Chapter Fourteen
Promotion &
Pricing Strategies
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Promotional Mix
Personal Selling
Non-Personal Selling




Advertising
Trade Shows
Direct Mail
Sales Promotions
 Samples
 Coupons
 Sweepstakes/Contests
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Objectives of
Integrated Marketing
Build Brand Equity
Provide Information
Manage Demand &
Build Sales
Differentiate Products
Influence Perceptions,
Attitudes, & Buyer
Behavior
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Components of
Integrated Marketing
 Advertising
 Corporate
Communication
 Crisis
Communication
 E-Commerce
 Event Marketing
 Internal
Communication
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 Issues
Management
 Marketing
 Multimedia
 Public Relations
 Sales Promotion
 Strategic
Planning
 Web Design
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Advertising Today
 Persuasive Communication
 Guerrilla marketing
 Viral marketing
 Infomercials
 Internet
 Global Advertising
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Figure 16.3 Advertising Expenditure by Media
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Automotive Marketing
 Autowrap
 Sales Promotion
 Tex Earnhardt rides a live bull
 Toyota dealer displays fiberglass lions
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Century’s
Top Ad Jingles
 “You deserve a
break today”
 “Be all you can be”
 “Pepsi-Cola hits
the spot”
 “Mm Mm good!”
 “See the USA in
your Chevrolet”
 “I wish I were an
Oscar Mayer wiener”
 “Double your
pleasure, double your
fun”
 “Winston tastes good
like a cigarette
should”
 “It’s the real thing”
 “A little dab’ll do ya”
Source: Advertising Age
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Thinking Out of the Box
 Kentucky Derby jockeys
 Ads on pants for 1st time in 2004
 Marlins painted poles like No.2
pencils from Office Depot in 1994
 Spiderman on baseball fields – 2004
 $50-100,000 per team
 Fenway Park & Yankee Stadium
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Do Blatantly Sexy
Ads Turn You Off?
Percent
Men
80
70
60
50
40
30
20
10
0
Women
72
51
45
24
4
Strongly/Somewhat
Agree
Strongly/Somewhat
Disagree
4
Don't Know
Source: USA Today
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Sex in Advertising




BuyMusic.com
Uncle Ben’s Rice
Gillette’s Satin Care
Dow Jones NewsPlus
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Internet
Advertising- 2004
Will reach $22 billion in the U.S.
 The rest of world will spend $10.8
billion.
$27 billion (10% of all U.S. ad
spending) will be siphoned from
traditional media
Hardest hit: newspapers and direct
mail
Source: CIO Web Business, 10/1/1999
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Office Depot
 2003 Back to School starts July 4th
 $7.7b school supply market
 Integrated marketing campaign
 E-commerce
 Direct marketing
 Radio, newspaper (including AfricanAmerican focus), & TV ads (including
Spanish-language stations)
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Steps in Personal Selling
Prospect/Qualify
Presentation
Objections
Preapproach
Close
Approach
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Follow-up
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Public Relations

Steps
Listen

Change/Develop

Inform
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Publicity
 Free
 More Effective
Than Ad
 Believable
 No Control
 No Repetition
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PR in Not–for-profit
 3-26-03 WSJ
 Military are battling more than the
enemy. Competing for valuable
press attention that some believe
can later pay off with fatter
budget allocations in Congress.
 The Army with over 400
embedded journalists appears
to have won the war.
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Sales Promotion






Internal & External
Sampling
Word-Of-Mouth
Viral Marketing/Swag
Technology
Testimonials
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Celebrity Endorsers
Celebrity
Product(s)
Catherine Zeta Jones
Kristie Alley
Jason Alexander
Britney Spears
Geoffrey the Giraffe
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Push/Pull
 Push – personal selling to market a
product to wholesalers & retailers
 Pull – promote a product by
generating consumer demand for
it, primarily through advertising &
sales promotions
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Promotional Strategies
Push Strategy
Promotion
Distribution
Retail Store
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Customer
Promotion
Pull Strategy
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Top Sports Endorsers
Athlete
Lebron
Kobe Bryant
Micheal Jordan
Tiger Woods
Arnold Palmer
Andre Agassi
Endorsements
$90.0 Million (2003)
$47.0 Million (2002)
$24.0 Million (2002)
$63.0 Million (2003)
$16.0 Million (2002)
$14.0 Million (2002)
Source: Fortune Magazine
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Hollywood as a Big Ad
 Miscellaneous
 Reese Pieces in E.T.
 Red Stripe in The Firm
 Accessories
 Ray-Ban
 Charlie’s Angels
 Men in Black
 Fashion
 Grant, Dean, Kelly
 Sex and The City
 Legally Blonde 2
 Stila, OPI nail polish,
Reem Acra bridal gown
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Pricing Strategies
 Skimming
 Penetration
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Breakeven Chart
$1,200,000
$1,000,000
$800,000
Fixed Cost
Total Cost
Total Revenue
$600,000
$400,000
$200,000
50,000
40,000
30,000
20,000
10,000
$0
0
Total Revenue or Total Cost
(Figure 14.9)
Number of Units
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Pricing Using
Breakeven Analysis
Problem
Should we charge $2 or $3 per box?
Costs
Total Fixed Costs $400,000
Variable Cost
Market
Research
Forecast
$
1 per box
Company can sell: 290,000 boxes at $2 @
210,000 boxes at $3 @
Breakeven point =
total fixed cost
price - variable cost
Breakeven
(per unit)
Analysis
$2 price = $400,000 400,000 units to breakeven
(per unit)
$2 - $1
$3 price = $400,000 200,000 units to breakeven
$3 - $1
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What They Cost
When First Introduced
1927
Transatlantic Call
$ 75/3 min.
1947
Microwave Oven
$ 3,000
1964
FAX unit rental
$ 850/month
1970
Pocket Calculator
$ 150
1974
VCR Tape
$
50
Source: World Features Syndicate
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