Download Small Business Management 13e

Promotional
Planning
Part 4 Focusing on the Customer:
Marketing Growth Strategies
PowerPoint Presentation by Charlie Cook
The University of West Alabama
Copyright © 2006 Thomson Business & Professional Publishing.
All rights reserved.
Looking Ahead
After studying 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.
Copyright © 2006 Thomson Business & Professional Publishing. 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
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.
16–3
Similarity of Personal and
Small Business
Communication Processes
(a)
(b)
A Personal
Communication
Channel
A Small Business
Communication
Channel
Parents
XYZ Company
"We love you"
"Buy my product"
Source
Message
Channel
Options
E-mail
message
Personal visit
to campus
Newspaper
advertisement
Personal sales call
Flowers and a "care
package" sent
Business gift
Daughter
at college
Customers
Receiver
Exhibit 16-1
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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 nature of target market
• Size of promotional budget
• Product’s characteristics
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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
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.
16–6
Four-Step Method of Determining
a Promotional Budget
Exhibit 16.2
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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?
NO
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
Compute average of
WTDJ, APS, WCS, and ACS
Compare WCS with
computed average
Proceed to develop
promotion at
average level
YES
Is WCS equal to or
greater than average?
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.
NO
Seek additional funds
to supplement
promotion
16–8
Personal Selling in the Small Firm
• Personal Selling
–A sales presentation (promotion) delivered in a oneon-one manner
–Requires:
• Product knowledge
• Well-prepared sales
presentation
• Ability to build good will
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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.
Copyright © 2006 Thomson Business & Professional Publishing. 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
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16–11
The Sales Presentation: Prospecting
• 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.
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16–12
Practicing the Sales Presentation
• Improves the salesperson’s success rate
• Prepares salesperson for objections related to
price, product, timing, service, or need
• Techniques for dealing with objections:
–Direct denial
–Indirect denial
–Boomerang technique
–Compensation method
–Pass-up method
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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 one of your
competitors decided to buy from me.
Copyright © 2006 Thomson Business & Professional Publishing. 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.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.
16–15
Customer Goodwill and
Relationship Selling
• Relationship Selling
–Building customer goodwill for future sales to satisfied
customers through:
• Maintaining a good personal appearance
• Having a pleasant personality
• Using professional etiquette in all customer contacts
• Understanding the customer’s point of view
• Maintaining high ethical standards in the customer relationship
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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
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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
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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
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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
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16–20
Obtaining Assistance with Advertising
• Advertising Agencies
–Furnish design, artwork, and copy for ads
–Evaluate and recommend media with greatest “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
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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 is determined by:
•
•
•
•
•
Geographical area for target market coverage
Customer type targeted by advertising campaign
Advertising media customarily used by industry
By type of business
Web advertising: advertising appearing on the World Wide
Web
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16–22
Advantages and Disadvantages of Traditional Advertising Media
Medium
Advantages
Disadvantages
Newspapers
Geographic selectivity and flexibility;
short-term commitments; short lead
time; immediacy; year-round
readership
Little demographic selectivity;
limited color capabilities; low passalong rate; may be expensive
Magazines
Good reproduction; demographic and
regional selectivity; relatively long
life; high pass-along rate
Long-term commitments; slow
audience buildup; long lead time
Radio
Low cost; immediacy; highly port
able; short-term commitments;
entertainment carryover
No visual treatment; short message
life; commercial clutter
Television
Wide, diverse audience; creative
opportunities for demonstration;
immediacy; entertainment carry-over
Short message life; high campaign
cost; long-term commitments; long
lead times; commercial clutter
Outdoor media
Repetition; moderate cost; flexibility;
geographic selectivity
Short message; lack of demographic selectivity; distracting noise
levels
Source: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Marketing (Cincinnati: South-Western, 2004), p. 505.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.
Exhibit 16.3
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
–E-mail promotion
• Advertising delivered by means
of electronic mail
• Spam: unsolicited e-mail
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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
• A type of advertising in which one firm pays another to
include a click-on (click-through) 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
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16–25
Web Site 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.technet/prodtechnol/sscomm/reskit/sitedes.mspx, August 3, 2004.
Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved.
Exhibit 16.4
16–26
Home Page for the Gorilla Glue Product
Source: http://www.gorillaglue.com
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Exhibit 16.5
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
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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!
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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
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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
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16–31
Key Terms
promotion
promotional mix
personal selling
prospecting
advertising
product advertising
institutional advertising
Web advertising
banner ads
pop-up ads
e-mail promotion
Web sponsorship
linkage
sales promotion
publicity
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16–32