part 5 powerpoint presentation by charlie cook copyright © 2003 south-western college publishing....

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PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie Cook

Copyright Copyright © © 2003 South-Western College Publishing.2003 South-Western College Publishing. All rights reserved.All rights reserved.

Promotional Promotional StrategiesStrategies

1717

Small Business Marketing

12e

Copyright © by South-Western College Publishing. All rights reserved. 17–2

Looking AheadLooking AheadLooking AheadLooking Ahead

After studying this chapter, you should be able to:

1. Describe the communication process and the factors determining a promotional mix.

2. Discuss methods of determining the appropriate level of promotional expenditure.

3. Describe personal selling activities.

4. Identify advertising options for a small business.

5. Describe sales promotional tools.


The Communication Process in PromotionThe Communication Process in PromotionThe Communication Process in PromotionThe 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 © by South-Western College Publishing. All rights reserved. 17–4Fig 17-1

A PersonalCommunication

Channel

Parents XYZ Company

"We love you" "Buy my product"

E-mailmessage

Personal visitto campus

Flowers and a "carepackage" sent

Daughterat college

Newspaperadvertisement

Personal sales call

Business gift

Customers

Source

Message

ChannelOptions

Receiver

(a) (b)

A Small BusinessCommunication

Channel

Similarity of Personal Similarity of Personal and Small Business and Small Business

Communication Communication ProcessesProcesses

Similarity of Personal Similarity of Personal and Small Business and Small Business

Communication Communication ProcessesProcesses


Promotional CommunicationsPromotional CommunicationsPromotional CommunicationsPromotional 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 marketSize of promotional budgetProduct’s characteristics


Determining the Promotional BudgetDetermining the Promotional BudgetDetermining the Promotional BudgetDetermining 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 © by South-Western College Publishing. All rights reserved. 17–7Fig. 17.2

Using apercentageof sales

Deciding HowMuch Can Be

Spared

Spending asMuch as the

Competition Does

Comparison Process

Decision

Promotional Budget

Allocating aPercentageof Sales

DeterminingWhat It Will Take

to Do the Job

Four-Step Method of DeterminingFour-Step Method of Determininga Promotional Budgeta Promotional Budget

Four-Step Method of DeterminingFour-Step Method of Determininga Promotional Budgeta Promotional Budget


Proceed to develop Proceed to develop promotion at promotion at WTDJ levelWTDJ level

Proceed to develop Proceed to develop promotion at promotion at WTDJ levelWTDJ level

Comparing Alternative Promotion Expense EstimatesComparing Alternative Promotion Expense EstimatesComparing Alternative Promotion Expense EstimatesComparing Alternative Promotion Expense Estimates

Compute WTDJCompute WTDJCompute WTDJCompute WTDJ

Is WTDJ equal toIs WTDJ equal toor less than others?or less than others?

Is WTDJ equal toIs WTDJ equal toor less than others?or less than others?

Compute average ofCompute average ofWTDJ, APS, WCS, and ACSWTDJ, APS, WCS, and ACS

Compute average ofCompute average ofWTDJ, APS, WCS, and ACSWTDJ, APS, WCS, and ACS

Compare WCS with Compare WCS with

computed averagecomputed average

Compare WCS with Compare WCS with

computed averagecomputed average

Is WCS equal to orIs WCS equal to orgreater than greater than

average?average?

Is WCS equal to orIs WCS equal to orgreater than greater than

average?average?

Proceed to develop Proceed to develop promotion at promotion at average levelaverage level

Proceed to develop Proceed to develop promotion at promotion at average levelaverage level

Seek additional funds Seek additional funds to supplement to supplement

promotionpromotion

Seek additional funds Seek additional funds to supplement to supplement

promotionpromotion

YESYES

NONO

NONOYESYES

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

STARTSTART


Personal Selling TechniquesPersonal Selling TechniquesPersonal Selling TechniquesPersonal Selling Techniques

• Personal Selling–A sales presentation (promotion) delivered in a

one-on-one manner.–Requires:

Product knowledgeWell-prepared sales

presentationAbility to build good will


Importance of Product KnowledgeImportance of Product KnowledgeImportance of Product KnowledgeImportance 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.


The Sales Presentation: ProspectingThe Sales Presentation: ProspectingThe Sales Presentation: ProspectingThe 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 referralsInformation on potential new

customers developed from public records and published sources.


The Sales Presentation: ProspectingThe Sales Presentation: ProspectingThe Sales Presentation: ProspectingThe Sales Presentation: Prospecting

• Prospecting Techniques (cont’d)–Marketer-initiated contacts

Market surveys are used to identify prospects

–Customer-initiated contactsPotential customers are identified

through their contacts with the firm.


Practicing the Sales PresentationPracticing the Sales PresentationPracticing the Sales PresentationPracticing the Sales Presentation

• Improves the salesperson’s success rate.• Prepares salesperson for customer objections

related to price, product, timing, service, or need.–Techniques for dealing with objections:

Convert the objection into the form of a question.Use third party testimonials or experiences.Use the boomerang or positive conversion

technique.Use comparisons.


