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ENPI MODULE 5

ENPI MODULE 5. CREATING A PROMOTION PLAN. PRICING A PRODUCT/SERVICE. Consider costs involved in creating your products/services: Fixed costs: rent, utilities, insurance, etc Variable costs: cost of goods sold, promotion, delivery, etc. SELECT A PRICING STRATEGY. Cost Based Pricing

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ENPI MODULE 5

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  1. ENPI MODULE 5 CREATING A PROMOTION PLAN

  2. PRICING A PRODUCT/SERVICE • Consider costs involved in creating your products/services: • Fixed costs: rent, utilities, insurance, etc • Variable costs: cost of goods sold, promotion, delivery, etc

  3. SELECT A PRICING STRATEGY • Cost Based Pricing • Consider product costs and profit goals • Calculate how much it costs to make • Calculate a related “fixed cost” to apply • Add a percentage to create a profit (your mark up) • You have your price!

  4. SELECT A PRICING STRATEGY • Demand Based Pricing • Determine what customers are willing to pay • Add a percentage to create a profit (your mark up) • You have your price! • This strategy is used in very few situations

  5. SELECT A PRICING STRATEGY • Competition Based Pricing • Determine what competition is charging a customer • Decide if you will be below, in line with, or above that price • You have your price! • This strategy is used if your main focus is having a competitive price

  6. TYPES OF PROMOTIONAL TOOLS: • Advertising: Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. • Public Relations: Any activity designed to create a favorable image toward a business, its products or its policies. • Personal Selling: Any form of direct contact between a salesperson and a customer. • Sales Promotion: Short-term incentives that encourage a customer to buy a product

  7. EVALUATING PROMOTIONAL TOOLS: • To be successful, promotional efforts should follow the AIDA approach: • Increase awareness (A) • Attract Interest (I) • Arouse desire (D) • Initiate action (A)

  8. EVALUATING PROMOTIONAL TOOLS: Advertising • Sender’s control over the communication Low • Amount of feedback Little • Speed of feedback Delayed • Direction of message flow One way • Speed in reaching large audiences Fast • Message Flexibility None • Mode of communication Indirect/Impersonal

  9. EVALUATING PROMOTIONAL TOOLS: Personal Selling • Sender’s control over the communication High • Amount of feedback Much • Speed of feedback Immediate • Direction of message flow Two way • Speed in reaching large audiences Slow • Message Flexibility Customized • Mode of communication Direct

  10. EVALUATING PROMOTIONAL TOOLS: Sales Promotion • Sender’s control over the communication Moderate to low • Amount of feedback Little to moderate • Speed of feedback Varies • Direction of message flow One way • Speed in reaching large audiences Fast • Message Flexibility None • Mode of communication Indirect

  11. EVALUATING PROMOTIONAL TOOLS: Public Relations • Sender’s control over the communication Moderate to low • Amount of feedback Little • Speed of feedback Delayed • Direction of message flow One way • Speed in reaching large audiences Fast • Message Flexibility Some • Mode of communication Indirect

  12. HOW TO BUILD AN EFFECTIVE PROMOTIONAL MIX/CAMPAIGN?: • Strategies should complement one another • Advertising should create awareness • Public relations should create positive image • Sales promotion should stimulate sales • Selling should complete sale • Mix elements MUST BE coordinated

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