PROMOTION,

DISTRIBUTION AND
PRICE
 PROMOTION
• All about communicating the products to the consumers.
• Helps the company to establish and maintain a strong and
harmonious relationship to their consumers.
• It corresponds to any marketing activities and communication
undertaken to inform a target audience and persuade them to
buy a product or respond to a specified call-to-action.
Note: this is one of the basic elements of the marketing mix
or the 4Ps model of marketing along with product or product
strategy, place or distribution, and pricing.
• Promotion is the part of marketing where you advertise and
market your product, also known as a promotional strategy.
Through it, you let potential customers know what you are
selling.
PURPOSE OF PROMOTION
• Create and promote awareness, create
interest, and generate sales or prompt a
favorable response. Nonetheless, there
are different ways organizations
promote their products or even an idea.
 TYPES OF PROMOTION
1. ADVERTISING is any paid forms of communication on goods,
services, ideas, individuals or institution through the use of media with the
intent of advertiser
2. SALES PROMOTION is a short term tactic designed to attract and
invite customers to try and purchased the products
3. PUBLIC RELATION a management functioned design to create and
maintain the strong and harmonious relationship between the organizations
and publics
4. PERSONAL SELLING is a face to face presentation to customers
with the intention of making sales and building relations.
5. DIRECT SELLING is a direct communication to prospective and
specific consumers using mail, telephone, fax, email and other non-personal
tools to gain immediate response
TWO STRATEGY OF PROMOTIONAL MIX

• PUSH STRATEGY. Companies may use sales force and trade

promotion in pushing the products into different channels.

• PULL STRATEGY. Marketers using this strategy heavily rely on

advertising and consumer creation to create demand. This
success will let the consumers demand the product to the
retailers. This retailer will demand the product to the
wholesalers. Moreover, the wholesalers will demand the product
to the manufacturer.
TWO MAIN PATHWAYS
• Above the line Promotions –Promotions which use
mass media vehicles like television, newspapers,
radio etc.

• Below the line Promotions – Promotions which

use out of home media, sales promotions, trade
promotions, or in general, where one to one
interaction receives more importance.
PROMOTIONAL STRATEGY

• Radio
• Television
• Print
• Electronic
• Word of Mouth
• Generic
 PROMOTIONAL TOOLS
1. Sample
2. Coupons
3. Cash refund or rebate
4. Price pack or cent-off
5. Premium
6. Discounts
7. Point of purchase
8. Contest, sweepstakes or games
DEVELOPING SALES
PROMOTIONAL PROGRAM
1. The size if incentives
2. The condition of the participants
3. The promotion and distribution of the
program
4. The duration of the promotion
5. The evaluation of the program
AFFECT OF PROMOTION IN
MARKETING
1. Awareness
2. Brand building
3. Positioning
4. Acceptance
5. Targeting of customers
6. Brand recall
 DISTRIBUTION
• Distribution (or place) is one of the four elements of the marketing
mix. Distribution is the process of making a product or service
available for the consumer or business user who needs it. This can
be done directly by the producer or service provider, or using indirect
channels with distributors or intermediaries.

• One of the sections of your marketing plan should describe how your
company intends to distribute the products to the final customers. ...
You have to make sure the distribution channels you select match
and reinforce the goals and objectives of your marketing plan.
Distribution is the activity of both selling and delivering products and services from manufacturer to
customer. This can also be called product distribution. As businesses become more global it
becomes important to improve distribution to ensure that customers and all members of the
distribution channel are happy. Depending on the length of the distribution channel there can be
many people involved in distribution.

What Is the Importance of Distribution?

Distribution is an important element of operations as, without a role that tracks and improves the
relationship between manufacturers and customers, a company cannot ensure the best possible
service. If bottlenecks happen in distribution, deliveries fall short, customers, retailers and
suppliers get angry, and trust is lost. For product distribution to be truly successful a continuous
feedback loop needs to be implemented to ensure everyone is happy with the process and that
any improvements that can be made, are made.

In terms of drop shipping and customers buying items online, merchants and customers do not get
to try the product before they buy so they trust that the item will arrive just like in the pictures and
descriptions. This means that the distribution channel needs to be efficient at providing responses
and comments across the whole channel.
What Is Distribution Management?
• Distribution management refers to the main activities of
distributing a product, which includes:

1. Packaging: Providing adequate packaging for a product so it

can be transported safely.
2. Inventory Management: Maintaining a good level of inventory
is hugely important to distribution. Management of inventory is
one of the main responsibilities for distribution management.
3. Order Processing: Once an order comes in from a customer,
distribution management needs to plan for the delivery. This
involves collecting the stock, loading it and delivering it in a timely
manner. Approval needs to be sent and invoicing done for this
step to be valid.
4. Logistics: Mode of transport is important to consider
for all orders. If they require overseas shipping there
must be agreements in place for permits to be approved
quickly. Loading and handling need to be decided so that
all equipment that could be needed is available onsite.

