📊 PRICING DEFINITIONS
Odd-Even Pricing
Pricing items slightly below whole numbers (e.g., $9.99) to make them seem cheaper.
Penetration Pricing
Setting a low initial price to quickly attract customers and gain market share.
Skimming Price Strategy
Setting a high initial price and gradually lowering it over time.
Price Elasticity
The degree to which demand changes when the price changes.
Prestige Pricing
Setting high prices to create an image of quality or luxury.
Cost-Plus Pricing
Determining price by adding a markup to the cost of the product.
❓ Key Concepts
Best strategy for price-sensitive customers
Penetration pricing—because lower prices attract them.
Best strategy when you have unique advantages
Skimming pricing—because customers are willing to pay more.
Last step in setting initial price
Finalizing the price after evaluating all factors.
💸 Costs
Fixed Costs
Expenses that do not change regardless of production level.
Variable Costs
Expenses that vary depending on production volume.
⚡ Other Pricing Concepts
Dynamic (On-Demand) Pricing
Adjusting prices in real time based on demand, competition, or other factors.
Demand
The quantity of a product consumers are willing and able to buy at a given price.
Status Quo (Competitive) Pricing
Setting prices based on what competitors are charging.
🎯 Pricing Objectives
Maximize Sales
Focus on increasing the number of units sold.
Maximize Profits
Focus on achieving the highest possible profit.
Maximize Market Share
Aim to capture the largest portion of the market.
Specific Return on Investment (ROI)
Set prices to achieve a targeted financial return.
Bundle Pricing
Offering several products together at a lower combined price than if purchased separately.
📢 PROMOTION DEFINITIONS
Promotion
Communication activities used to inform, persuade, and remind customers about a product.
Integrated Marketing Communication (IMC)
Coordinating all promotional tools to deliver a consistent message.
Public Relations (PR)
Managing a company’s image and relationships with the public.
🧰 Public Relations Tools
News Releases
Official statements given to media to share information.
Public Service Announcements (PSAs)
Messages promoting social good, often free of charge.
⚖️ Strengths & Weaknesses
Public Relations
Strengths → Credible, low cost
Weaknesses → Little control over how message is presented
Sales Promotion
Definition
Short-term incentives to encourage purchase.
Strengths → Immediate results
Weaknesses → Short-lived impact
Advertising
Definition
Paid, non-personal communication through media.
Strengths → Large audience, message control
Weaknesses → Expensive, easily ignored
Personal Selling (Professional Selling)
Definition
Direct interaction between a salesperson and a customer.
Strengths → Personalized, builds relationships
Weaknesses → Costly, time-intensive
🎯 Key Promotion Concepts
Lead Element for Mass Consumer Audiences
Advertising—reaches large groups efficiently.
Lead Element for Business-to-Business (B2B)
Personal selling—focuses on relationships.
Promotion Strategy in Growth Stage
Increasing advertising and sales promotions to build demand.
💵 Budgeting METHODS
Objective Task Approach
Setting budget based on specific goals and tasks needed to achieve them.
Pros → Accurate, goal-oriented
Cons → Time-consuming, complex
Competitive Comparison Budgeting
Setting budget based on competitors’ spending.
Percentage of Sales Budgeting
Allocating a fixed percentage of sales revenue to promotion.
📊 ADVERTISING TERMS
Touch Points
Any interaction between a customer and a brand.
Reach
The number of different people exposed to a message.
Frequency
The number of times a person sees the message.
🛍️ SALES PROMOTION TYPES
Trade Promotions
Incentives aimed at retailers or wholesalers to carry or promote products.
Consumer Promotions
Incentives aimed directly at consumers.
Rebate
A partial refund given after purchase.
Coupons
Certificates offering discounts on products.
Contests
Promotions where skill is required to win.
Sweepstakes
Promotions where winners are chosen randomly.
📞 SELLING TERMS
Cold Calling
Contacting potential customers without prior interaction.
Lead Generation
Identifying and attracting potential customers
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