Promo Selling Pricing (1)

8/8/2019 Promo Selling Pricing (1)

1/33

Elements of the PromotionMix

Advertising

Ingredientsof thePromotion

Mix

Ingredientsof thePromotion

Mix

Public Relations

Personal Selling

Sales Promotion


2/33

The CommunicationProcess

Receiver DecodingChannelEncodingSender

Noise

Channel


3/33

Goals and Tasks of Promotion

Informing Reminding

Persuading

TargetAudience


4/33

AIDA and the Hierarchy of Effects

Attention Interest Desire Action

Awareness

Knowledge

Liking

Preference

Conviction

Purchase


5/33

When Elements of Promotion Are MostUseful

Advertising

Personalselling

Salespromotion

Publicrelations

Either not effective or inefficient

Very effective

Somewhat effective

Awareness Knowledge Liking Preference Conviction

Effectiveness

Purchase


6/33

Factors that Affect the PromotionMix

PushandPull Strategies

Nature of the Product

Stage in the ProductLife Cycle

Target Market Characteristics

Type of Buying Decision

Available Funds $ $ $


7/33

Creating a PromotionPlan

Choose Promotion Mix

Develop Promotion Budget

Set Promotion Objectives

Identify Target Market

Analyze the Marketplace


8/33

Criteria for Setting PromotionObjectives

Promotion objectives should:

be measurable, concrete

be based on sound research, with awell-defined target audience

be realistic

reinforce the overall marketing plan andrelate to specific marketing objectives


9/33

Examples of PromotionObjectives

Objective: To RemindTo remind consumers that Peter Pan peanut butter is thecreamiest peanut butter and is available at their nearest groceryand convenience stores

Objective: To Inform (Awareness)To increase the top-of-mind awareness level for Peter Panpeanut butter from 16 percent to 24 percent

Objective : To Persuade (Attitudinal)To increase the percentage of parents who feel that Peter Panpeanut butter is the best peanut butter for their children from22 percent to 35 percent


10/33

Techniques for Setting PromotionBudgets

Arbitrary Allocation

All - You - Can - Afford

Competitive Parity

Percent of Sales

Market Share Objective and Task


11/33

Regulation of Promotion

Self-Regulation National Advertising Division (NAD)

National Advertising Review Board (NARB)

Federal Regulation Federal Trade Commission (FTC)


12/33

Effects of Advertising

Advertising Spending

Return onAdvertising

Expenditures

Increasing efficiencyas ad budget becomessufficient

Diminishingreturnson additionalspending


13/33

Major Types of Advertising

Corporate Image

Advocacy Advertising

Typesof Advertising

Typesof Advertising

Pioneering

Competitive

Comparative

ProductAdvertising

InstitutionalAdvertising


14/33

Advertising Campaign DecisionProcess

Determine the campaign objectives.

Make creative decisions. Make media decisions.

Evaluate the campaign.


15/33

Common AdvertisingAppeals

ProfitProfit

HealthHealth

Love or RomanceLove or Romance

Fear Fear

AdmirationAdmiration

ConvenienceConvenience

Fun and PleasureFun and Pleasure

Vanity and EgotismVanity and Egotism

Save money, keep from losing moneySave money, keep from losing money

Body-conscious, healthyBody-conscious, healthy

Sell cosmetics and perfumesSell cosmetics and perfumes

Social embarrassment, growing old, losinghealth, power Social embarrassment, growing old, losinghealth, power

Celebrity endorsement effectiveCelebrity endorsement effective

Fast-food and microwave productsFast-food and microwave products

Vacations, beer, amusement parksVacations, beer, amusement parks

Expensive, conspicuous itemsExpensive, conspicuous items


16/33

Executional Styles for Advertising

Mood or Image

Musical

Demon-stration

Scientific

Real/AnimatedProduct

Symbols

Fantasy

Lifestyle

Spokes-person/

Testimonial

Slice-of-Life

Humorous

CommonExecutional

Styles

CommonExecutional

Styles


17/33

Methods Used to Evaluate AdvertisingCampaignsPretests

Examples:

Consumer jury tests

Portfolio or unfinished rough tests

Physiological tests

Post-testsExamples:

Recognition tests

Recall tests

Attitude measures

Audience size measurement


18/33

The Tools of PublicRelations

Major Tools

Used ByPR

Professionals

Major Tools

Used ByPR

Professionals

New Product Publicity

Product Placement

Customer SatisfactionPhone Lines

Consumer Education

Event Sponsorship

Issue Sponsorship

Web Sites


19/33

Types of Consumer & Sales PromotionGoalsType of buyer Desired results Sales promotion examples

Loyal customers Reinforce behavior, Loyalty marketing programs,People who buy your increase consumption, such as frequent-buyer cardsproduct most or all change purchase timing or frequent-shopper clubsof the time Bonus packs that give loyal

consumers an incentive tostock up or premiums offeredin return for proofs-of-purchase

Competitors Break loyalty, persuade Sampling to introduce your customers to switch to your brand products superior qualities

People who buy a compared to their brandcompetitors product Sweepstakes, contests, or most or all of the time premiums that create interest

in the productBrand switchers Persuade to buy your Any promotion that lowers thePeople who buy a brand more often price of the product, such asvariety of products coupons, price-off packages,in the category and bonus packs

Trade deals that help make theproduct more readily availablethan competing products

Price buyers Appeal with low prices Coupons, price-off packages,People who or supply added value refunds, or trade deals thatconsistently buy the that makes price less reduce the price of brand toleast expensive brand important match that of the brand that

would have been purchased

Source: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.


