Pricing and Promotion: Project Contents Course: BUS 101 Lecturer: NNA

Pricing The amount of money charged for a product or service; the sum of the values that customers exchange for the benefits of having or using the product or service. Ch Copyright © 2011 Pearson Education Walmart, the world’s largest retailer, and Amazon.com, the world’s largest online merchant, are at war over the hearts and dollars of online shoppers. The weapon of choice? Prices. However, although price can be a potent

Customer Perceptions of Value Value-based pricing uses the buyers’ perceptions of value, not the sellers cost, as the key to pricing. Price is considered before the marketing program is set. Value –Based Pricing Copyright © 2011 Pearson Education

Customer Perceptions of Value Good-value pricing offers the right combination of quality and good service to fair price. Existing brands are being redesigned to offer more quality for a given price or the same quality for less price. Value-Based Pricing Good-value pricing example: Ryanair appears to have found a radical new pricing solution, one that customers are sure to love: Make flying free!

Customer Perceptions of Value Value-added pricing attaches value-added features and services to differentiate offers, support higher prices, and build pricing power. Value-Based Pricing: Value-Added Pricing Ch Copyright © 2011 Pearson Education Value-added pricing example: Rather than dropping prices for its venerable Stag umbrella brand to match cheaper imports, Currims successfully launched umbrellas with funky designs, cool colors, and value-added features and sold them at even higher prices.

Company and Product Costs Cost-based pricing involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk. Cost-Based Pricing Ch Copyright © 2011 Pearson Education

Company and Product Costs Setting prices based on competitors’ strategies, prices, costs, and market offerings. Competition-Based Pricing Pricing against larger, low-price competitors: Independent bookstore Annie Bloom’s Books isn’t likely to win a price war against Amazon.com or Barnes & Noble. Instead, it relies on outstanding customer service and a cozy atmosphere to turn booklovers into loyal customers.

The promotion mix or marketing communication mix is the specific blend of advertising, public relations, personal selling, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationships. The Promotion Mix Marketing Communication Mix Ch Copyright © 2011 Pearson Education

The Promotion Mix Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Broadcast Print Internet Outdoor Major Promotion Tools Ch Copyright © 2011 Pearson Education

The Promotion Mix Sales promotion is the short-term incentives to encourage the purchase or sale of a product or service. Discounts Coupons Ch Copyright © 2011 Pearson Education Major Promotion Tools

The Promotion Mix Public relations involves building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Press releases Sponsorships Special events Major Promotion Tools Ch Copyright © 2011 Pearson Education

The Promotion Mix Personal selling is the personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Sales presentations Trade shows Major Promotion Tools Ch Copyright © 2011 Pearson Education

The Promotion Mix Direct marketing involves making direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships—through the use of direct mail, telephone, direct-response television, , and the Internet to communicate directly with specific consumers. Catalog Telemarketing Kiosks Major Promotion Tools Ch Copyright © 2011 Pearson Education