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R8 & R9: the marketing mix: promotion... marketing comms (Act 7.1) +…
R8 & R9: the marketing mix: promotion... marketing comms (Act 7.1) + pricing (Act 7.5)
R8 1 the promotion mix
Jobber & Ellis-Chadwick, 2013, pp. 514-5; Dibb et al., 2016, p. 479
advertising
personal selling
irect marketing
digital marketing
sales promotion
sponsorship
public relations
Fill and Turnbull, 2013 Criteria for choosing marketing comms mix
extent of control over message
level of resrouces to invest
size of target audience & geographic spread
target audience pref & behaviours per media
comms goal(s)
R8 2 the communication process
Shannon and Weaver, 1998 Potential problems
technical problem (accuracy of message coding)
semantic problem (accuracy of message decoding (intended meaning))
effectiveness problem (effectiveness of decoded message causing desired action(s)/outcome(s)
Hughes and Fill, 2007 macro-level model of communication
planned and unplanned marketing comms
product experience-based comms
service experience-based comms
audience experience from all of the above
Fill and Turnbull, 2013
influence & engage clients (+ those that influence potential clients) via 'a blend of intellectual and emotional content'
cognitive - being absorbed and intellectually absorbed
relational - feeling connected
behavioural - feel involved & joining in activies
R9 1 type of pricing
cost-based
'full' or 'total cost'
hm units must be sold at diff prices to cover full cost (production, distrib, marketg) u/ 'break even' analysis
limitation: if sales fall, prices must increase to break even
advantage: highlights costs & price req'd for initial profit (Jobber and Ellis-Chadwick, 2013)
'direct cost pricing' or 'marginal cost pricing' (Jobber and Ellis-Chadwick, 2013)
taking account of costs that increase as sales increase
applied to service offerings where capacity would otherwise be unused (eg boost footfall in otherwise quiet periods such that direct costs are covered, but busy periods must cover fixed costs)
aka 'second market discounting' - bc difference price is charged to diff markets - seasonal or international (as demanded by local environment) (Blythe, 2006)
'cost plus pricing'
adding % for profit to cost of unit
limitation: doesnt account for competitor pricing strategy
used by professional services firms as its seen as 'fair'
'mark-up pricing' when used by retailers to add 'mark up' for profit is added to stock purchase price
value in relation to meeting customer needs is earlier consideration of customer based pricing (v not so much with cost-based pricing)
cost based pricing = simple formula v complicated myriad of factors to determine customer value
competitor based
'competitor based pricing'
price set as relates to competition
Kotler and Armstrong (2016, p. 332) recommended questions where setting offering price as compared to competitors:
How does offering compare with competitor's offering in terms of customer value?
How strong are current competitors?
What are competitors' current pricing strategies?
'competitive bidding'
offering priced in relation to what competitors might charge in their bids (Jobber and Ellis-Chadwick, 2013)
balance profits against chance of winning the bid
info per previously successful bids, and competitor bids are available (Jobber and Ellis-Chadwick, 2013)
customer based
Demand pricing
customers professed willingness to buy at various price points
Good-value pricing
fair price: balance of quality v price
poss: offer budget version at lower price (same qual for less)
poss: higher qual version at reasonable price
value added pricing
adding features or services to incr offering value
added value differentiation point
differentiation enables incr offering price
psychological based pricing
using price to elicit emotional response
odd-even pricing (odd number price, lower price perception) (Blythe, 2006)
value in relation to meeting customer needs is earlier consideration of customer based pricing (v not so much with cost-based pricing)
cost based pricing = simple formula v complicated myriad of factors to determine customer value
R9 2 factors that affect pricing
R9 3 product mix pricing
where product is a part of a product mix (e.g. Ford Fiesta in different engine sizes, rims etc)
product line pricing
pricing different products in a range based on level of value each offers
optional-product pricing
optional products or accessories with principal offering
captive-product pricing
products needed to se the principal product
by-product pricing
offset principal product cost by selling by-products incurred in the principal products production
product bundle pricing
set of related products in a bundle at a price lower than if purchased individually
R9 4 pricing in business markets
discounts often offered
trade or functional discounts (eg single function (storage, transportation)
quantity discounts
cash discounts
seasonal discounts
allowances
R9 5 approaches for information pricing decisions
4 approaches for informing pricing decision - Grigsby (2014)
general survey ('nice to know')
Van Westendorp survey ('price map' over time)
conjoint analysis
elasticity modelling
+1 more - Kotler and Armstrong (2016)
experimentation
R9 6 ethical considerations
Dynamic pricing
segmented pricing
super-sized pricing
