CHAPTER

OBJECTIVESOBJECTIVES

PRICING AND PROMOTION

Discuss how businesses and consumers make their buying decisions.

Describe factors involved in establishing product prices and common pricing strategies.

Discuss ways that companies try to control costs that can lead to higher prices.

Discuss the purpose of promotion in meeting business and consumer needs.

Identify the common promotional methods. Explain the parts of the selling process and how each is

used to help customers make effective buying decisions. Identify important laws and regulations that apply to

advertising and promotion.

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To inform and educate. To introduce product or

business. To announce

improvement or product change.

To reinforce features and benefits.

To increase frequency of use.

To increase variety of uses.

Advertising Purposes - pg 608

To convince people to enter a store.

To develop a list of prospects.

To make a brand, trademark, or slogan familiar.

To improve the image of a company of product.

To gain support for ideas or causes.

All forms of PAID promotional messages

Publication - newspapers, magazines, prof. journals

Mass media - radio, TV Outdoor - billboards, signs, Direct - sales letters, catalogs,

telemarketing, computer databases Display - window, counter, aisle, trade

show Internet - static banner, buttons,

sponsored sites, email

Media Choices - pg 609

PLANNING AND MANAGING ADVERTISING

The advertising budget companies allow an amount for advertising

when they develop their overall company budget

most businesses plan the advertising program for one year or less

emergencies may arise that require a quick decision, but planning helps avoid budget misuse

the amount a business spends on advertising depends more on the characteristics of the product and target market than on the competition

PLANNING AND MANAGING ADVERTISING

Timing of advertising advertising is more effective at sometimes than

others companies spend more advertising dollars seasonally

during the time the consumer is willing and able the buy the products or services advertised

occasionally companies advertise to increase purchases at times customers do not traditionally consider buying the product

a single advertisement may produce temporary results, but regular advertising is important in building a steady stream of customers

businesses often spend their advertising over the entire year to keep their name and brand fresh in the customers mind

Studying the wants of customers

Buying motives- the reason why people buy.Examples: status, appetite,

comfort, desire for bargains, recognition, ease of use.

Presenting and demonstrating the product

Customers are interested in what the product will do for them and how they can use it.Examples: “Why is this pair

of shoes $168 and this one is $65?”

Answering customer questions

Objections- concerns or complaints expressed by the customer.

Sales people should not be concerned by the questions, but should view them as an opportunity to better understand the customer’s needs and help the customer make the best decision.

Closing the sale

Sales people should continue to work with customers until it is clear that they do not want the product or until the sale is made.

This may take several meetings before the decision is made.

Follow-up The selling process is not complete just

because a customer agrees to purchase the product.

It’s not complete until the sales person makes sure that the customer is satisfied—successful selling.

Check with customer to make sure order is correct

May send thank-you note to customer after purchase

TRUTH IN ADVERTISING AND SELLING

False advertising Full disclosure Substantiation Cease and desist order Corrective advertising

TRUTH IN ADVERTISING AND SELLING

False advertising Defined by federal law as misleading or

in any way that could influence the customers purchase or use of the product

Full disclosure Providing all information necessary for

consumers to make a informed decision

Advertisers are required to use it

TRUTH IN ADVERTISING AND SELLING

Substantiation Must prove all claims they make about

their products and services in promotions

Cease and desist order Requires the company to stop using

specific advertisements

TRUTH IN ADVERTISING AND SELLING

Corrective advertising New advertising designed to change the

false Impression left by the misleading

information

Review Facts 1,3,7,9,10,13, 15

Discussion Ideas 3,5,6,7, 9, 10