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Business battle fiercely, making anenormous variety of products to meet different customers’ needs. In manybusinesses, promotion is the key to a new product success. Promotion is anytechnique designed to sell a product to a customer. To sell a product,promotional techniques must communicate the uses, features, & benefits ofthe product. Here we will look at different reasons for & approaches topromotion, When & why companies use particular tools & strategies,& the special promotional problems & solutions of small business.

Promotional Objectives, Strategies, &Tolls

In developing a promotional plan, marketersmust consider the company’s basic promotional objectives. They must developpromotional strategies to reach those objectives. Then, as a part of theirstrategies, they must choose among various promotional tools that may be usedalone or in combination

Promotional Objectives

You may think that the ultimate objectiveof any type of promotion is to increase sales. You’re right. After all, thegoal of any business is to make money, & companies make money by makingsales. However, marketers also use promotion to communicate information,position products, & control sales volume.

Communication of Information.

A very basic objective of promotion is tocommunicate information from one person or organization to another. Consumerscannot buy a product unless they have been informed about it.

Information may advise customers about theavailability of a product. It may educate them on the latest technologicaladvances. Or it may announce the candidacy of someone running for a governmentoffice.

Information may be communicated in writing(newspapers & magazines) It may be communicated verbally (in person or overthe telephone) Or it may be communicated visually (television, a match bookcover, or a billboard). Today, the communication of information regarding acompany’s products or services is so important that markets try to place itwherever consumers may be.

Product Positioning.

Another objective of promotion, ProductPositioning, is to establish an easily

identifiable image of a product in the minds ofconsumers. For example, by selling only in

department stores, Lauder products havepositioned themselves as more upscale than cosmetics sold in drugstores. Givenall the brands & trademarks in the marketplace, it is impossible for anindividual to remember each one. Therefore, marketers seek a unique position inbuyer’s minds.

Positioning a product is difficult becausethe company is trying to appeal to a specific segment of the market rather thanto the market as a whole. First, the company must identify which segments of amarket could would be likely purchasers of its product & who is competitorsare. Only then can it focus its promotional strategy on differentiating itsproduct from the competition’s, while appealing to its target audience.

Controlling Sales Volume.

Another objective of promotions is salesvolume control. Many companies such as Hallmark Cards, experience seasonalsales patterns. By increasing its promotional activities in slow periods, thefirm can achieve a more stable sales volume throughout the year. As a result,it can keep its production & distribution systems running evenly.Promotions can even turn slow seasons into peak sales periods. For example,greeting card companies & florists together have done much to createGrandparents’ day.The result has been increased consumer desire to send cards& flowers to older relatives in the middle of what was a dry for theseindustries.

Promotional Strategies

Once a firm’s promotional objectives areclear, it must develop a promotional strategy to achieve these objectives.Promotional strategies may be of the push or pull variety. A company with aPush strategy will aggressively push its product through wholesalers &retailers, who persuade customers to buy it. In contrast, a company with Pullstrategy appeals directly to customers who demand the product from retailers,who in turn demand the product from wholesalers.

Makers from industrial products most oftenuse a Push strategy And makers of consumer products most often use a Pullstrategy. Many large firms use a combination of the two strategies. Forexample, General Foods uses advertising to create consumer demand(pull) for itscereals. It also pushes wholesalers & retailers to stoke these products.Once the promotional strategy has been determined, it guides the company’schoice of promotional objectives & the types of promotional communicationaltools that will be used.

Picking the Right Tools for the PromotionalMix

Based on these strategies, the firm mustselect the right promotional tools. There are four basis types of promotionaltools: Advertising, Personal selling, Sales promotions, & Publicity &Public relations.

The best combination of these tools-thebest promotional mix — depends on many

factors. The company’s product, the costs of differenttools versus the promotional budget, & characteristics in the targetaudience all play a role.

The product. The nature of the product being promotedaffect the mix greatly. For example, advertising can reach a large number ofwidely dispersed consumers. Thus it is used by makers of products that might bepurchased by anyone, like sunglasses, radios & snack foods. Companies introducingnew products also favor advertising because it reaches a large number of peoplevery quickly & can repeat a message many times. Personal selling, on theother hand, is important when the product appeals to a very specific audience,such as piping or pressure gauges for industrial accounts.

Cost of the Tolls. The cost of communication tools is alsoimportant. Because personal selling is an expensive communicational tool, it ismost appropriate in marketing high-priced goods like computers for industrialcustomers & homes for consumers. In contrast, advertising reaches morecustomers per dollar spent.

