MARKETING

UNIT 2. ANALYSIS OF MARKET OPPORTUNITIES A. MARKET RESEARCH

Warm up:

Do you agree with the following statement: To manage a business well is to manage the future, and to manage the future is to manage information? Many managers receive too much information. How can organizations ensure that the right information gets to the right people at the right time?

I. An overview of the 4- step process of market research:

Step 1.( hardest) : Defining the problem
identifying the right cause for something wrong & research objectives a. Exploratory: to gather information for better defining problems. b. Descriptive: to describe the market potential, customer attitude etc. c. Causal: to test hypothesis -> cause & effect relationship i.e. Would price reduced 10%-> high sales?

Step 2 . Developing research plan

collecting information (data): + Secondary data available ( already existed from data bank) collected for + primary data collected ( as a project) requires decisions on : 1. Research approaches a. Observational : gathering information by observing relevant people, actions, situations etc. b. Surveys : Structural - questionnaires (formal lists of questions) / Unstructural - Interviews c. Experimental selecting matched groups of subjects + different treatments + controlling unrelated factors + checking for differences in group responses e.g. weather /incident of psychological depression Inflation/purchasing power of customers 2. Contact methods mail /telephone / personal interview

Pham khac Thong,MBA Lecturer in Business English

MARKETING 3. Sampling plan + 3 variables : Sample unit who will be selected ( a segment of population selected) Sample size How many will be surveyed Sample procedure How people will chosen i.e. at random, at convenience/ pre-judgement. 4. Research instruments questionnaire ( most common) What question; form; open/close; multiple choice; true/false. Mechanical galvanometer (using small electric current) measure interests, emotion etc. Step 3 Implementing the plan ( putting in action) most expensive. subject to errors monitor closely to make sure the plan is implementing properly Step 4 Interpreting and reporting not based on statistics + useful findings for making decisions NOTE: Research objectives -- Research approaches Exploratory best fit Observational Descriptive ---------------- Survey Causal ---------------- Experimental A typical questionaire for a research project (p.19)

II.CONTACT METHODS USED IN MARKET RESEARCH

Would you fill in a market research questionaire sent to you by mail? Do you always respond honestly to market research interviews? MAIL ( Questionaire ) Telephone interview Personal interview

CONTACT METHODS

Pham khac Thong,MBA Lecturer in Business English

MARKETING lower cost more honest answers ( no bias) quickest method more flexible better response rate more infor and insight much more flexible good response rate enormou s cost small sample size low accurate Informati on lots bias from interview er

Advantages +

Disadvantage s ___

less flexible ( not adapted toresponde nt) slow respond rate. little control

higher cost less impartial lots interview bias

Do you think the commercial world has become more competitive during the past twenty years? If so why ? Besides companies which sell similar products, what other types of competitor does an organization face?

Suggestive ideas for discussion: + Emergence of the first truly international market place globalization + struggles between leading trading nations and blocs. + More new developed countries + countries developing similar products.

A.

THE MARKET ENVIRONMENT

+actors/forces best opportunities to help the companies develop and position their products in the market. ACTORS/FORCE S NONMACRO SOCIOMARKET ENVIRONMENT MICRO CO. ITSELF + All

Pham khac Thong,MBA Lecturer in Business English

MARKETING CONTROLLABL E depts. Impact Marketing Departs Suppliers + pricing & materials available for Marketing operations M. intermediaries + powerful impact on Manufacturer Customer behavior Competitors PRODUCT, PRICE, PLACE, PROMOTION CULTURE POLITICS & LAW ECONOMY& POPPULATION TECHNOLOGY &NATURE

CONTROLLABL E

4Ps:

