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Strategies for Pricing, Promotion and Marketing Analysis

Paper Type: Free Essay Subject: Marketing
Wordcount: 5335 words Published: 12th Jan 2018

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We all are exposed to marketing in one or the other form everyday. Every time we buy or use a product, go window shopping, watch an advertisement, find a new product or someone telling about it. Marketing outputs are very familiar and are not as narrow as people generally know. Marketing is not just advertising, selling or making people buy things they want or they don’t.

Marketing infact covers a wide range of absolutely essential business activities that bring us the products we want them, when we want them, where we want them, with all information. (Kotler P and Keller K, 2006)

“Marketing is the management process that is responsible for identifying, anticipating and satisfying customer requirements profitably”. (CIM, 2001)

“Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives”. (AMA, 1985)

A definition that includes the important elements of both the AMA and CIM definitions, but still embraces the evolving relationship orientation is offered by Gronroos (1997).

“Marketing is to establish, maintain and enhance relationship with customers and other partners at a profit, so that the objectives of the partners, at a profit, so that the objectives of the parties involved are met. This is achieved by mutual exchange and fulfilment of promises”. (Gronroos C, 1997)

Marketing management is the act and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value. (Kottler.P , Keller.K 2006)

Marketing is a management process.

Marketing involves management skills, requires planning, analysis, resource allocation, control and investment in terms of money, skilled people and physical resources. It also requires implementation monitoring and evaluation.

Marketing fulfills customer requirement profitably

Marketer has to work within the resource capabilities of the organisation and specifically work within the agreed budgets and performance targets set for the marketing function.

Marketing identifies and anticipates customer requirements.

Marketer creates some sort of offering only after researching the market and pinpointing exactly what the customer want.

Marketing is about giving customers what they want

It implies a focus towards the customer or end consumer of the product or service. (Kotler P and Keller K, 2006)

Marketing offers and exchanges ideas, goods and services.

The idea of marketing is an exchange process, organisation offers a product or service and the customer offers a sum of money in return. (Brassington F and Pettit S, 2006)

Marketing deals with identifying and meeting human and social needs, one of the shortest definitions is “meeting needs profitably”. (Kotler P and Keller K, 2006)

  • Marketing management tasks
  • Capturing marketing insights
  • Developing marketing strategies
  • Connecting with customers
  • Shaping the market offerings
  • Delivering value
  • Communicating value
  • Creating long term growth

(Kotler P and Keller K, 2006)

The marketing mix is one of the dominant ideas in modern marketing. Marketing mix consists of everything the firm can do to influence the demand for its product. The many possibilities gather into 4 P’s. They are Product, Price, Place and Promotion. “The set of controllable tactical marketing tools– product, price, place and promotion- that blends to produce the response it wants in the target market.

Marketing Mix

Variety Advertising

List price







Personal selling





Payment period


Brand name

Direct selling

Credit terms






Target Market

(Kotler et al, 2001, p98)

THE 4 Ps of Marketing – The four strategies of the marketing mix (product, price, promotion and place) are interconnected. The marketing mix is one of the dominant ideas in modern marketing. Action in one affects decisions in another. It is the set of controllable tactical marketing tools that blends to give or meet the market needs. Target population must be first selected and then the strategies are applied towards. Marketing mix consists of everything that can influence the demand of the product.

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PRODUCT- Product can be a tangible object or a service offered by a company to the target market. A product can be any physical object, services, person, places, organisation and ideas that are offered to a market for acquisition, attention, consumption or use that satisfies the customer needs or wants. There are different product levels depending on the customer value hierarchy, they are; core benefit, basic product, expected product, augmented product, potential product.

PRICE – Price is the amount of money charged for a product or service rendered, it is also the sum of value that consumers exchange for the benefits of having, using satisfying their needs or wants of the product or service.

PROMOTION – Promotion are the activities that communicate the merits of the product or service that persuade the target customer to buy them. Special promotion offers like cash discount, rebates, offers etc.

