Test 3 marketing 101 Sac State Flashcards
(30 cards)
Promotional mix
advertising, personal selling, sales promo, publicity
advertising
any form of non-personal selling through established media
advertising advantages
o inexpensive on a cost per household reach basis
o can do things quickly
o good visual display
advertising disadvantages
o expensive
o wasted coverage
o spill out – say its for woman and men hear it
o a lot of interference – DVR, bathroom
o you cant close the sale – unless its internet
personal selling
any paid form of promotion involving direct contact between the buyer and seller including their agents
personal selling advantages
o adapt the message
o can close the sale
personal selling disadvantages
o most expensive every $1 on advertising you will spend $3 on personal selling
o fluctuating quality
o hard to get good sales people
sales promo
(catch all) – any paid form of promotion other than advertising and personal selling - includes…coupons, special packages
sales promo advantages
o can be creative
o inexpensive
sales promo disadvantages
o not strong enough to stand on its own
o limited life span – 3-6 months, hard to eliminate
o easy to duplicate
publicity
any non paid form of promotion – cant be focal point of promo
publicity advantages
o can be inexpensive
o It can have great credibility
publicity disadvantages
o can be very expensive
o you never know what you’re going to get – could be bad, good, or nothing
o You don’t know the timing – don’t know when it is going to come out
Goals in promotion
a. increase awareness
b. increase sales (key- most important)
c. increase market share (very important to company) companies with higher market share can charge more for share
d. keep or maintain market share – as it goes higher and higher its harder to keep it going (realistic goal)
e. ward off competition
f. respond to competitor claims – gives more attention to claim 9could be bad)
g. liquidate merchandise
h. change image of company or product
general principals of promotion
a. decay constant – sales of other products decline at a constant rate
b. thresholds in promotion
c. timing is all important – timing within the year, timing within the day,
Promotion
- Goals in promotion
- what methods
- what is budgets
- timing of promotion
- what is your message
every product needs to be promoted
- How
- How much and
- when
De-market profit
o Price the product higher to reduce demand for a while
o Higher charges in peak usage times - smud and pg&e
desensitizing customers to price
o Price jump after years of having the product available
o Raise prices over time –
o Desensitizing price over time make it go up and down all the time – gas – doesn’t work for most products
stabilize the market
price at competitive level
o Don’t run the risk of screwing up price
Cost base pricing
problem is you come up with strange prices
o Cost plus pricing – cost +(some% x cost)= price or 1.00 + (.40% x 1.00)=1.40
o Mark down on price – price =[ % x price – price = cost]
• 1.00 = 20% (.20) - 1.00 = pay .80
• set the price and profit margin then figure out the what you’re willing to pay for product
o return on investment pricing
• Q = 100
• VC = $20 = $2000
• FC = 500 = 500/2500+1250=3750/100
• Profit = $37.50
o problem with CBM - all cover cost but don’t consider demand
Demand base pricing
elasticity of demand – doesn’t take cost into consideration. o E>1 = elastic o E<1 = inelastic o E = 1 = unitary = max revenue o R = P x Q = [revenue = price x quantity] o BEP(break even point) = o Total fixed price/price(unit)- VC(unit)
psychology in pricing
o favorite # in pricing – 8!!
Prestige pricing
o If you want a high status product you have to pay/charge a high price
o Whole number pricing – you don’t charge 7.99 you charge 9.00
o odd, even pricing – even whole #, odd is .99