POPULATION ECONOMIC
INTERMEDIARIES

TECHNOLOGICAL NATURAL
planning

analysing

PRODUCT

target SUPPLIERS PUBLICS PROMOTION CUSTOMER PRICE

Pham khac Thong,MBA Lecturer in Business English

MARKETING

controlling

PLACE

LEGAL

POLITICAL

implementing SOCIO-CULTURAL COMPETITORS

I.COMPETITORS
A companys marketing system is surrounded by a large number of competitors. As in the case of a chocolate bar manufacturer. there are 4 types of competitors in the viewpoint of a buyer who is working hard and needs a break, Desire competito rs possibili ties of needs

Generic competito rs differen t ways to satisfy needs

Product-form competitors Different candy forms

Brand competitors

What I want to do now What I want to EAT What type of Candy What brand? Socializing potato chip chocolate bars Hersheys Pham khac Thong,MBA Lecturer in Business English 5

MARKETING Exercising Eating candy soft drink Mars Fruits licorice Nestle sugar drops

UNIT 3. A. BUYER BEHAVIOR

TO IDENTIFY WHO WILL BUY HOW THEYBUY WHEN & WHY THEY BUY

I. CONSUMER BUYING BEHAVIOR MODEL OF BUYING BEHAVIOR

Showing the factors that affect buyer behavior

Pham khac Thong,MBA Lecturer in Business English

MARKETING STIMULIE MARKETI NG ENVIRONMENTA L Product product Price choice Place * brand Promotion * place * time assessment * quantity 4. Decision 5. After sale attitude Main problem/Marketer: identify how the consumers react/ Marketing stimuli to create great competitive advantages Economic Technological Political Cultural OTHER FACTORS Buyers Buyers decision decision process 1. problem recognition 2.searching information 3.option *

Buyers features Cultural Social

Personal Psychological

II. MAJOR FACTORS AFFECTING BUYER BEHAVIOR

CULTURAL PERSONA PSYCHOLOGICA BUYER L L culture * friends age motives nationality neighbors life time sense race colleagues job sensibility religion social status eco condition trust social class family role lifestyle attitude SOCIAL

In order to plan suitable 4Ps strategies and attract the customers with suitable products and advertising designs in which the participants will be included , a company must identify the consumer role in family WHO would be involved in BUYING DECISION MAKING / A NEW PRODUCT (THE ROLE OF EACH FAMILY MEMBER IN THE BUYING PROCESS) Products Shoes Motorcycles TVs Cars Buying decision-making unit by men/husbands

Pham khac Thong,MBA Lecturer in Business English

MARKETING

Make-ups Cosmetics Kitchen utensils Washing machines appliances

by women/wives

New products e.g. a family car kind of car ( influencers) car make

by family members by the oldest child ( initiator ) by friends/ colleagues/ neighbors by husband +wife ( deciders) buyer husband end-user wife

In conclusion The more complex buying decision + more buying participants the more buying deliberation. + product features Product 3 types of buying COST, PRODUCTexamplesMARKETING TASKS behavior CLASS & BRAND LOW COST detergents Satisfy current customers + 1. ROUTINE RESPONSEFREQUENTLY consistant quality, service and PURSHASED value. ITEMS 2. attract new buyers + new features, displays, discounts LIMITED PROBLEM- FAMILIAR Tennis Design a communication SOLVING PRODUCT CLASS rackets program UNFAMILIAR brands and reliability + BRAND quality criteria EXTENSIVE EXPENSIVE Cell phones Educate & persuade that high PROBLEM- SOLVING LESS FAMILIAR Lap tops Brand rate benefits and CLASS AND values BRAND

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MARKETING

II. ORGANIZATIONAL BUYER BEHAVIOR

ORGANIZATIONAL MARKETS ( biggest and diversified ) BUSINESS + individuals/ organizations purchasing products for MARKETS production, resale, rent, supplying others ( Industrial + + Purchasers from processing, construction, transport and re-sale markets ) communications, b Banking and finance, insurance service industries STATE + State agencies buying communities for defense, security, MARKETS education, public utilities etc.. by bidding for a contract or an agreement.

How business buyers would make their buying decision?