A promotional mix that is good for onecompany is not really good for another. For example, Frito -Lay can afford tospend millions of dollars on advertising & consumer promotions to promoteRuffles Cajun Spice potato chips nationally. But Zapps Potato Chips ofGramercy, Louisiana, the innovator in Cajun flavor potato chips, must rely onpersonal selling & publicity to promote its Cajun Craw-taters locally.

Promotion & the Buyer Decision Process.Anotherconsideration in establishing the promotional mix is the stage of the buyerdecision process that customers are in. Customers must first recognize the needto make a purchase. At these stage marketers need to make sure the buyer isaware that their products exist. Thus, advertising & publicity, which canreach a large number of people very quickly, are very important.

At the next stage, customers want to learnmore about possible products. Advertising & personal selling are importantbecause they both can be used to educate the customer about the product.

During the third stage, customers willevaluate & compare competing products. Personal selling is vital at thispoint because sales representatives can demonstrate their product’s quality& performance in direct relation to the competition’s product.

Next, customers decide ton a specificproduct & purchase it. Sales promotion is effective at these stage becauseit can give consumers an incentive to buy. Personal selling can also help bybringing the product to convenient location for the consumer.

Finally, consumers evaluate the productafter buying it. Advertising, or even personal selling, is sometimes used afterthe sale to remind consumers that they made wise & prudent purchases.

Advertising Promotions

Advertising Strategies

Advertising strategies most often depend onwhich stage of the product life cycle their product is in. During theintroduction stage, Informative Advertising can help develop anawareness of the company & its product among buyers & can establish aprimary demand for the product. For example, when a new textbook is beingpublished, instructors receive direct-mail advertisements notifying them of thebook’s contents & availability.

As products become established, advertisingstages must change. During the growth stage,Persuasive Advertising caninfluence customers to buy the company’s products, not those of its rivals. Forexample, during its growth stage, Advil used this approach to attract buyers ofTylenol & other pain relievers. Persuasive advertising is also importantduring the maturity stage to maintain the product’s level of sales. Inaddition, Comparative Advertising may help to steal sales away from thecompetition. After proclaiming that «most people in Ford country drive Chevypickups», the ad then discusses specific features of the two brands, in aclassic example of the comparison approach.

Finally, during the latter part of thematurity stage and all of the decline stage, Reminder Advertising keepsthe product’s name on the tip of the consumer’s lips. And so Atari continues toadvertise its home video games, even though attention has shifted over to anewer competitor, Nintendo.

Whatever the product’s life cycle stage,advertising strategies must consider timing. Should the organizationadvertise throughout the year on a continual basis, or seasonally? Companiessuch as commercial banks space ads evenly throughout a year.

Advertising Media

In developing advertising strategies,marketers must also consider the best

Advertising Medium for their message. IBM, for example, usestelevision ads to keep its name fresh in consumers’ minds. But it usesnewspaper & magazine ads to educate consumers on the product’s abilities& trade publication to introduce new software. Each advertising medium hasits own advantages & disadvantages.

Newspapers. Newspapers are the most widely usedadvertising medium, accounting for about 27 % of all advertising expenditures.Newspapers offer excellent coverage, since each local market has at least thedaily newspaper & many people read the paper ever day(Like you are).Thismedium offers flexible, rapid coverage, since ads can change from day to day.It also offers believable coverage, since ads are presented side-by-side withnews. However, newspapers are generally thrown out after one day, often cannotprint in color, & have poor reproduction quality. Moreover newspapers don’tusually allow advertisers to target their audience very well.

Television. Television accounts for about 22% of all advertisingexpenditures. In addition to the major networks, cable television is becoming amajor advertising medium. Cable ad revenues have increased from $58millionin1980 to $1.4billion in1988, & are projected to be over $2billion by1990.

Television allows advertisers to combinesight, sound, & motion, thus appealing to almost all the viewer’s senses.National advertising is done on television because it reaches more people thanany other medium.

One disadvantage of television is thatthere are too many commercials, causing viewers to confuse products. Mostpeople for example, can’t recall whether a tire commercial was for Firestone,or Goodrich. Viewers of VCR tapes of shows often fast-forward past the ads.Another disadvantage, is that the normal «Commercial spot» lasts only a shorttime(usually 30sec), & then its gone. If the viewer is not payingattention, the impact of the commercial is lost. Brevity also makes televisiona poor medium in which to educate viewers about complex products. Finallytelevision is the most expensive medium. A 30sec commercial during the SuperBowl costs about $750.000!

