Lesson 5: 7P's of Marketing and Branding Flashcards
third P of the marketing mix
price
the value of money in exchange for a product or
service
price
the amount or value that a customer gives up
to enjoy the benefits of having or using a product or service
price
customers
exchange a certain value for having or using the product – a value we call
price
price is determined by
what a customer is willing to pay; a seller is willing to accept; the competitor is allowing to be charged
most important factor affecting a small business’ revenue potential
pricing strategy utilized
The price charged for products and services is set artificially low in order
to gain market share. Once this is achieved, the price is increased.
penetration pricing
A company charges a higher price then slowly lowers the price to make
the product available to a wider market because it has a considerable
competitive advantage. However, the advantage tends not to be
sustainable. The high price attracts new competitors into the market, and
the price inevitably falls due to increased supply.
skimming prices
A pricing method in which a seller uses prices of competing products as a
benchmark instead of considering own costs or the customer demand. In
reality a firm has three options and these are to price lower, price the same
or price higher than competitors
competition pricing
The practice of reviewing and setting prices for multiple products that a
company offers in coordination with one another.
product line pricing
The act of placing several products or services together in a single
package and selling for a lower price than would be charged if the items
were sold separately.
bundle pricing
Setting the price of a product higher than similar products. The goal is to
create the perception that the products must have a higher value than
competing products because the prices are higher
premium pricing
the practice of setting prices slightly lower than
rounded numbers, in the belief that customers do not round up these
prices, and so will treat them as lower prices than they really are. This
practice is based on the belief that customers tend to process a price from
the left-most digit to the right, and so will tend to ignore the last few digits
of a price.
psychological pricing
The company earns more through cross-selling products along with a
basic core product. The main product does not have many features (and
is priced low) which can be enhanced through optional or accessory
products which are sold at premium by the same company.
optional pricing
involves adding a markup to the cost of goods and
services to arrive at a selling price. Under this approach, you add together
the direct material cost, direct labor cost, and overhead costs for a
product, and add to it a markup percentage in order to derive the price of
the product.
cost plus pricing
A pricing method in which a fixed sum or a percentage of the total cost is
added (as income or profit) to the cost of the product to arrive at its selling
price.
cost based pricing
A price-setting strategy where prices are set primarily on consumers’
perceived value of the product or service.
value based pricing
the fourth P of the marketing mix
promotion
refers to the complete
set of activities, which communicate the product, brand or service to the user.
promotion
The idea
is to create an awareness, attract and induce the consumers to buy the product, in
preference over others.
promotion
promotional mix includes
advertising; public relations (PR); personal selling; sales promotions; direct marketing; (social media)
what is under advertising
radio, television, print, electronic, word of mouth, generic
radio is
cheaper than TV advertising
The promotion of a particular commodity is without reference to a specific
producer, brand name or manufacturer. Producers join together to expand total
demand for the commodity, thereby helping their own sales. These activities are often
self-funded through assessments on marketing called check-off programs
generic advertising
involves
sharing information with the public using platforms that do not require a payment, such
as social media or through press releases shared with magazines and newspapers.
public relations
its goal is to shape public perception of a
business, presenting a positive image through various strategies to its various
constituents.
public relations
