Download The Promotion Strategy

12
The Promotion
Strategy
Section
12.1
Developing a Promotion Strategy
Section
12.2
Budgeting and Implementing
Promotional Plans
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
Section Objectives
•
•
•
•
Explain the role of the promotion strategy.
Explain how to formulate promotional plans.
Identify considerations for putting together a promotional mix.
Describe the elements of a promotional mix.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
The Main Idea
The promotion strategy is the most visible marketing strategy, designed
to get the attention of prospective customers and convince them to buy
from you.
Promotional activities must be in the right mix.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
Content Vocabulary
image
preselling
campaign
promotional mix
advertising
specialty item
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
publicity
news release
public relations
premium
rebate
sweepstakes
SECTION
12.1
Developing a
Promotion Strategy
Drawing Up Promotional Plans
As a new business owner, you need two kinds of promotional plans:
a preopening plan to lay the groundwork for your opening
a second plan to support your operation once it is under way
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
The Role of Promotion Strategy
Promotion is communication intended to persuade, inform, or remind a
target audience about a business or its products.
The promotion strategy involves planning, determining the right
promotional mix, and selecting specific promotional activities.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
Preopening Plan
Objectives of a Preopening Plan
Establish a positive image.
Let potential customers know you are opening for business.
Bring in customers or have them contact your business.
Interest customers in your new company and your products
or services.
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SECTION
12.1
Developing a
Promotion Strategy
Preopening Plan
The image you establish in
your preopening plan sets
the tone for your
promotional plan.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
image
the impression people have of a
company; a company’s
personality
Ongoing Plan
Objectives of an Ongoing Promotional Plan
Explain major features and benefits of your products.
Communicate information about sales.
Clear up customers’ questions and concerns.
Introduce new goods or services.
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SECTION
12.1
Developing a
Promotion Strategy
Ongoing Plan
An ongoing promotional
plan helps in preselling
your goods or services.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
preselling
the act of influencing potential
customers to buy before contact is
actually made
SECTION
12.1
Developing a
Promotion Strategy
Promotional Plan Format
Both a preopening and an
ongoing plan can be
organized around a
promotional campaign,
independent promotional
activities, or a combination
of the two.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
campaign
a series of related promotional
activities with a similar theme
SECTION
12.1
Developing a
Promotion Strategy
Selecting a Promotional Mix
Every business has a
unique promotional mix.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
promotional mix
the combination of different
promotional elements that a
company uses to reach and
influence potential customers
Ongoing Plan
When selecting elements for a promotional mix,
consider:
target market
product value
promotional channels
time frame
cost
13
The Elements of the Promotional Mix
advertising
Internet
Marketing
personal
selling
Promotional
Mix
publicity
sales
promotion
14
SECTION
12.1
Developing a
Promotion Strategy
Advertising
In the United States, most
businesses spend about
one-fourth of their
advertising dollars on
newspaper ads.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
advertising
the paid nonpersonal
presentation of ideas, goods, or
services directed at a mass
audience by an identified sponsor
by means of print and broadcast
Advertising
newspapers
magazines
specialty
items
Internet
direct mail
Types of
Advertising
outdoor
advertising
directories
radio
television
transit
advertising
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SECTION
12.1
Developing a
Promotion Strategy
Advertising
A specialty item serves as
a reminder of a business.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
specialty item
an advertising device that
includes giveaways, such as
pens, T-shirts, and caps, printed
with a business name or logo
SECTION
12.1
Developing a
Promotion Strategy
Publicity
Taking advantage of
publicity means calling
attention to yourself and
your business.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
publicity
placement in the media of
newsworthy items about a
company, product, or person
SECTION
12.1
Developing a
Promotion Strategy
Publicity
A news release should
answer these questions:
news release
a brief newsworthy story that is
sent to the media
?
?
Who?
?
What?
?
When?
Where?
?
Why?
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
Publicity
Public relations may
generate unsolicited
publicity when such
activities are reported by
the media.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
public relations
activities designed to create
goodwill toward a business or
control damage done by negative
publicity
Sales Promotion
displays
sweepstakes
and contests
Examples
of Sales
Promotion
samples
premiums
rebates
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SECTION
12.1
Developing a
Promotion Strategy
Sales Promotion
One type of sales
promotion may be to
include a premium with a
purchase.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
premium
any item of value that a customer
receives in addition to the good
or service purchased; designed
to attract new customers or build
loyalty among existing
customers, they may include
coupons and gifts
SECTION
12.1
Developing a
Promotion Strategy
Sales Promotion
Some companies give a
rebate on purchases.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
rebate
a return of part of the purchase
price of a product used as an
incentive for customers to
purchase the product
SECTION
12.1
Developing a
Promotion Strategy
Sales Promotion
A sweepstakes is a sales
promotion that can draw
attention to a business.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
sweepstakes
a simple game of chance used by
a business to get customers
interested in what the company
has to offer
SECTION
12.1
Developing a
Promotion Strategy
After You Read
1.
