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Lecture 3 support page
 Price & Promotion

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Sample slides from Lecture 3

Preview: Price & Promotion

Here's what's in store for you at our final lecture:

  • The opening takes us back to Marketing in the '50s.

  • After "Marketing in the News," we'll find out that price is more
    than what marketers charge for the product.

    Prepare to expand your thinking about all the challenges in meeting, beating, or retreating from the competition.

  • After lunch, we conclude the marketing mix with the 3 components
    of promotion (personal selling, advertising, PR, and sales promotion), focusing first on several resume myths, then why marketers waste at least 50˘ of every advertising dollar.

  • And before we head home, it's time to review how far we've come
    in 3 short lectures.

Read after the third lecture:
 Putting it into perspectiveResearch terms at your marketing glossary

Our third lecture discussed that price is more than
what marketers charge for a product or service.
Price is the sum of all the values that consumers
exchange for the benefits of having it.

And based on dynamic market uncontrollable variables
such as competition, economy, and availability
of resources, changes may have to be made in form,
place, time, and possession utilities. This results in a range
of value the consumer will pay: Too high > not worth it;
too low > what's wrong with it?

As a result, pricing is probably the most complex and risky parts of developing a marketing strategy.

An organization's pricing policies are tied to its goals and flexibility, from skimming (maximizing profits) to introductory/penetration policies required to enter and hopefully gain a share of the market. The Price Setting handout reveals the depth and scope of pricing decision.

We then reviewed the 3 major pricing objectives of profit, sales and status quo orientation. Status quo non-price pricing involves changing any of the other 3 Ps, but NOT the actual price.

Listing of major pricing strategies

We then looked at the components of price setting, starting with BEP (break even point > where selling price = all costs), and ROI (return on investment).

Margins (total profit within a given commercialization schedule) is the marketer's playground. while Mark-up is the percentage of the selling price to each channel member.

After lunch, we discovered that Promotion is merely telling the TM that what they want (product) is now available where they want it (place exposure), at a price that's within their set range of values (pricing and possession utility).

And we learned another acronym for TM when discussing media:
TA (target audience = total of persons or households reached).

An integrated promotional mix includes all 3 categories

Personal selling allows marketers to ask questions and give feedback that meets the specific needs of the customer.

Mass selling is a one-way flow of communication generally in electronic (radio/TV/Internet) or print (magazines/newspapers, outdoor/transit, direct mail) media.

And Sales Promotion includes all promotional activities that support personal and mass selling (brochures and PowerPoint sales presentations to coupons, displays, and sampling).

The 3 dimensions fuse into an overall promotional mix based on what's needed in the pre- purchase, and post-purchase phase of introduction. You have a handout of the strengths and weaknesses of major promotional elements.

Notice how all elements merge in the pre-purchase phase: see Lecture 3 slide #15 for more

Finally, we now appreciate that marketers use push strategies to promote (create transactions) products through a channel (between channel members and ultimately, between retailer and consumer).

Pull strategies help create or reinforce channels by promoting to the end user, who then asks for the product where they expect/want to acquire it. That channel member in turn goes to a supplier, makes a request, and so on until ultimately, a channel member makes contact with the marketer and completes a commercialization schedule.

While the diagram below shows a promotional pull campaign from marketer to consumer, pull campaigns can apply to specific channel members to fill or complete the flow.

Push applies to products already being distributed. Pull first creastes demand, then distribution

We concluded with an efficacious display of everything marketing is (the delivery of a standard of living = all activities involved, except making the product).

And we now better understand that while everyone is involved in marketing activities of some sort, not everyone is marketing-oriented.

Reviews of important marketing research slides, why marketing plans fail,
and a review of place strategy

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Support stuff

More quick links to other stuff that's not on this page:

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More on promotional pull strategies...

A “pull” selling strategy is one that requires consumer promotion to build consumer demand for a product. 

If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers, thus creating a channel that does not already exist.

Fimbles exposure at retail began as a "pull" campaign to create demandA good example of this is the heavy advertising and promotion of children's’ toys on television.

A recent British promotional campaign on the BBC involved Fimbles, a show aimed at 2-4 year-olds. The BBC agreed to a deal with toy maker Fisher-Price to market products based on the show.

BBC achieved phenomenal sales of these toys. The demand created from broadcasting of the Fimbles and a major advertising campaign “pulled” demand from children and encouraged retailers to stock Fimbles toys in their stores for the following Christmas season. (The key here is that availability [exposure] of these toys was not available until demand was created.)

 "Pull" also works when the service provider promotes to the end user, pulling them towards another channel member.

In this case, the manufacturer must list the retailers where possession utility takes place.

These types of campaigns rely on the customer to take action.

And though you can target a particular audience through a well-honed media and copy thrust strategy, you have less control over who responds. 

Social marketing is a great example of pull campaigns when any group begins to communicate up the channel about what it likes/dislikes, and asks the message recipient to take action so as to effect change.

If this service is not yet available, this ad is a "pull" campaign; otherwise, it's "push"

In this ad, a nonprofit group wants you to call them to find out how to persuade
elected officials to pass local ordinances to help the disabled.

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On the topic of resumes...

Steve gets requests to review copies of generic resumes from his students' relatives
and friends in search of marketing jobs.

 

While he gets requests from organizations seeking candidates for marketing positions, he only provides names of those he knows.

As you recall from our third lecture, there is no such thing as a generic job. That's why Steve doesn't provide generic feedback on resumes of those he does not know.

That said, he does provide feedback for his students, but only when they have identified a specific job for which they are qualified, researched the one person with the authority to hire them, and personalized the resume for the benefit of the reader.

That doesn't mean you can't help your in-laws or good buddies. Educate them on the value of the marketing concept:

 You've got about 15 seconds to make a good first imporession

The goal of a good resume
is to keep from being rejected.

  1. Remind them that the goal of any job search is to find an organization
    that has a need for their talents
    > find an unmet need

  2. Once identified, tell them to find out as much as they can about the decision maker
    who has the authority to hire them    . Then figure out a way to get face-to-face
    with that person. In short, network.

    If a resume must be written, personalize it for THAT individual based on his/her needs
    and interests
    > allocate resources

    And deliver it in person.

  3. In many cases, a resume isn't needed until after the job has been offered.
    > make a profit (the job offer)

Steve applauds you for wanting to help your friends.

Towards furthering your own marketing-oriented career:

  • Prepare your Word master template (all the absolute and comparative criteria
    that best positions you for various jobs). Each listing should include quantitative data/results—that includes both experience and education (specific research papers
    or prescriptive analyses -- what was accomplished!)

  • After you identify a specific position and the person who can hire you,
    refine/edit your master template with
    -- a job objective that points to your new business card
    -- information that's prioritized, based on the interest of the reader
    -- application of the Rule of 3s for bullet points (use the fourth to list "Others:")
    -- a psychographic profile of shared activities, interests, opinions
       that are shared or of interest by the reader/prospective employer

  • Ask for/get personalized feedback from Steve:
     Send Steve the prototype/refined resume for feedback. In your email message,
    tell him what you know about the reader.

Research indicates that by following these tips, you will be one of the top 3 candidates
for any position for which you meet the absolute criteria...

...unless it's already been filled through the back door.

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