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ContentsContents

1. Marketing Mix and Key Marketing Activities

2. Developing Market Segmentation

3. Product Planning and Development

4. Promotion Mix : Advertising, Publicity, Personal

Selling and Sales Promotion

5. Distribution Planning and Pricing Strategy

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Marketing Mix and Marketing Mix and Market Segmentation Market Segmentation


Marketing CredoMarketing Credo

There is only one valid definition There is only one valid definition

of business purpose : of business purpose : to create a to create a

customer customer Peter Drucker


Marketing MixMarketing Mix

ProductProduct PricePrice

PlacePlace PromotionPromotion

Target Market


Key Marketing ActivitiesKey Marketing Activities

Consumer AnalysisConsumer Analysis

Product PlanningProduct Planning

Price PlanningPrice Planning

Distribution Distribution

PlanningPlanning

Promotion Promotion

PlanningPlanning



Consumer AnalysisConsumer Analysis

Product PlanningProduct Planning

Examination and evaluation of consumer

characteristics, needs, and purchase

processes

Development and maintenance of products,

product assortments, product positions,

brands, packaging, options, and deletion of

old products

Price PlanningPrice PlanningOutlines price ranges and levels, pricing

techniques purchase terms, price

adjustments, and the use of price as an

active or passive factor



Distribution Distribution

PlanningPlanning

Establishment of channel relations, physical

distribution, inventory management,

warehousing, transportation, allocation of

goods, and wholesaling

Promotion Promotion

PlanningPlanning

Combination of advertising, publicity,

personal selling, and sales promotion to

drive sales revenue


Product/Market MatrixProduct/Market Matrix

Existing ProductsExisting Products New ProductsNew Products

Existing MarketsExisting Markets

New MarketsNew Markets

Market Penetration

Market Penetration

Market Development

Market Development

Product Development

Product Development

DiversificationDiversification



Market Penetration

Market Penetration

Market Development

Market Development

• The firm seeks to achieve growth with

existing products in their current market

segments, aiming to increase its market

share• Effective when the market is growing or not

yet saturated

• The firm seeks growth by targeting its

existing products to new market segments• Effective when a local or regional business

looks to wider its market, new market

segments are emerging due to changes in

consumer life-style/demographics, and

innovative uses are discovered for a mature

product



Product Development

Product Development

DiversificationDiversification

• The firms develops new products

targeted to its existing market segments

• Effective when the firm has a core of

strong brands

• The firm seeks growth by targeting its

existing products to new market

segments

• Diversification is utilized so that the

firm does not become overly depend

ent on one product line


Market SegmentationMarket Segmentation

The division of a market into

different homogeneous groups of

consumers

Market Market

SegmentSegment

Should be:• measurable • accessible by communication and distribution

channels • different in its response to a marketing mix • durable (not changing too quickly) • substantial enough to be profitable


Types of Market SegmentationTypes of Market Segmentation

GeographicGeographic

DemographicDemographic

Based on regional variables such as

region, climate, population density, and

population growth rate.

Based on variables such as age, gender,

ethnicity, education, occupation, income,

and family status


Types of Market SegmentationTypes of Market Segmentation

PsychographicPsychographic

BehavioralBehavioral

Based on variables such as values,

attitudes, and lifestyle

Based on variables such as usage rate

and patterns, price sensitivity, brand

loyalty, and benefits sought


Step in Planning A Segmentation StrategyStep in Planning A Segmentation Strategy

Determining

characteristics and

needs of consumers

for the product

category of the

company

Analyzing

consumer

similarities and

differences

Developing

consumer

group

profiles

Selecting

consumer

segment (s)

Positioning

company’s

offering in

relation to

competition.