Direct Mail. Direct Mail advertisements account for 17% of alladvertising expenditures. As the name implies, direct mail often involvesfliers mailed directly to consumers’ homes or places of business. Direct Mailallows the company to select its audience & personalize the message.Consumers are also exposed to far less direct mail than to other advertisingmedia. Moreover, although direct mail incurs the largest advance costs of anyadvertising technique, it also appears to have the highest cost effectiveness.These features have helped to make direct mail a fast-growing advertisingmedium.

Radio. About 7% of all advertising expenditures are for radio time. Atremendous number of people listen to the radio each day, and radio ads arevery inexpensive. In addition, since most radio is programmed locally, thismedium gives advertisers a high degree of customer selectivity. For example,radio stations are already segmented into listening categories such as rock& roll, country & western, jazz, talk shows, news & religiousprogramming.

Like television however, radio ads are overquickly. And radio permits only an audio presentation. Also people tend to usethe radio as a background while they’re

doing their things, paying little attention to theadvertisements.

Magazines.Magazine advertising accounts for roughly 5% of alladvertising. The many different magazines on the market provide a high level onconsumer selectivity. Magazine advertising also allows for excellentreproduction of photographs & artwork that not only grabs buyer’sattention, but may also convince them on the product’s value. And magazinesallow advertisers plenty of space for detailed product information Anotheradvantage of magazines is that they have a long life & tend to be passedfrom person to person, thus doubling & tripling the number of exposures.

The problem with magazine advertising isthat ads must be submitted well in advance to be included in a certain issue.Often there is no guarantee of where within a magazine in ad will appear.Naturally, a company would prefer to have its advertisement appear near thefront of the magazine or within a feature article.

Outdoor.Outdoor advertising — billboards, signs, &advertising buses, taxis, & subways — makes up a little more than 1 % ofall advertising. These advertisements are relatively inexpensive, they facelittle competition for customers’ attention, & they are subject to highrepeat exposure. Unfortunately, companies have little control over who will seetheir advertisement.

Types of Advertising

Regardless of the media used,advertisements fall into one of several categories. Brand Advertisingpromotes a specific brand, such as Kodak126 film, Head & shoulders shampoo,& Nike Air Jordan basketball shoes. Advocacy Advertising promotes aparticular candidate or viewpoint, as in ads for political candidates atelecton time and antidrug commercials.Institutional Advertisingpromotes a fir’s long-term image, as when AT&T assures customers that it is``the right choice.

Advertising to Specific Markets’

Advertisements also differ in to whom theyare directed. That is, advertisement depend on the company’s target market. Inconsumer markets, local stores usually sponsor retail advertising toencourage consumers to visit the store & buy its products & services.Larger retailers use retail advertising on both a local & national level.Often retail advertising is actually cooperative advertising, with thecost of the advertising shared by the retailer & the manufacturer.

In industrial markets, to communicate withcompanies that distribute its products, some firms use trade advertisingpublications. And to reach the professional purchasing agent & managers atfirm buying raw material or components, companies use industrialadvertising.

Regulation of Advertising

Advertising affects nearly every American.Because it can be used to deceive as well as inform buyers, advertising hasincreasingly come under regulation. The first regulation of advertisingactivities came in1914. This act created the Federal Trade Commission toprotect competition from unfair trade practices.

Members of the advertising industry alsoregulate themselves to some degree. Advertising media, including televisionnetworks & local stations magazines, & newspapers, decline ads theybelieve to be false or in poor test. And the National Advertising Review Boardinvestigates complaints against national advertisers. If it finds in favor ofthe advertiser, chargers are dropped. If it finds in favor of the complainingparty, then the advertiser must modify or withdraw its claim.

Personal Selling Promotions

Virtually everyone has engaged in some sortof sales activity. Perhaps you had a lemonade stand or sold candy for the dramaclub. Or you may have gone on a job interview — selling your abilities &service as an employee to the interviewers company.

Personal selling — the oldest form ofselling — is a vital cog in many companies’ promotional efforts. It providesthe personal link between seller & buyer. It adds to a firm’s creditabilitybecause it provides buyers with someone to interact with & to answer theirquestions.

