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CONTENT/TEACHING OUTLINE
Unit D: Marketing a Small Business
COMPETENCY:
10.00 Identify the function of promotion in small business.
OBJECTIVE:
10.02 Describe the elements that make up the promotional mix.
A. Define terms related to promotion.
1. Promotion: Any form of communication a business or organization uses to
inform, persuade, or remind consumers about its products/services.
2. Product promotion: Communication used to persuade consumers to buy a
particular product/service.
3. Institutional promotion: Communication used to create a favorable image
of the business in the eyes of the consumer instead of promoting a
product/service.
4. Promotional mix: The combination, or blend, of the different types of
promotion.
5. Media: Agencies, means, or instruments used to deliver promotional
messages to the public.
B. Describe the elements of the promotional mix.
1. Advertising: Any paid form of non-personal presentation of ideas, goods,
or services.
a. Types of advertising
(1) Promotional advertising: Communication designed to increase
sales of products and services.
(2) Institutional advertising: Promotion designed to create a
favorable image and goodwill for a business or organization.
b. Five categories of advertising media
(1) Print: Oldest and most effective category. Includes newspapers,
magazines, direct mail, signs, and billboards.
(2) Broadcast: Uses verbal communication. Includes radio and
television.
(3) Specialty: Inexpensive, useful items with the name of the
advertiser printed on them. Includes such items as hats, t-shirts,
pencils, and pens.
(4) Online: Advertising messages delivered on the Internet.
(5) Other: Creative means of advertising such as in movie theaters,
on video rental tapes, skywriting, air balloons, and airplane
banners, in sports arenas, and many others.
c. Advantages and disadvantages of advertising
(1) Advantages include a large number of people to view the
message with a high rate of frequency of exposure. The
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costs per potential customer are usually lower than other forms
of promotion. Advertising messages can be controlled by the
business.
(2) Disadvantages include not being able to select a specific target
market. Some media are too expensive for small business
owners (TV). The advertisement can be too short or not give
enough information about product. Some types of print
advertisement are perceived negatively.
2. Personal selling: A form of promotion that uses planned, personalized
communication to influence decisions and to ensure satisfaction.
a. Types of personal selling
(1) Retail selling: Customer comes into store and the
salesperson’s job is to help the customer and answer
questions about the product.
(2) Business to business selling: The salesperson goes to the
customer and selling takes place in manufacturer’s/wholesaler’s
showroom or in the customer’s place of business.
(3) Telemarketing: Process of selling over the telephone.
b. Characteristics of an effective salesperson
(1) Product knowledge: To better serve customers, the salesperson
should be knowledgeable of the product/service.
(2) Selling skills: Each salesperson should be trained and
knowledgeable of the steps of selling.
(3) Positive personal traits: To interact effectively with
customer, the salesperson should behave ethically and
responsibly and have a positive attitude and awareness of
professional appearance.
(4) Communication skills: It is important that a salesperson be
skilled at verbal and nonverbal language to better serve the
customer.
c. Steps in the selling process
(1) Prospecting/preapproach
(2) Approach
(3) Determining needs
(4) Product presentation/demonstration
(5) Overcoming objections
(6) Closing the sale
(7) Suggestion selling
(8) Relationship building
d. Advantages and disadvantages of personal selling
(1) Advantages include the flexibility of being able to communicate
with the consumer to influence purchases and get immediate
feedback.
(2) The disadvantage is that it is the most expensive form of
promotion.
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3. Public relations: Any activity designed to create a favorable image toward
a business, its products, or its policies. Includes such things as
donations to charity.
4. Publicity: Information that is provided to the public by the media or other
sources usually at no cost to the business.
a. Types of publicity tools
(1) News release: A prepared statement or story that provides
newsworthy information about the business or organization
providing it. It should answer the five basic questions of who,
what, when, where, and why.
(2) Press conference: A meeting to which a business or
organization invites media for the purpose of distributing
information about a newsworthy event.
(3) Press kit: A folder containing feature stories, articles,
photographs, and/or new releases about the company, product
or persons which has been prepared to assist the media.
b. Characteristics of publicity
(1) It can be positive or negative and cannot be controlled.
(2) It reaches mass audiences because many people follow the
news.
(3) It provides believable, valid news often viewed as an
endorsement.
(4) It is intended to inform about the business, not sell a
product/service.
(5) No sponsor is identified. There is usually no cost unless the
business pays for a press kit to be assembled.
c. Advantages and disadvantages of publicity
(1) Advantages include helping to create positive image, therefore
increasing profits and saving advertising money. Introduces new
products and fosters good human relations.
(2) Disadvantages are that timing and method of presentation may
fail to reach the target market and inaccurate or negative
information could be released.
5. Sales promotion: The variety of activities other than personal selling,
advertising, and public relations that are used to increase consumer
purchases.
a. Objectives of sales promotion
(1) Increase demand and stimulate sales
(2) Inform customers about new and/or improved products
(3) Create positive business image
b. Examples of trade promotions - designed to promote to
businesses instead of consumers.
(1) Slotting allowances: Money paid by a manufacturer to the
retailer for placing a product in the store, perhaps in a specific
location.
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(2) Buying allowance: Price discount given by a manufacturer to
increase the desire of a wholesaler or retailer to purchase the
product.
(3) Trade shows: Provide the manufacturer a place to introduce
new items and to gain support for new and existing products.
(4) Sales incentive/contests: Awards given to salespersons for
meeting or exceeding sales goals.
c. Examples of consumer sales promotion - designed to increase
consumer desire to buy products.
(1) Premiums: Low cost items given to the consumer at a discount
or free. Examples include coupons, free samples, and
redemptions.
(2) Incentives: Products earned through contests, sweepstakes,
and rebates.
(3) Product samples: Trial size products generally sent through the
mail or distributed at the business at no cost to the consumer.
(4) Promotional tie-ins: A strategy in which two or more businesses
combine promotional resources to increase sales.
(5) Product placement: Increasing product recognition by featuring
the item in movie theaters, on TV, or at special events.
(6) Visual merchandising and display: Coordination of the physical
elements of a business (or a product) to project the desired
image to consumer.
d. Advantages and disadvantages of sales promotion
(1) Advantages include stimulating sales and raising consumer
awareness of the product.
(2) Disadvantages include costs involved in promotion of image and
product and the negative attitudes toward some activities, such
as coupons and rebates, because of expiration dates.
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