MGT 3300 Note 13

MGT 3300 Note 13 - Marketing management Sales promotion...

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Marketing management June 17, 2011
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Sales promotion Includes all of those items that aren’t mass media or personal selling Designed to compliment the campaign Very creative and very diverse Hard to quantity due to the diversity of options Can be deployed quickly Must be managed very carefully because a problem can cause bad results with customers
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Sale promotion Activities or materials that act as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or customers Free samples Games Rebates Sweepstakes Contests
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Sales promotion Two types Trade Orientated Typically aimed at people within the distribution channel hoping to boost sales Trade shows, ad/promo allowances, cooperative advertising, training, giveaways, contests, bonuses Consumer Orientated Aimed at the end users/samples Coupons, contest, giveaways, trail sizes/samples, POP materials, product placement
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pricing The value paid for a product in a marketing exchange Price does not always take the form of money paid Barter: The oldest form of trade, money may not be involved Not always called price. Could be free, commission, deposit, rent, tuition
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Competitive environment Pricing competition emphasizes the prices an issue and matching or beating competitors’ prices Flexibility is a major advantage To compete effectively, firm must be the low-cost seller – price war - danger Non price competition emphasizes factors other than price to distinguish a product from competing brands Can help a firm build customer loyalty
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Analysis demand For most products, there is an inverse relationship between price and demand The Demand Curve A graph of the quantity of products expected to be sold at various prices if other factors remain constant
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Factors affecting elasticity of Demand Availability of substitutes Can consumers replace coffee with tea or caffeine? Amount of income available With an increase in price, will the consumer on a fixed income be forced to buy less? Time Over time will a consumer cutback/quit smoking if price of cigarettes goes up?
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Marginal analysis (ch19) Examines what happens to a firm’s costs and revenues when production or sales changes by one unit Fixed Costs: Do not vary with changes in the number of units produced or sold Average Fixed Cost: The fixed cost per unit produced Variable Costs: vary with changes in the number of units produced or sold Average Variable Cost: the variable cost per
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Break-even analysis Break-Even Point
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MGT 3300 Note 13 - Marketing management Sales promotion...

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