Chapter 18: Setting the Right Price

I liked learning about Price Skimming and Penetration Pricing because I can apply these two terms to my daily life. Price Skimming is when the product has a unique advantage and the product is marked up above the average price and people are still willing to pay for the product. I’m a culprit of this because sometimes I think that if the product is priced higher than other similar products then the higher priced item must be better quality so I pay more. I should know better because I actually did a report on generic brands versus name brands and low and behold all products are the same and all approved by the FDA.

Penetration Pricing is when you charge a low price for a product but sell a lot of that product to make the break-even point. I like Penetration Pricing and I like Wal-Mart, they go hand in hand. Who doesn’t like low prices?

I believe Wal-Mart must be value-based pricing or value pricing because they are all about customers. Wal-Mart has set a price at a level that seems to customers, like me, to be a good price, a price that keeps us coming back time and time again. We just can’t get enough of Wal-Mart. Most customers like me know that we don’t need to compare prices with other stores because more than likely Wal-Mart will be the cheapest because they’ve settled on a price that is below their competitors and pleasing to their customers.

I learned about Price lining and Odd-even pricing….interesting. I never would’ve thought sellers would establish a price series such as these two. Now I’ll know when I see an item for sell that they may have three different prices that are marked between certain figures. And how Odd-numbered prices are to connote a bargain and even-numbered pricing are to imply quality. Never knew that and that’s good to know. I’ll be the shopping smarty.

Chapter 16: Sales Promotion and Personal Selling

What’s not to like about Sales Promotions: an incentive to motivate consumers to purchase a good or service? I just like to see what sales people can come up with. I like coupons that entitle consumers an immediate price reduction compared to rebates, where most of the time we forget about the rebates or the effort to redeem them is just too time consuming we don’t even bother so in the end the manufacturer still gets the best deal. I also enjoyed learning about Premiums. What kid can’t convince their parents that the Happy Meal is the best deal because it comes with a toy that will keep them entertained for a merely 2-3 minutes. But hey, it’s free with your meal right? ;)

SAMPLING!!!! MMMM, I know I LOVE SAMPLES! I heard a good date idea was to take a date to Costco and try all the samples, it’s a good appetizer. Whether it is a product of some sort, my favorite samples are for hair care, make up or food samples…no one can resist or turn down a FREE SAMPLE. Sampling is definitely a good way to attract people to your product or food. And what about generating leads these days….isn’t that why we’re all on Facebook, Linkedin, Twitter and other social networks. When we need something all we have to do is submit a post and all our friends become social leads.

The one thing I have to emphasize per this chapter is Step #7: Following Up, per the salesperson’s responsibilities. We ordered a couch on Christmas Eve and finally received the couch in April only to find out that our specially ordered couch was made wrong. We contacted the Salesperson who assured us that a new couch would be delivered to us a week later. It’s now been 4 weeks and the sales person hasn’t even called to let us know. We will never purchase anything from that store again and we’ll be sure to vocally announce to our friends through our social network(s) not to purchase there either.

Chapter 15: Advertising and Public Relations

What effect does advertising have on consumers? Surely advertising cannot change a person’s deeply rooted values but is sure can succeed in transforming a person’s negative attitude toward a product into a positive one. I mean take a papertowel that is cheap and falls apart when you try to absorb your spilled milk, only to be disappointed that you have to grab 3-4 to wipe up the mess you just made with the leaky papertowel you first used. Yep, your attitude toward papertowels isn't great until you see an ad where a new and improved papertowel has been designed to absorb in one wipe and can be used over and over again with continuous washes. Amazing how commercials can change the way you feel about something.

 I personally like Institutional advertising, this is where the goal of the advertisement is to build up the image of the company instead of enhance the sale of a specific good or service. I like to see how companies are helping and benefiting people and not so much what they do to get you to focus on the company: "me, me, me". Pioneering advertising was also easily understood because it’s intended to promote the demand of a new product. The one we often see is comparative advertising with the comparison of two or more competing brands per one or more attributes. We see this in politics, and when it comes to comparing paper towels or laundry detergent. Someone is always trying to get the consumer to purchase their product because it’s so much better than the other brand. Another fun one is identifying product benefit. When a consumer looks at a product they say “What’s in it for me?” An easy way to remember if the ad is an attribute or a benefit you see if it provides details and information or if it tries to catch your attention and what it will do for you. Info=attribute; satisfaction=benefit.

No Class

Today we didn't have class. Looks like it's a day to study. :)

Chapter 14: Integrated Marketing Communications

Did you know that a promotion informs, persuades, and reminds? It’s a plan for optimal use of the elements of promotion: advertising, public relations, personal selling, and sales promotion. Its main function is to convince target customers that their product being offered provides a competitive advantage over the competition. Advertising is also an important term to know because advertising is used every day, it’s any form of impersonal paid communication in which the sponsor or company is identified. These are all forms of transmit advertisements: television, radio, newspapers, magazines, books, direct mail, billboards, and transit cards. Also make a note that even in public relations, even though an organization doesn’t have to pay directly for its publicity it should not be viewed as free.

I also learned in this chapter that some corporates have blogs. They are maintained by one or more of the company’s employees and they disseminate marketing-controlled information. A non-corporate blog is not associated with the marketing efforts and are nonmarketing controlled information and are perceived to be independent and more authentic than a corporate blog.