Establishing

an

appropriate

marketing

plan


Product Planning and Product Planning and DevelopmentDevelopment


Products : Types of GoodsProducts : Types of Goods

Types of

Goods

Convenience Convenience

GoodsGoods

Shopping Shopping

GoodsGoods

Specialty Specialty

GoodsGoods


Convenience GoodsConvenience Goods


GoodsGoods

• Those purchased with a minimum of effort,

because the buyer has knowledge of

product characteristics prior to shopping

• The consumer does not want to search for

additional information (because the item

has been bought before) and will accept a

substitute rather than have to frequent

more than one store



GoodsGoods

• Staples are low-priced items that are

routinely purchased on a regular basis,

such as detergent, milk, and cereal

• Impulse goods are items that the

consumer does not plan to buy on a

specific trip to a store, such as candy, a

magazine, and ice cream

• Emergency goods are items purchased

out of urgent need, such as an umbrella

during a rainstorm, a tire to replace a flat,

or aspirin for a headache

Convenience GoodsConvenience Goods


Shopping GoodsShopping Goods

Shopping Shopping

GoodsGoods

• Those for which consumers lack

sufficient information about product

alternatives and their attributes, and

therefore must acquire further

knowledge in order to make a

purchase decision


Shopping GoodsShopping Goods

Shopping Shopping

GoodsGoods

• For attribute-based shopping goods,

consumers get information about and then

evaluate product features, warranty,

performance, options, and other factors.

The goods with the best combination of

attributes is purchased. Sony electronics

and Calvin Klein clothes are marketed as

attribute-based shopping goods

• For price-based shopping goods,

consumers judge product attributes to be

similar and look around for the least

expensive item/store


Specialty GoodsSpecialty Goods

Specialty Specialty

GoodsGoods

• Those to which consumers are brand

loyal.

• They are fully aware of these products

and their attributes prior to making a

purchase decision.

• They are willing to make a significant

purchase effort to acquire the brand

desired and will pay a higher price than

competitive products, if necessary.

• For specialty goods, consumers will not

make purchases if their brand is not

available. Substitutes are not

acceptable.


ServicesServices

Type of

Services

Rented- Rented-

goods goods

ServiceService

Owned-goods Owned-goods

serviceservice

Non-goodsNon-goods


ServicesServices

Rented- Rented-

goods goods

ServiceService

Owned-goods Owned-goods

serviceservice

Non-goodsNon-goods

Involves the leasing of a good for a specified

period of time. Examples include car, hotel room,

apartment, and tuxedo rentals

Involves an alteration or repair of a good owned by

the consumer. Examples include repair services

(such as automobile, watch, and plumbing), lawn

care, car wash, haircut, and dry cleaning

Provides personal service on the pan of the seller;