Vary/ typical conditions: For brand-new purchases 8 steps For second-hand purchases some steps ignored

through a process + 8 steps 1.Problem recognition 2. General need description 3.product specifications 4. Research for suppliers 5.Proposal solicitation 6. Making decision about supplier 7. Order-routine specification 8. Performance Review

Differences between consumer and industrial buying behavior Consumer buying behavior Industrial buying behavior 5 steps 8 steps 3 types 2 types Criteria: cost; product class/ brand Routine purchases quality, price, 1. delivery 2. Special purchases quality, price , technical .. / Priority of criteria:1. Eco factors :price, quality repair ,service( minimum price for best service) personal relationship , respect ..etc.. Pham khac Thong,MBA Lecturer in Business English 9

MARKETING

Unit 3. Section B MARKET SEGMENTATION: TARGETING& POSITIONING

Definition: a strategy to divide a market into homogeneous groups of consumers, each of which can be expected to respond to a different marketing mix/ a different product. There are several ways of segmenting market such as sex, age, family size, income, social class.. etc.. Position/process MARKET RESEARCH MARKET DEMAND MARKET SEGMENTATION find out the most attractive segments that best suit strength and capabilities of the company. MARKET SEGMENTED typical features best suit capabilities and resources of the firm Opportunities

The MOST ATTRACTIVE + high demand SEGMENTS +high market growth rate +high profits +less competition +simple marketing +etc.. SEGMENT MARKETING TARGETING + 3 STRATEGIES /APPROACHES MARKETING FOCUS Advantages/disadvantages

UNDIFFERENTIATED One product for cost economies + whole market: hard to satisfy all a new chocolate consumers. Pham khac Thong,MBA Lecturer in Business English 10

MARKETING bar Attracting heavy competition Low margins

DIFFERENTIATED

CONCENTRATED

Several market ++ Strengthen Co.s segments: identification General Motorbetter chance of repeating make purchase . several models more total sales + 3 Ps ( purse, production & marketing purpose, costs. personality) Over-segmentation Co broaden base . e.g. J&J + target a large share of market for adults a sub-market e.g. Sinclair + strong market position Computer + suitable for CO+ limited bottom end of resources home computer + Low operation costs market +higher rate of return on investment high risks ( turn sour ) larger competition

In conclusion In practice, choosing a suitable strategy / many factors a. CO + limited resources Concentrated marketing b. CO + homogeneous product undifferentiated M. c. Product-life cycle considered a new product ( introduction) + one version undifferentiated/ concentrated M. a maturer product differentiated. d. / rivals M strategies: i.e. when competitor using undifferentiated M, we use differentiated/ concentrated ; for the competitors had segmented that market.

II. POSITIONING in a SEGMENT

Defined : the extent to which a product was recognized product position occupied in the customers mind( collection of impression, concept, feeling product) as compared + other competitors. E.g. TIDE positioned as multipurpose family detergent CHEESE in hot/ cold water DATSUN, TOYOTE economical power cars

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MARKETING MERCEDES and CADILLAC Deluxe car MARKETING TASKS:: Drawing up suitable Marketing Mix to reach the most competitive advantage in the target market. In what ways a new product should be positioned in the market? /marketers preferences positioning strategies as follows: POSITIONING ON a. PRODUCT ATTRIBUTES ( price, quality, after sale service, reputation, brand etc.. b. PRODUCT USAGE e.g. Colgate help prevent decay; Close up helps whitening + antu-plague effects c. competitive advantages by comparing directly+ other competitors e.g Detergents: HOMO, TIDE, VISO.

