This document discusses various aspects of pricing, including objectives of pricing, factors influencing pricing, and pricing strategies. It provides details on different pricing methods such as cost-oriented pricing, customer demand-oriented pricing, and competition-oriented pricing. The document also covers topics like promotion mix, advertising, sales promotion, personal selling, publicity, public relations, and media management.

1. Pricing
MANISH KUMAR

2. Pricing
 Pricing is the art of translating into quantitative terms (rupees and paisa) the
value of the product or a unit of a service to customers at a point in time.
 Pricing is managerial task that involves establishing pricing objectives, identifying
the factors governing the price, ascertaining their relevance and significance,
determining the products value in monetary terms and formulation of price
policies and the strategies, implementing them and controlling them for the best
results.

3. Objectives of pricing
 To maximise the profits
 Competitive situation
 Capturing the market
 Long-run welfare of the firm
 Price stability
 Achieving a target return
 Ability to pay
 Margin of profit to middlemen
 Resource mobilization

4. Importance of pricing
 Product differentiation getting blunted
 Mature products and markets
 Inflation in the economy
 Inter firm rivalry
 Customers value perception
 Firm now finds itself in a dilemma

5. Factors influencing pricing
Internal factors
External factors

6. Internal factors
 Organizational factors
 Marketing mix
 Product differentiation
 Cost of the product
 Objectives of the firm

7. External factors
 Demand
 Competition
 Suppliers
 Economic conditions
 Buyers
 Government

8. Methods of pricing/price adapting
policies
Other Pricing
Methods
Competition
Oriented
Customer
Demand
Oriented
Cost
Oriented

9. Cost oriented pricing policy
 Mark up Pricing or cost plus pricing method
 Full cost or absorption cost
 Marginal cost or incremental cost pricing method
 Break even point or BEP pricing method
 Rate of return or target pricing method

10. Customer Demand-Oriented Pricing
 ‘What the traffic can bear’ pricing
 Skimming based pricing
 Penetration based pricing

11. Competition oriented pricing policy
 Parity pricing or going rate pricing
 Pricing below competitive level or discount pricing
 Pricing above competitive level or premium pricing
 Competitive bidding/ sealed bid/ tender pricing

12. Other pricing methods
 Value based pricing
 Affordability based pricing
 Prestige based pricing
 Market and demand based pricing

13. Strategies of pricing

14. Strategies of pricing
Product Mix
Pricing
strategy
New product
Pricing
strategy
Promotional
pricing
strategy
Discriminatory
pricing
strategy

15. Product mix strategy

16. New product pricing strategy
Market
Skimming
Market
Penetration

17. Promotional pricing
Complementary
Pricing
Loss Leader
strategy
Psychological
Pricing
Psychological
Discounting

18. Discriminatory Pricing strategy
Customer
Segment
Pricing
Image Pricing
Location
Pricing
Time Pricing

19. Promotion

20. Meaning and definition
 Promotion compasses all the tools in the marketing mix whose major role is
persuasive communication
 Promotion includes advertising, personal selling, sales promotion and other
selling tools
 Promotion includes every activity which inspires people to buy the goods and
services of the company.
 Promotion is that marketing activity that attempts to inform and remind
individuals and persuade them to accept, resell, recommend or use a product,
service, idea or institution.

21. Characteristics
 Constant activity
 Information transaction
 Differentiating act
 Reminding act
 Informing act
 Persuading act
 Human skill
 Interpersonal element
 Marketing tool
 Customer oriented

22. Objectives of promotion
Leads to
behavior
modification
Objective to
inform
Objective to
Remind
Specific
objectives
Objective to
persuade

23. Importance of promotion
 Consistency of message delivery
 Client relationships
 Motivation
 Corporate cohesion
 Interaction
 Participation

24. Promotion Mix
 Promotion mix refers to the combination of various promotional elements viz.
advertising, personal selling, publicity and sales promotion techniques used by a
business firm to create, maintain and increase demand of the product. It involves
an integration of all the above elements of promotion.
 A company’s promotional mix includes adverting, personal selling, sales
promotion, public relations direct marketing. It also includes product design,
shape, package, colour, label etc. as all these communicate something to buyer.

