Download Small Business Management 14e.

Part 4
Focusing on the Customer: Marketing Growth Strategies
CHAPTER 16
Promotional
Planning
Longenecker • Moore • Petty • Palich
© 2008 Cengage Learning.
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
Looking AHEAD
After you have read this chapter, you should be able to:
1. Describe the communication process and the factors
determining a promotional mix.
2. Explain methods of determining the appropriate level
of promotional expenditure.
3. Describe personal selling activities.
4. Identify advertising options for a small business.
5. Discuss the use of sales promotional tools.
© 2008 Cengage Learning. All rights reserved.
16–2
The Communication Process in Promotion
• Communication Process Components
Source—the message sender
Channel—the path the message travels
Receiver—the recipient of the message
• Forms of Promotional Communication
Nonpersonal—advertising
Personal—personal selling
Special forms—sales promotion
© 2008 Cengage Learning. All rights reserved.
16–3
16-1
Similarity of Personal and Small Business Communication Processes
© 2008 Cengage Learning. All rights reserved.
16–4
Promotional Communications
• Promotional Mix
A blend of nonpersonal, personal, and special forms
for communication techniques aimed at a target
market.
Makeup of the mix is determined by:
 Geographical
 Size
nature of target market
of promotional budget
 Product’s
characteristics
© 2008 Cengage Learning. All rights reserved.
16–5
Determining the Promotional Budget
• “How much should a small business spend on
promotion?”
Allocating a percentage of sales
Deciding how much can be spared
Spending as much as the competition
Determining what it takes to do the job
© 2008 Cengage Learning. All rights reserved.
16–6
16-2
Four-Step Method for Determining a Promotional Budget
© 2008 Cengage Learning. All rights reserved.
16–7
Comparing Alternative Promotion Expense Estimates
START
Compute WTDJ
Proceed to
develop
promotion at
WTDJ level
YES
Is WTDJ equal to
or less than others?
Key Terms:
WTDJ: What it will take to do the job
APS: A percentage of sales
WCS: What can be spared
ACS: As much as the competition spends
NO
Compute average of
WTDJ, APS, WCS, and ACS
Compare WCS with
computed average
Proceed to
develop
promotion at
average level
YES
© 2008 Cengage Learning. All rights reserved.
Is WCS equal to or
greater than average?
NO
Seek additional
funds to
supplement
promotion
16–8
Personal Selling in the Small Firm
• Personal Selling
A sales presentation (promotion) delivered in a one-
on-one manner.
Requires:
 Product
knowledge
 Well-prepared
sales
presentation
 Ability
to build good will
© 2008 Cengage Learning. All rights reserved.
16–9
Importance of Product Knowledge
• Salespersons use product knowledge to:
Successfully educate customers about the product’s
advantages, uses, and limitations.
Answer customer questions and counter customer
objections.
Personal selling becomes order-taking when
a salesperson lacks product knowledge.
© 2008 Cengage Learning. All rights reserved.
16–10
The Sales Presentation: Prospecting
• Prospecting
A systematic process of continually looking for new
customers
• Prospecting Techniques
Personal referrals
 Salesperson
initiates customer contact through
referral by another party known to the customer.
Impersonal referrals
 Information on potential new
customers developed from public
records and published sources.
© 2008 Cengage Learning. All rights reserved.
16–11
The Sales Presentation: Prospecting
(cont’d)
• Prospecting Techniques (cont’d)
Marketer-initiated contacts
 Market
surveys are used to identify prospects
Customer-initiated contacts
 Potential customers are identified through their
contacts with the firm.
© 2008 Cengage Learning. All rights reserved.
16–12
Practicing the Sales Presentation
• Improves the salesperson’s success rate.
• Prepares salesperson for objections related to
price, product, timing, source, service, or need.
• Techniques for dealing with objections:
Direct denial
Indirect denial
Boomerang technique
Compensation method
Pass-up method
© 2008 Cengage Learning. All rights reserved.