PLACE – Place is all the activities that a companies carries to make the product reach and available to the market. Place is also the distribution channel and distribution of the product or service in the most advantageous and best way possible to the target customer. (Kotler et al, 2001, p98), (Kotler P and Keller K, 2006), (Lancaster G and Massingham L, 1993, p100)


The communication of merits of the product and persuading the customer to purchase is promotion. The benefits of the product have to be communicated to the customers for earning profits and gaining sales. The process of communicating with various form or promotion mix is known as promotion. (Kotler et al, 2001, p98)

Promotion mix

Promotion mix is the blend of promotional tools, which are, advertising, sales promotion, personal selling, sales force, direct marketing and public relations. These promotional tools are used to communicate or spread awareness to the customers. These tools have different characteristics and costs. Total marketing communications programme carried by a company or a business is called the promotional mix. (Kotler et al, 2001), (Michael J. Barker, 2003)


Any paid form of non-personal communication of ideas or products through the medium or channel like television, newspapers, magazines, hoardings, posters, radio, cinema etc by an identified sponsor. Advertising include not only business firms, but also museums, charitable organisations, and Government agencies that direct messages to target publics. Advertisements are cost-effective way to disseminate messages, whether to build brand preference or to educate people. (Kotler. P, p590, 2005)

The intention of advertisement is to inform and to persuade. The two basic aspects of advertising are the message that has to be communicated and how to be communicated. (Keith Crosier, 1998a)

Personal Selling

Personal selling is one of the effective tools of promotion mix involving an interactive relationship between the seller and the buyer. It is more effective in building up buyer preference, conviction and action. (Philip Kotler, 2005, p580 ; Kotler P and Keller K, 2006, p556)

Sales Promotion

Sales promotion is used for short run effects to promote product offers and to push sagging sales. Through sales promotion, companies get better, stronger and quicker response from the customers. Ex- contests, coupons, premiums, offers-buy one get one etc.(Philip Kotler, 2005, p580)

Public relation or Publicity

It is to build good relationship between the public and the company by favourable publicity, thereby building image. Lower in cost compared to advertising. It is most of the times the communication of a product, brand or business by placing information about it in the media without paying for the time or media directly. (Kotler et al, 2001, p690)

Direct marketing

Direct marketing is an interactive system of marketing that uses one or more advertising media to effect a measurable response or transaction at any location. Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships by using telephone, mail, e-mail, internet, fax etc. to communicate directly with specific consumer alternative. (Bennett P D, 1995), (Betts et al., CIM, 1998) (Terance A. Shimp, 1997, p386)

Promotion mix



Builds awareness, public presentation (impersonal) Repetition of brand awareness and product helps in positioning and build customer trust

Personal Selling

Immediate and interactive – lots of communication between the buyer and seller, sales call are costly. Communicating complex and deeper product information and features.

Relationships can be built up – important if closing the sale make take a long time.

Sales Promotion

Can stimulate sales by targeting promotional incentives on particular products

Effective short term promotional tool.

Public Relations

News, stories and features are more authentic and credible.

Cheap way of reaching many customers – if the publicity is achieved through the right media but lose control.

Direct Marketing

Direct interaction with targeted individual consumers.

Communication can be personalised and activities less visible to competitors.

(David Jobber, 2001),( William G. Zikmund and Michael d’Amico, 1998), Kotler P and Keller K, 2006, p555-6)


“Advertising is any paid form of non personal presentation and promotion of ideas, goods and services by an identified sponsor”.(AMA, 1963)

“Advertising is the non-personal communication of marketing related information to a target audience, usually paid for by the advertiser, and delivered through the mass media in order to reach the specific objectives of the sponsor”(Burnett, 1993)

Advertising: Its role and structure

Developments in magazines, radio and television have had a tremendous impact of advertising. Apart from marketing, advertising may also serve several other functions in the economy and in the society. (Bovee C. L and Arens W. L, 1992)

A hierarchy of effects model proposes that ads can move consumers closer to buying step by step, from being unaware, to knowledge, to liking, to preference, to desire, to purchase.

The basic functions of advertising are-

Precipitation- Create awareness and stimulate needs and wants.

