Pricing and Promoting Your Product or Service Maximize Advertising & Promotion 6-1Copyright © 2011 Nelson Education Ltd. chapter 66 Prepared by Ron Knowles Algonquin College & Jennifer Rouse Barbeau Canadore College

Chapter Overview Chapter 6 will:   Price your product or service.   Develop and refine your marketing strategy.   Refine your product features and benefits.   Develop a cost-effective promotional strategy. Copyright © 2011 Nelson Education Ltd.6-2 chapter 66

Learning Opportunities  Understand how to price your product or service.  Develop a pricing strategy.  Understand how to communicate with target customers using both conventional and guerrilla marketing techniques.  Get free publicity. Copyright © 2011 Nelson Education Ltd.6-3 chapter 66

Learning Opportunities  Maximize economy in advertising and promotion.  Understand the value of personal selling.  Use creative techniques to arrive at the right promotional mix.  Promote through networking & build your own network.  Attach price tags to your promotional strategies. Copyright © 2011 Nelson Education Ltd.6-4 chapter 66

Marketing strategy includes an analysis of 4 major elements 1.External market trends 2.Target market 3.Product uniqueness & competitive advantage 4.Marketing mix   The first three elements were discussed in Chapters 1 through 5   In Chapter 6 we focus of the fourth element – the marketing mix. Marketing Strategy Copyright © 2011 Nelson Education Ltd.6-5

The Marketing Mix The marketing mix is a blend of  P roduct offering  P ricing  P romotion  P lace (location) Some refer to this mix as the 4Ps of marketing Copyright © 2011 Nelson Education Ltd.6-6

Pricing Your Product or Service Four common methods 1.Competitor-based pricing (market- based pricing) 2.Profit-based (cost plus) pricing 3.Industry norm or “keystone” pricing 4.Ceiling or premium pricing Copyright © 2011 Nelson Education Ltd.6-7

Your Pricing Strategy   The price you charge must be acceptable to:  you, the seller  your customer  the market   Your price depends on a number of factors:  cost of production  the market  competitive forces  and so on   Begin with a ceiling price strategy   Follow up to ensure your price covers costs and leads to a profit Copyright © 2011 Nelson Education Ltd.6-8

Promotion Promotion  The art or science of moving the image of your business into the forefront of a prospective customer’s mind. Promotional plan  Your promotional plan must be consistent with your image, your target market and your business mission. Copyright © 2011 Nelson Education Ltd.6-9

Promotional Mix Promotional mix  The key to connecting with customers  All the elements that you blend to maximize communication with your customer. Copyright © 2011 Nelson Education Ltd.6-10

Guerrilla Marketing & Service and Quality Guerrilla Marketing An important part of your promotional mix will be your “guerrilla marketing” promotional strategies. Service and Quality Your promotional cornerstones are customer service and quality. Copyright © 2011 Nelson Education Ltd.6-11

What is Guerrilla Marketing? Guerrilla Marketing   Unconventional methods of getting the customer’s attention at minimal cost. Copyright © 2011 Nelson Education Ltd.6-12

Customer Service and Quality Some Market Facts If you provide quality service, you can:   Charge up to 10 % more for your product or service   Increase sales growth   Gain new customers   Make word-of-mouth advertising work for you AND  Increase Profits! Copyright © 2011 Nelson Education Ltd.6-13

Promotional Mix 6-14 Direct Mail Discount Coupons Promotion in Cyberspace Branding Yourself Catalogues Paid media advertising Paid media advertising Point-of- purchase displays Working visibly Direct Mail Free Ink and Free Air Trade Shows Industry Literature Personal Selling Promotional Mix Money-Back Guarantees Business Cards

Promotional Strategy: Important Considerations 1. Select sales reps carefully   Your sales rep’s reputation becomes YOUR reputation.   Encourage and support your reps.   Insist on sales call reports.   Write monthly sales letters.   Encourage feedback. 2. Use courtesy as promotion   Impress upon your employees the importance of customer courtesy.   Reward employees for exceptional courtesy. Copyright © 2011 Nelson Education Ltd.6-15

Networking: A Source of Promotional Power Copyright © 2011 Nelson Education Ltd.6-16 Networking  Communicating through person- to-person channels in an attempt to sell or gain information.  Talking to people with the purpose of doing business.

Networking: A Source of Promotional Power Copyright © 2011 Nelson Education Ltd.6-17 Build Your Own Network  Complete Action Step 33  Everyone you know is your potential network  Build a couple of core groups  Be diverse & balance your talents.

1. 1.Network for a purpose Position yourself and contribute Build relationships Be persistent Be active Be organized Evaluate your networking and be prepared to change Add value Be considerate Listen. 10 Handy Rules for Networking Copyright © 2011 Nelson Education Ltd.6-18

Plan Ahead Plan ahead   If you fail to plan your promotion, you’re planning to keep your business a secret.   Brainstorm an ideal promotional campaign.   Be creative. Don’t discard any ideas. Copyright © 2011 Nelson Education Ltd.6-19

Promotion & Market Research   You can’t plan your promotional strategy without building on your market research.   You are selling benefits, not features.   Your target customers are interested in what your product or service will do for them.   Market research helps you clarify the benefits. Copyright © 2011 Nelson Education Ltd.6-20

Promotion & Market Research Develop your core benefit proposition:Develop your core benefit proposition:  A statement about the benefits of your product or service to your target market Do primary research. Ask your customers questions:Do primary research. Ask your customers questions:  find out how customers perceive your business.  listen to the answers and value the information. Copyright © 2011 Nelson Education Ltd.6-21

Your Promotional Plan: Attach a Price Tag Copyright © 2011 Nelson Education Ltd.6-22

Business Plan Business Plan Building Block Chapter 6 helps you prepare Part D of your Business Plan:  Marketing Strategy 2-23Copyright © 2011 Nelson Education Ltd.

q q What is your marketing strategy? q q What prices will you charge? q q What are your promotional mix, goals and objectives? q q What stimulates your target market to buy or use your product or service? q q What has your primary and secondary research told you about promoting your business? Copyright © 2011 Nelson Education Ltd.6-24 Your Business Plan Checklist for Your Business Plan

q q Develop a promotional strategy for your business. q q How will you cost out your promotional budget? q q Does your business have a unique twist for a possible publicity story? q q Why did you select the business name you are using? Copyright © 2011 Nelson Education Ltd.6-25 Your Business Plan Checklist for Your Business Plan

1-800-GOT- JUNK? Learn from the marketing strategies, pricing and promotional tactics of Brian Scudamore and his GOT-JUNK? success story Answer the Chapter 6 case study questions to learn:  What major market trends GOT JUNK took advantage of  What Brian learned about the purpose of competitive intelligence  How GOT JUNK benefited from guerrilla marketing  Which pricing strategy GOT JUNK used and why  Promotional tactics of the GOT JUNK team  Cyberspace promotional tactics GOT JUNK used Copyright © 2011 Nelson Education Ltd.6-26 Case Study