2. ENPI MODULE 5 CREATING A PROMOTION PLAN

3. PRICING A PRODUCT/SERVICE Consider costs involved in creating your products/services: –Fixed costs: rent, utilities, insurance, etc –Variable costs: cost of goods sold, promotion, delivery, etc

4. SELECT A PRICING STRATEGY Cost Based Pricing –Consider product costs and profit goals –Calculate how much it costs to make –Calculate a related “fixed cost” to apply –Add a percentage to create a profit (your mark up) –You have your price!

5. SELECT A PRICING STRATEGY Demand Based Pricing –Determine what customers are willing to pay –Add a percentage to create a profit (your mark up) –You have your price! –This strategy is used in very few situations

6. SELECT A PRICING STRATEGY Competition Based Pricing –Determine what competition is charging a customer –Decide if you will be below, in line with, or above that price –You have your price! –This strategy is used if your main focus is having a competitive price

7. TYPES OF PROMOTIONAL TOOLS: Advertising: Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Public Relations: Any activity designed to create a favorable image toward a business, its products or its policies. Personal Selling: Any form of direct contact between a salesperson and a customer. Sales Promotion: Short-term incentives that encourage a customer to buy a product

8. EVALUATING PROMOTIONAL TOOLS: To be successful, promotional efforts should follow the AIDA approach: Increase awareness (A) Attract Interest (I) Arouse desire (D) Initiate action (A)

9. EVALUATING PROMOTIONAL TOOLS: Advertising Sender’s control over the communicationLow Amount of feedbackLittle Speed of feedbackDelayed Direction of message flowOne way Speed in reaching large audiencesFast Message FlexibilityNone Mode of communication Indirect/Impersonal

10. EVALUATING PROMOTIONAL TOOLS: Personal Selling Sender’s control over the communicationHigh Amount of feedbackMuch Speed of feedbackImmediate Direction of message flowTwo way Speed in reaching large audiencesSlow Message FlexibilityCustomized Mode of communicationDirect

11. EVALUATING PROMOTIONAL TOOLS: Sales Promotion Sender’s control over the communicationModerate to low Amount of feedbackLittle to moderate Speed of feedbackVaries Direction of message flowOne way Speed in reaching large audiencesFast Message FlexibilityNone Mode of communicationIndirect

12. EVALUATING PROMOTIONAL TOOLS: Public Relations Sender’s control over the communicationModerate to low Amount of feedbackLittle Speed of feedbackDelayed Direction of message flowOne way Speed in reaching large audiencesFast Message FlexibilitySome Mode of communicationIndirect

13. HOW TO BUILD AN EFFECTIVE PROMOTIONAL MIX/CAMPAIGN?: Strategies should complement one another Advertising should create awareness Public relations should create positive image Sales promotion should stimulate sales Selling should complete sale Mix elements MUST BE coordinated