Transcript Entrepreneurship: Ideas in Action 5e

Chapter 6
Distribution, Promotion,
and Selling
6.1 The Marketing Mix─Distribution
6.2 The Marketing Mix─Promotion
6.3 Selling and Promoting
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 2
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Vocabulary
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supply chain management
distribution
channels of distribution
direct channel
indirect channel
physical distribution
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Entrepreneurship: Ideas in Action 5e
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Supply Chain Management
 supply chain management
 the coordination of manufacturers,
suppliers, and retailers working together to
meet a customer need for a product or
service
Chapter 1
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 distribution
 involves the locations and methods that
are 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
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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
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Entrepreneurship: Ideas in Action 5e
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Channel Options
Chapter 6
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Entrepreneurship: Ideas in Action 5e
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 Manufacturer to Consumer
 sales methods may include:
 the Internet
 direct mail
 television shopping channels
 no intermediaries
 most cost-effective
 limited sales opportunities
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 Manufacturer to Retailer to Consumer
 sales force sells goods to retailers
 retailers sell goods to consumers
 offers more sales opportunities
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Manufacturer to Wholesaler to Retailer
to Consumer
 manufacturer sells large quantities to a
wholesaler
 wholesaler stores and sells smaller quantities to
many retailers
 lower production costs can lead to lower
prices
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Entrepreneurship: Ideas in Action 5e
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 Manufacturer to Agent to Wholesaler to
Retailer to Consumer
 The manufacturer delegates the sales
function to an agent.
 frequently used in international marketing
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What are the four basic options of
channels of distribution?
Chapter 1
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Distribute Goods and Services
 Distribution channels will vary based on
business needs.
 market size
 type of product or service
 customer needs and wants
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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
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Entrepreneurship: Ideas in Action 5e
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Service Businesses
 Most service businesses sell directly to
customers.
 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
stores
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Manufacturing Businesses
 Manufacturers usually sell products to
other businesses.
 The other businesses sell to the final
consumer.
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Entrepreneurship: Ideas in Action 5e
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Why are channels of distribution
different for different types of
businesses?
Chapter 1
Slide 17
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Physical Distribution
 Physical distribution
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Chapter 6
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transportation
storage
handling
packaging
Entrepreneurship: Ideas in Action 5e
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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.
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Entrepreneurship: Ideas in Action 5e
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Product Storage and Handling
 Benefits of efficient storage include:
 balancing supply and demand of products
 Other considerations of storage include:
 adds to the cost of products
 increases the risk of damage or theft
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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.
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Entrepreneurship: Ideas in Action 5e
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Receiving Goods to Sell
 All types of businesses must receive
goods from suppliers.
 Sources that can be consulted to find
suppliers include:
 The American Wholesalers and
Distributors Directory
 The ThomasNet website
 Trade magazines
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What factors are important to
consider in the physical distribution
of products?
Chapter 1
Slide 23
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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.
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Slide 24
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Vocabulary
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advertising
publicity
press release
public relations
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Entrepreneurship: Ideas in Action 5e
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Promotion Strategies
 promotional mix
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Chapter 6
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advertising
publicity
personal selling
sales promotion
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Advertising
 advertising
 a paid form of communication sent out by
a business about a product or service
 Advertising is very important for small
and/or new businesses.
 Advertising should clearly communicate
your message and image.
Chapter 6
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Entrepreneurship: Ideas in Action 5e
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Online Advertising
 Online advertising has increased as
Internet usage has grown.
 Online technology lets businesses
interact with consumers via
 chat rooms
 blogs
 e-newsletters
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Entrepreneurship: Ideas in Action 5e
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 Common types of online advertising
include the following:
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Chapter 6
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Banner Ad
Floating Ad
Wallpaper Ad
Trick Banner
Pop-Up Ad
Pop-Under Ad
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 As it is easier to determine the
effectiveness of online advertising than
traditional advertising, new methods to
charge for online advertising have been
developed.
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Cost per Click (CPC)
 the advertiser is charged based on the
number of user clicks on the advertisement
 viewers 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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Disadvantages of Online Advertising
 In an effort to combat excessive spamming,
many Internet users now utilize software that
blocks promotions from reaching their
computers.