UNIT 4. PRODUCT A. PRODUCT TYPES

Goods + services Attributes and typical benefits to satisfy customers needs and wants. Usage value & other values (installation, warranty, after-sale service etc Tangible /intangible

B.Developing a product , the product planner needs to think about a total product+ 3 levels.
Core product Core benefit/service ( Usage value ) Actual product( tangible)+ + Brand name, Packaging, Feature, Styling ,Quality. Augmented product (intangible + increased value ( installation, After-sale service, Warranty, Delivery & credit Mix decisions on total product ( 3 levels of product) must be created for the benefits of maximum satisfaction of customers. Pham khac Thong,MBA Lecturer in Business English 12

MARKETING

C.THE ROLE OF BRANDING DECISIONS

Why Branding Decisions are important in product strategies ?
Branding helps to identify a product/ increase value of product. A product + no Brand means bad quality or low- priced. A branded product as good quality.

D. Some basic concepts

Brand name different from other products e.g. SONY, JVC, PANASONIC. Brand mark Logos, symbols e.g. Mercedes + wheels + 3 angles; TRINITRON SONY. Trade mark registered + legal protection to prevent fake product.

E. DECISIONS ABOUT BRANDS ( BRANDING DECISIONS) PROCESS: Step1: Develop product brand / who benefits, how to get benefits and costs.
/ Customers identify quality; easy to choose with many product lines. / Producer: easy to implement orders Easy for ads to attract customers ; + legal protection; higher competition; reliability. / Society, Brands means higher quality.

Step 2: Branding Sponsorship + 3 sponsorship options ( Strategies)

Manufacturers Label Middlemans label Both labels combined popular in fashion industry.

Step 3: Brand Quality as a tool of positioning

(endure,reliable safe easy to use , repair)
+ 4 levels : LOW MEDIUM HIGH EXCELLENT

Step 4 : Branding Decisions/ 5 brand-name options ( Strategies)

1. Individual Brand name ( Ten hieu rieng hay ten cong ty) e.g MASUSHITA + NATIONAL /PANASONIC.

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MARKETING 2. Blanket Family name for all products (M rong thng hieu, ong nhat nhan hieu) E./g J&Js, Gilettes , Colgates.. 3. Separate Family name for a product class ( quyet nh a hieu hoa san pham) e.g. P&G make 10 detergents with different brands: Tide,Cheese,Bold, Ivory Dreft, Oxyduel, Eve etc.. Advantages: occupying on store shelves higher sales and profits. 4. CO Trade name + individual product name (Ket hp thng hieu va san pham ) e.g. Kentucky Fried Chicken, Mc Donalds Hamburgers, Kinh DOs Bakery, Johnson& Johnsons .etc 5. Re-positioning Brand ( nh v lai san pham ) + changes in Product& Image .e.g. VMEP SYM; GOLD STAR LG. In conclusion Decisions on the Brand Names require a careful Process to follow and answers for the following questions. Whetheror not Branding suggest product benefits and qualities Brand easy to pronounce , recognize, remember it distinctive /unique/ competition easy to translate. available to be registered for legal protection.

1. 2. 3. 4. 5.

4B. PRODUCT DEVELOPMENT DECISIONS

I.NEW PRODUCT DEVELOPMENT
New product as a source for companies survival and development. The development based on the needs & wants of customers; competition; new technological progress. 1. A new product can be defined + various aspects: /curent product + new functions e.g Mobiles; Microwave ovens, Electric cars. Product + legal recognition : New invention, new patent available for register. e.g. Digital Cameras ; LCD Tv; Water filter . /Customers view: a product meeting new wants and desires of customers is a NEW product. e.g fashion clothes, kitchen utensils.

What is a new product?

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MARKETING

2.Why too many new products + completely new brand failed to convince customers?
Too costly and risky. E.g. In the US, average costs for developing a new product cost nearly $100 million; success rate is only 20%. Signals leading product faillures: - no suit objectives and capabilities. Rough competition Lack of interest from top management + finance 6 factors leading new products to fail: a. Target market too narrow -> not enough to cover the costs ( +R&D,production,marketing ) e.g. Banking market in Vietnam b. Product + no identity /competitors. E/g movies c. low quality product=> customers disappointed d. Product + poor information, distribution. E.g softwares e. Poor marketing mix

3. most companies pursuing new product strategies rather than developing new products.
quick and easy way to access the market less costly and risky in the long term.

