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D. Marketing a Small Business
10.00 Identify the function of
promotion in small business.
10.02 Describe the elements
that make up the
promotional mix.
1. Promotion: Any form of communication
a business or organization uses to
inform, persuade, or remind consumers
about its products/services.
2. Product promotion: Used to persuade
consumers to buy a particular product
or service.
3. Institutional promotion: Used to create a
favorable image of the business in the
eyes of the consumers instead of
promoting a particular product or
service.
4. Promotional mix: The combination, or
blend, of the different types of
promotion.
5. Media: Agencies, means, or instruments
used to deliver promotional messages to the
public.
•Advertising
•Personal selling
•Public relations
•Publicity
•Sales promotion
Any PAID form of
NONPERSONAL
presentation of ideas,
goods, or services.
1) Promotional advertising- Communication
designed to increase sales or products and
services.
(examples: Buy One Get One Free, Free gift with $20.00 purchase)
2) Institutional advertising- Promotion
designed to create a favorable image and
goodwill for a business or organization.
(examples: Coke with Polar Bear ads at Christmas; Phillip-Morris
regarding quitting smoking; or alcohol ads with Don’t Drink
and Drive massages.)
1) Print media: Oldest and most effective.
Ex: Newspapers, magazines, direct
mail, signs, billboards
2) Broadcast media: Uses verbal communication.
Ex: Radio and TV
3) Specialty: Inexpensive, useful items with the
advertiser’s name printed on them.
Ex: hats, t-shirts, cups, pencils, pens.
4) Online: An advertising message placed on the
Internet.
5) Other media: Creative means of advertising
such as in movie theaters, on video rentals,
skywriting, air balloons, airplane banners,
sports arenas, etc…
1) Advantages
– a large number of people to view the
message with a high rate of frequency
of exposure.
– The costs per potential customer are
usually lower than other forms of
promotion.
– Advertising messages can be controlled
by the business.
2) Disadvantages
– not being able to select a specific target
market.
– Some media are too expensive for small
business owners (TV).
– The advertisement can be too short or not
give enough information about a product.
– Some types of print advertisements are
perceived negatively.
The form of promotion
that uses PLANNED,
PERSONALIZED
communication in
order to influence
purchase decisions and
to ensure satisfaction.
1) Retail selling- Customer comes into store
and the salesperson’s job is to help
customer and answer questions about the
product.
2) Business to Business selling- The
salesperson goes to the customer and the
selling takes place in the manufacturer’s/
wholesaler’s showroom or in the
customer’s place of business.
3) Telemarketing- Process of selling over
the phone.
1) Product knowledge- To better
serve customers, the sales
person should be knowledgeable
of the product/service.
2) Selling skills- Each salesperson
should be trained and
knowledgeable of the steps of
selling.
3) Positive personal traits- To interact effectively
with customers, the salesperson should behave
ethically and responsibly and have a positive
attitude and awareness of professional
appearance.
4) Communication skills- It is important that a
salesperson be skilled at verbal and nonverbal
language to better serve the customer.
1. Prospecting/pre-approach
2. Approach
3. Determining needs
4. Product presentation/demonstration
5. Overcoming objections
6. Closing the sale
7. Suggestion selling
8. Relationship building
1. Advantages
–
–
Flexibility of being able to communicate with
the consumer to influence purchases.
Get immediate feedback
2. Disadvantages
–
Most expensive form of promotion.
•Any activity designed to create
a favorable image toward a
business, its products, or its
policies. Includes such things as
donations to charity and
sponsoring a little league team.
• Information that is provided to the
public by the media or other sources
usually at no cost to the business.
1) News release- A prepared statement or
story that provides newsworthy
information about the business or
organization providing it. It should
answer the five basic questions of who,
what when, where and why.
2) Press conference- A meeting to which
a business or organization invites media
for the purpose of distributing
information about a newsworthy event.
3) Press kit- A folder containing feature
stories, articles, photographs, and/or
news releases about the company,
product or persons which has been
prepared to assist the media.
•It can be positive or negative and cannot be controlled.
•It reaches a mass audience because many people follow
the news.
•It provides believable, valid news often viewed as an
endorsement.
•It is intended to inform about a business not to sell a
product/service.
•No sponsor is identified. There is usually no cost unless
the business pays for a press kit to be assembled.
1). Advantages:
– Helping to create positive image,
therefore increasing profits and saving
advertising money.
– Introduces new products and fosters good
human relations.
2). Disadvantages:
– Timing and method of presentation may
fail to reach the target market
– Inaccurate or negative information could
be released.
5. Sales Promotion
The variety of activities other
than personal selling,
advertising, and public
relations that are used to
increase consumer purchases.
a. Objectives of Sales Promotion
1) Increase demand and stimulate sales
2) Inform customers about new and/or
improved products.
3) Create positive business image.
Examples of Trade Promotions
Designed to promote to businesses instead of
consumers.
1). Slotting allowances: Money paid by a
manufacturer to the retailer for placing a product
in the store, perhaps in a specific location.
2). Buying allowance: Price discount given by a
manufacturer to increase the desire of a
wholesaler or retailer to purchase the product.
Examples of Trade Promotions
(cont.)
3). Trade shows: Provide the manufacturer a
place to introduce new items and to gain
support for new and existing products.
4). Sales incentives/contests: Awards given
to salespersons for meeting or exceeding
sales goals.
Examples of Trade Promotions
Designed to increase consumer desire to buy
products.
1) Premiums: Low cost items given to the
consumer at a discount or free. Ex:
coupons, free samples, redemptions.
2) Incentives: Products earned through
contests, sweepstakes, and rebates.
3) Product samples: Trial size products
generally sent through the mail or
distributed at the business at no cost to the
consumer.
Examples of Trade Promotions
(cont)…
4) Promotional tie-ins: A strategy in which
two or more businesses combine
promotional resources to increase sales.
5) Product placement: Increasing product
recognition by featuring the item in movie
theaters, on TV or at special events.
6) Visual merchandising and display:
Coordination of the physical elements of a
business (or product) to project the desired
image to the consumer.
1). Advantages:
– Stimulating sales raising customer awareness of
the product
2). Disadvantages:
– Cost involved in promotion of image and
product
– Negative attitudes towards some activities such
as coupons, rebates, because of expiration
dates.