Reward employees for exceptional courtesy. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-13 Guerrilla Marketing • Guerrilla Marketing An important part of your promotional mix will be your “guerrilla marketing” promotional strategies—unconventional methods of getting the customer’s attention at minimal cost. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-14 Networking—Another Source of Promotional Power Networking • Communicating through person-toperson channels in an attempt to sell or gain information. • Talking to people with the purpose of doing business. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-15 Networking—Another Source of Promotional Power Research Shows • Successful entrepreneurs spend more than 50 percent of their time maintaining their personal networks. • Personal entrepreneurial networks outlast individual business ventures. • Managing a personal entrepreneurial network requires initiative. Build Your Own Network • Complete Action Step 33 p. 142 Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-16 Nine Rules for Networking 1. Recognize that entrepreneurial know-who is just as important as know-how 2. Be systematic 6. Identify and communicate with your gatekeepers 3. Assess your network in terms of specific types of ventures that you peruse 7. Assess your network in terms of entrepreneurial functions 4. Get close to your natural contacts 8. Contribute regularly to your personal network 5. Use your network regularly 9. Find a balance between your know-who and know how Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-17 Promotion and 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. Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-18 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 Chapter 6 Frequency Annual Cost Copyright © 2007 by Nelson, a division of Thomson Canada Limited. Comment 6-19 Plotting Your Future Checklist 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? Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-20 Plotting Your Future Checklist 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? Chapter 6 Copyright © 2007 by Nelson, a division of Thomson Canada Limited. 6-21