ENPI MODULE 5

CREATING A PROMOTION PLAN

PRICING A PRODUCT/SERVICE

• Consider costs involved in creating your products/services:– Fixed costs: rent, utilities, insurance, etc– Variable costs: cost of goods sold,

promotion, delivery, etc

SELECT A PRICING STRATEGY

• Cost Based Pricing– Consider product costs and profit goals– Calculate how much it costs to make– Calculate a related “fixed cost” to apply– Add a percentage to create a profit (your

mark up)– You have your price!

SELECT A PRICING STRATEGY

• Demand Based Pricing– Determine what customers are willing to

pay– Add a percentage to create a profit (your

mark up)– You have your price!

– This strategy is used in very few situations

SELECT A PRICING STRATEGY

• Competition Based Pricing– Determine what competition is charging

a customer– Decide if you will be below, in line with,

or above that price– You have your price!– This strategy is used if your main focus

is having a competitive price

TYPES OF PROMOTIONAL TOOLS:• Advertising: Any paid form of non-personal

presentation and promotion of ideas, goods or services by an identified sponsor.

• Public Relations: Any activity designed to create a favorable image toward a business, its products or its policies.

• Personal Selling: Any form of direct contact between a salesperson and a customer.

• Sales Promotion: Short-term incentives that encourage a customer to buy a product

EVALUATING PROMOTIONAL TOOLS:• To be successful, promotional efforts

should follow the AIDA approach:

• Increase awareness (A)

• Attract Interest (I)

• Arouse desire (D)

• Initiate action (A)

EVALUATING PROMOTIONAL TOOLS:Advertising

• Sender’s control over the communicationLow

• Amount of feedback Little• Speed of feedback

Delayed• Direction of message flow

One way• Speed in reaching large audiences Fast• Message Flexibility

None• Mode of communication

Indirect/Impersonal

EVALUATING PROMOTIONAL TOOLS:Personal Selling

• Sender’s control over the communication High

• Amount of feedback Much• Speed of feedback Immediate• Direction of message flow Two way• Speed in reaching large

audiences Slow• Message Flexibility Customized• Mode of communication Direct

EVALUATING PROMOTIONAL TOOLS:Sales Promotion

• Sender’s control over the communication Moderate to low

• Amount of feedback Little to moderate• Speed of feedback Varies• Direction of message flow One way• Speed in reaching large

audiences Fast• Message Flexibility None• Mode of communication Indirect

EVALUATING PROMOTIONAL TOOLS:Public Relations

• Sender’s control over the communication Moderate to low

• Amount of feedback Little • Speed of feedback Delayed• Direction of message flow One way• Speed in reaching large

audiences Fast• Message Flexibility Some• Mode of communication Indirect

HOW TO BUILD AN EFFECTIVE PROMOTIONAL MIX/CAMPAIGN?:

• Strategies should complement one another

• Advertising should create awareness• Public relations should create positive

image• Sales promotion should stimulate sales• Selling should complete sale• Mix elements MUST BE coordinated