Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART Understanding Principles of Marketing

Copyright ©2003 Prentice Hall, Inc Chapter 11 Pricing, Promoting, and Distributing Products

Copyright ©2003 Prentice Hall, Inc “If there is no price to be paid, it is also not of value” ~Albert Einstein

Copyright ©2003 Prentice Hall, Inc Key Topics Pricing objectives, price-setting tools, and pricing strategies and tactics Promotion and the promotion mix Personal selling and sales promotion Channels of distribution Retailing and retail stores The physical distribution process

Copyright ©2003 Prentice Hall, Inc Pricing to Meet Business Objectives Profit maximizing objectives Market share objectives

Copyright ©2003 Prentice Hall, Inc Price Setting Tools Cost Oriented Pricing Breakeven Analysis

Copyright ©2003 Prentice Hall, Inc Pricing Strategies Pricing existing products Pricing new products Price skimming Penetration pricing Pricing e-commerce products Dynamic vs. fixed

Copyright ©2003 Prentice Hall, Inc Pricing Tactics Price lining Psychological pricing Odd-even pricing Discounts

Copyright ©2003 Prentice Hall, Inc Promotional Objectives Communicate information Position products POSITIONING An identifiable product image in the minds of consumers POSITIONING Add value Control sales volume

Copyright ©2003 Prentice Hall, Inc The Promotional Mix The combination of tools used to promote a product Advertising Personal Selling Sales Promotions Publicity & Public Relations

Copyright ©2003 Prentice Hall, Inc Promotion and the Buyer Decision Process Most Effective Promotional Tool Stages of the Consumer Buying Process Problem (Need) Recognition Information Seeking Evaluation of Alternatives Postpurchase Evaluation ADVERTISING Publicity ADVERTISING Personal Selling PERSONAL SELLING SALES PROMOTION Personnel Selling ADVERTISING Personal Selling Purchase Decision

Copyright ©2003 Prentice Hall, Inc Advertising Promotions Advertising Media Communication devices for carrying a seller’s message to potential customers Newspapers25% Television22% Direct mail18% Radio7% Magazines5% Outdoor1%

Copyright ©2003 Prentice Hall, Inc $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Network Television Ad Expenditures (millions) Top 10 Network TV Advertisers General Motors Proctor & Gamble Johnson & Johnson Philip Morris Ford Pfizer McDonald's Tricon Globa Restaurants Daimler- Chrysler WorldCom

Copyright ©2003 Prentice Hall, Inc Internet Advertising High Potential, But With Limitations Targeted advertising is key Data Mining Data Warehousing

Copyright ©2003 Prentice Hall, Inc Personal Selling One-on-One Interaction With Potential Buyers Order Processing Creative Selling Missionary Selling Telemarketing Using the telephone to perform personal selling Telemarketing

Copyright ©2003 Prentice Hall, Inc Sales Promotions Short-term Promotional Activity Coupons Point-of-purchase displays Premiums Trade shows Contests Samples Goal: To stimulate consumer buying or cooperation from distributors and sales agents 50% OFF

Copyright ©2003 Prentice Hall, Inc Publicity and Public Relations Publicity When information about a company or product is communicated to the public via mass media PRO Free to the company PRO Free to the company Public Relations Company-influenced publicity CON The company has no control CON The company has no control

Copyright ©2003 Prentice Hall, Inc Distribution Terms Distribution Channel Distribution Mix Intermediary Wholesaler Retailer Agent/broker

Copyright ©2003 Prentice Hall, Inc Channels of Distribution ProducerAgent/BrokerWholesalerRetailerUsers Consumer Channel 1 ConsumerChannels Channel 2 Consumer Channel 3 Consumer Channel 4 Consumer Channel 5 Consumer/ Business Consumer/BusinessChannel Channel 6 Business Channel 7 Business Channel 8 Business BusinessChannels

Copyright ©2003 Prentice Hall, Inc Merchant Wholesaler Wholesaling E-intermediaries Syndicated Sellers Shopping Agents Business-to-Business Brokers

Copyright ©2003 Prentice Hall, Inc Retailing Product Line Retailers Department stores Supermarkets Specialty stores Bargain Retailers Discount houses Catalog showrooms Factory outlets Warehouse clubs Convenience stores

Copyright ©2003 Prentice Hall, Inc Nonstore and Electronic Retailing Direct Response Retailing Mail order (or catalog marketing) Telemarketing Direct selling Electronic Retailing Electronic storefront E-catalogs Interactive marketing

Copyright ©2003 Prentice Hall, Inc Physical Distribution Warehousing Operations Public and private warehouses Transportation Operations Modes E-customer satisfaction Distribution can be a competitive advantage!

Copyright ©2003 Prentice Hall, Inc Chapter Review Identify pricing objectives, strategies, and tactics Discuss promotional objectives, the promotional mix, and advertising media Describe personal selling and the various types of sales promotions Identify the channels of distribution and the differences between merchant wholesalers and agents/brokers

Copyright ©2003 Prentice Hall, Inc Chapter Review Identify the different types of retailing and retail stores Describe the major activities in the physical distribution process