Pricing above prevailing market prices for similar products to take advantage of the common assumption that higher price means higher quality 2. Pricing below market prices while offering a product of comparable quality to higher-priced competitors 3. Pricing at or near market prices
PRICING NEW PRODUCTS When introducing new products, companies must often choose between very high prices or very low prices. Price skimming: setting an initially high price to cover new product costs and generate a profit Penetrating pricing: setting an initially low price to establish a new product in the market This is the best strategy when introducing a product which has or expects to have competitors very quickly Pricing Tactics Price lining: setting a limited number of prices for the certain categories of products Psychological pricing: a pricing tactic that takes advantage of the fact that consumers do not always respond rationally to stated prices e.g, odd even pricing Discounts: a price reduction offered as an incentive to purchase PROMOTING PRODUCTS AND SERVICES Promotion: aspect of the marketing mix concerned with the most effective techniques for communicating information about and selling a product ultimate objective of promotion is to increase sales make consumers more knowledgeable about product fea- tures, and to persuade consumers to prefer their brand over others Promotional Strategies Push strategy: a promotional strategy in which a company aggressively pushes its products through wholesalers and retailers, which persuade customers to buy it Pull strategy: a promotional strategy in which a company appeals directly to customers, who demand the product from retailers, which demand the product from wholesalers Advertising “ pulls ,” while personal selling “ pushes .” industrial products often use a push strategy, while makers of consumer products often use a pull strategy
The Promotional Mix Promotional mix: The combination of tools used to promote a product ADVERTISING PROMITIONS AND MEDIA Advertising: paid, non-personal communication by which an identified sponsor informs an audience about a product Advertising Media Advertising media: The specific communication device- television, radio, newspapers, direct mail, magazines, outdoor, mobile- used to carry a firm’s advertising message to potential customers PERSONAL SELLING, SALES PROMOTIONS, DIRECT (OR INDIRECT) MARKETING, PUBLIC RELATIONS, AND PUBLICITY Personal Selling Personal selling: promotional tool in which a salesperson communicates one to one with potential customers Personal selling is the most expensive form of promotion per contact, because presentations are generally made to one or two individuals at a time
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