Overcoming Customer ObjectionsOvercoming Customer ObjectionsOvercoming Customer ObjectionsOvercoming Customer Objections

I had problems with a similar I had problems with a similar product before and don’t want product before and don’t want to go through that again!to go through that again!

I’m too busy.I’m too busy.

I like what you have said, but I I like what you have said, but I need to wait.need to wait.

Yes, I understand your attitude, but Yes, I understand your attitude, but have you considered . . . ?have you considered . . . ?

That’s why I want to explain how I can That’s why I want to explain how I can save you time by . . .save you time by . . .

Let’s figure how much you can save Let’s figure how much you can save by acting now.by acting now.

Your product sounds just like Your product sounds just like your competitor’s.your competitor’s.

There are similarities, but we have . . . There are similarities, but we have . . . at a better price.at a better price.

I’m not sure I can risk a I’m not sure I can risk a changeover to your product.changeover to your product.

Let me tell you how one of yourLet me tell you how one of yourcompetitors decided to buy from me.competitors decided to buy from me.


Making the Sales PresentationMaking the Sales PresentationMaking the Sales PresentationMaking 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.


Customer Goodwill andCustomer Goodwill andRelationship SellingRelationship Selling

Customer Goodwill andCustomer Goodwill andRelationship SellingRelationship 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.


Compensating SalepeopleCompensating SalepeopleCompensating SalepeopleCompensating Salepeople

• Nonfinancial Rewards–Personal recognition of employees by the firm

Plaques and “Employee of the Month” awardsProviding “perks” to superior performers.

–Personal satisfaction drawn by salespersons from doing their work well.


Compensating SalepeopleCompensating SalepeopleCompensating SalepeopleCompensating Salepeople

• Financial Rewards–Commissions

Compensation paid as percentage of sales productivity.

Strong sales motivator

–Straight SalaryCompensation paid regardless of

sales made.

–Combination of Commissions and SalaryBalance of two compensation forms is adjusted to

provide an increasing proportion of commission as salesperson gains experience.


Advertising Practices for Small FirmsAdvertising Practices for Small FirmsAdvertising Practices for Small FirmsAdvertising 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.


Types of AdvertisingTypes of AdvertisingTypes of AdvertisingTypes 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.


Advertising Decision FactorsAdvertising Decision FactorsAdvertising Decision FactorsAdvertising Decision Factors

• Frequency of Advertising–With regularity for effectiveness and continuity

Introduction of new uses for established productsIntroduction of new products and services

• Where to Advertise–Appropriate media mix is determined by:

Geographical area for target market coverageCustomer type targeted by advertising campaignAdvertising media customarily used by industry By type of business


Advantages and Disadvantages of Traditional AdvertisingAdvantages and Disadvantages of Traditional AdvertisingAdvantages and Disadvantages of Traditional AdvertisingAdvantages and Disadvantages of Traditional Advertising

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 pass-along 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 demo-graphic selectivity; distracting noise levels

Source: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Marketing (Cincinnati: South-Western, 1998), p. 509.


Creating the Promotional MessageCreating the Promotional MessageCreating the Promotional MessageCreating the Promotional Message

• 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


Web AdvertisingWeb AdvertisingWeb AdvertisingWeb Advertising

• Basic Web Promotions–A corporate Web site

A firm’s location on the World Wide Web

–Banner adsAdvertisements that appear across a Web page,

often as moving rectangular strips

–Pop-upsAdvertisements that burst open

on computer screens

–E-mail promotionAdvertising delivered by means

of electronic mail


Web Advertising (cont’d)Web Advertising (cont’d)Web Advertising (cont’d)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.

–LinkagesA type of advertising in which one firm pays

another to include a click-on (click-through) link on its Web site.


Sales Promotion ToolsSales Promotion ToolsSales Promotion ToolsSales Promotion Tools

• Sales Promotion–An inclusive term for any promotional techniques

that are neither personal selling or advertisingUsed 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.


Sales Promotion Tools (cont’d)Sales Promotion Tools (cont’d)Sales Promotion Tools (cont’d)Sales Promotion Tools (cont’d)

• Trade Show Exhibits–Provide hands-on experience with products.–Are less costly than personal selling.

• Creating Effective Trade Show Exhibits–Create moving billboards–Make the booth interactive–Qualify sales leads immediately–Create a presence on the sales floor–Plan ahead how to use the trade show time–Recruit customers actively



• Publicity–Information about a firm and its products or

services that appears as a news item, usually free of charge.Provides visibility for the firmRequires regular contacts with

the news media



• When to Use Sales Promotion–For manufacturers

To stimulate channel members—retailers and wholesalers—to market a firm’s products.

–For wholesalersTo induce retailers to buy inventories earlier than

they normally would.

–For retailersTo persuade customers to make a purchase.

part 5 powerpoint presentation by charlie cook copyright © 2003 south-western college publishing....

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