25. Tools of promotion mix
Tools of
promotion
mix
Advertising
Publicity
Public
relations
Word-of-
mouth
Personal
Selling
Sales
Promotion
Direct
Marketing
Online
Marketing

26. Factors affecting promotion Mix
Type of
product
Stage in the
product life
cycle
Company
Policy
Nature of
Market
Budget
availability
Type of
product
market
Buyer
readiness
stage

27. Advertising
 Advertising is any paid form of non-personal presentation of ideas, goods or
services by an identified sponsor
 Advertising is any form of paid non-personal presentation of ideas, goods or
services for the purpose of inducing people to buy.
 An integral part of marketing, adverting are public notices designed to inform
and motivate.
 Their objective is to change the thinking pattern of the recipient, so that he or she
is ersdaed to take the action desired by the advertiser.

28. Characteristics of adverting
 Mass-Communication Process
 Informative in action
 Persuasive Act
 Competitive act
 Paid-for
 Identified sponsor
 Non-Personal Presentation

29. Objectives of adverting
 To increase demand
 To sell a new product and to build new brands
 To educate the masses
 To build brand preferences
 To build goodwill
 To support salesman
 To remind the customers of the product and company
 To inform about changes in marketing mix
 To enter in new geographical area.

30. Strengths of adverting
 Advantages to manufacturers
 Advantages to consumers
 Advantages to middlemen
 Advantages to society

31. Advantages to manufacturers
 Increased sales
 Steady demand
 Lower costs
 Greater dealer interest
 Quick turnover and smaller inventories
 Supplementing salesmanship

32. Advantages to consumer
 Facility of purchasing
 Improvement in quality
 Consumer’s surplus
 Education of consumers

33. Advantages to middleman
 It guarantees quick sales
 It acts as a salesman
 It makes possible retail price maintenance

34. Advantages to society
 Encouragement to research
 Sustaining the press
 Change in motivation
 Encouragement to artists
 Glimpse of national life

35. Weaknesses of Advertising
 Multiplication of needs
 Misrepresentation of facts
 Consumer deficit
 Increased cost
 Wastage of national resources
 Barriers to entry
 Product proliferation
 Deferred revenue expenditures

36. Sales promotion
 Sales promotion is an exercise in information, persuasion and influence
 These marketing activities, other than personal selling, adverting and publicity
that stimulate consumer purchasing and dealer effectiveness such as display
shows and exhibitions demonstrations and various non-recurrent selling efforts
not in the ordinary routine

37. Characteristics of sales promotion
 Irregular/non-recurring activity
 Target action
 Action focused
 Motivation and extra incentive
 Acceleration tool
 Non-media activity
 Strategic role
 Planned activity
 Means of marketing communication
 Element of promotion mix

38. Difference between sales promotion and
advertising
BASIS FOR COMPARISON ADVERTISING PROMOTION
Meaning
Advertising is a technique of driving
public attention towards a product or
service, through paid network.
The set of activities that spread a word
about the product, brand or service is
known as promotion.
What is it? Subset
Superset
Objective
Building brand image and boosting
sales.
Short term sales push
Strategy Promotional strategy Marketing strategy
Effects Long term Short term
Results Generally slow, can be seen over time. Instant
Cost involved Highly expensive Cost Effective
Best suited for Medium and big enterprises All enterprises

39. Objectives of sales promotion
 To introduce new products
 To attract new customers
 To induce present customers to buy more
 To help remain competitive
 To increase sales in off season
 To develop patronage habits among customers
 To educate customers
 To stimulate sales
 To facilitate coordination