1. Acquiring new brands (Acquisition): buying ( merging, gobbing up, absorbing,

obtaining ) another company with e.g. In mid 80s, P&G Thompson Electric Nestle ($2.5 b) Philip Morris Schwepp its established brands. acquired Richardsonvicks bought RCA absorbed Rown Tree Mackintosh obtained merged General Food ( $ 5.7 b) Cadbury

Drawbacks: *

too costly + high initial outlays

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MARKETING Tricky -> Inconsistency: whether the cos current products + skills and resources blended with / similar to the acquired products more profitable. Government restrictions/ Anti- Trust (1970s ) set high price tags for acquired established brands. cheaper in the long run, as compared with enormous costs to create a new brand from scratch. +Quick and easy to access the market and strengthen positions in the current market .

+Advantages: +

2. Developing Me- too product strategies

imitation of successful competing product ( CLONES)
e.g. Tandy, Sanyo, Compaq producing CLONES of IBM (models ) compatible personal computers. + 50% cheaper; quicker & less expensive to develop + offer more value + less costly and risky to enter a proven market + Clones fairplay in many products: Soft drinks, toiletries, family appliances, motorcycles etc..

Drawbacks: Clones as newcomers face& battle market leader +strong

competition.

3 Reviving old product strategies

->To find out the big value of the old brands,( Gold in the ore ) and reformulate and reposition into a successful new product + low costs e.g. VISO , P/S in VN as a classic brand revivals by UNILEVER + Dead product rises again with a new name at low costs. e.g. Nestles cookery brands--the lean cuisine brand/ new health consumer market. The biggest danger for reviving old brands:Marketers only look backward. E.g VISO

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MARKETING

II. PRODUCT-LIFE CYCLE

Different products have different life cycles -both in length and shape, but every life cycle goes through a series of common stages.

widely Known Slow

popular

less popular

(replaced)

quick sales Climax obsolescence

New Pham khac Thong,MBA Lecturer in Business English 17

MARKETING SALES (Launch) Introduction 1950 1960

1.

2.Growth 3.Maturity 1970-81-82

4. Decline

PROFITS

RELATIONSHIP BETWEEN THE 4 STAGES OF PRODUCT-LIFE- CYCLE & MARKETING OBJECTIVES AND MARKETING MIX.
Introduction Decline Marketing objectives Growth Maturity

Competitors less Product hard to sell Price Promotion place less

penetrating market increase harvest sales & profits NO increasing 1 diversifying

defend shares

rough full sales & profits hold stimulating maximum no

high market share Information ->pressure +Publicity competition limited open

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MARKETING

UNIT 5

PRICING

AS ONE OF MOST IMPORTANT TOOLS OF MARKETING MIX plays a decisive role affecting a. buying decision of customer b. increasing sales and profitability in competition. 1.Does a lower price always mean higher sales? 2.For what types of product do higher prices sometimes mean higher sales?

How to set prices

-Formerly, bargaining between the buyer and seller to reach an acceptable price. Nowadays, building and managing pricing straregies as an important requirement to ensure that the company may penetrate and dominate market with effective business. However, prices are affected by a lot of factors. I. FACTORS TO CONSIDER WHEN SETTING PRICES IMMANENT (INTERNAL) factors FACTORS 1.marketing objectives market 2. M.Mix Strategies 3.COSTS 4.Price sponsorship environment PRICING DECISIONS EXTERNAL 1.Nature of PRICING DECISIONS and Demands 2.Competition 3.Macro

A.

