promo selling pricing (1)
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Elements of the PromotionMix
Advertising
Ingredientsof thePromotion
Mix
Ingredientsof thePromotion
Mix
Public Relations
Personal Selling
Sales Promotion
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The CommunicationProcess
Receiver DecodingChannelEncodingSender
Noise
Channel
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Goals and Tasks of Promotion
Informing Reminding
Persuading
TargetAudience
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AIDA and the Hierarchy of Effects
Attention Interest Desire Action
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
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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
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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 $ $ $
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Creating a PromotionPlan
Choose Promotion Mix
Develop Promotion Budget
Set Promotion Objectives
Identify Target Market
Analyze the Marketplace
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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
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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
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Techniques for Setting PromotionBudgets
Arbitrary Allocation
All - You - Can - Afford
Competitive Parity
Percent of Sales
Market Share Objective and Task
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Regulation of Promotion
Self-Regulation National Advertising Division (NAD)
National Advertising Review Board (NARB)
Federal Regulation Federal Trade Commission (FTC)
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Effects of Advertising
Advertising Spending
Return onAdvertising
Expenditures
Increasing efficiencyas ad budget becomessufficient
Diminishingreturnson additionalspending
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Major Types of Advertising
Corporate Image
Advocacy Advertising
Typesof Advertising
Typesof Advertising
Pioneering
Competitive
Comparative
ProductAdvertising
InstitutionalAdvertising
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Advertising Campaign DecisionProcess
Determine the campaign objectives.
Make creative decisions. Make media decisions.
Evaluate the campaign.
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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
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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
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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
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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
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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.
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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
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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
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Advantages of PersonalSelling
Cost ControlCost Control
Message ControlMessage Control
TargetedTargeted
DetailedInformation
DetailedInformation
Closing SalesClosing Sales
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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.
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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.
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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
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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
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Cost Determinants of Price
01 2 3 4 5 6 7 8 9 10
50
100
150
200
Dollars
Quantity
MC
ATCAVC
AFC
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Break-EvenAnalysis
Quantity (units)
Price($)
Fixed Costs
Total Revenue
Total Costs
Profits
Losses
Break Even
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Steps in Setting the RightPrice
$ $ $ $ $ $ $ $$ $ $ $ $ $ $ $
Fine-Tune Base Price
Choose Strategy
Estimate Demand, Costs,and Profits
Establish Pricing Goals
Right Price
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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
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CashDiscount
Quantity
Discount
FunctionalDiscount
Trade Loading
EDLP
Seasonal
Discounts
PromotionalAllowances
Rebates
Discounts, Allowances, andRebates
PriceReductions
PriceReductions
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GeographicPricing
Basing-Point
Freight-Absorption
Zone Pricing
Uniform Delivered
FOB Origin
PricingTacticsBased on
Geography
PricingTactics
Based onGeography
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Special PricingTactics
Odd-EvenPricing
Two-PartPricing
BundlePricing
BaitPricing
PriceLining
FlexiblePricing
ProfessionalServices
Leader Pricing
SinglePrice
CommonSpecial Pricing
Tactics
CommonSpecial Pricing
Tactics