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Transcript
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