it does not involve a goods. Examples include

accounting, legal, and consulting services


Characteristics of ServicesCharacteristics of Services

• The intangible nature of many services makes the

consumer's choice more diffi cult than with goods

• The producer and his or her services are often

inseparable

• The perishability of services prevents storage and

increases risks

• Service quality may be variable


Product Life CycleProduct Life Cycle

IntroductionIntroduction

GrowthGrowth MaturityMaturity

DeclineDecline



Characteristics Introduction Growth

Marketing objective Attract innovators and opinion leader to new product

Expand distribution and product line

Industry sales Increasing Rapidly increasing

Competition None or small Some

Industry profits Negative Increasing

Customers Innovators Affluent mass market

Product mix One or two basic models

Expanding line

Distribution Depends on product Rising number of outlets

Pricing Depends on product Greater range of prices

Promotion Informative Persuasive



Characteristics Maturity Decline

Marketing objective Maintain differential advantage as long as possible

(a) cut back,(b) revive,(C) terminate

Industry sales Stable Decreasing

Competition Substantial Limited

Industry profits Decreasing Decreasing

Customers Mass market Laggards

Product mix Full product line Best-sellers

Distribution Greatest number of outlets

Decreasing number of outlets

Pricing Full line of prices Selected prices

Promotion Competitive Informative


New Product PlanningNew Product Planning

Idea Idea

GenerationGeneration

Product Product

ScreeningScreeningConcept Concept

TestingTestingBusiness Business

AnalysisAnalysis

Product Product

DevelopmentDevelopmentTest Test

MarketingMarketing

Commercial-Commercial-

izationization



Idea Idea

GenerationGeneration

• A continuous, systematic search for new

product opportunities

• It involves delineating sources of new

ideas and methods for generating them

Product Product

ScreeningScreening

• After the firm identifies potential

products, it must screen them

• Many companies use a new-product

screening checklist for preliminary

evaluation


Screening ChecklistScreening Checklist

GENERAL CHARACTERISTICS OF NEW PRODUCTSGENERAL CHARACTERISTICS OF NEW PRODUCTS

Profit potential

Existing competition

Potential competition

Size of market

Level of investment

Patentability

Level of risk

MARKETING CHARACTERISTICS OF NEW PRODUCTSMARKETING CHARACTERISTICS OF NEW PRODUCTS

Fit with marketing capabilities

Effect on existing products (brands)

Appeal to current consumer markets

Potential length of product life cycle

Existence of differential advantage

Impact on image

Resistance to seasonal factors

PRODUCTION CHARACTERISTICS OF NEW PRODUCTSPRODUCTION CHARACTERISTICS OF NEW PRODUCTS

Fit with production capabilities

Length of time to commercialization

Ease of product manufacture

Availability of labor and material resources

Ability to produce at competitive prices



Concept Concept

TestingTesting

Business Business

AnalysisAnalysis

• Concept testing presents the consumer with

a proposed product and measures attitudes

and intentions at this early stage of

development

• Concept testing is a quick and inexpensive

way of measuring consumer enthusiasm

• Business analysis for the remaining product

concepts is much more detailed than product

screening

• Because the next step is expensive and time-

consuming product development, critical use

of business analysis is essential to eliminate

marginal items


Business Analysis VariablesBusiness Analysis Variables

Factors Considerations

Demand projections Price/sales relationship; short- and long-run sales potential; speed of sales growth; rate of repurchases; channel intensity

Cost projections Total and per unit costs; use of existing facilities and resources; startup vs. continuing costs; estimates of future raw materials and other costs; econo mies of scale; channel needs; break-even point

Competition Short-run and long-run market shares of company and competitors; strengths and weaknesses of competitors; potential competitors; likely competitive strategies in response to new product by firm

Required investment Product planning (engineering, patent search, product development, testing); promotion; production; distribution

Profitability Time to recoup initial costs; short- and long-run total and per-unit profits; control over price; return on investment (ROI)



Product Product

DevelopmentDevelopment

Test Test

MarketingMarketing

• Product development converts a product idea

into a physical form and identifies a basic

marketing strategy

• It involves product construction, packaging,

branding, product positioning, and attitude and

usage testing.

• Test marketing involves placing a product for

sale in one or more selected areas and

observing its actual performance under the

proposed marketing plan.

• The purpose is to evaluate the product and

pretest marketing efforts in a real setting prior

to a full-scale introduction



Commercial-Commercial-

izationization

• After testing is completed, the firm is ready

to introduce the product to its full target

market. This is commercialization and

corresponds to the introductory stage of the

product life cycle

• Commercialization involves implementing a

total marketing plan and full production


Promotion Mix : Promotion Mix : Advertising, Publicity, Personal Advertising, Publicity, Personal

Selling and Sales PromotionSelling and Sales Promotion


Promotion MixPromotion Mix

AdvertisingAdvertising PublicityPublicity

Personal Personal SellingSelling

Sales Sales PromotionPromotion

Target Market


Promotion MixPromotion MixFactor AdvertisingAdvertising PublicityPublicity Personal SellingPersonal Selling Sales PromotionSales Promotion

Audience Mass Mass Small (one-to-one) Varies

Message Uniform Uniform Specific Varies

Cost Low per viewer or reader

None for media space and time; can be moderate costs for press releases and publicity materials

