2. PowerPoint Presentation by Charlie Cook Copyright © 2005 Prentice Hall, Inc. All rights reserved. Chapter 11 Pricing, Distributing, and Promoting Products

3. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–2 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

4. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–3 Pricing to Meet Business Objectives Profit maximizing objectives Market share objectives

5. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–4 Price Setting Tools Cost Oriented Pricing Breakeven Analysis

6. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–5 Breakeven Analysis Figure 11–1

7. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–6 Pricing Strategies Pricing existing products  Price at market, below, or above Pricing new products  Price skimming: low  Penetration pricing: high Pricing e-commerce products  Dynamic vs. fixed

8. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–7 Pricing Tactics Price lining  Setting a limited number of prices for certain categories of products Psychological pricing: we are not rational  E..g, Odd-even pricing Discounts  Price reduction

9. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–8 Distribution Terms Distribution Channel  Path followed by product from producer to end user. Distribution Mix  Combination of distribution channels used Intermediary  Wholesaler: sells products to other companies for resale to final consumers  Retailer: sells products directly to consumers  Agent/broker: receive commissions

10. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–9 Channels of Distribution Figure 11–2

11. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–10 Merchant Wholesaler Wholesaling E-intermediaries  Syndicated Sellers  Shopping Agents  Business-to-Business Brokers

12. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–11 Retailing Product Line Retailers  Department stores  Supermarkets  Specialty stores Bargain Retailers  Discount houses  Catalog showrooms  Factory outlets  Warehouse clubs  Convenience stores

13. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–12 The Value-Adding Intermediary Figure 11–3

14. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–13 Nonstore and Electronic Retailing Direct Response Retailing  Mail order (or catalog marketing)  Telemarketing  Direct selling Electronic Retailing  Electronic storefront  E-catalogs  Interactive marketing

15. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–14 Small Business and the Web Figure 11–4

16. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–15 Physical Distribution Warehousing Operations  Public and private warehouses Transportation Operations  Modes  Trucks, railroads, planes, water carriers, pipelines  E-customer satisfaction Distribution can be a competitive advantage!

17. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–16 Promotion Promotional Objectives  Communicate information  Position products: we need an identifiable product image in the mind of the consumer Positioning  Establishing an identifiable product image in the minds of consumers  Add value  Control sales volume

18. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–17 The Promotional Mix The combination of tools used to promote a product: How do you reach your target audience? Advertising Personal Selling Sales Promotions Publicity and Public Relations

19. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–18 The Consumer Buying Process and the Promotional Mix Figure 11–5

20. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–19 Advertising Promotions Advertising Media  Communication devices for carrying a seller’s message to potential customers Newspapers25% Television22% Direct mail18% Radio7% Magazines5% Outdoor1%

21. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–20 Internet Advertising : High Potential, But With Limitations Targeted advertising is key  Data Mining  Data Warehousing

22. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–21 Personal Selling: One-on-One Interaction With Potential Buyers Order Processing Creative Selling Missionary Selling Telemarketing  Using the telephone to perform personal selling

23. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–22 Sales Promotion: Short-term Promotional Activity Goal: To stimulate consumer buying or cooperation from distributors and sales agents  Coupons  Point-of-purchase displays  Premiums  Trade shows  Contests  Samples 50% OFF

24. Copyright © 2005 Prentice Hall, Inc. All rights reserved.11–23 Publicity and Public Relations Publicity  When information about a company or product is communicated to the public via mass media Public Relations  Company-influenced publicity PRO: Free to the company CON: The company has no control

25. Copyright © 2005 Prentice Hall, Inc. All rights reserved.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 © 2005 Prentice Hall, Inc. All rights reserved.11–25 Chapter Review (cont’d) Identify the different types of retailing and retail stores Describe the major activities in the physical distribution process