IMMANENT (INTERNAL) Factors 1.Marketing objectives

a product Target market + positioning => pricing strategies

E.g. P&G

rich segment expensive HIGH PRICING Shampoo 19

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MARKETING

* Setting other objectives setting prices easily

a. Survival in rough competition low pricing enough to cover costs to survive difficulty. b. for maximum profits pricing /demands +costs higher sales + max profit top market share / lowest cost+ higher profit in the long run by low pricing+ suitable mix program. c. Top quality> setting high price + R&D. e.g. Michelin tires + high + new function. d. Product pricing affecting other objectives. LOW to prevent competition SIMILAR to settle market Pegging to remain loyalty of intermediaries; to avoid G interruption REDUCING to meet customers welcome; attract more customers... PRICING plays a very important role in reaching the companys objectives at different levels

2. Marketing mix (4Ps) strategies

Pricing as a major positioning factor/product; defining market, competitors and samples; deciding features & cost of a product

Sampling DECISIONS to develop consistent & effective marketing program Distributing Promoting If positioning on NON-PRICE factors ( economy, advertising, budget.. Decisions ad quality& distribution affect strongly on Prices

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MARKETING

3.PRICING /COSTS ( as a base for pricing)

( + production, distribution, product sale , reasonable profits ) If co costs> competitors high pricing or less profits + competitive disadvantages Two types of costs a. Fixed costs ( unvariable) for rental, management, depreciating estate. b. Variable costs / amount of production quantity TOTAL COSTS * When amount of production or sales increase fixed cost/unit . Variable costs/unit not vary average cost decreased cos efficiency+ Economies of scales

4. Pricing sponsorship ( Who sponsors pricing?)

Top management in small businesses pricing Product managers in big companies pricing Sales rep/ top managers pricing policy & objectives in industrial market pricing and bargaining. Pricing department in air, rail, oil industries pricing

B. EXTERNAL FACTORS affecting prise decisions 1. Market and demands * Product prices / customers benefits
PRICES DEMANDS SETTING PRICES MARKET PRICES COMPETITIVE MARKET CHALLENGING PRICES MONOPOLY MARKET Customers perception pricing

*I .ANALYSIS OF PRICE-DEMAND RELATIONSHIP

Each price level varied will lead to a different level of demand.

The relationship between Demands and prices represents

* inverse ratio i.e. the higher price the lower demand and vise-versa * in demand curve. We can identify price elasticity of demand by estimating demand at different prices. FORMULA:

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MARKETING Price elasticity of demand % change in demand 10 % change in price 2 5

P2 2 P1

Elastic P1 10 D2 D1

P2 Little elastic

D2

D1

The less price elasticity of demand the more profitable the price raises. 2.COMPETITION COMPETITORSS PRICES/RESPONSES affect cos pricing strategies Attracting more competition high pricing, high profits Discouraging competitors, withdrawing from market low pricing, low profits Knowing rivals prices & product quality pricing 3. MACRO- ENVIRONMENT Economic conditions ( inflation + growth/detrograde of interest rates) affect pricing Intermediaries' reactions/price pricing satisfactory profits will encourage them to sell product effectively. Government business law/price ensure pricing policy is satisfactory.

II. PRICING DECISIONS

TOO HIGH NO DEMAND /general approaches: 1. COSTS 2.PERCEIVED VALUE TO CUSTOMERS PRICING 3.RIVALS PRICE DECISIONS - OPTIMUM 4.INTERNAL& EXTERNAL FACTORS GOING RATE Pham khac Thong,MBA Lecturer in Business English 22

MARKETING

Too low no profits

Pricing/costs COST PLUS PRICING FORMULA S = C + P ( sale/unit) cost/U + target profit (%) ( fixed+variable) ( manufacturers margin + retailers mark-up e.g. retail price $12 = 4 + 2 + 2 + 4 3000d = 700 + 300 + 500 + 1500 (COKE) Price 16 14 12

20,ooo

440,000

Demand

B. PRICING STRATEGIES / NEW PRODUCTS

1. PRODUCT/ NEW INVENTION a. Market skimming pricing % high profit / Unit. + few customers reducing prices new customers + No competition + supporting image of excellent product b. Market Penetration pricing large numbers of customers + big market share gradually improved + experience lower costs further profits low price market growth increase product cost distribution prodct improved + experience less competition