16–13
Overcoming Customer Objections
I had problems with a similar
product before and don’t want to
go through that again!
Yes, I understand your attitude,
but have you considered . . . ?
I’m too busy.
That’s why I want to explain
how I can save you time by . . .
I like what you have said, but I
need to wait.
Let’s figure how much you can
save by acting now.
Your product sounds just like your
competitor’s.
There are similarities, but we
have . . . at a better price.
I’m not sure I can risk a
changeover to your product.
Let me tell you how a competitor
decided to buy from me.
© 2008 Cengage Learning. All rights reserved.
16–14
Making the Sales Presentation
• Adapting the sales approach to the customers’
needs:
Avoid a “canned” sales talk.
Speak the customer’s “language”.
Answer every objection explicitly and adequately.
Be enthusiastic, friendly, and persistent.
Be personally supportive of
the customer.
© 2008 Cengage Learning. All rights reserved.
16–15
Customer Goodwill and Relationship Selling
• Relationship Selling
 Building customer goodwill for future sales to satisfied
customers through:
 Maintaining
 Having
 Using
a good personal appearance.
a pleasant personality.
professional etiquette in customer contacts.
 Understanding
 Maintaining
© 2008 Cengage Learning. All rights reserved.
the customer’s point of view.
ethical standards in the relationship.
16–16
The Compensation Program for Salespeople
• Nonfinancial Rewards
 Personal recognition of employees by the firm
 Plaques
and “Employee of the Month” awards
 Providing “perks” to superior performers.
 Personal satisfaction drawn
by salespersons from doing
their work well.
© 2008 Cengage Learning. All rights reserved.
16–17
Compensating Salespeople
• Financial Rewards
Commissions
 Compensation
paid as percentage of
sales productivity.
 Strong sales motivator
Straight salary
 Compensation paid regardless of
sales made.
Combination of commissions and salary
 Balance of two compensation forms is adjusted to
provide an increasing proportion of commission as
salesperson gains experience.
© 2008 Cengage Learning. All rights reserved.
16–18
Advertising Practices for Small Firms
• Advertising
 The impersonal presentation of a business idea
through mass media.
• Advertising Objectives
 To sell by informing, persuading, and reminding.
 To serve as a complement to product quality and
efficient service.
 To properly reflect changes in customer needs and
preferences.
© 2008 Cengage Learning. All rights reserved.
16–19
Types of Advertising
• Product Advertising
The presentation of a business idea designed to make
potential customers aware of a specific product or
service and create a desire for it.
• Institutional Advertising
The presentation of information
about a particular firm, designed
to enhance the firm’s image.
© 2008 Cengage Learning. All rights reserved.
16–20
Obtaining Assistance with Advertising
• Advertising Agencies
Furnish design, artwork, and copy for ads
Evaluate/recommend media with “pulling power”
Evaluate the effectiveness of advertising appeals
Advise on promotion and merchandise displays
Conduct market sampling studies
Furnish mailing lists
• Other Sources
Suppliers
Trade Associations
© 2008 Cengage Learning. All rights reserved.
16–21
Advertising Decision Factors
• Frequency of Advertising
With regularity for effectiveness and continuity
 Introduction
of new uses for established products
 Introduction of new products and services
• Where to Advertise
Appropriate media mix determined by:
 Geographical
area for target market coverage
 Customer type targeted by advertising campaign
 Advertising media customarily used by industry
 Type of business
 Web advertising on the World Wide Web (Internet)
© 2008 Cengage Learning. All rights reserved.
16–22
16-3
Advantages and Disadvantages of Major Advertising Media
Source: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Marketing, 9th ed. (Cincinnati: South-Western, 2008), p. 475.
© 2008 Cengage Learning. All rights reserved.
16–23
Web Advertising
• Basic Web Promotions
Banner ads
 Advertisements
that appear across a Web page,
often as moving rectangular strips
Pop-up ads
 Advertisements that burst open
on computer screens
Direct e-mail promotion
 Advertising delivered by means
of electronic mail
 Spam: unsolicited e-mail
© 2008 Cengage Learning. All rights reserved.