Explain the role of the promotion strategy.
The role of the promotion strategy is to set the course for and
coordinate all aspects of promotion. It involves planning,
determining the right mix, and selecting specific activities.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
After You Read
2.
Explain preopening and ongoing promotional plans.
Preopening promotional plans establish the company’s image, let
customers know the business is opening, bring in customers, and
create interest in the business so that the business will have
customers when it opens. Ongoing promotional plans maintain and
build sales after a business is open.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
After You Read
3.
Describe considerations for putting together a promotional mix.
When selecting elements for a promotional mix, consider the target
market, product value, promotional channels, time frame, and cost.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.1
Developing a
Promotion Strategy
After You Read
4.
Describe the elements of a promotional mix.
The elements of the promotional mix are advertising, sales
promotion, publicity, and personal selling.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Section Objectives
•
•
•
•
Determine promotional costs for a start-up business.
Describe ways to implement your promotion strategy.
Examine options for short-term changes in your promotion
strategy.
Identify considerations for updating the promotion strategy.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
The Main Idea
Thorough planning and information gathering can help you arrive at a
realistic promotional budget.
That budget will have a direct affect on how you implement your
promotional plans.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Content Vocabulary
industry average
cooperative advertising
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
advertising agency
consumer pretest
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Budgeting for Promotion
To plan the promotional budget for a new venture, you must take
these steps:
•
•
•
Cost out promotional activities.
Compare industry averages.
Make final adjustments.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Compare Industry Averages
You can find out the
industry average for
promotional expenses from
such sources as trade
associations or the SBA.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
industry average
the standard used to compare
costs among companies; usually
expressed as a percentage
Basic Media Formats
Print
Include a headline, copy, illustrations,
and a signature.
Radio
Include same elements as print, but
can add music or sound effects.
Television
Same elements apply, but it requires
casting, set design, sound, and filming.
Internet
Same components as print, but may
also have audio, video, and animation.
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SECTION
12.2
Budgeting and Implementing
Promotional Plans
Getting Help
You can carry out your promotional plans yourself, or you can hire
professionals to implement some or all of your promotional activities.
Professional help can come from the media, manufacturers and
suppliers, and advertising agencies.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Getting Help
You may be able to save on
your promotional budget by
arranging for cooperative
advertising.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
cooperative advertising
an arrangement in which
advertising costs are divided
between two or more parties
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Getting Help
An advertising agency can
handle all phases of your
advertising, including
writing the copy, creating
the artwork, choosing the
media, and producing the
ad.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
advertising agency
a company that acts as
intermediary between a business
and the media to communicate a
message to the target market
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Making Possible Promotion Changes
The three most common adjustments to the promotion strategy are:
•
•
•
adjust your advertising
generate publicity
promote sales
Chapter 12 The Promotion Strategy
Section 12.2 Budgeting and Implementing Promotional Plans
Glencoe Entrepreneurship: Building a Business
Adjust Your Advertising
market
budget
results
source
Factors
for
Evaluation
media
Section 12.2 Budgeting and Implementing Promotional Plans
motives
messages
39
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Adjust Your Advertising
One way to reduce the risk
involved in an expensive
advertising campaign is to
conduct a consumer
pretest.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
consumer pretest
a procedure in which a panel of
consumers evaluates an ad
before its release
SECTION
12.2
Budgeting and Implementing
Promotional Plans
Revising the Promotion Strategy
Conduct a formal review of your promotion strategy on a regular
basis.
Use your sales forecast to arrive at a promotional budget to support
that level of sales.
Then revise your promotional mix promotion plan.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
After You Read
1.
Describe how to determine promotional costs for a start-up
business.
Promotional costs for a start-up business are determined by costing
out the planned activities, comparing the costs to industry
averages, and adjusting the budget if necessary.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
After You Read
2.
Describe approaches to implementing your promotional
strategy.
Two approaches to implementing a promotion strategy are
developing your own promotion items and hiring professionals to
do the job.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
After You Read
3.
Discuss options for short-term changes in your promotion
strategy.
Options for short-term changes are increasing the effectiveness of
your advertising expenditures, capitalizing on publicity
opportunities, and stimulating sales through sales promotions or
changes in the sales force.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
SECTION
12.2
Budgeting and Implementing
Promotional Plans
After You Read
4.
Name considerations for updating the promotion strategy.
To update the promotional plan, consider the sales forecast for the
upcoming period; make budget adjustments required by the
forecast; and study changes in the target market, research results,
and experiences to date. On the basis of those considerations, a
new mix can be determined and a new plan developed.
Chapter 12 The Promotion Strategy
Glencoe Entrepreneurship: Building a Business
12
The Promotion
Strategy
End of
Chapter 12
Section
12.1
The Promotion
Developing a Promotion
Strategy
Strategy
Section
12.2
Budgeting and Implementing
Promotional Plans
Glencoe Entrepreneurship: Building a Business