Download EIA_Chap 06 - Interboro School District

Chapter 6
Distribution, Promotion,
and Selling
6.1 The Marketing Mix─Distribution
6.2 The Marketing Mix─Promotion
6.3 Selling and Promotion
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Ideas in Action
Turning a Bad Experience Into a Million
Dollars
 After loosing most of her hair at age 11
from a harsh chemical treatment, Jasmine
Lawrence began to research treatments
that promoted healthy hair.
 Jasmine began to manufacture her own line
of hair care products.
Chapter 6
Slide 2
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Jasmine initially sold her products
directly to customers, including website
based sales.
 As her business developed, Jasmine
starting selling to retailers and chain
stores.
 By age 15, Jasmine was the CEO of her
own company.
Chapter 6
Slide 3
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Lesson 6.1
The Marketing
Mix─Distribution
Goals
 Describe the four basic options of
channels of distribution.
 Apply channels of distribution to the
specific needs of various types of
businesses.
 List factors to consider in the physical
distribution of products.
Chapter 6
Slide 4
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Terms





distribution
channels of distribution
direct channel
indirect channel
physical distribution
Chapter 6
Slide 5
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Channels of Distribution
 distribution
 determining the locations and methods
that will be used to make products
available to customers
 channels of distribution
 the routes that products and services take
from the time they are produced to the
time they are consumed
Chapter 6
Slide 6
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Direct and Indirect Channels
 direct channel
 moves product directly from the
manufacturer to the consumer
 indirect channel
 uses intermediaries
 people or businesses that move products
between the manufacturer and the consumer
Chapter 6
Slide 7
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Channel Options
Chapter 6
Slide 8
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Manufacturer to Consumer
 Sales channels may include:
 the Internet
 direct mail
 television shopping channels
 most cost-effective
 limited sales opportunities
Chapter 6
Slide 9
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Manufacturer to Retailer to Consumer
 sales force sells goods to retailers
 retailers sell goods to consumers
 more sales opportunities
Chapter 6
Slide 10
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Manufacturer to Wholesaler to Retailer
to Consumer
 manufacturer sells large quantities to a
wholesaler
 wholesaler stores product
 sells smaller quantities to many retailers
 lower production costs can lead to lower
prices
Chapter 6
Slide 11
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Manufacturer to Agent to Wholesaler to
Retailer to Consumer
 The manufacturer delegates the sales
function to an agent.
 frequently used in international marketing
Chapter 6
Slide 12
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
What are the four basic options of
the channels of distribution?
Chapter 6
Slide 13
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Distribute Goods and Services
 Distribution channels will vary based on
the industry needs.
 Customer satisfaction is an important
factor to consider when planning a
distribution strategy.
Chapter 6
Slide 14
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Retail Businesses
 Retail businesses can distribute
products in a variety of ways.
 offer the product at a convenient location
during convenient times
 use advertising to reach customers
 allow for phone or fax ordering
 develop a website for online purchases
Chapter 6
Slide 15
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Service Businesses
 Most service businesses sell directly to
the consumer.
 production and consumption of the service
happens at the same time
 the service needs to be provided to the
customer when the customer needs it
 some service providers sell through retail
outlets
Chapter 6
Slide 16
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Manufacturing Businesses
 Manufacturers usually sell products to
other businesses.
 The other businesses sell to the final
consumer.
Chapter 6
Slide 17
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Why are channels of distribution
different for different types of
businesses?
Chapter 6
Slide 18
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Physical Distribution
 Physical distribution of products
includes:




transportation
storage
handling
packaging
Chapter 6
Slide 19
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Transportation
 The best and most cost efficient
transportation method should be
determined.
 The type of product and the destination
of the product will help guide the
decision-making process.
Chapter 6
Slide 20
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Product Storage and Handling
 Benefits of efficient storage include:
 helps balance supply and demand of
products
 Other considerations of storage include:
 adds to the cost of products
 increases the risk of theft or damage
Chapter 6
Slide 21
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Packaging
 The purpose of packaging is to protect
the product from the time between
production and consumption.
 Effective packaging provides value by
minimizing product damage.
Chapter 6
Slide 22
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Receiving Goods to Sell
 All types of businesses must receive
goods from suppliers.
Chapter 6
Slide 23
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
What factors are important to
consider in the physical distribution
of products?
Chapter 6
Slide 24
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Lesson 6.2
The Marketing Mix─Promotion
Goals
 List the many forms of advertising and
discuss advantages and disadvantages
of each.
 Define publicity and describe ways to
use publicity as a promotional tool.
Chapter 6
Slide 25
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Terms




advertising
publicity
press release
public relations
Chapter 6
Slide 26
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Promotion Strategies
 promotional mix




