Joel Poor Marketing 3000 Exam 3

Pricing

used to determine value of something that can be exchanged for satisfaction/utility

Pricing Objectives

Financials-the need to survive or make a profit

Competitiveness- being able to compete with other companies price wise

Price Sensitivity

How sensitive a target market is to price, is demand elastic or inelastic

Inelastic Demand

Changes in price do not drastically affect consumption

Elastic Demand

Consumers are highly affected by changes in price

Price Skimming

When demand is inelastic, top level products may be raised in price to get more profit from high end buyers

Penetration Method

Pricing lower than competition to gain market share

Quantity Discounts

Discount for buying large quantities

Cash Discount

Discount for paying in cash or paying very soon after purchase

Noncumulative Quantity Discount

Buy 3 get one free

Cumulative Discount

Buy 10 over time and get your 11th free

Functional Discount

Giving a discount to employees

Trade-In Allowances

Price reductions for turning in old products at the time of purchase

Customer Segmented Pricing

Different customers pay different prices for same product

Product Form Pricing

Different Versions of products are priced differently but not based off of costs

Time Pricing

Seasonal, or otherwise time based pricing

Location Pricing

Products priced differently based on location

FOB Origin Pricing

Customer pays for shipping and product

Countertrade

Barter between products- not common

Transfer prices

Prices calculated using the cost to transfer from HQ to local branch

System Prices

Bundling goods together so it may benefit the seller (Computer Systems)

Promotion

Coordination of all seller parts to promote a good/service

Promotional mix

Basic tools used to accomplish promotional goals

Advertising

Sales Promotion

Public Relations/Publicity

Personal Selling

Marketing Mix/ Four P's

Product, Prices, Promotion, Place

Advertising. Pros and Cons

Paid form of impersonal communication by an identified sponsor.

Pros: Cost effective, can be used with other tools,

Cons: Cost, Difficult to find how effective, High Clutter

Sales Promotion. Pros and Cons

Pros: extra incentive for consumers to buy, appeals to price sensitive consumers, can be measured

Cons: Clutter, promo wars, only buying while on sale

Public Relations/ Publicity. Pros and Cons

Pros: credibility of publicity, low cost, word of mouth

Cons: Lack of control, can be good or bad

Personal Selling. Pros and Cons.

Pros: direct, message can be adapted, immediate feedback

Cons: can be expensive difficult to be consistent

Cross Marketing

Marketing that involves movies/people/events

Trade Fairs

more popular outside of the US

Advertising Objectives: Short Term

Direct, Aka buy now and save

Advertising Objectives: Long Term

Indirect, "introducing the next generation of gadgets"

Advertising Budgeting: "All I Can Afford"

used by small businesses- either % of profits or whatever is left after expenses

Advertising Budgeting: "Percent of Sales"

popular with small firms, worst method bc could lead to large losses

Advertising Budgeting: "Competitive Parity"

Looking at other advertisers spending and does the same

Advertising Budgeting: "Objective and Task Approach"

Objectives are set and advertising tasks are defined so a precise amount can be found

Media Fragmentation

When the target audience is split over many platforms

Critical Thinking Customers

Customers who value authenticity and facts over hype

Reach

The number of potential customers reached

Frequency

How often target audience sees advertisement

Impact

Reach*Frequency

Types of Advertisement Media: "Internet" Pros/Cons

Pros: timely, interactive, low cost, high info, measurable results

Cons: Low attention, clutter, Intrusive, short lived

Types of Advertisement Media: "Outdoor" Pros/Cons

Pros: No clutter, flexible, repeat exposure, inexpensive

Cons: Distractions, Not selective, creative limitations

Types of Advertisement Media: "Magazines" Pros/Cons

Pros: pass along, High attention

Cons: Long prep time, wasted circulation, no guarantee of position

Types of Advertisement Media: "Radio" Pros/Cons

Pros: Low cost, mass use, selective audiences, low income target

Cons: Low attention, distractions, audio only, short life

Types of Advertisement Media: "Television" Pros/Cons

Pros: Attention Getting

Cons: Expensive, Non selective, short life

Types of Advertisement Media: "Mail" Pros/Cons

Pros: Selective, Flexible, personalization, clutter

Cons: High cost, Junkmail

Types of Advertisement Media: "Newspapers" Pros/Cons

Pros: Locality, flexible, timely

Cons: short life, nonselective, expensive

Customer Promotion Tools

Samples, coupons, rebates, contests, price pack, premiums, point of purchase

Customer Promotion Tools (Price Pack)

savings on multiple things bundled together

Customer Promotion Tools (Premiums)

Providing a good offered at low cost/free to buy a product

Customer Promotion Tools (Point of Purchase)

displays or demonstrations at the place of purchase

Trade Promotion Tools

Tools used for promotion between businesses:

Discount off list price

Allowance

Free Goods

Push Money

Trade Promotion Tools (allowance)

so much off a product in exchange for specific promotion

Trade Promotion Tools (Free Goods)

Free goods for those who buy a certain quantity

Push Money

Cash or gifts to dealers to push certain goods

Cost of getting a new customer vs keeping one

4-10 times as expensive to get a new customer vs keep an old one

CLV (Customer Lifetime Value)

used to measure how much a customer is bought into seller

Traditional Sales Method B2B

Prospecting

PreApproach

Approach

Presentation

Follow-Up

Traditional Sales Method B2B (Prospecting)

locating and qualifying prospects

Traditional Sales Method B2B (Pre-Approach)

planning sales call

Traditional Sales Method B2B (Approach)

making a good first impression

Traditional Sales Method B2B (Presentation)

presenting the value proposition, uncovering/handling objections

Traditional Sales Method B2B (Follow Up)

checking in with customer after order

Selling Attitude (what is most important)

trust is dependent on the expertise and intent of the seller. They should want to help you

Consulting Process

Learning

Analyzing/Synthesizing

Teaching

Consulting Process (Learning)

get out all potential issues

prioritize issues

collect evidence/ impact

explore context

Consulting Process (Analyzing/Synthesizing)

Making sure offerings are needed

creating useful solutions

Consulting Process (Teaching)

challenging a customers assumptions on why they may not need the product and correcting

Viral Media Commonalities

Providing something for free

Exploiting existing networks

Generating emotional responses