High per customer Moderate per customer

Sponsor Company No formal sponsor in that media are not paid

Company Company

Flexibility Low Low High Moderate

Control over content and placement

High None High High

Credibility Moderate High Moderate Moderate

Major goal To appeal to a mass audience at a reasonable cost, and create awareness and favorable attitudes

To reach a mass audience with an independently reported message

To deal with individual consumers, to resolve questions, to close sales

To stimulate short-run sales, to increase impulse purchases

Example Television ad for a Kodak video camera

Newspaper article reporting on the unique features of a Kodak video camera

Retail sales personnel explaining how a Kodak video camera works

A Kodak video camera displayed at consumer photography shows


Four Key Steps to AdvertiseFour Key Steps to Advertise

Determine Determine

message content message content

and devise an adand devise an ad

Specify the Specify the

location of an ad location of an ad

(media placement)(media placement)

Outline a promotion Outline a promotion

scheduleschedule

Choose how many Choose how many

variations of a variations of a

basic message to basic message to

utilizeutilize


Things to Consider in AdvertisingThings to Consider in Advertising

WasteWaste

ReachReach

Waste is the portion of an audience that is

not in a firm's target market. Because

media appeal to mass audiences, waste

is a significant factor in advertising.

Reach refers to the number of viewers or

readers in the audience



FrequencyFrequency

Message Message permanencepermanence

Frequency is how often a medium can be

used. It is greatest for newspapers, radio, and

television, where ads may appear daily and

advertising strategy may be easily changed

Message permanence refers to the number

of exposures one advertisement gener ates

and how long it remains with the audience



Persuasive Persuasive impactimpact

ClutterClutter

Persuasive impact is the ability of a medium

to stimulate consumers. Television often has

the highest persuasive impact because it is

able to combine audio, video, color,

animation, and other appeals.

Clutter involves the number of ads that are

contained in a single program, issue, etc. of a

medium. Clutter is low when a limited number

of ads is presented and high when many ads

are presented.


Publicity : Poor and Good ResponsePublicity : Poor and Good Response

SituationSituation Poor ResponsePoor Response Good ResponseGood Response

Fire breaks out in a company plant

Requests for information bymedia are ignored.

Company spokesperson explains the cause of the fire and company precautions to avoid it and answers questions.

New product introduced

Advertising is used withoutpublicity

Pre-introduction news releases, product samples, and testimonials are used.

News story about product defects

Requests for information by media are ignored, blanket denials are issued, hostility is exhibited toward reporter of story.

Company spokesperson states that tests are being conducted on products, describes procedure for handling defects, and answers questions.

Competitor introduces new

product

The advertising campaign isstepped up.

Extensive news releases, statistics, and spokespeople are made available to media to present company's competitive features.

High profits reported

Profits are rationalized and positive effects on the economy are cited.

Profitability is explained, data (historical and current) are provided, uses of profits are detailed: research, community development.

Overall view of publicity

There is an infrequent need for publicity; crisis fighting is used when bad reports are circulated.

There is an ongoing need for publicity, strong planning, and contingency plans for bad reports.


Developing a Publicity PlanDeveloping a Publicity Plan

Setting Setting

objectivesobjectives

Outlining Outlining

types of types of

publicitypublicity

Selecting Selecting

mediamedia

Creating Creating

publicity publicity

messagesmessages

Timing Timing

publicity publicity

messagesmessages


Publicity TypePublicity Type

Publicity Type Example

News publicity Macy's describes its decision to sell its stores in the Midwest.

Business feature article Toyota explains its goals and objectives for the 2020.

Service feature article A trade association offers 10 tips on how to reduce home heating costs.

Finance release General Electric distributes quarterly financial data about the company.

Product release Intel announces its new, fast-speed microprocessor

Pictorial release Apple distributes photos showing all of its personal computer products and related software

Background editorial release

Mc Kinsey presents a biography of its president and his rise through the company.

Emergency publicity The Red Cross makes a request for aid to tornado victims.


