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Sales Related marketing Policies

Product policies what to sell


Product line policy Changes in product offerings Reappraising the product line and line simplification Reappraising the product line and line diversification Ideas for new product Appraisal of proposed new products

Product line policy


Under product line pricing, a seller offers merchandise at a limited number of prices rather than having individual prices for each item. For instance, a boutique might offer lines of women's sportswear priced at 1200, 1500, and 2000. Product line pricing is a common marketing practice among retailers. As a pricing strategy, product line pricing prevents the confusion common in situations where all items are priced individually. It makes the pricing function easier. But marketers must clearly identify the market segments to which they are appealing.

Product line policy contd


A disadvantage of product line pricing is that it is sometimes difficult to alter the price ranges once they have been set. If costs go up, the firm must either raise the price of the line or reduce its quality. Consumers may resist these alternatives. While product line pricing can be useful, its implementation must be considered carefully.

Changes in product offerings

Reappraising the product line and line simplification


How much is used? What is it used for? When is it used? Where is it used? Most critical factor : Profitability

Reappraising the product line and line diversification


Some firms diversify to survive To expand sales To reduce costs Any shift in consumers buying patterns may signal the need for line diversification

Ideas for new products


Both internal and external sources generate new ideas Sales department Production department Research and development department Ex: cool cats decorated ceiling fans, nestle chocolates, cibaca lime toothpaste

Appraisal of proposed new products


Will this item add to profitability? Nature and size of markets Competition Price policy sales programs Legal implications

Product design policy


The frequency of design change The extent to which designs should be protected from copying Product design is the process of creating a new product to be sold by a business to its customers. In a systematic approach, product designers conceptualize and evaluate ideas, turning them into tangible inventions and products. The product designer's role is to combine art, science, and technology to create new products that other people can use. Their evolving role has been facilitated by digital tools that now allow designers to communicate, visualize, analyze and actually produce tangible ideas in a way that would have taken greater manpower in the past.

Product Quality and service policy Quality is defined as fitness for purpose.
Quality is a perceptual, conditional and somewhat subjective attribute and may be understood differently by different people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace. Producers might measure the conformance quality, or degree to which the product/service was produced correctly. Support personnel may measure quality in the degree that a product is reliable, maintainable, or sustainable. Simply put, a quality item (an item that has quality) has the ability to perform satisfactorily in service and is suitable for its intended purpose. Guarantee policy

Distribution policies who to sell

Policies on marketing channels A marketing channel consists of individuals and firms involved in the process of making a product or service available for consumption or use by consumers and industrial users. Sales volume potential For each channel option, the key question is: Can
enough potential buyers be reached to absorb the desired quantity of products?

Comparative distribution costs Net profit possibilities

Policies on distribution intensity Mass distribution


Company aims for maximum sales exposure by securing distribution through all possible outlets Ex: FMCG products Selective distribution Selecting only those outlets that can best serve the manufacturers interests Ex: electronic appliances Exclusive agency distribution Ex: musical instruments, high-end clothing line

Pricing policies

Policy on pricing relative to the competition


Meeting the competition Pricing above the competition Pricing under the competition

Policy on pricing relative to costs


Full-cost pricing
No sale is made at price lower that covering total costs

Promotion pricing Contribution pricing


Pricing at any level above the relevant incremental costs

Policy on uniformity of prices


A one-price policy A variable- price policy

Policy on list pricing


Printing the price on the package Requiring sales personnel to suggest the resale price to buyers

Policy on Discounts

Trade discounts
Different prices offered to each class of customers

Quantity discounts
Price reductions granted for purchases in a stated quantity

Geographical pricing policies F.O.B pricing


The customers pays the freight

Delivered pricing
Seller pays the freight

Competitive bidding policy

Pure competition
No single buyer or seller is large enough to the market that it can single handedly control total demand or supply

Monopolistic competition Oligopolistic competition

Competitive setting where the number of competitors is small enough that they are individually identified and known to each other and it is difficult for new competitors to enter the market.

Product market analysis