Transcript 17_SBM15e_PPT_Ch17

Promotional Planning
PART 4
Focusing on the Customer:
Marketing Growth Strategies
PowerPoint Presentation by Charlie Cook, The University of West Alabama
© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.
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 expenditures.
3. Describe personal selling activities.
4. Identify advertising options for a small business.
5. Discuss the use of sales promotional tools.
17–2
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Promotion: Getting the Message Across
Personal Selling
Advertising
Marketing communications that
inform and persuade consumers
Sales
Promotional
Tools
17–3
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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
17–4
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Exhibit 17.1
Similarity of Personal and Small Business Communication Processes
17–5
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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
17–6
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Determining the Promotional Budget
• “How much should a small business spend on
promotion?”
1. Allocating a percentage of sales
2. Deciding how much can be spared
3. Spending as much as the competition
4. Determining what it takes to do the job
17–7
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Exhibit 17.2 Four-Step Method for Determining a Promotional Budget
17–8
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Comparing Alternative Promotion Expense Estimates
START
Compute WTDJ
Proceed to
develop
promotion at
WTDJ level
YES
Is WTDJ equal to
or less than others?
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
NO
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?
NO
Seek additional
funds to
supplement
promotion
17–9
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Personal Selling in the Small Firm
• Personal Selling
 A sales presentation (promotion) delivered in a one-
on-one manner.
 Requires:



Product knowledge
Well-prepared sales
presentation
Ability to build good will
17–10
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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.
17–11
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Personal Selling: 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.
17–12
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Personal Selling: Prospecting (cont’d)
• 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.
17–13
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Practicing the Sales Presentation
• Improves the salesperson’s success rate.
• Prepares salesperson for objections:
 Price, product, timing, source, service, or need.
• Techniques for dealing with objections:
 Direct denial
 Indirect denial
 Empathetic response
 Compensation method
 Pass-up method
 Find true objection
 Follow up and follow through
17–14
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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 a competitor
decided to buy from me.
17–15
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Making the Sales Presentation
• Adapting sales approach to 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.
17–16
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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 customer contacts.

Understanding the customer’s point of view.

Maintaining ethical standards in the relationship.
17–17
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Cost Control in Personal Selling
• Reducing Selling Costs
 Efficiently and economically schedule sales calls
 Push products that contribute to seller’s cost
economies
 Emphasize sales of high-margin products
 Partner with outside sales and
marketing representatives
17–18
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Compensation 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.

17–19
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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.
17–20
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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.
17–21
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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.
17–22
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Obtaining Assistance with Advertising
• Advertising Agencies
 Furnish design, artwork, and copy for ads
 Evaluate/recommend media with “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
17–23
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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 determined by:





Geographical area for target market coverage
Customer type targeted by advertising campaign
Advertising media customarily used by industry
Type of business
Web advertising on the World Wide Web (Internet)
17–24
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Exhibit 17.3 Advantages and Disadvantages of Major Advertising Media
Source: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Marketing, 9th ed. (Cincinnati: South-Western, 2008), p. 475.
17–25
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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
 Direct e-mail promotion


Advertising delivered by means
of electronic mail
Spam: unsolicited e-mail
17–26
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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

One firm pays another to include a click-on (click-through)
advertising link on its Web site.
17–27
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Web Advertising (cont’d)
• Basic Web Promotions (cont’d)
 A corporate Web site on the Internet



Creating and registering a site name
Building a user-friendly Web site
Promoting the Web site
 Blogs

An interactive website in which an
individual can maintain a personal online
journal, post comments and reflections,
and provide hyperlinks.
17–28
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Exhibit 17.4 Website Design Tips
Tip 1: Know your purpose
Tip 2: Think like your customer
Tip 3: Make it easy to navigate
Tip 4: Reduce the load time
Tip 5: Avoid surprises
Tip 6: Document everything
Sources: Gary Klingsheim, “How to Create an Attractive, User Friendly Website,” March 20, 2009,
http://www.webdesign.org, accessed April 11, 2009; and http://www.usability.gov, accessed June 30, 2009.
17–29
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Exhibit 17.5 Options for Getting Your Website Listed in Search Engines
1. Use a free submission service
2. Use a low-cost, automated submission service
3. Do it yourself by manually submitting your website
to individual search engines
4. Use a professional search engine consultant
5. Use submission software
6. Pay for inclusion.
Sources: Adapted from the Internet Marketing Center’s website, http://www.marketingtips.com/newsletters/
search-engines/search-engine-strategies.html, accessed July 13, 2007; and Joe Burns, “So, You Want to
Register Your Pages, Huh?” http://www.htmlgoodies.com, accessed April 11, 2009.
17–30
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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.
17–31
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Sales Promotion Tools (cont’d)
• Trade Show Exhibits
 Provide hands-on experience with products at less
cost 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!
Twofer Tool Sells Itself
Millionaire by Morning
Guaranteed $$$
17–32
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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
17–33
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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.
17–34
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Key Terms
•
•
•
•
•
•
•
promotion
promotional mix
personal selling
prospecting
advertising
product advertising
institutional advertising
•
•
•
•
•
•
•
•
banner ads
pop-up ads
e-mail promotion
Web sponsorship
linkage
blog
sales promotion
publicity
17–35
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