Week 12 Summary – Place and Promotion
4 P’s – Marketing Mix
Product – Creating Value
Price – Delivering Value
- Penetration- Pricing method of new product introduction to market that consists of
pricing low and promoting heavily in order to gain a large market share and
associated economies of scale as quickly as possible and before competition builds.
This method assumes that consumers are price sensitive, that product awareness is
low, and that competition will build quickly
- Skimming- A product pricing strategy by which a firm charges the highest initial
price that customers will pay. As the demand of the first customers is satisfied, the
firm lowers the price to attract another, more price-sensitive segment.
- Competition-offering a price relatively lower than your competitiors
- Product Line- having relatively the same prices for each one
- Bundle-buying in a bundle to save more money
- Psychological- pricing it in a way to make it seem cheaper, 39.99
• Interdependent organizations involved in the process of making a product or
service available for consumption.
• Objective is to create place utility – the value of having products where the
customer wants them when they want them
• Involves Logistics - the movement of goods
• Involves Strategies – who participates, what they do and what they get.
Global Trading Theory
- New communication and transportation technologies reduce transaction costs.
- Low labor costs and quality assurance contracts make distant supplier attractive.
• Ever expanding global supply-chains, and increasing channel competition in
domestic markets, forces all businesses to adapt their distribution systems. • This requires a sound understanding of the basic functions of a distribution
Creating Value of Place
• Reaching target customers through the channels they prefer to buy through or
• Creating a very efficient supply-chain
• Developing highly cooperative partnerships where new insights about customer
and market trends are shared and clever new business processes are developed
- Promotion / Information
- Risk Taking
Integrated Distribution Logistics
The goal is to increase the efficiency and effectiveness of the whole system, not just one