Wk 6-Direct/Digital & Wk 8-Price

• Factors that affect pricing

  • Company objectives
  • Competition
  • Costs
  • Customers
  • Channel members

  
• Price


  Amount of money charged for a product or service, sum of all values that consumers exchange for the benefits
• Price communicates a lot for products, companies often have a short-term view of pricing

  
• Overpricing example

  Concert Band is in their 20s, segmented buying like cheap pre-sale tickets
• Price

  Only element that produces revenue in the marketing mix and is very flexible, has a direct impact on the firm's bottom line

  
• 5 C's of pricing

  • Company objectives
  • Competition
  • Costs
  • Customers
  • Channel members
• Price competition

  • Matching or beating competitors' prices, firm must be a low cost seller, frequent price changes flexibility but may include price wars
• Non-price competition

  • Using other factors to distinguish a product from competing brands, builds customer loyalty, features, quality, promotion, packaging
• Steps in establishing price

  1. Developing pricing objectives

  2. Evaluating target markets

  3. Determining price elasticity

  4. Considering competitors' prices

  5. Selecting pricing basis

  
• Pricing objectives


  What the company wants to achieve done through price
• Price elasticity

  How much demand will change for a given change in price
• Factors influencing price elasticity

  • Availability of substitutes
  • Temporary or permanent price changes
• Competitors' prices

  Marketers must keep prices the same or lower than competitors
• Bases used for setting price

  • Cost-based pricing
  • Customer value-driven pricing
  • Competition-based pricing

  
• Cost-based pricing

  Adding a dollar amount to the cost of the product, markup pricing
• Customer value-driven pricing

  Based on levels of benefits and demand, customers first
• Competition-based pricing

  Influenced by competitors' prices

  
• Pricing strategies

  • Price lining
  • Optional product pricing
  • Captive pricing
  • Bundle pricing
  • Psychological pricing
  • Reference pricing
  • Odd-even pricing
  • Everyday low pricing
  • Multi-unit pricing

  
• Price adjustments

  • Trade discounts
  • Quantity discounts
  • Seasonal discounts
  • Random discounts
  • Event discounts
• Direct digital marketing

  Interact directly with individual consumers/communities to gain responses and build lasting relationships
• Omnichannel retailing

  Creating a seamless cross-channel buying experience that integrates online and in-store shopping
• Rapid growth of direct digital marketing, direct marketing continues to grow faster online, digital largest share of media spending
• Benefits to buyers of direct digital marketing

  • Convenient, private, interactive
• Direct marketing companies


  Tailor their offers to the needs of defined segments
• Traditional vs digital direct marketing

  • Traditional has distinct advantages over digital forms, but risk of being junk mail
  • Digital marketing companies' efforts to market products/services, building relationships
• Digital marketing tools

  • Websites
  • Online advertisements
  • Email
  • Social media
  • Ratings/reviews online
  • Online videos
  • Collaborations
• Traditional direct marketing uses magazines and newspapers, whereas Digital uses social media and websites</b>
• Native advertising


  Matches the platform and info from it is exactly what the customer wants
• Branded content

  Storytelling way to build connections with consumers, highlights mutual interests
• Social media requires lots of planning and awareness so businesses can choose the right platforms
• Influencer marketing

  Key way to market, great way to market because of their influence and followers
• Integrated marketing communications

  Vital for company's to use to get their message across (sender, encoding, message, media, receiver)
• Privacy legislation


  Has a major impact on use of consumer data by companies
• NZ Privacy Act 2020 governs how government and businesses can collect, use and share your information
• Characteristics of digital marketing

  • Strong presence on social media, make sure information is up-to-date and relevant
• Digital media platforms

  Email, phone, website, social media