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Television Advertising
 commercials
 last less than a minute
 infomercials
 last a half hour or more
 provide in-depth coverage about a specific
product
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Disadvantages of television advertising
include:
 it is very expensive
 the audience is too broad to be effective for
most businesses
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 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 38
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 number of people
Chapter 6
Slide 39
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 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 40
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 41
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Disadvantages of telephone directory
advertising include:
 People only look in the directory when they
are already seeking a specific business.
 It is hard to persuade a potential customer to
use your business instead of your
competitor’s business.
Chapter 6
Slide 42
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 43
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Disadvantages of direct-mail
advertising include:
 Direct-mail is often considered to be “junk
mail.”
 It often gets discarded without being read.
Chapter 6
Slide 44
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 45
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Disadvantages of magazine advertising
include:
 National distribution can make some
magazines an inappropriate way to
advertise a local business.
Chapter 6
Slide 46
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Outdoor Advertising
 billboards and signs
 can be effective as the name of your
business is located where many
people can see it
Chapter 6
Slide 47
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Disadvantages of outdoor advertising
include:
 limited information can be included
 may not project the image you wish to
convey
Chapter 6
Slide 48
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 49
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Social Networking Sites
 Business owners are using social
networking sites for business
promotion.
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Chapter 1
Slide 50
Twitter
LinkedIn
YouTube
Facebook
Blogging
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Budgeting for Promotion
 Obtain cost estimates for all advertising
that is under consideration.
 Calculate a projected budget.
 Determine whether your advertising
budget, as a percent of sales, is in line
with industry averages.
Chapter 6
Slide 51
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Why is promotion important to a
business?
Chapter 1
Slide 52
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 press release
 a written statement meant to inform the
media of an event or product
Chapter 6
Slide 54
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Public Relations
 public relations
 the act of establishing a positive
relationship with customers and the
general public
Chapter 6
Slide 55
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 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 56
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 57
Entrepreneurship: Ideas in Action 5e
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What are the advantages and
disadvantages of publicity?
Chapter 1
Slide 58
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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.
 Evaluate the effectiveness of promotional
categories.
Chapter 6
Slide 59
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Vocabulary
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personal selling
rational buying decisions
emotional buying decisions
sales promotion
rebate
telemarketing
visual marketing
Chapter 6
Slide 60
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 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
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Entrepreneurship: Ideas in Action 5e
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 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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Why is selling important to a
business?
Chapter 1
Slide 64
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 better
selling skills
Chapter 6
Slide 65
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Buying Decisions
 rational buying decisions
 based on the logical reasoning of
customers
 customers evaluate alternatives
 purchase after careful thought
Chapter 6
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 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
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Customer Decision-Making
Process
 A problem-solving approach for helping
customers includes the following steps:
 define the problem
 gather information
Chapter 6
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Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 6
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identify various solutions
evaluate alternatives
select the best option
take action
evaluate the action
Entrepreneurship: Ideas in Action 5e
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Why is it important to meet customer
needs and wants in the selling
process?
Chapter 1
Slide 71
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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
Chapter 6
Slide 72
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Telemarketing
 telemarketing
 using the phone to market your product or
service
Chapter 1
Slide 73
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Visual Marketing
 visual marketing
 the use of visual media to promote, sell,
and distribute a product or service to a
targeted audience
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Chapter 1
Slide 74
logo
signage
promotional tools
company vehicles
uniforms
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What is the purpose of sales
promotions?
Chapter 1
Slide 75
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Evaluation Strategies
1. Is the volume of sales increasing?
2. How are you getting new customers?
3. Does your advertising and/or
promotional activity produce direct
responses?
Chapter 1
Slide 76
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4. Do your networking activities create
new opportunities for you?
5. Do your marketing tactics make it easier
to sell your services?
6. What is your sales conversion rate?
7. Does your plan have a positive return on
investment (ROI)?
Chapter 6
Slide 77
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
How can you determine the
effectiveness of promotional
activities?
Chapter 1
Slide 78
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
PERFORMANCE INDICATORS
 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 79
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 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
 Determine priorities and set deadlines
Chapter 6
Slide 80
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 81
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3. Who are popular examples of
entrepreneurs?
4. What are three characteristics of
successful entrepreneurs?
Chapter 6
Slide 82
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.