Chapter 6
Slide 27
advertising
publicity
personal selling
sales promotion
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Advertising
 advertising
 a paid form of communication sent out by
a business about a product or service
 Advertising is critically important for
new and/or small businesses.
 Advertising should clearly communicate
the intended message.
Chapter 6
Slide 28
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Online Advertising
 Online advertising has increased as
Internet usage has grown.
Chapter 6
Slide 29
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Common types of online advertising
include the following:






Banner Ad
Floating Ad
Wallpaper Ad
Trick Banner
Pop-Up Ad
Pop-Under Ad
Chapter 6
Slide 30
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 As it is easier to determine the
effectiveness of online advertising than
traditional advertising, new methods to
charge for online advertising have been
developed.
Chapter 6
Slide 31
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Three common ways to charge for
online advertising include:
 Cost per Mil (CPM)
 the advertiser is charged based on the exposure
of the message to a specific audience
 priced per thousand viewers reached with the
message
Chapter 6
Slide 32
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Cost per Click (CPC)
 the advertiser is charged based on the number of
user clicks on the advertisement
 viewers need to actually respond to the ad by
clicking on the hyperlink within the ad
 Cost per Action (CPA)
 the advertiser is charged when a user takes an
action that leads to a sale
 the publisher of the ad assumes all the risk in
running this type of ad
 advertisers prefer this type of charge for banner
ads
Chapter 6
Slide 33
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of Online Advertising
 In an effort to combat excessive spamming,
many Internet users now utilize software that
blocks promotions from reaching their
computers.
Chapter 6
Slide 34
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Television Advertising
 commercials
 last less than a minute
 infomercials
 last a half hour or more
 provide in-depth coverage about a specific
product
Chapter 6
Slide 35
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Fees associated with television
advertising include:
 the fee paid to the station for airing the
commercial
 based on the length of time the commercial plays
 the costs of producing the commercial
Chapter 6
Slide 36
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of television advertising
include:
 it is very expensive
 the audience is too broad to be effective for
most businesses
Chapter 6
Slide 37
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Radio Advertising
 less expensive than television
advertising
 listener demographics are more specific
than television
 easier to reach target audience
 pay for air time
 pay for production costs
Chapter 6
Slide 38
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of radio advertising
include:
 the message is purely audio
 a visual of the product is not shown
 listeners may forget what they hear
 listeners may “surf the airways” during
commercials
Chapter 6
Slide 39
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Newspaper Advertising
 Historically, newspapers were the single
largest form of advertising in the U.S.
 Advantages of newspaper advertising
include:
 relatively inexpensive
 targets a limited geographic area
 reaches a large volume of people
Chapter 6
Slide 40
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of newspaper
advertising include:
 Many people in the audience may not be
interested in your business.
 Your ad faces a lot of competition from many
other ads in the newspaper.
Chapter 6
Slide 41
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Telephone Directory
Advertising
 Consumers use telephone directories
repeatedly.
 Ads usually appear close to the listing
and phone number of the business
placing the ad.
Chapter 6
Slide 42
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of telephone directory
advertising include:
 People only look in the directory when they
are already seeking a specific product or
service.
 It is hard to persuade a potential customer to
use your business instead of your
competitor’s business.
Chapter 6
Slide 43
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Direct-Mail Advertising
 promotional materials sent to target
customers through the mail
 Companies that specialize in
maintaining targeted mailing lists can
provide almost any type of list needed.
Chapter 6
Slide 44
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of direct-mail
advertising include:
 Direct-mail is often considered to be “junk
mail” and it gets discarded without being
read.
Chapter 6
Slide 45
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Magazine Advertising
 Magazines are an excellent way to aim
products and services at specific
markets.
 Local magazines that target a limited
geographic area are often the best
choice for small businesses.
Chapter 6
Slide 46
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of magazine advertising
include:
 National distribution can make some
magazines an inappropriate way to advertise
a local business.
Chapter 6
Slide 47
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Outdoor Advertising
 billboards and signs
 can be effective as the name of your
business is located near where you
want people to see it
Chapter 6
Slide 48
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Disadvantages of outdoor advertising
include:
 limited information can be included
 may not project the image you wish to
convey
Chapter 6
Slide 49
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Transit Advertising
 signs on public transportation
 can provide more information than a
billboard
 effective if your target market includes
consumers who use mass transit
Chapter 6
Slide 50
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Budgeting for Promotion
 Obtain cost estimates for all advertising
that is under consideration.
 Calculate a projected budget.
 Determine whether the ratio of
advertising expenses to sales is in line
with industry averages.
Chapter 6
Slide 51
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Why is promotion important to a
business?
Chapter 6
Slide 52
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Publicity
 publicity
 a nonpaid form of communication that calls
attention to your business through media
coverage
 can be positive or negative
 Publicity is free.
 Staging the events that generate publicity is
usually not free.
Chapter 6
Slide 53
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 press release
 a written statement meant to inform the
media of an event or product
Chapter 6
Slide 54
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Chapter 6
Slide 55
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Public Relations
 public relations
 the act of establishing a positive
relationship with customers and the
general public
Chapter 6
Slide 56
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Ways to support your community
include:
 sponsoring a sports team
 donating to local charities
 supporting work-based programs at local
educational institutions
 supporting Big Brothers or Big Sisters
 organizing community programs
Chapter 6
Slide 57
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Self-Promotion
 Self-promotion is a way to keep the
name of your business visible and in
the forefront of people’s minds.
 Self-promotion methods include the
distribution of goods with your
company’s identifying information on it.
 t-shirts
 office supplies
Chapter 6
Slide 58
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
What are the advantages and
disadvantages of publicity?
Chapter 6
Slide 59
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Lesson 6.3
Selling and Promoting
Goals
 Explain the role of selling in a business.
 Determine how to meet customer
needs and wants.
 Discuss other types of promotional
activities.
Chapter 6
Slide 60
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Terms