Specific Personal Selling ObjectivesSpecific Personal Selling Objectives

Type of Objective Illustrations

Demand-Oriented

Information To fully explain all good and service attributes

To answer any questions

To probe for any further questions

Persuasion To clearly distinguish good or service attributes from those of competitors

To maximize the number of sales as a per cent of presentations

To convert undecided consumers into buyers

To sell complementary items, e.g., film with a camera

To placate dissatisfied customers

Reminding To ensure delivery, installation, etc.

To follow up after a good or service has been purchased

To follow up when a repurchase is near

To reassure previous customers when making a new purchase

Image-Oriented

Industry and company To maintain a good appearance by all personnel in contact with consumers

To follow acceptable sales practices


Personal Selling ProcessPersonal Selling Process

Prospecting Prospecting (blind, lead)(blind, lead)

ApproachApproach Customer Customer

WantsWants

Sales Sales

PresentationPresentation

Answering Answering

Questions Questions (questions and (questions and

objections)objections)

CloseClose Follow up Follow up (satisfaction, (satisfaction, referrals, referrals, repurchase)repurchase)


Types of Sales PromotionTypes of Sales Promotion

TypeType CharacteristicsCharacteristics IllustrationIllustration

Coupons Manufacturers or retailers advertise special discounts for customers who redeem coupons.

P&G mails consumers a 25-cents-off coupon for Sure deodorant, which can be redeemed at any supermarket.

Refund or rebate

A consumer submits proof-of-purchase (usually to the manufacturer) and receives an extra discount.

First Alert home fire alarms provides $5 rebates to consumers submitting proof of purchase.

Samples Free merchandise or services are given consumers, generally for new items.

When Sunlight dishwashing liquid was introduced, free samples were mailed to consumers.

Contests or sweepstakes

Consumers compete for prizes by answering questions (contests) or filling out forms for random drawings of prices (sweepstakes).

Publishers Clearinghouse sponsors annual sweepstakes and awards automobiles, houses, and other prices.


TypeType CharacteristicsCharacteristics IllustrationIllustration

Bonus or multipacks

Consumers receive discounts for purchasing in quantity

Some stores run I-cent sales, whereby the consumer buys one item and gets a second one for a penny.

Point-of-purchase displays

In-store displays remind customers and generate impulse purchases.

Chewing gum sales in supermarkets are high because displays arc placed at checkout counters.

Special events

Manufacturers or retailers sponsor celebrity appearances, fashion shows, and otheractivities.

Virtually every major league baseball team has an annual "Old Timers' Day," which attracts large crowds.

Gifts Consumers are given gifts for making a purchase or opening a new account.

Savings banks offer a range of gifts for consumers opening new accounts or expanding existing ones.

Types of Sales PromotionTypes of Sales Promotion


Sales Promotion AdvantagesSales Promotion Advantages

• It helps attract customer traffic and maintain brand or store

loyalty

• Quick results can be achieved

• Some forms of sales promotion (calendars, t-shirts. Pens,

etc) provide value to the consumer and are retained by

them; and these forms can provide a reminder function

• Impulse purchases can be increased through in-store

displays


Sales Promotion DisadvantagesSales Promotion Disadvantages

• The image of the firm may be lessened if it continuously runs

promotions. Consumers may view discounts as representing a

decline in product quality and believe the firm could not sell its

offerings without them.

• When coupons, rebates, or other special deals are used

frequently, consumers may not make purchases if the items are

sold at regular prices. Instead, they will stock up each time there

is a promotion.


Sales Promotion DisadvantagesSales Promotion Disadvantages

• Sometimes sales promotions shift the focus away from the

product onto secondary factors. Consumers may be attracted by

calendars, coupons, or sweepstakes instead of by product

quality, functions, and durability. In the short run this generates

consumer enthusiasm. In the long run this may have adverse

effects on a brand's image and on sales, because a product-

related differential advantage has not been developed.


