MKT205_Module_Four_Milestone

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Feb 20, 2024

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1 Module Four Milestone Worksheet: Promotion and Price Lucy Kelly Southern New Hampshire University MKT 205: Applied Marketing Strategies Alan Christopher February 3, 2024

2 PRODUCT “healthy” carob (chocolate substitute) bars PERSONA Jennifer, 32 PROMOTION FIRST MARKETING CHANNEL Description of first marketing channel: My first marketing communicating channel will be social media. Social media includes any platforms that people can post publicly on such as Facebook, TikTok, Twitter, or Instagram. These platforms have become increasingly popular, and most people spend most of their phone time on social media instead of "browsing the internet" While a Google ad might be useful, a well placed social media ad would reach people more frequently and be seen more often. Social media also has options for ads and sponsorships with different influencers, which is a good way to promote the product. Why this channel is appropriate for this persona: I chose social media because my target audience is made up primarily of millennials. They are frequently on social media, and it is where they usually look at product reviews. They are more easily convinced to buy a product by influencers who try the product and post about it than other generations. The influencers create relationships with their viewers and carry a lot of weight when they recommend a new product (Joyful Millenial, 2023). Millennials also do a lot of their shopping online and spend more time on their phones, so social media ads would very useful especially for a healthy chocolate substitute. I think a social media campaign with influencers sampling and trying the chocolate or fitness coaches making it part of their diet would be a good way to convince people to try it. SECOND MARKETING CHANNEL Description of second marketing channel: My second choice for an ad campaign would be in- person events. I would set up a booth at fitness events, 5k races, and health stores, so that people could sample the chocolate, and I would provide coupons. This is a good way to introduce the chocolate to the target market and give people a chance to try it before they buy. Sampling can increase the market reach and convince people who might not normally consider

3 the product simply by offering it to them for free (Pro Business Plans, 2023). Plus, who doesn't love free samples? Why this channel is appropriate for this persona: I chose in-person communication, because introducing people to a new kind of healthy chocolate will require market penetration. The best way to do this is to get people to sample the product. People can be very picky about chocolate, so if they are worried it might not taste good, they might not be willing to spend the extra money to buy the health chocolate option. Coupon handouts at in-person booths or sample stations will encourage people to buy more the next time they go out. The more people we can convince to try it, the more likely our product will succeed. From personal experience at 5k races, I have sampled health foods and energy products, and have been convinced to buy them again. I never stuck with them for long because they were usually expensive, but the samples caught my attention and were convincing. PRICE PRICING FACTOR: COMPANY PROFITABILITY Company profitability: Profitability is a way to look at how well a company is doing by comparing its profit to its expenses. Profit is a specific amount which is found by looking at the total revenue over the total expenses. Profitability measures the efficiency of a business and looks at the big picture to see how well or poorly a business is doing. If the company's revenue is more than the its expenses, then the company is successful (Horton, 2023). Even if the business loses money in the beginning and does not turn a profit, looking at profitability can give a better idea about whether the company will succeed in the future. How pricing factor is used to determine pricing: The company profitability pricing factor allows for some initial loss in exchange for market exposure. This affects pricing, because the first products will be mostly given away as free samples or sent in sample packages to social media influencers to try. While this might lose money at first, the goal is to get the brand name out there and allow people to try the product for themselves. The price on additional units (not samples), should also have a lower price than other health substitutes. Chocolate Bliss should use a "Buy one get one" plan or just show the product as marked down on the shelf. Not only does this get buyer's attention, but it also introduces them to the idea of a higher price later, which creates a greater sense of product value. PRICING STRATEGY: PENETRATION General advantages and drawbacks of penetration pricing strategy: The advantage of penetration pricing strategy is that people receive more exposure to the brand. People who

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4 might not normally spend extra money to try a new product are able to sample the product for free or receive a discount. The point of this strategy is not to just introduce people to a new product, but the to convince them to remain loyal customers. It is important that the company does not raise the prices or get rid of the sales too soon, though, since other companies might jump with a similar strategy and steal customers back. Customers need a chance to become loyal, and the samples and discount promotions help grow that. Another advantage of penetration pricing is that even though there is a loss in the short term, in the long-term people will have a good feeling about the brand when they shop because of the discounts. As time goes on that good feeling will help when prices slowly go up.The drawbacks of this pricing strategy are usually a result of pulling out of the promotion and discount stage to early. The other drawback is that people associate price with quality, so sometimes low prices and discounts make people think that the product is not valuable. Also, starting out a business on a loss can be difficult in the first stages and cause a strain on the company. Specific advantages and drawbacks of penetration pricing strategy: Our penetration strategy will only work is the rest of our marketing campaign is strong. Packaging, branding and the social media campaign must focus on the health benefits of this chocolate. That will set us apart from other chocolate and also convince our customer base that the chocolate is valuable despite the coupons and discounts. The sales and samples can help Chocolate Bliss break into the market and starting brand loyalty, but only if the customer base believes in its value. Jacking the price back up too soon will lose a lot of the market we have won over. A drawback is that people might enjoy the sample because it is free, but not care to pay for the product itself. That is a risk that has to be taken in order to convince people to try a new chocolate, especially when there are so many popular chocolate brands already. My persona, as a mom, would likely be convinced by marketing the product as healthy and by offering a discount. Moms like my persona appreciate finding healthy alternatives for themselves and their kids, but are also on a budget. They tend to buy things for their kids, but are less likely to splurge on themselves. The samples and coupons will justify the purchase and convince them to buy more frequently.

5 REFERENCES Horton, M. (2023, August 17). The difference between profitability and profit . Investopedia. https://www.investopedia.com/ask/answers/012715/what-difference-between- profitability-and-profit.asp Joyful Millenial. (2023, July 20). Millennials and Influencers: A Match made in modern marketing . LinkedIn. https://www.linkedin.com/pulse/millennials-influencers-match- made-modern-marketing/ Kenton, W. (2023, May 13). Penetration pricing definition, examples, and how to use it . Investopedia. https://www.investopedia.com/terms/p/penetration-pricing.asp Pierre, A. (2023, August 6). Pricing for profit – 12 factors to consider for peak operational performance . LinkedIn. https://www.linkedin.com/pulse/pricing-profit-12-factors- consider-peak-operational-butler-pierre/ Pro Business Plans. (2023, July 27). Mastering market penetration strategy: A comprehensive guide to expand your business . Medium. https://pro-business-plans.medium.com/mastering-market-penetration-strategy-a- comprehensive-guide-to-expand-your-business-8e69581d2bbc

MKT205_Module_Four_Milestone

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