Micro-Marketing
Cost-based pricing is the simplest pricing strategy. Using this strategy price is set by adding some mark-up to the cost of the product. This strategy works if firm’s prices are not too high as compared to the competition. (Kotler P. , Armstrong, Saunders, & Wong, 2005)
Another cost-oriented pricing strategy is Break-even Pricing. Firms determine the price at which they can recover manufacturing and marketing cost, or make targeted profit. (Nagle & Hogan, 2006)
Competition-based Pricing is when a company sets prices in accordance with the competition. Prices are largely based on the prices of the competitors. (Kotler P. , Armstrong, Saunders, & Wong, 2005)
In Customer-value based Pricing, products are priced on the basis of perceived value of the product. Company shall find out what value customers assign to competitors’ product and what value they perceive of company’s product. Measuring perceived value is difficult and if the more prices are charged than the perceived value, sales will suffer. (Kotler P. , Armstrong, Saunders, & Wong, 1999)
Promotion
Kotler (2002) defines promotion as the activities a company performs in order to communicate to its existing and potential customers. Multiple channels are used to communicate to different parties (Distributors, customers) and different means could be used to do promotion.
Branding Strategies for Promotion
Kotler (2002) classifies promotional activities into different categories.
Advertising is a non-personal presentation of goods or services, such as T.V ads. (Kotler P. , Armstrong, Saunders, & Wong, 2002). Keller (1998) considers advertisement a powerful tool to create strong associations with brands.
Personal Selling is the type of promotion in which a company representative meets customers personally to sell a product. It is useful to understand customer needs deeply. (Kotler P. , Armstrong, Saunders, & Wong, 2002). According to Keller (1998) personal selling is more customized and detailed.
Sales
Another cost-oriented pricing strategy is Break-even Pricing. Firms determine the price at which they can recover manufacturing and marketing cost, or make targeted profit. (Nagle & Hogan, 2006)
Competition-based Pricing is when a company sets prices in accordance with the competition. Prices are largely based on the prices of the competitors. (Kotler P. , Armstrong, Saunders, & Wong, 2005)
In Customer-value based Pricing, products are priced on the basis of perceived value of the product. Company shall find out what value customers assign to competitors’ product and what value they perceive of company’s product. Measuring perceived value is difficult and if the more prices are charged than the perceived value, sales will suffer. (Kotler P. , Armstrong, Saunders, & Wong, 1999)
Promotion
Kotler (2002) defines promotion as the activities a company performs in order to communicate to its existing and potential customers. Multiple channels are used to communicate to different parties (Distributors, customers) and different means could be used to do promotion.
Branding Strategies for Promotion
Kotler (2002) classifies promotional activities into different categories.
Advertising is a non-personal presentation of goods or services, such as T.V ads. (Kotler P. , Armstrong, Saunders, & Wong, 2002). Keller (1998) considers advertisement a powerful tool to create strong associations with brands.
Personal Selling is the type of promotion in which a company representative meets customers personally to sell a product. It is useful to understand customer needs deeply. (Kotler P. , Armstrong, Saunders, & Wong, 2002). According to Keller (1998) personal selling is more customized and detailed.
Sales