Because it involves personal interaction,however, personal selling requires a level of trust between the buyer & theseller. When a buyer fells cheated by the seller, that

trust has been broken & negativeattitude towards salespeople in general develops. To counteract thisreputation, many companies are emphasizing customer satisfaction &generally striving to improve the effectiveness of whatever personal sellingthey undertake.

Personal selling is also most expensiveform of promotion per contact because presentations are generally made to oneor two individuals at time. Personal selling expenses include salespeople’scompensation & their overhead, usually travel, food & lodging. Theaverage cost of sales call has been estimated an approximately $240 & hasbeen increasing rapidly in recent years.

The high cost of personal sales have prompted manycompanies to set up Telemarketing departments.Telemarketing is the useof the telephone to carry out many of the activities involved in marketing acompany’s products. Telemarketing can be used to handle any stage of thepersonal selling process or to set up appointments for outside sales people.

Types of Personal Selling Situations

Managers of both telemarketing &traditional personal sales people must always consider how personal service areaffected by the difference between consumer products & industrial products.Retail selling involves selling a consumer product for the buyer’s ownpersonal or household use. Industrial selling deals with sellingproducts to other businesses, either for manufacturing other products or forresale.

Each of this selling groups situations hasits own distinct characteristics. In retail selling the buyer usually comes tothe seller. The industrial salesperson almost always goes to the prospect’splace of business. The industrial decision process also may take longer than aretail decision because more money, decision makers, & weighting ofalternatives are involved. And industrial buyers are professional purchasingagents who are accustomed to dealing with salespeople. Consumers in retailstores, on the other hand, may be intimidated by salespeople.

Personal Selling Tasks

Improving sales efficiency also requiresmarketers to consider salespeople’s tasks. Three basic tasks are generallyassociated with selling: Order processing, creative selling, & missionaryselling. Sales jobs usually require salespeople to perform all three tasks tosome degree, depending on the product & the company. As you will see, thistasks differ in the skills required, the methods used, & the reasons forusing them.

Order Processing. At the most basic level, OrderProcessing, a salesperson receives an order & sees to the handling &delivery of that order. Route salespeople are often order processors. They callon regular customers to check the customer’s supply of bread, milk, snackfoods, or soft drinks. Then, with a customer’s consent, they determine the sizeof the reorder, fill the order form their trucks, & stack the customer’sshelves.

Creative Selling.When the benefits of the product are notclear, creative selling may persuade buyers. Most industrial products involvescreative selling because the buyer has not used the product before or may notbe familiar with the features & uses of

a specific brand. Personal selling is also crucial forhigh priced consumer products, such as homes, where buyers comparison shop. Anynew product can benefit from creative selling that differentiates it from otherproducts. Finally, creative selling can help to create a need.

Missionary Selling. A company may also use missionary sellingto promote itself & its products. The goal of missionary selling is topromote the company’s long-term image than to make a quick sale.

The Personal Selling Process

Although all three sales tasks areimportant to an organization using personal selling, perhaps the mostcomplicated is creative selling. It is the creative salesperson who isresponsible for most of the steps in the personal selling process described here.

Prospecting & Qualifying. In order to sell, a sales person must firsthave a potential customer, or prospect. Prospecting is the process ofidentifying this potential customers. Salespeople find prospects through pastcompany records, customers, friends, relatives, company personnel, &business associates. Prospects must then be qualified to determinewhether or not they have the authority to buy & the ability to pay.

Approaching. The first few minutes that a salespersonhas contact with a qualified prospect are called the approach. Thesuccess of later stages depends on the prospect’s first impression of thesalesperson, since this impression affects the salesperson’s creditability.Thus, salespeople need to present a neat, professional appearance & togreet prospects in a strong, confident manner.

Presenting & Demonstrating. Next, the salesperson mustpresentthe

promotional message to the prospect. A presentation isthe full explanation of the

product, its features, & its uses. Itlinks the product’s benefits to the prospect’s needs. A presentation may or maynot include ademonstration of the product.

Handling Objections. No matter what the products, prospects willhave some objections. At the very least, prospects will object to a product’sprice, hoping to get a discount. Objections show the salesperson that the buyeris interested in the presentation & which parts of the presentation thebuyer is insure of or has a problem with. They tell the salesperson whatcustomers feel is important &, essentially, how to sell them.