Persuasion- Encourage action and commitment

Reinforcement- Support customer’s past decisions

Reminder- Create habit

Advertisings have the ability to add value to the brand as they are capable of endowing a brand with a symbolic meaning that makes more value in the consumer’s eye. (Kotler P and Keller K, 2006, p556)

Advertising performs the communication function of a company, which the company has faith on. The main function of advertising are informing, persuading, reminding, adding value and assisting other company efforts.

Informing: Advertising makes consumer aware of brands, new brand, educates about the features and benefits, builds brand image or forming o it by reaching the mass audience at a low cost per head. It also increases demand for existing product, teaches new uses of product and awareness.

Persuading: Advertisements persuades or try to push the consumers and customers to try the advertised products and services. At chances there is also demand created for the secondary product of the brand.

Reminding: Advertisements make the brand memorable by recalling them, they also remind customers of their purchases, influences the consumer’s interest in mature brand bears influence on brand switchers by letting them know about the other.

Assisting other company efforts: Advertisement assists other company efforts by carrying the information or spreading the awareness of sales promotion to consumers(coupons, offers). It also helps the consumers in recognising the product or brand by showing the packaging and design on television, hoardings and magazines. (Shimp T. A., 2000)

Advantages of advertisements

  • Advertising provides an introduction to the company and its products
  • Advertising explains the products new features
  • Advertisements are more economical
  • Advertisements offering brochures generate leads to sales people
  • Advertisements tell people how to use the products and make them aware of their right purchase. (Kotler P and Keller K, 2006, p556)

Advertisings have the capability to compliment the other promotional mix elements, like- Delivering sales promotions directly and supporting them indirectly, carrying public relations messages and announcing public relations activities, it also presells the salesperson’s product. Thereby advertising increases sales and profitability. (Burnett, 1993)

The economic impact of advertising can be linked to the opening shot in billiards, a chain reaction that affects the company that advertises as well as its competitors, customers and the business community. On the otherside or broaderscale, advertising is often considered the trigger on mass distribution system that enables the manufacturers to produce the products in high volume, at low prices, standardised quality. Advertising adds value to products, makes products more or less expensive, affects total consumer demand, encourages or discourages competition, narrows or widens consumer choice and affects national business cycles.

Advertising influences in an economy that produces more goods and services that can be consumed. (Bovee C. L and Arens W. L, 1992). Advertising is expensive and its effects are uncertain, moreover sometimes it takes time to impact on consumer behaviour.

Functions and effects of advertisements as a marketing tool

  • To stimulate the distribution of a product
  • To lower the overall cost of sales
  • To build brand preference and loyalty
  • To identify products and differentiate them from others
  • To communicate information about product, its features and its location of sale
  • To induce consumers to try new products and to suggest reuse. (Bovee C. L and Arens W. L, 1992)

The magnitude of advertising

Advertising is a big business. USA’s expenditure on advertisements alone total to 200 million dollars as of 1998. Some American companies invest more than 1 billion dollar a year on domestic product. (Coen R. J, 1997)

Advertising is investment in brand equity bank

Brand’s equity is enhanced by marketing communications that create brand awareness thereby leading to strong, favourable and unique relation in the consumer’s memory between brand, feature and its benefits. (Aaker D. A., 1993). A brand is differentiated from competitive offering from price competition. (Boulding W, 1994)

Advertising affects on building brands

Advertising helps to build brands by communicating value and adding personality. It is only advertising that can do this task well. Advertising is essential to build consumer perception of brand values in market. (Randall, 1994, p 16)

Advertising cannot be evaluated separately and it is an extricable part of total brand.

The sales of brand are associated with the advertising expenditure as they are directly proportional. Advertising takes the sales up and down with the increase and decrease with proportion to the communication spread to the consumers of the market. Mraket have instinctive and correct feeling that the brand is the most valued property that evaporates unless supported properly by investment in advertising. (Arnold, D 1993)


A brand is a name, term, sign, symbol or design or combination of them intended to identify the goods and services of one seller or group sellers and to differentiate them from those of competitors.

-American Marketing Association

Ultimately, a brand is something that resides in the mind of customer.

“A brand is every sign that is capable of distinguishing the goods or services of a company.”

