BU121 – Winter 2023
MARKETING
Pricing, Promoting & Distributing
Products
Learning Objectives
Marketing Trends
• Gain an awareness of current marketing trends
Price
• Identify common pricing objectives that govern pricing decisions and describe pricesetting tools used in making these decisions (LO 13.1)
• Discuss pricing strategies that are used in different competitive situations and identify
pricing tactics that are used for setting prices (LO 13.2)
Promotion
• Identify the objectives of promotion, two most common promotion strategies and discuss
the factors to consider in selecting a promotional mix (LO 13.3)
• Understand the five components of the promotional mix (advertising, personal selling,
direct/interactive marketing, sales promotion, publicity & public relations) (LO 13.4 and
13.5)
•
Explain what is meant by greenwashing and how to avoid it when advertising
Learning Objectives cont’d
Place/Distribution
• Explain the distribution mix, why it is important, and identify the different channels of
distribution (LO 13.6)
•
•
•
•
Identify common distribution strategies and which types of goods they are appropriate for (LO 13.6)
Understand the implications of using nondirect distribution channels and how producers
maintain control of the consumer price
Explain the functions that wholesalers provide (LO 13.7)
Identify the link between distribution decisions and company branding
Integrative Thinking
• Understand how marketing decisions are integrated with the other functional areas and
where they occur within a business model
Marketing Trends
Another trend: DE-MARKETING
What are common pricing objectives?
• Pricing objectives = goals company hopes to
achieve when pricing products
•
•
• Must also consider social/ethical concerns
and corporate image
What are price-setting tools?
• Cost-oriented pricing determines total costs
and adds a profit figure to arrive at selling
price
• Markup percentage =
• Breakeven analysis* assesses total costs vs.
revenues for various sales volumes
• Breakeven point (in units) =
What are some pricing strategies?
• Pricing strategy needs to be
coordinated with the other
elements of the marketingPRICE
mix!
Existing
Products
Above market
Below market
Near market
New
Products
Price skimming
Price penetration
Online
Products
Fixed
Dynamic (auction or reverse
auction)
What are some pricing tactics?
• Price lining
• Product category is set at 3-4
levels and all products are
priced at one of those levels
• Psychological pricing
• Odd prices traditionally used
but even prices for small
ticket items are increasingly
used to convey value
• Discounting
• Uses price reductions to
stimulate sales
What are the objectives of promotion?
• Sell products*
• Promotional Mix needs to be integrated
• Advertising, Personal Selling, Sales Promotion,
Direct/Interactive Marketing, Publicity & Public Relations
What are the two most common
promotional strategies?
PUSH
PULL
• Direct promotional efforts to
wholesalers and retailers to
encourage them to sell products
• Used most often for industrial
products
• Direct promotional efforts to
consumers to encourage them
to demand the product
• Used most often for consumer
products
What are factors to consider when
developing promotional mix?
• Product classification
• Characteristics of target market
•
• Buyer’s decision process
• Promotional mix budget
What is advertising?
Any form of paid,
nonpersonal
communication by an
identified sponsor
Many mediums* with
various costs, strengths
and weaknesses – use
Table 13.1 in text!
Online Advertising & Customer
Engagement
• Transforming advertising as well as
nature/depth of relationship marketing
Beware of greenwashing!
Green·wash – verb:
the act of misleading
consumers regarding the
environmental practices of a
company or the environmental
benefits of a product or
service.
How do I avoid greenwashing?
What is personal selling?
• One-on-one sales communication with potential customer
• Strengths:
• Weaknesses:
• Factors to consider in budget decision
• Target market and classification of product
What are sales promotions?
• Short-term promotional activities designed to
stimulate consumer buying or cooperation from
distributors & sales agents
• Strengths:
• enhance product recognition
• may increase purchase size and amount
• Weaknesses:
• must be convenient and accessible
• excessive use can ‘condition’ customers to hold off
What are examples of sales promotions?
What is direct/interactive marketing?
• One-on-one, nonpersonal selling that
tries to get consumers to make
purchases outside of retail stores
• Catalogues, telemarketing, home video
shopping, direct mail (enhanced through
permission marketing), direct-response
advertising, online connections*
• Strengths:
What is publicity & public relations?
Publicity = information about a
company, a product, or an event
transmitted by general mass media to
attract public attention
• Strength =
• Weakness =
Public relations = company-influenced
information that seeks to build good
relations or repair damage
• Strength =
• Weakness =
What is the distribution mix and why is it
important?
• distribution mix = combination of distribution
channels by which a firm gets products to end users
•
• additionally, distribution decisions can be costly and
time consuming to set up
What are the different channels of
distribution?
What are the implications of using a
nondirect distribution channel?
Costs
Benefits
Each intermediary
charges a markup
or commission for
functions
performed
Intermediaries often perform distribution functions more
efficiently than producer could
• Buy in large quantities
• Spread transaction costs over many products
Intermediaries provide valuable information
Intermediaries make right quantities of products available
where and when consumers need them (PLUS they may
reach more consumers) $1.50
How do producers maintain control over
the consumer price in nondirect
distribution channels?
• MSRP
• Demand-backward pricing
Producer
Wholesaler
Retailer
$2.49
$1.00
$1.00
$1.50
$1.50
End User
$4.99
What are common distribution strategies?
Which goods are they appropriate for?
INTENSIVE
- Distribute through as many channels as possible
-
SELECTIVE
- Only use channel members that will give special attention to product
-
EXCLUSIVE
- Distribute through one intermediary in each geographic area
-
What functions do wholesalers provide?
Wholesalers
Provide storage, delivery,
credit, marketing advice,
merchandising services
(marking prices & setting
displays)
Merchant wholesalers take
title to products
Note:
You will not be tested on
different types of retailers
and e-intermediaries OR
the physical distribution
process. However, refer
to these topics if relevant
for your New Venture
project.
How do distribution decisions impact
branding?
• Reputation/values/SDG practices of intermediaries
are linked!
“Bolt’s customer-centric and sustainable approach and the integration
of zero-emission trucks into its fleet will contribute to reaching our goal
of 100 percent zero-emission home deliveries by 2025 and support
IKEA in becoming more accessible, affordable, and sustainable for
many people.“ - Mattson, Managing Director of Ingka Investments
Marketing….but everything really!