16–24
Web Advertising (cont’d)
• Basic Web Promotions (cont’d)
Web sponsorships
 A type
of advertising in which the firm pays another
organization for the right to be part of that
organization’s Web page.
Linkages
 One firm pays another to include a click-on (clickthrough) advertising link on its Web site.
A corporate Web site on the Internet
 Creating and registering a site name
 Building a user-friendly Web site
 Promoting the Web site
© 2008 Cengage Learning. All rights reserved.
16–25
16-4
Website Design Tips
Tip 1: Make It Easy to Buy
Tip 2: Make a Strong First Impression
Tip 3: Minimize Distractions: Advertising Isn’t Always Necessary
Tip 4: Make It Personal
Tip 5: Avoid Long Instructions
Tip 6: Provide Visual Clues to Location
Tip 7: Show Off Products
Tip 8: Encourage Spontaneous Purchases
Tip 9: Alternate Background Colors in Long Lists
Tip 10: Allow Users to Collect Items
Source: Nadja Vol Ochs, “Easy-to-Buy E-Commerce Site Design Tips,”
http://www.microsoft.com/technet/prodtechnol/sscomm/reskit/sitedes.mspx, accessed July 13, 2007.
© 2008 Cengage Learning. All rights reserved.
16–26
16-5
Options for Getting Your Website Listed in Search Engines
1. Use a Free Submission Service
2. Use a Low-Cost, Automated Submission Service
3. Do It Yourself by Manually Submitting Your
Website to Individual Search Engines
4. Use a Professional Search Engine Consultant
5. Use Submission Software
Source: Adapted from the Internet Marketing Center’s website,
http://www.marketingtips.com/newsletters/search-engines/search-engine_strategies.html, accessed July 13, 2007.
© 2008 Cengage Learning. All rights reserved.
16–27
Sales Promotional Tools
• Sales Promotion
An inclusive term for any promotional techniques that
are neither personal selling or advertising
 Used in combination with personal selling and
advertising.
• Specialties
Tangible and enduring functional items of worth
distributed personally to recipients that serve as
reminders of the firm.
 Pens, key chains, magnets, and clothing imprinted
with the name, logo, or slogan of the firm.
© 2008 Cengage Learning. All rights reserved.
16–28
Sales Promotion Tools (cont’d)
• Trade Show Exhibits
Provide hands-on experience with products.
Are less costly than personal selling.
• Making Trade Show Exhibits Effective
Check out the trade show’s history.
Prepare a professional-looking display.
Have a sufficient quantity of literature on hand.
Make sure you have a good product.
Do pre-show promotion.
Have a giveaway or gimmick.
Train booth personnel.
Follow up!
© 2008 Cengage Learning. All rights reserved.
16–29
Sales Promotion Tools (cont’d)
• Publicity
 Information about a firm and its products or services
that appears as a news item, usually free of charge.
 Provides visibility for the firm
 Requires regular contacts with
the news media
© 2008 Cengage Learning. All rights reserved.
16–30
Sales Promotion Tools (cont’d)
• When to Use Sales Promotion
 For manufacturers
 To
stimulate channel members—retailers and
wholesalers—to market a firm’s products.
 For wholesalers
 To induce retailers to buy inventories earlier than
they normally would.
 For retailers
 To persuade customers to make a purchase.
• Strategic Alliances and Sales Promotion
 Joining with another firm to promote products by
sharing marketing resources and customers
© 2008 Cengage Learning. All rights reserved.
16–31
Key TERMS
•
•
•
•
•
•
•
promotion
promotional mix
personal selling
prospecting
advertising
product advertising
institutional advertising
© 2008 Cengage Learning. All rights reserved.
•
•
•
•
•
•
•
banner ads
pop-up ads
e-mail promotion
Web sponsorship
linkage
sales promotion
publicity
16–32