40. Methods of sales promotion
Consumer
promotion Middlemen
promotion

41. Forms of consumer promotion
 Free distribution samples
 Coupons
 Premiums or bonus offer
 Money refund offer
 Contests
 Cheap bargain or self liquidating premium

42. Form of middlemen promotion
 Buying allowance discount
 Buy back allowance
 Display and adverting allowance
 Dealer listed promotion
 Push money
 Sales contest
 Adverting material
 Credit facility

43. Personal Selling

44. Meaning and definition
 Salesmanship is the power to persuade plenty of people pleasurably to purchase
your product at a profit.
 The art of presenting and offering that the prospect appreciates the need for it
and that a mutually satisfactory sale follows.
 It is a part of salesman’s business to create demand by demonstrating that the
need does exist although before his visit there was no consciousness of that need.

45. Characteristics of personal selling
 Personal contact with customers
 Oral conversation
 Quick solution of queries
 More expensive approach
 More flexible
 Slow speed of sales
 Receipt of additional information
 Real sale
 Maintaining the sales records

46. Objective of personal selling
 Building product awareness
 Creating interest
 Providing information
 Stimulating demand
 Reinforcing the brand

47. Strengths of personal selling
 Allowing two way interaction
 Tailoring of the message
 Lack of distraction
 Involvement in the decision process
 Source of research information.

48. Weaknesses of personal selling
 Inconsistent message
 Sales force/ management conflict
 High costs
 Poor reach
 Potential ethical problems

49. Publicity

50. Publicity
 Publicity is any unpaid form of non-personal presentations of the ideas, goods or
services.
 Publicity is, any form of non paid commercially significant news or editorial
comment about ideas products or institutions
 Publicity is defined as the process of drawing attention to a person or thing
however, in the world of publishing, publicity refers more correctly to the process
of drawing attention to a person or thing for free.

51. Characteristics of publicity
 Credible message
 No media cost
 Loss of control of publication
 Loss of control of content
 Loss pf control of timing

52. Strength of publicity
 Low cost
 Prevent critic situations
 Increase visibility
 Get product reviews
 Increase perceived worth
 Building sales

53. Weaknesses of publicity
 Lack of control
 Community concern
 Unpredictable
 Biased
 Negative
 repetition

54. PUBLIC RELATION

55. PUBLIC RELATION
 Most firm’s in todays environment are not only concerned to customers, suppliers
and dealers but also concerned about the effect pf their actions on people
outside their target markets.
 Public relations are a broad set of communication activities used to create and
maintain favourable relations between the organisation and its publics customers,
employees, stockholders are officials and society.

56. Characteristics of public relations
 Relatively low cost
 Can be targeted
 Credibility
 Relatively uncontrollable
 Saturation of effort

57. Objective of public relations
 Building product awareness
 Creating interest
 Providing information
 Stimulating demand
 Reinforcing the brand

58. Strengths of public relation
 Credibility
 Low cost
 Not compete in other PR tools
 Effective

59. Weaknesses of public relations
 May not appear in media
 Incapable of link message
 Fail to achieve the objectives
 Brief life
 Incapable of changing perception

60. Media Management

61. Media management
 The advertising media can be defined as the communication channels used for
adverting, including television, radio, the printing press, and outdoor, adverting
etc.
 Media refers to the channels of communication that carry the message from
advertiser to audience.
 The communication channels through which message moves from sender to
receiver is called media.

62. Major types of advertising media
 Newspaper media
 Television media
 Radio television
 Outdoor adverting media
 Direct mail/ direct marketing media
 Web/internet advertising media

63. Criteria for media selection
 Communication effectiveness
 Geographic selectivity
 Audience selectivity
 Flexibility
 Impact
 Prestige
 Message life
 Coverage

64. Basic concepts in media selection and
management
 Reach
 Effective reach
 Frequency
 Effective frequency
 Reach versus frequency
 continuity