Distribution Planning and Distribution Planning and Pricing Strategy Pricing Strategy


Distribution PlanningDistribution Planning

• Distribution planning is systematic decision making

regarding the physical movement and transfer of

ownership of a product from producer to consumer.

• It includes transportation, storage, and customer

transactions.

• Distribution functions are carried out through a channel of

distribution, which is comprised of all the organizations or

people involved in the process.

• These organizations or people are known as channel

members or middlemen.


Intensity of Channel CoverageIntensity of Channel Coverage

CharacteristicsCharacteristics Exclusive Exclusive DistributionDistribution

Selective Selective DistributionDistribution

Intensive Intensive DistributionDistribution

ObjectivesObjectives Prestige image, channel control and loyalty, price stability and high profit margins

Moderate market coverage, solid image, some channel control and loyalty, good sales and profits

Widespread market coverage, channel acceptance, sales volume and profits

Channel Channel members members

Few in number, well-established reputable stores

Moderate in number, well-established, better stores

Many in number, all typesof outlets

Customers Customers

Few in number, trend setters, willing to travel to store, brand loyal

Moderate in number, brand conscious, somewhat willing to travel to store

Many in number,convenience-oriented


Intensity of Channel CoverageIntensity of Channel Coverage

CharacteristicsCharacteristics Exclusive Exclusive DistributionDistribution

Selective Selective DistributionDistribution

Intensive Intensive DistributionDistribution

MarketingMarketingEmphasis Emphasis

Personal selling, pleasantshopping conditions, good service

Promotional mix, pleasant shopping conditions, good service

Mass advertising, nearby location, items in stock

Major Major DisadvantagesDisadvantages

Limited sales potential

May be difficult to carve out a niche

Limited channel control

ExamplesExamples Automobiles, designer clothes, caviar

Furniture, clothing, watches

Groceries, household products, magazines


Methods of Channel CooperationMethods of Channel CooperationFactor Manufacturer Action Channel Member Action

New-product New-product introductionintroduction

Thorough testing, adequate promotionalsupport

Good shelf location and space, enthusiasm for product, assistance in test marketing

DeliveryDelivery Prompt filling of orders, adherence toscheduled dates

Proper time allowed for delivery, shipments immediately checked for accuracy

PromotionPromotion Sales force training, sales force incentives, development of national advertising campaign, cooperative programs

Attractive in-store displays, knowledgeable salespeople, participation in cooperative programs

