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Pricing and Sales Promotion A Wrap Up

Pricing and Sales Promotion A Wrap Up. MAR 331. Pricing and Sales Promotion A Wrap Up. Marketing and Pricing Price/Value Relationships Role of the Distribution Channel Retailer vs. Consumer. Pricing and Sales Promotion. Pricing can be temporary and permanent Deal prices - trade promotion

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Pricing and Sales Promotion A Wrap Up

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  1. Pricing and Sales PromotionA Wrap Up MAR 331

  2. Pricing and Sales PromotionA Wrap Up • Marketing and Pricing • Price/Value Relationships • Role of the Distribution Channel • Retailer vs. Consumer

  3. Pricing and Sales Promotion • Pricing can be temporary and permanent • Deal prices - trade promotion • Provided to get and maintain distribution • Temporary price reduction given to trade • Sometimes passed on to the consumer

  4. Consumer Pricing • Regular pricing • Temporary sales

  5. Price Elasticity • Customer sensitivity to price • When a relative change in volume is more than the relative change in price, demand is described as elastic.

  6. Price Elasticity • If the price is cut by 1% and demand increases by 5% , the brand is very elastic. • When demand is that sensitive to price, it pays to cut prices.

  7. Price Elasticity • Some products are not terribly sensitive to price • When a relative change in quantity sold is less than the relative change in price, demand is said to be inelastic. • When demand is inelastic, profits can be improved by raising prices.

  8. Price Elasticity and Advertising • An important part of your job as marketing manager is to make your brands less elastic • Higher prices • Little monopoly, more perceived differences

  9. Breakeven • BE = Fixed Costs divided by Mfr. Price less Variable costs • What is the volume necessary to cover your costs • Does NOT take the demand ceiling into account

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