3The amount of money charged for a product or service Generally price is..The amount of money charged for a product or serviceSo how are Prices Set ???
4Historically…Prices were usually set by buyers and sellers bargaining with each other. BUT NOW ...
5Price setting is based on… Internal Factors1. Marketing objectives2. Marketing mix strategy3. Costs4. Organizational considerationsExternal Factors1. Nature of the market and demand2. Competition3. Other environmental factors (economy, resellers, government)Pricing Decisions
6Internal Factors: Objectives SurvivalLow Prices to Cover Variable Costs andSome Fixed Costs to Stay in Business.Current Profit Maximization Choose the Price that Produces the Maximum Current Profit, Etc.MarketingObjectivesMarket Share LeadershipLow as Possible Prices to Becomethe Market Share Leader.Product Quality LeadershipHigh Prices to Cover HigherPerformance Quality and R & D.
10Price setting is based on… Internal Factors1. Marketing objectives2. Marketing mix strategy3. Costs4. Organizational considerationsExternal Factors1. Nature of the market and demand2. Competition3. Other environmental factors (economy, resellers, government)Pricing Decisions10
13Price setting is based on… Internal Factors1. Marketing objectives2. Marketing mix strategy3. Costs4. Organizational considerationsExternal Factors1. Nature of the market and demand2. Competition3. Other environmental factors (economy, resellers, government)Pricing Decisions13
15Case Study: Iron Industry Production of 1 ton costs: L.E 1,500Transportation costs: L.E 200Handling costs: L.E 300Market price: L.E 3,500Demand >> SupplyProfit maximization strategyMonopolyPrice control from the government15
23“Distribution Channel" can be defined as "all the routes through which a product can pass between its point of production and consumption"
24Marketing Channel Functions Physical distributionTransporting and storing goodsFinancingAcquiring and using funds to cover the costs of the distribution channelRisk takingAssuming some commercial risks by operating the channel (e.g. holding stock)InformationGathering market research data- important for marketing planningMatchingAdjusting the offer to fit a buyer's needs, including grading, assembling and packagingNegotiationReaching agreement on price and other terms of the offer
25Number of Channel Levels ProducerConsumerProducerRetailerConsumerProducerWholesalerConsumerRetailer
26Channel 1 Called a direct-marketing channel Has no intermediary levels It consists of a manufacturer selling directly to consumersProducerConsumer
27Channel 2 Contains one intermediary level. ProducerRetailerConsumerContains one intermediary level.In consumer markets, this level is typically a retailer.For example, the makers of televisions, cameras, furniture, major appliances and many other products sell their goods directly to large retailers, which then sell the goods to final consumers.
28Channel 3ProducerWholesalerRetailerConsumerContains two intermediary levels , a wholesaler and retailer.This channel is often used by manufacturers of food, drugs, hardware and other products
29Different forms of distribution channels FranchiseAgent
31Characteristics of intermediaries You must consider:Company PlanMarketing strategy Financial situationThe number of its outletsChoice of its transportation methodCharacteristics of intermediariesTheir abilities to handle promotion, customer contact, storage and creditAbility to deliver the product with required QualityCompetitors' channelsBetter be similar to competitors channelsUsing the same channel expected by the customers
33Marketing Communications The means by which firms attempt toinform, persuade, and remindconsumers, directly or indirectly, aboutthe products and brands they sell.
34Communications Environment Market Fragmentation Led toMedia FragmentationMarketers Have ShiftedAway From MassMarketingLess BroadcastingTwo Factorsare Changing the Face of Today’sMarketing Communications:Improvements inInformation TechnologyHas Led toSegmented MarketingMore Narrowcasting
35Integrated Marketing Communications With Integrated Marketing Communications (IMC), the Company Carefully Integrates and Coordinates Its Many Communications Channels to Deliver a Clear, Consistent, and Compelling Message About the Organization and Its Product or Service.
41Designing the Communications Message strategyCreative strategyMessage sourcePersonal communication channelsNonpersonal communication channelsIntegration
42Setting the Promotion Mix AdvertisingReach Many Buyers, Repeat Message Many Times, Impersonal, ExpensivePersonalSellingPersonal Interaction, Relationship Building, Most Expensive Promo ToolSalesPromotionWide Variety of Tools, Rewards Quick Response, Efforts Short-LivedPublicRelationsVery Believable, Dramatize a Company or ProductDirectMarketingNonpublic, Immediate, Customized, Interactive