Closing.The most critical part of the selling process is the close,in which the

sales person asks the prospective customer to buy theproduct. Successful salespeople, recognize the signs that a customer is ready tobuy. Salespeople can ask directly for the sale or they can indirectly imply aclose. Questions such as « Could you take delivery Tuesday?» & « Why don’twe start you off with an initial order of ten cases?» are implied closes. Suchindirect closes place the burden of rejecting the sale on the prospect, whooften will find it hard to say no.

Following Up. The sales process doesn’t end with theclose of the sale. Most companies wants customers to come back again. Salesfollow-up activities include fast processing of the customer’s orders &on-time delivery. Training in the proper care & usage of the product &speedy service if repairs are needed may also be part of the fallow-up.

Sales Promotions

Sales promotions ( motivators) are a veryimportant factor in the promotional mix because they increase the chances thatconsumers will try a product. They also enhance recognition for the products.And they can increase the purchase size & amount.

Did you ever here a promotional slogan « buy three& get one free.»

To succeed, however, sales promotions mustbe convenient & accessible when the decision to purchase occurs.

Types of Sales Promotions

Sales promotions can take a variety offorms. The best known are coupons, point of purchase displays, free samples,trading stamps, premiums, trade shows, trade promotions, & contests &sweepstakes.

Coupons. Any certificate that entitles the bearer toa stated savings off aproduct’s regular price is acoupon.Coupons may be used to encourage customers to try new products, to attractcustomers away from competitors or to include current customers to buy more ofa product. They appear in newspapers & magazines & are often sentthrough direct mail.

Point-of-Purchase Displays. To grab customer’s attention as they walkthrough the store, some companies use Point of Purchase Displays.Displays located at the end of the aisles or near the checkout in supermarketsare POP displays. POP displays are always coincide with a sale or the itembeing displayed. They also make it easier for customers to find a product &easier for manufacturers to eliminate competitors from

consideration. The cost of shelf & display space,however, is becoming more & more expensive.

Free Samples, Trading Stamps, &Premiums. Purchasingincentives such as free samples, trading stamps, & Premiums are used bymany manufacturers & retailers. Premiums are gifts, such as pens,pencils, calendars, & coffee mugs, that are given away to consumers inreturn for buying a specified product. Retailers & wholesalers also receivepremiums for carrying some products.

Trade Shows. Periodically, industries sponsor TradeShows for their members & customers. Trade shows allow companies torent booths to display & demonstrate their products to customers who have aspecial interest in the products or who are ready to buy. Trade shows arerelatively inexpensive & are very effective, since the buyer comes to theseller already interested in a given type of product.

Contests & Sweepstakes. Customers, distributors, & salesrepresentatives may all be persuaded to increase sales of a product through theuse of contest. For example, distributors & sales agents may win a trip toHawaii for selling the most pillows in the month of March. Although sweepstakescan’t require consumers to buy a product to enter, they may increase sales bystimulating buyers’ interest in a product.

Publicity & Public Relations Promotions

Much to the delight of marketing managerswith tight budgets, Publicity Is FREE. Moreover, consumers see publicity asobjective & highly believable. Thus, it is a very important part of thepromotional mix. However marketers often have a little control over publicity.

Public relations is company-influencedpublicity. It attempts to establish a sense of goodwill between the company& its customers through public service announcements that enhance thecompany’s image. From this topic, so far, you may think that only largecompanies can afford to seriously promote their goods & services. Althoughsmall businesses have fewer resources, cost-effective promotions can improvesales & enable small firms to complete with a much larger firms.

Small Business Advertising

The type of advertising chosen by a smallbusiness depends on the market the

firm is trying to reach: Local, National,International.

Local Markets.Advertising is non prime-time slots onlocal television offers great impact at a cost many small firms can afford.More commonly though, small businesses with a local market use newspaper &radio advertising &, increasingly, direct mail.

National Markets. Many businesses have grown from small tolarge operations by using direct mail & particularly catalogues. Bypurchasing mailing lists of other companies’ customers, a small firm can targetits mailing, reducing costs. The ability to target an audience also makesspecialized magazines attractive to small businesses.

International Markets.Television, radio, & newspapers areseldom viable promotional options in reaching international markets because ofboth their costs and their limited availability. Most small firms find directmail & magazine advertising the most effective promotional tools.

Small Business Personal Selling

Like advertising, personal sellingstrategies used by small businesses depend on their intended market.

Local Markets. Some small firms maintain a sales force topromote & sell their products locally. Other contract with a sales agency — a company that handles the products of several companies — to act on theirbehalf. Insurance agents who sell insurance for several different companies aresales agencies.