In this definition, the stress is on ‘sign’ and ‘distinguishing’. A sign may be a word, picture or form mark. The brand name is that part of the brand that can be pronounced. A brand name can serve as a characteristic in the recognition of the branded article.(Riezebos.R et al, p-33,63,85, 2003)

Brands are fundamentally important to the survival and success of many firms for which companies have to manage them correctly. Strong brands are powerful and profitable yet there are many challenges and threats continuing strength and their existence.

Branding is a fundamental strategic process that involves all parts of the firm in its delivery. Brand must always deliver value which must be defined in consumer terms. Brand has a continuing relationship with its buyers and users, this may change overtime but the company should always work on it to maintain it.

Branding must be continuously adapted so that it is both efficient and effective due to the threat of growing competition. (Randall G, 2000, p1-5)

The connection of Zippo lighters, Swatch watches or Mont blanc pens. With all the views it feels that a brand is something different from a product. When Virgin first started, it sold music as a product. Later the Virgin brand was built up and now is in various fields like airlines, cola, railways and financial services. It is now definitely a brand.

A brand has an existence that is more than an actual product or service, it has a life of its own that feeds on the original product but also carries its original values and identify into new product areas.

“A product is something that is made in factory and brand is something that is bought by a consumer” (Randall G, 2000, p1-5)

It is every human being’s nature to invent and build brand values in each individual head. We do it with people, we do it with animals and we do it with inanimate objects. The skill of brand management is to see that each consumer is offered the right raw materials from which he or she will build the brand as the brand owner would prefer.(Randall G, 2000, p1-5)

A brand is not an objective fact, it is made up of a million or more individual and subjective assessments. (Bullmore, 1999)

Hankinson and Cowking (1993) have described brand definition under six headings;

  • Visual
  • Perceptual
  • Positioning
  • Added value
  • Image
  • Personality

(Hankinson, G and Cowking, P,1993)

Brand Image and Brand Identity

Brand image- Brand image is what exists in the minds of consumers and the entire information of the brand they have received by word of mouth, advertising, packaging, experience, service etc. modified by perception, previous beliefs, social norms and forgetting. Brand image is what exists.

Brand identity- Brand identity is what is under control and what is transmitted to the market. A strong brand is one that has a consistent, coherent identity. (Randall G, 2000, p1-5). Brand identity consists of twelve dimensions organised around four perspectives- the brand as product(scope, attributes, quality or value, uses, users, country of origin), brand as organisation (organisational attributes, local versus global), brand as person (brand personality, customer relationships), and brand as symbol (visual imagery and heritage). (Randall G, 2000, p68)

As per Randall, (1993) brands perform five man functions for consumers.

Identity- Brand must identify itself clearly and unambiguously, so name, legal protection and design elements are important.

Shorthand summary- The identity should act as a summary of all the information the consumer holds about the brand.

Security- Brand should guarantee to provide the benefits expected.

Differentiation- The brand must clearly differentiate itself from its competitors and shows its uniqueness.

Added value- Brand must offer more than the generic product. (Randall, G, 1993)

One more view of brand is to excel in their offering product like price such as Asda, functional benefit such as Toyota or psychological benefit such as Timotei. (Davidson, H, 1997)

When General Motors (GM) and Toyota both marketed a car produced by them in joint venture and cars were functionally identical but were branded as Toyota and Geo Prizm. In the course of 1990-94, Toyota were able to sell 200,000 Corollas at US $ 11,000 each and GM were able to sell only 80,000 and that to with a lower price of US $ 10,700. This shows the greater power of the Toyota brand over the other. This shows the perception of quality in consumer’s mind with respect to brand. (Almquist et al, 1998)

Brands in Takeovers

Nestle made a takeover bid for Rowntree at a premium due to the brand equity or value by Rowntree. The premium was not paid for the present performance of the brand but for their future potential. Nestle made kitkat the truly European brand.

Brand Equity

Brand equity is a set of liabilities and assets which are attached to a brand, its value, name, symbol of a company to that of the customers. They are grouped under five categories.