personal selling
rational buying decisions
emotional buying decisions
sales promotion
rebate
telemarketing
Chapter 6
Slide 61
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Selling
 Entrepreneurs need selling skills for
many reasons.
 It is necessary to sell business ideas to
potential investors when selling a
business.
 For many customers, the salesperson is
the business.
 a positive image should be conveyed
Chapter 6
Slide 62
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 personal selling
 a direct communication between a buyer and
a sales person
 the sales person tries to influence the
prospective buyer’s purchasing decision
Chapter 6
Slide 63
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Product Knowledge
 features
 the physical characteristics or capabilities of the
product or service
 benefits
 the advantages that could result from the use of
those features
Chapter 6
Slide 64
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Why is selling important to a
business?
Chapter 6
Slide 65
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Determine Customer Needs
and Wants
 A salesperson must determine what
need the customer is seeking to satisfy.
 lower-level needs usually do not require
personal selling
 upper-level needs often require personal
selling
Chapter 6
Slide 66
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Needs Assessment
 need satisfying
 fulfilling the needs of a customer who
knows exactly what they want
 problem resolution
 helping the customer find products or
services when they are not quite sure what
they want
Chapter 6
Slide 67
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Buying Decisions
 rational buying decisions
 based on the logical reasoning of
customers
 customers evaluate alternatives
 purchase after careful thought
Chapter 6
Slide 68
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 emotional buying decisions
 based on the desire to have a specific
product or service
 little time or thought is used when making the
buying decision
Chapter 6
Slide 69
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Customer Decision-Making
Process
 A problem-solving approach for helping
customers includes the following steps:
 define the problem
 gather information
Chapter 6
Slide 70
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western





identify various solutions
evaluate alternatives
select the best option
take action
evaluate the action
Chapter 6
Slide 71
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Why is it important to meet
customer needs and wants in the
selling process?
Chapter 6
Slide 72
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
Other Types of Promotion
 sales promotion
 an incentive offered to customers in order to
increase sales
 rebate
 a refund offered to people who buy a product
 telemarketing
 using the phone to market your product or service
Chapter 6
Slide 73
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
What is the purpose of sales
promotions?
Chapter 6
Slide 74
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
PERFORMANCE INDICATORS
EVALUATED
 Demonstrate knowledge and understanding of
entrepreneurship.
 Engage in activities that clarify and enhance
understanding of entrepreneurship.
 Plan and implement presentation/activities to
educate and promote entrepreneurship to
targeted groups.
Chapter 6
Slide 75
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Derive facts from data, findings from facts,
conclusions from findings, and
recommendations from conclusions.
 Demonstrate critical-thinking skills.
 Develop a concept from an idea to reality.
 Plan, organize, and conduct a group
project.
Chapter 6
Slide 76
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
 Determine priorities and set deadlines.
 Evaluate group presentations.
Chapter 6
Slide 77
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
THINK CRITICALLY
1. What are the benefits of presenting this
project to elementary or middle-school
students?
2. Why is it important to explain risks
associated with entrepreneurship?
Chapter 6
Slide 78
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western
3. Who are popular examples of
entrepreneurs?
4. What are three characteristics of
successful entrepreneurs?
Chapter 6
Slide 79
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western