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Marketing Mix. Price and Promotion, times-square, :, RTE, Add on tv,…
Marketing Mix. Price and Promotion
Price
. The price is the amount of money the business charges consumers for the product.
Factors that determine the price a business sets for its products
Cost of the Product – the price should at least equal to the cost of making and selling the product. This is the ‘breakeven’ price, i.e. the absolute minimum.
Competitors’ Prices – must be in line with competitors’ prices.
Consumers – how much can its customers afford to pay for it or are willing to pay?
Legal Regulations – taxes (e.g. excise duties, VAT) will increase the price. In exceptional cases the government can set the maximum/minimum price.
Strategies for setting the price
Price Skimming – the business charges a high price when the product is launched, as customers will pay to be first to have it. The price will be reduced at a later stage.
Penetration Pricing – is where the firm deliberately charges a lower price so that it is cheaper than its competitors and the business increases market share
Premium Pricing – involves charging a high price for goods which have a luxury image and status, e.g. designer clothes, Rolex watch.
Price Discrimination – the business charges different customers different prices for its product, e.g. student discount.
Loss Leader – this is when a business sells a product below cost price so as to attract customers into the business in the hope they will buy other products.
Promotion
Promotion involves communicating with customers to let them know about the product and to persuade them to buy it.
Four ways to promote a product
Advertising
Internet, television, radio, newspaper, magazines , billboards, direct mail
Sales Promotion
Loyalty cards, free gifts, money off vouchers, competitions, free samples, merchandising
Public Relations
Attract publicity, attract certain customers, build an image, defend products,
Personal Selling
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The business relies on the salesperson’s knowledge and expertise to convince the consumer to purchase the product, e.g. cosmetic counter, computer store.
Advertising mediums
Television
Can be shown how well the product works ‘live’
TV is widely watched
Tv can also use pictures and sounds to appeal to customers
Radio
Very popular medium and can reach a large audience either nationally or locally
Costs a lot less than TV
Examples include RTE Ratio, Beat 102, IRadio
Internet
Global audience
Social media allows direct contact with consumers
Examples include pictures, sounds, and movement to appeal to customers
Newspapers
Can provide a lot more detailed written information
It costs less than tv
Examples include The Sun, The Evening Herald
Magazines
Can provide a lot of detailed written information
Pictures can be in colour and in better quality
It costs a lot less than TV advertising
Examples, Time, Newsweek, Rolling Stone
Billboards
They cost a lot less than TV advertising
Can reach a local target market by placing different posters in different areas
Example can include Times Square in New York
Marketing Mix
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