National Markets. Because of a high costs of operating anational sales force,

many companies have establishedtelemarketing staffs. By combining telemarketing with a catalog or othereducational product literature, small companies can sell their productsnationally & compete against much larger companies.

International Markets. Small companies can’t afford to establishinternational offices in order to conduct businesses. Even sending salesrepresentatives overseas is expensive. Thus, many small companies have combinedtelemarketing with direct mail in order to expand internationally. Smallbusinesses often depend on an interesting or unusual sign to attract newcustomers.

Small Business Sales Promotions

Small companies use the same salespromotion incentives that larger companies use. The difference is that largerfirms tend to use more coupons, POP displays, & sales contests. Smallerfirms rely on premiums & special sales, since coupons & sales contestsare more expensive & difficult to manage.

Small Business Publicity

Publicity is very important to smallbusinesses with local markets. Small firms often have an easier time gettinglocal publicity than do national firms. Readers of local papers like to readabout local companies, so local papers like to write about such businesses. Butfierce competition for coverage in national & international publicationslimits the access small businesses have to those markets.

Distributing Goods & Services

In selecting a distribution mix for gettingits products to customers, a firm may use any or all of six distributionchannels. The first four are aimed at consumers & the last two atindustrial customers. Channel 1 involves a direct sale to the consumer. Channel2 includes a retailer. Channel 3 also includes one wholesaler, while Channel 4includes an agent or broker before the wholesaler. Distribution strategiesinclude intensive, exclusive, & selective distribution.

Wholesalers act as distributionintermediaries, extending credit & storing, repackaging, & deliveringthe product to other members of the distribution channel. Full-service, &limited-service, merchant wholesalers differ in the number of distributionfunctions they offer. Agents & brokers never take legal possession of theproduct.

Retailing involves direct interaction withthe final consumer. The major types of retail stores are department, specialty,bargain, convenience, supermarkets, & hypermarkets. (Like in Moscow.) Theydiffer in terms of size, services, & product type they offer, & productpricing. Some retailing also takes place without stores, through the use ofcatalogs, vending machines, & video marketing. According to the wheel ofretailing, conventional retailers are periodically Displaced by low-pricedinnovative retailers, who then become more conventional & subject todisplacement.

Distribution ultimately depends onphysically getting the product to the buyer. Physical distribution includescustomer-service operations such as order processing. It also includeswarehousing & transportation of products. Warehouses may be public orprivate & may be used for long-term storage or serve as distributioncenters. Costs of warehousing include inventory control & materialshandling.

Truck, plane, railroad, water, &pipeline transportation differ in cost, availability, reliability of delivery,& speed. Air is the fastest but most expensive. Water carriers are theslowest, but least expensive. Most products are moved by truck at some point.Transportation in any form may be supplied by common carriers, freightforwarders, contract carriers, or private carriers.

Developing & Pricing Products

Products are a firm’s reason for being,their features offer benefits to buyers, whose purchases are the source ofbusiness profits. In developing products, marketers must take into accountwhether their market is individual consumers or other firms. Marketers mustalso recognize that buyers will pay less for & worry less about the exactnature of convenience goods than about shopping & specialty goods. Inindustrial markets, expensive items are generally less expensive & morerapidly consumed than are capital items.

The seven stages of product development aredevelopment the ideas, screening, concept testing, business analysis, prototypedevelopment, test marketing, & commercialization. Very few ideas for newproducts survive to the commercialization stage.

When new products are launched, they have alife cycle that begins with their introduction & progresses through stagesof growth, maturity, & decline Revenues rise through the early growthperiod; sales rise through the late maturity period. In terms of the growth-share matrix, this progression appears as a product moves from questions markto star to cash cow to dog.

Each product is given a visible identity byits brand & the way it is packaged & labeled. National, licensed &private brands are developed to create brand loyalty. Packaging provides anattractive container & advertises the product. The label informs theconsumer of the package contents. The pricing of the product will determine itsbusiness success, depending on the business objectives that are being sought.Profit maximization, market share, & other business objectives may berelevant to the pricing decision. Economic theory, cost-oriented pricing, &break-even analysis are tan used as tools in determine prices.

Pricing also involves choices of a basicpricing strategy can be used for new products. Existing products may be pricedat, above, or below prevailing prices for similar products, depending on theother elements in the marketing mix. Within a firm’s pricing strategies,managers set prices using tactics such as price lining, psychological pricing, &discounting.