5. Communication: Clear communication is needed

both on and offsite at distribution centers. This is to
ensure that the correct products are shipped and
customers know when they will receive their items. If a
shipment is delayed, distribution management needs to
notify all interested parties immediately.
A distribution channel is a chain of businesses or intermediaries
through which a good or service passes until it reaches the final buyer
or the end consumer. Distribution channels can include wholesalers,
retailers, distributors, and even the Internet.

Distribution Strategy is a strategy or a plan to make a product or a

service available to the target customers through its supply chain. A
company can decide whether it wants to serve the product and service
through their own channels or partner with other companies to use their
distribution channels to do the same.

Personal distribution relates to the forces governing the distribution of

income and wealth among the various individuals of a country. Under
personal distribution, we study the pattern of the distribution of national
income and the shares received by the different classes.
PRICE
• Pricing is the method of determining the value a producer will
get in the exchange of goods and services. Simply, Pricing
method is used to set the price of producers relevant to both the
producer and the customer.

• Price is also what a consumer must pay in order to receive a

product or service. Price does not necessarily always mean
money. Bartering is an exchange of goods or services in return
for goods or services. For example, I teach you English in
exchange for you teaching me about graphic design.
 We’ve been using the word “price” a lot. There are, however, other terms you
may come across in your studies and daily life that serve as synonyms.

• Charge

When someone wants to know the price of a service, they may ask, “How
much do you charge? ” In this context, the word “charge” is a synonym for price.

• Value

From a customer’s point of view, value is the sole justification for price. Many
times customers lack an understanding of the cost of materials and other costs that
go into the making of a product. But those customers can understand what that
product does for them in the way of providing value. It is on this basis that
customers make decisions about the purchase of a product.
• Fee
Service providers may present you with a fee list as opposed to a price tag if you ask for the
price of their services.

• Fare
You pay a price to fly, ride the bus and take the train. The price in these industries is
expressed as a fare.

There are a number of pricing strategies that a company can use to sell its product. The
strategy used at any time will depend on the company’s strategy and objectives. Some of these
pricing strategies are the following.

Penetration Pricing

Is the practice of setting an initial price much lower than the eventual standard price. This
strategy essentially represents a price war, going for the deepest possible price cuts and aiming for
your price to always be the lowest on the market. Penetration pricing can bring new customers into
your store, increasing market share and building customer loyalty. Customers who are looking for the
best bargain will switch their loyalty to you if you can entice them with the lowest prices. This strategy
works best during a product’s growth phase, since the product already has a positive reputation.
Skimming Pricing
Here, the initial price is set high and may slowly be brought down.
This will allow the company to introduce the product step by step to
different layers of the market. Electronic and tech gadgets often start at
a very high price which is subsequently lowered with the lowest point
reached right before a new model is launched.

Competition Pricing
When trying to go head to head with competitors offering similar
benefits, a company may decide to:
a. price higher to create a higher quality perception or to target a nice
market
b. price the same to show more benefits for the same price
c. price lower to try to gain a wider customer base
Product Line Pricing
Here, different products in the same range may be set at different
prices. Television sets are priced differently depending on whether they
are HD or not, whether they have Wi-Fi features of not and whether
they are 3D or not.

Bundle Pricing
A group of products may be bundled together and sold at a
reduced price. Supermarkets often use this method through their ‘buy
one get one free’ offers.

Psychological Pricing
Often a company will make small changes to prices to make a
customer think the item is priced lower than it is. This is often seen in
prices ending in 99. For example, an item market 199 will be perceived
as closer in price to 100 than 200.
Premium Pricing
A high price is set to establish an exclusive product of high quality. Designer
cars and premium brand stores are a good example of this type of pricing.

Optional Pricing
A company may add optional extra items within the price to increase a
product’s attractiveness. Car sellers may offer car insurance for the first year for
example.

Cost Based Pricing

Simply, a company may determine the exact cost of producing and selling an
objective, add a markup that may be desirable for profits and price accordingly. This
method may be used in a changing industry where even costs of production are
unpredictable.

Factors That Affect Pricing

There are several basic factors that affect pricing for almost all companies
and industries. These can be categorized as internal factors and external factors.