Product Product qualityquality

Product guarantees Proper installation and servicing of products


Pushing and Pulling StrategyPushing and Pulling Strategy

ManufacturerManufacturer

Channel members

Channel members

ConsumersConsumers

ManufacturerManufacturer

Channel members

Channel members

ConsumersConsumers

Pushing StrategyPushing Strategy Pulling StrategyPulling Strategy


Price PlanningPrice Planning

A PriceA PriceA PriceA PriceRepresents the value of a Represents the value of a

good or service for both the good or service for both the

seller and the buyerseller and the buyer

Represents the value of a Represents the value of a

good or service for both the good or service for both the

seller and the buyerseller and the buyer

Price Price PlanningPlanning

Price Price PlanningPlanning

Systematic decision making Systematic decision making

by an organization regarding by an organization regarding

all aspects of pricingall aspects of pricing

Systematic decision making Systematic decision making

by an organization regarding by an organization regarding

all aspects of pricingall aspects of pricing


Factors Affecting Pricing DecisionsFactors Affecting Pricing Decisions

ConsumersConsumers CompetitorsCompetitors

Channel Channel MembersMembers

GovernmentGovernment

CostCost

Total Effects Total Effects on Price on Price

Decisions Decisions


Consumers and Price DecisionsConsumers and Price Decisions

ConsumersConsumers

• The relationship between price and

consumer purchases and perceptions is

explained by two economic principles —

the law of demand and price elasticity of

demand

• The law of demand states that consumers

usually purchase more units at a low price

than at a high price

• The price elasticity of demand defines the

sensitivity of buyers to price changes in

terms of the quantities they will purchase


Elastic Elastic

DemandDemand

Elastic Elastic

DemandDemand

• Elastic demand occurs if relatively small changes in

price result in large changes in quantity demanded

• Numerically, price elasticity is greater than 1

• With elastic demand, total revenue goes up when

prices are decreased and goes down when prices rise

• Inelastic demand takes place if price changes have

little impact on quantity demanded

• Price elasticity is less than 1

• With inelastic demand, total revenue goes up when

prices are raised and goes down when prices decline

In-elastic In-elastic

DemandDemand

In-elastic In-elastic

DemandDemand



Unitary Unitary

DemandDemand

Unitary Unitary

DemandDemand

• Unitary demand exists if changes in price are

exactly offset by changes in quantity demanded,

so that total sales revenue remains constant.

• Price elasticity is 1



Competitors and Price DecisionsCompetitors and Price Decisions

CompetitorsCompetitors

• Another element contributing to the

degree of control a firm has over

prices is the competitive environment

within which it operates


Market-

controlled

price

environment

Market-

controlled

price

environment

• Characterized by a high level of com

petition, similar goods and services, and

little control over price by individual

companies

• Characterized by moderate competi tion,

well-differentiated goods and services, and

strong control over price by individual firms

Company-

controlled

priced

environment

Company-

controlled

priced

environment



Government-

controlled

price

environment

Government-

controlled

price

environment

• Characterized by prices set by the

government. Examples are public utilities,

buses, taxis, and state universities



Channel Members and Price DecisionsChannel Members and Price Decisions


• A wholesaler or retailer can gain stronger

control over price by stressing its importance as

a customer to the manufacturer, refusing to

carry unprofitable product, stocking competitive

items, and developing strong dealer brands so

that consumers are loyal to the seller and not

the manufacturer

• Sometimes retailers engage in selling against

the brand, whereby they stock merchandise,

place high prices on it, and then sell other

brands for lower prices. This is often done to

increase the sales of their own brands


Channel Members and Price DecisionsChannel Members and Price Decisions


• To ensure channel member cooperation with

price decisions, the manufacturer needs to

consider four factors: channel member profit

margins, price guarantees, special deals, and

the impact of price increases


Government and Price DecisionsGovernment and Price Decisions

GovernmentGovernment

Price fixing regulationsPrice fixing regulations

Prohibitions against price discrimination among

channel members

Prohibitions against price discrimination among

channel members

Unfair sales acts : predatory pricing

Unfair sales acts : predatory pricing


Cost and Price DecisionsCost and Price Decisions

CostCost

Cost of raw materials and

supplies

Cost of raw materials and

supplies

Labor costLabor cost

Advertising CostAdvertising Cost

Distribution CostDistribution Cost

Pricing Pricing DecisionsDecisions


Price StrategyPrice Strategy

Cost-based Price Cost-based Price StrategyStrategy

Demand-based Demand-based Price StrategyPrice Strategy

Competition-Competition-based Price based Price

StrategyStrategy

Price Price StrategyStrategy



Cost-based Price Cost-based Price StrategyStrategy

Demand-based Demand-based Price StrategyPrice Strategy

With a cost-based price strategy, the

marketer sets prices by computing

merchandise, service, and overhead

costs, and then adding the desired profit

to these figures

The marketer sets prices after

researching con sumer desires and

ascertaining the range of prices

acceptable to the target market



Competition-Competition-based Price based Price

StrategyStrategy

• The marketer sets prices in

accordance with competitors

• Prices may be below the market, at

the market, or above the mar ket,

depending on customer loyalty,

services provided, image, real or

perceived differences between

brands or stores, and the

competitive environment


Recommended Further ReadingsRecommended Further Readings

1. Joel Evans and Barry Berman, Marketing, Prentice Hall

2. Phillip Kotler, Marketing Management, Prentice Hall


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