Transcript SBE Obj. 10.03

D. Marketing a Small Business
10.00 Identify the function of
promotion in small business.
10.03 Identify promotional media
activities used by small
businesses.
Channels of
communication that serve
as tools for promoting
ideas, goods, and services
to consumers.
Factors affecting the costs of advertising
media
• Types of media
• Circulation
• Production costs
• Preferred space positions
•Demographics of target audience
•Editorial credibility and prestige (image)
• Ability to obtain response rate
Types of media
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Newspaper
Magazine
Internet
Radio
Television
•Circulation
Primary circulation: The total
number of copies sold.
Secondary circulation: The
number of pass along readers
(those who read the newspaper
but do not purchase it).
•Production costs: Usually low; the
advertiser is not charged for the actual
production costs of the ad.
•Color requirements: Usually poor quality in
the newspaper; the cost for color is normally
very expensive—can increase cost by 40%.
•Production costs: High costs are passed
along to the advertisers.
•Preferred position: Most desirable positions
include the front and back covers both inside
and outside.
•Color: Runs approximately 30% higher.
•Bleed pages: These are pages that have no white
border; the ad is printed to the edge of the page.
This feature can increase cost by 15 to 20%.
Circulation
•CPM = Cost of an ad X 1000 divided by
audience
•Only part of the audience exposed to an
advertisement would be considered likely
prospects for a product.
•Extensive coverage means reaching a larger
audience.
•Intensive coverage means reaching a smaller
group of people more often.
Circulation
•Reach is the number of different people in a
target audience who are exposed at least one
time to a promotional message. Each person is
included only once, even if they view the message
more than once.
•Frequency is the average number of times a
person in the target audience is exposed to a
promotional message.
Production Costs
• Color rates – Each time a color is added
to the advertisement the rate increases.
Four color or Full-color ads are the
most expensive.
• Black & White rates – Lowest rates that
are offered for advertisements.
Run-of-paper (ROP): The ad
appears wherever there is room
for it.
Premium position: For higher
rates, the ad will appear in the
space thought to attract the
greatest audience attention
such as first page or back cover.
Internet
• Fast growing media for
advertising
• Product information easily
available
• Advertising rates are based
on type of format desired:
• Banner ads
• Button/text links
• Pop ups
•Audience size
•Time availability
•Commercial length
•Production costs are less than for
television and vary widely
•Audience
•The larger the audience, the higher the
rate will be.
•Network time which reaches national
audiences is higher than that for
regional or local television.
•Charge time is based on audience ratings.
•Audience demographics influence the
rate.
•Audience size and composition are
affected by time of day, season of the
year, program quality, and program
popularity.
Demographics of
Target Market
Media selected
should be able to
reach the desired
target market.
Editorial
credibility & image
• Positive media image is important.
• The media must have the ability to
present a believable product.
Ability to Obtain
Response Rate
Media should be able
to reach a large
number of customers
and obtain a high
response rate.