Understanding Price in Social Marketing

Social Marketing

• Social marketing involves applying traditional business marketing concepts and tools to encourage behaviors that create individual and societal well-being.

The Concept of Price

• Price is the amount of money charged for a product or service, but it also includes the sum of all the values that customers give up to gain the benefits of having or using a product or service.
• Historically, price has been a major factor affecting buyer choice, but non-price factors have gained importance in recent decades.
• Price is a critical element in determining a firm's market share and profitability, and it is the only element in the marketing mix that produces revenue.

Pricing Strategies

• Customer Value-Based Pricing: Pricing decisions should start with customer value, considering how the product compares to competitors in terms of customer value.
• Market-Skimming Pricing: Involves setting high initial prices to skim revenues from the market, often used by companies that invent new products.
• Market-Penetration Pricing: Involves setting a low initial price to penetrate the market quickly and deeply, attracting a large number of buyers and winning a large market share.

The Promotion Mix

• Sales promotion is a short-term incentive to encourage customers to buy, often used to supplement advertising and personal selling.
• Personal selling involves personal customer interactions by the firm's sales force to engage customers, make sales, and build customer relationships.
• Personal selling is effective in building up buyers' preferences, convictions, and actions, but it requires a longer-term commitment than advertising.

The Place (Distribution)

• The Place refers to the various activities a company undertakes to make the product easily available and accessible to target customers.
• It includes deciding on and recruiting middlemen and marketing facilitators to efficiently supply products to the target market.