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MARKETING

2. PRICING ( NEW PRODUCT) / IMITATION / POSITIONING ON PRICE AND QUALITY + 9 STRATEGIES

PRICE /HIGH QUALITY 1.PREMIUM 2.PENETRATIO N 5.MEDIUM 3.EXCELLENT VALUE MEDIUM LOW

4. EXPENSIVE 7. SKIMMING

6. PRETTY VALUE

8. LOW MEDIUM

9.LOW VALUE

B.PRICING STRATEGIES

1.How can price be used as an active market penetration strategy? 2.Will new competitors always enter the market with lower prices?

I.PRICE WARS
BETWEEN THE TWO GIANTS IN CONSTRUCTION EQUIPMENT & MINING using prices as their weapons, lowering profits in short run to gain market share as their long-run objective.

CATERPILLAR, Inc ============================= KOMASU LTD US leader pricing Japanese Challenger starting + a few product 40% market share + non-price factors ( for 50 years) by stressing on + high quality grabbed 17% market share (1986) +after-sale service by stressing + high quality +strong dealer body + after-sale service

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MARKETING + PREMIUM Pricing strategy + cut down prices higher profit margin (/ strong dollars+ lower manufacturing ) to protect nO_ 1 THE PRICE WAR 40% lower ( cost advantage) support LOWER PRICES workforce (1/3)

costs (22%) price cut down. E.g. A bulldozer listed 140,000 sold only $110,000 PROFITs 30% Ks price advantage loss/profits: $1 billion/5 years prices raised 5% 10% BY 1988,Dollars + cost cutting program

Caterpilla regained Komasus market share 12%

SIGNALS: end fighting and return to peaceful coexistence and better profits for both by RAISING PRICES

II.PRICE ADJUSTMENT STRATEGIES

( FOR CHANGING CONDITIONS environment; factors concerning customers )

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MARKETING *What sort of price adjustments can be offered to a customer in order to persuade him/her to buy for the first time or to remain loyal to a certain supplier?

1. DISCOUNT PRICING & ALLOWANCES ( FOR WHOM, AIM, BENEFITS)

a. Cash discount for early payment e.g. A label 2/10 net 30 : payment may last 30 days. A customer + a benefit of 20% discount if he/she pays the bill within 10 days. To improve cash flow b. Quantity discount for big customers ( purchasing large quantities) by reducing costs and profits to save on inventory and distribution costs c. Functional (trade) discount for distribution channel members to encourage middlemen fulfill their sales and distribution functions. d. Seasonal discount to encourage sales in slow selling periods. E.g. Hotels / beach resorts discount in winter. e. Allowances ( as another type of reducing retail prices) Exchanging allowances for customers who exchange the old for new products,. Promotional allowances for wholesalers/ agents who participate in sales promotion campaigns. To encourage sales in new lines.

2. Identity pricing Fares reduced for some types of customers ( children, students, war-invalid ..) on train, planes buses. On packages Services : seatings in cinemas, theatres . 3. Psychological pricing e.g. A product with a label worth $299.95 creates a pschological difference with $300 . It is still cheaper, more satisfied for the customers. 4. Pricing for adverts Prices set lower than the label prices in many forms: a. Capital pricing on special occasions Pham khac Thong,MBA Lecturer in Business English 26

MARKETING b. Return from cash directly delivered to customers when buying a product. c. Pschological discount Setting high price but selling at lower prices i.e. Former price:$591 now: $299 5. Geographical pricing Setting prices in different areas/ countries. a. FBO ( free on board ) Customers will pay for transport to destination. b. Equal fee for transport pricing both supplier & customers share the fee. c. Exemplifying fee of transport suppliers cover all costs of transport to attract customers.

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