20/33

Tools for Consumer SalesPromotion

Coupons

Premiums

Frequent Buyer Programs

Contests andSweepstakes

Samples

Point-of-PurchaseDisplays

Six

Categoriesof Consumer

Sales

Promotions

Six

Categoriesof Consumer

Sales

Promotions


21/33

Tools for Trade SalesPromotion

Trade Allowances

Push Money

Training

Free Merchandise

Store Demonstrations

Business Meetings,Conventions, Trade-Shows

Six

Categoriesof TradeSales

Promotions

Six

Categoriesof TradeSales

Promotions


22/33

Advantages of PersonalSelling

Cost ControlCost Control

Message ControlMessage Control

TargetedTargeted

DetailedInformation

DetailedInformation

Closing SalesClosing Sales


23/33

Advertising Versus PersonalSelling

Personal Selling is more important if...

The product has a high value.It is a custom-made product.There are few customers.The product is technically complex.

Customers are geographically concentrated.

Advertising/Sales Promotion is more important if...

The product has a low value.It is a standardized product.There are many customers.The product is simple to understand.Customers are geographically dispersed.


24/33

Differences Between Traditional & RelationshipSelling

Traditional Personal SellingSell products (goods and services)

Focus on closing sales

Limited sales planning

Spend most contact time tellingcustomers about product

Conduct product-specific needsassessment

Lone-wolf approach to the account

Proposals and presentations basedon pricing and product features

Sales follow-up focused on productdelivery

Relationship SellingSell advice, assistance, and counsel

Focus on improving the customers bottom line

Considers sales planning as top priority

Spend most contact time attempting to build aproblem-solving environment with the customer

Conduct discovery in the full scope of thecustomers operations

Team approach to the account

Proposals and presentations based on profitimpact and strategic benefits to the customer

Sales follow-up is long term, focused onlong-term relationship enhancement

Source: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., Consultative Selling: Walking the Walk in the New Selling Environment, National Conference on Sales Management, Proceedings, March 1996.


25/33

Steps in the SellingProcess

BasicSteps in

theSelling

Process

BasicSteps in

theSelling

Process

Generating Sales Leads

Qualifying Sales Leads

Making the Sales Approach

Making the SalesPresentation

Handling Objections

Closing the Sale

Following Up


26/33

Functions of SalesManagement

MotivateSales Force

EvaluateSales Force

ManageTurnover

Train SalesForce

DevelopCompen-

sation Plan

StructureSales Force

DetermineSales Force

Size

Recruit SalesForce

Set SalesObjectives

Major Tasks of Sales

Management

Major Tasks of Sales

Management


27/33

Cost Determinants of Price

01 2 3 4 5 6 7 8 9 10

50

100

150

200

Dollars

Quantity

MC

ATCAVC

AFC


28/33

Break-EvenAnalysis

Quantity (units)

Price($)

Fixed Costs

Total Revenue

Total Costs

Profits

Losses

Break Even


29/33

Steps in Setting the RightPrice

$ $ $ $ $ $ $ $$ $ $ $ $ $ $ $

Fine-Tune Base Price

Choose Strategy

Estimate Demand, Costs,and Profits

Establish Pricing Goals

Right Price


30/33

Legal and Ethical Issues inPricing

Unfair Trade Practices

Key Legaland Ethical

IssuesRelated to

Price

Key Legaland EthicalIssuesRelated to

Price

Price Fixing

Price Discrimination

Predatory Pricing


31/33

CashDiscount

Quantity

Discount

FunctionalDiscount

Trade Loading

EDLP

Seasonal

Discounts

PromotionalAllowances

Rebates

Discounts, Allowances, andRebates

PriceReductions

PriceReductions


32/33

GeographicPricing

Basing-Point

Freight-Absorption

Zone Pricing

Uniform Delivered

FOB Origin

PricingTacticsBased on

Geography

PricingTactics

Based onGeography


33/33

Special PricingTactics

Odd-EvenPricing

Two-PartPricing

BundlePricing

BaitPricing

PriceLining

FlexiblePricing

ProfessionalServices

Leader Pricing

SinglePrice

CommonSpecial Pricing

Tactics

CommonSpecial Pricing

Tactics

Documents

Promo Selling Pricing (1)