Transcript 0176501800_263198

Pricing and Promoting
Your Product or Service
Maximize Advertising & Promotion
chapter
6
Prepared by
Ron Knowles
Algonquin College
& Jennifer Rouse Barbeau
Canadore College
Copyright © 2011 Nelson Education Ltd.
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Chapter Overview
Chapter 6 will:
chapter
6
 Price your product or service.
 Develop and refine your marketing
strategy.
 Refine your product features and
benefits.
 Develop a cost-effective promotional
strategy.
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Learning Opportunities
Understand how to price your product or
service.
Develop a pricing strategy.
chapter
6
Understand how to communicate with
target customers using both conventional
and guerrilla marketing techniques.
Get free publicity.
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Learning Opportunities
chapter
6
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.
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Marketing Strategy
Marketing strategy includes an analysis of
4 major elements
1.
2.
3.
4.
External market trends
Target market
Product uniqueness & competitive advantage
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.
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The Marketing Mix
The marketing mix is a blend of
Product offering
Pricing
Promotion
Place (location)
Some refer to this mix as the 4Ps of marketing
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Pricing Your Product
or Service
Four common methods
1. Competitor-based pricing (marketbased pricing)
2. Profit-based (cost plus) pricing
3. Industry norm or “keystone” pricing
4. Ceiling or premium pricing
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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
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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.
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Promotional Mix
Promotional mix
The key to connecting with
customers
All the elements that you
blend to maximize
communication with your
customer.
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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.
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What is
Guerrilla Marketing?
Guerrilla Marketing
Unconventional methods of getting
the customer’s attention at minimal
cost.
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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!
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Promotion
in
Cyberspace
Paid media
advertising
Promotional Mix
Working
visibly
Industry
Literature
Branding
Yourself
Trade
Shows
Business
Cards
Point-ofpurchase
displays
Promotional Mix
Catalogues
Discount
Coupons
Personal
Selling
Free Ink and
Free Air
Direct Mail
Money-Back
Guarantees
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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.
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Networking: A Source of
Promotional Power
Networking
 Communicating through personto-person channels in an attempt
to sell or gain information.
 Talking to people with the
purpose of doing business.
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Networking: A Source of
Promotional Power
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.
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10 Handy Rules
for Networking
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
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.
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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.
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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.
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Promotion
& Market Research
• 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:
find out how customers perceive your
business.
listen to the answers and value the
information.
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Your Promotional Plan:
Attach a Price Tag
Promotional Method
Yellow Pages
Window Signs
Point of Purchase Signs
Newspaper Ads
Fliers
Sales Promotions
Publicity
Personal Sales Calls
Freebies & Gifts
Networking
Thank You Letters
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Frequency
Annual Cost
Comment
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Business Plan
Building Block
Chapter 6 helps you prepare
Part D of your Business Plan:
Marketing Strategy
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Checklist for
Your Business Plan
 What is your marketing strategy?
 What prices will you charge?
 What are your promotional mix, goals and
objectives?
 What stimulates your target market to buy
or use your product or service?
 What has your primary and secondary
research told you about promoting your
business?
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Checklist for
Your Business Plan
 Develop a promotional strategy for your
business.
 How will you cost out your promotional
budget?
 Does your business have a unique twist for
a possible publicity story?
 Why did you select the business name you
are using?
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Case
Study
1-800-GOT- JUNK?
Learn from the marketing strategies, pricing and
promotional tactics of Brian Scudamore and his
1-800-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
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