  • Brand loyalty
  • Name awareness
  • Perceived quality
  • Brand association in addition to perceived quality
  • Other proprietary brand assets-patents, trademarks, channel relationships etc. (Aaker D A, 1991, p8)

Celebrity Endorsements (Brand Ambassadors)

Celebrities are individuals who enjoy public acknowledgment by a large share of a certain group of people. Their attributes like attractiveness, skills, extraordinary lifestyle are observed, They also differ from the social norm and take pleasure in a high degree of public awareness. Few classic examples of celebrities like, Meg Ryan, Pierce Brosnan, models like Naomi Campbell, Gisele Buendchen, sports persons like Anna Kournikova, Michael Schumacher entertainers like Oprah Winfrey, Conan O’Brien, and pop stars e.g. Madonna, David Bowie, Britney Spears and Rihanna and also business class or groups like Donald Trump, Bill Gates or politicians like Bill Clinton, Tony Blair. Appearances of celebrities are in different ways. Initially, when they appear in their actual profession (Tennis players in Wimbledon) like Anna Kournikova Pete Sampras. Later, their appearance in public by attending special celebrity events like world premieres of movies and academy awards, in news, magazines provide information on events and the personal life of celebrities through mass-media. Celebrities act as spokespeople in advertising to promote products, services and ideas. (Kambitsis et al. 2002, Tom et al. 1992).

Celebrities like Britney Spears, Michael Jackson, Liz Hurley and Tiger Woods are paid billions of dollars for every contract with the company or brand as they play a major role in advertising industry. (Daneshvary, Rennae and Schwer, 2000, Kambitsis et al. 2002). For example, Famous Tennis player Venus Williams has been endorsed by the sportswear manufacturer Reebok International Inc. for $40 million and five year contract. Advertising with the use of celebrities create enormous publicity and attention of people. (Ohanian 1991)

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Celebrities as Spokespersons

Spokespersons are generally used by companies to deliver their advertising message and convince consumers of their products or brands. Spokesperson who are popular and are widely known are endorsed by companies, thereby celebrity endorser (Tom et al. 1992). “A celebrity endorser is an individual who is known by the people for their achievements in their fields other than the product class endorsed.” (Friedman and Friedman, 1979, p63). Actress Catherine Zeta-Jones endorses the perfume manufactured by Elizabeth Arden (cosmetic manufacturer). Celebrities are endorsed due to their high influential potential capability and their higher recall and degree of attention in advertising. Advertising with celebrities create positive feelings towards brands, more entertaining and increases company’s awareness, Advertising with celebrities are likely affect consumers brand attitudes and purchase behaviour. (Solomon 2002)

Source Credibility and Attractiveness

The main intention of advertising is to persuade customers, attempt to modify or change consumer’s attitude towards brands (Solomon 2002). Celebrity endorsement strategy by advertisers enables to project an image in terms of persuasiveness, objectiveness, expertise, and trustworthiness. (Till and Shimp 1998).

Source attractiveness- It is the endorser’s individuality, physical appearance, likeability, and similarity to the consumer perception, thereby to the perceived social value (Solomon 2002). Using celebrities or attractive people in television and print advertising is common practice followed and have proved to be more successful in influencing customer’s attitudes and beliefs. (Ohanian 1991)

The Match-up Hypothesis

Many research studies have showed the relativity between brand and celebrity endorsers and explained the effectiveness of using them to promote brands. Many of the celebrity endorsements proved to be successful. (Walker et al. 1992).

Celebrity Endorser

Company/Product Success


Liz Hurley

Estee Lauder


Cindy Crawford





Bruce Willis



Michael Jordan





Whitney Houston



Jerry Seinfeld

American Express


Milla Jovovich



(Successful and unsuccessful celebrity endorsements Source, Walker et al. 1992, Till 1998)

It is not enough for a person to be just famous to endorse (Solomon 2002). Super stars like Bruce Willis and Whitney Houston who were attractive failed in their endorsements. Celebrity spokespersons should be knowledgeable, experienced, and qualified to talk about the product to be effective on consumer. (Tom et al. 1992, Daneshvary and Schwer 2000)


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