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Pricing and Promotion

CHAPTER 22. Pricing and Promotion. 22.1 The Business Buying Decision 22.2 Pricing and Costs 22.3 Promotion. 22.1 The Business Buying Decision. GOALS Discuss how businesses make their buying decisions. Describe the steps in the business buying process. Planning a Business Purchase.

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Pricing and Promotion

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  1. CHAPTER22 Pricing and Promotion 22.1 The Business Buying Decision 22.2 Pricing and Costs 22.3 Promotion

  2. 22.1 The Business Buying Decision GOALS • Discuss how businesses make their buying decisions. • Describe the steps in the business buying process. CHAPTER 22

  3. Planning a Business Purchase • What to purchase • When to purchase • From whom to purchase • How much to purchase CHAPTER 22

  4. Business Buying Processes • New task purchase • Modified rebuy • Straight rebuy CHAPTER 22

  5. 22.2 Pricing and Costs GOALS • Distinguish between various types of discounts and price components. • Describe factors involved in establishing product prices and common pricing strategies. • Discuss ways that companies try to control costs that can lead to higher prices. CHAPTER 22

  6. Payment Terms and Discounts • List price • Payment terms • Discounts • Trade discount • Quantity discount • Seasonal discount • Cash discount CHAPTER 22

  7. Components of Price • Selling price • Cost of goods sold • Operating expenses • Margin or gross profit • Net profit • Markup • Markdown CHAPTER 22

  8. Components of Selling Price CHAPTER 22

  9. Pricing Strategies • Pricing to meet competition • Pricing to earn a specific profit • Profit based on consumer demand • Pricing to sell more products • Pricing to provide customer services CHAPTER 22

  10. Controlling Costs • Careful purchasing and operating decisions • Factors that can affect costs • Markdowns • Damaged or stolen merchandise • Returned merchandise CHAPTER 22

  11. 22.3 Promotion GOALS • Discuss the purpose of promotion in meeting business and consumer needs. • Discuss how businesses use advertising to promote their products. • Explain the parts of the selling process and how each is used to help customers make buying decisions that meet their needs. • Describe the different types of sales promotions. CHAPTER 22

  12. Promotion as Marketing Communication • Promotional mix • Consumer decision-making process • Problem recognition • Information search • Alternative evaluation • Purchase • Post-purchase evaluation CHAPTER 22

  13. Advertising • Advertising purposes and media choices • Planning and managing advertising • Advertising budget • Timing of advertising • Advertising evaluation CHAPTER 22

  14. Advertising Purposes • To inform and educate consumers • To introduce a product or business • To announce improvement or product change • To reinforce features and benefits • To increase frequency of use • To increase variety of uses • To convince people to enter a store • To develop a list of prospects • To make a brand, trademark, or slogan familiar • To improve the image of a company or product • To gain support for ideas or causes CHAPTER 22

  15. Types of Advertising Media • Publication advertising • Mass media advertising • Outdoor advertising • Direct advertising • Display advertising • Internet advertising CHAPTER 22

  16. Truth in Advertising and Selling • False advertising • Full disclosure • Substantiation • Penalties for violations • Case-and-desist order • Corrective advertising • Fines CHAPTER 22

  17. Personal Selling • Studying the wants of customers (buying motives) • Presenting and demonstrating the product • Answering customer questions • Closing the sale • Follow-up CHAPTER 22

  18. Sales Promotions • Coupons • Promotional material • Samples • Demonstration • Displays • Self-service merchandising CHAPTER 22

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