2. Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART 4........................ Understanding Principles of Marketing

3. Copyright ©2003 Prentice Hall, Inc. 11 - 2 Chapter 11 Pricing, Promoting, and Distributing Products

4. Copyright ©2003 Prentice Hall, Inc. 11 - 3 “If there is no price to be paid, it is also not of value” ~Albert Einstein

5. Copyright ©2003 Prentice Hall, Inc. 11 - 4 Key Topics Pricing objectives, price-setting tools, and pricing strategies and tactics Promotion and the promotion mix Personal selling and sales promotion Channels of distribution Retailing and retail stores The physical distribution process

6. Copyright ©2003 Prentice Hall, Inc. 11 - 5 Pricing to Meet Business Objectives Profit maximizing objectives Market share objectives

7. Copyright ©2003 Prentice Hall, Inc. 11 - 6 Price Setting Tools Cost Oriented Pricing Breakeven Analysis

8. Copyright ©2003 Prentice Hall, Inc. 11 - 7 Pricing Strategies Pricing existing products Pricing new products Price skimming Penetration pricing Pricing e-commerce products Dynamic vs. fixed

9. Copyright ©2003 Prentice Hall, Inc. 11 - 8 Pricing Tactics Price lining Psychological pricing Odd-even pricing Discounts

10. Copyright ©2003 Prentice Hall, Inc. 11 - 9 Promotional Objectives Communicate information Position products POSITIONING An identifiable product image in the minds of consumers POSITIONING Add value Control sales volume

11. Copyright ©2003 Prentice Hall, Inc. 11 - 10 The Promotional Mix The combination of tools used to promote a product Advertising Personal Selling Sales Promotions Publicity & Public Relations

12. Copyright ©2003 Prentice Hall, Inc. 11 - 11 Promotion and the Buyer Decision Process Most Effective Promotional Tool Stages of the Consumer Buying Process Problem (Need) Recognition Information Seeking Evaluation of Alternatives Postpurchase Evaluation ADVERTISING Publicity ADVERTISING Personal Selling PERSONAL SELLING SALES PROMOTION Personnel Selling ADVERTISING Personal Selling Purchase Decision

13. Copyright ©2003 Prentice Hall, Inc. 11 - 12 Advertising Promotions Advertising Media Communication devices for carrying a seller’s message to potential customers Newspapers25% Television22% Direct mail18% Radio7% Magazines5% Outdoor1%

14. Copyright ©2003 Prentice Hall, Inc. 11 - 13 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Network Television Ad Expenditures (millions) 888 621 467 383 365 297 288 286 274 Top 10 Network TV Advertisers General Motors Proctor & Gamble Johnson & Johnson Philip Morris Ford Pfizer McDonald's Tricon Globa Restaurants Daimler- Chrysler WorldCom

15. Copyright ©2003 Prentice Hall, Inc. 11 - 14 Internet Advertising High Potential, But With Limitations Targeted advertising is key Data Mining Data Warehousing

16. Copyright ©2003 Prentice Hall, Inc. 11 - 15 Personal Selling One-on-One Interaction With Potential Buyers Order Processing Creative Selling Missionary Selling Telemarketing Using the telephone to perform personal selling Telemarketing

17. Copyright ©2003 Prentice Hall, Inc. 11 - 16 Sales Promotions Short-term Promotional Activity Coupons Point-of-purchase displays Premiums Trade shows Contests Samples Goal: To stimulate consumer buying or cooperation from distributors and sales agents 50% OFF

18. Copyright ©2003 Prentice Hall, Inc. 11 - 17 Publicity and Public Relations Publicity When information about a company or product is communicated to the public via mass media PRO Free to the company PRO Free to the company Public Relations Company-influenced publicity CON The company has no control CON The company has no control

19. Copyright ©2003 Prentice Hall, Inc. 11 - 18 Distribution Terms Distribution Channel Distribution Mix Intermediary Wholesaler Retailer Agent/broker

20. Copyright ©2003 Prentice Hall, Inc. 11 - 19 Channels of Distribution ProducerAgent/BrokerWholesalerRetailerUsers Consumer Channel 1 ConsumerChannels Channel 2 Consumer Channel 3 Consumer Channel 4 Consumer Channel 5 Consumer/ Business Consumer/BusinessChannel Channel 6 Business Channel 7 Business Channel 8 Business BusinessChannels

21. Copyright ©2003 Prentice Hall, Inc. 11 - 20 Merchant Wholesaler Wholesaling E-intermediaries Syndicated Sellers Shopping Agents Business-to-Business Brokers

22. Copyright ©2003 Prentice Hall, Inc. 11 - 21 Retailing Product Line Retailers Department stores Supermarkets Specialty stores Bargain Retailers Discount houses Catalog showrooms Factory outlets Warehouse clubs Convenience stores

23. Copyright ©2003 Prentice Hall, Inc. 11 - 22 Nonstore and Electronic Retailing Direct Response Retailing Mail order (or catalog marketing) Telemarketing Direct selling Electronic Retailing Electronic storefront E-catalogs Interactive marketing

24. Copyright ©2003 Prentice Hall, Inc. 11 - 23 Physical Distribution Warehousing Operations Public and private warehouses Transportation Operations Modes E-customer satisfaction Distribution can be a competitive advantage!

25. Copyright ©2003 Prentice Hall, Inc. 11 - 24 Chapter Review Identify pricing objectives, strategies, and tactics Discuss promotional objectives, the promotional mix, and advertising media Describe personal selling and the various types of sales promotions Identify the channels of distribution and the differences between merchant wholesalers and agents/brokers

26. Copyright ©2003 Prentice Hall, Inc. 11 - 25 Chapter Review Identify the different types of retailing and retail stores Describe the major activities in the physical distribution process