Introduction & Learning Outcomes
Promotion is marketing communication that informs and persuades consumers. A key decision in developing a promotional strategy is determining what you want to get out of it. This will drive what you choose to communicate to prospective customers and the means for getting your message out to them.
Learning Outcomes:
- Describe the communication process and the factors determining a promotional mix.
- Explain methods of determining the appropriate level of promotional expenditures.
- Describe personal selling activities.
- Identify advertising options for a small business.
- Discuss the use of sales promotional tools.
The Communication Process in Promotion
Promotion is based on communication. A promotional mix is a blend of nonpersonal, personal, and special forms of communication aimed at a target market.
Factors Determining Promotional Methods:
- Geographical nature of the market to be reached.
- The size of the promotional budget.
- Product’s characteristics.
Comparison of Communication Channels:
| Element | Personal Communication | Small Business Communication |
|---|---|---|
| SOURCE | Daughter | XYZ Company |
| MESSAGE | “I love you and please send money” | “Buy my product” |
| CHANNEL OPTIONS | E-mail message, Personal visit, Greeting card | Newspaper advertisement, Personal sales call, Blog posting |
| RECEIVER | Parents | Customers |
Determining the Promotional Budget
There are four main methods for determining your promotional budget:
1. Allocating a Percentage of Sales
Allocating a specific percentage of past or anticipated sales for promotion.
2. Deciding How Much Can Be Spared
Deciding how much the business can spare after all other expenses.
3. Spending as Much as the Competition
Spending as much as the competition does.
4. Based on Objectives & Tasks
Determining how much is needed to achieve specific results.
Personal Selling in the Small Firm
Personal selling is a sales presentation delivered in a one-on-one manner. It is essential for building relationships and understanding customer needs.
The Importance of Product Knowledge
Effective selling is built on a foundation of product knowledge. A salesperson must be able to educate customers, answer questions, and counter objections.
Prospecting Techniques
- Personal referrals from friends and customers.
- Impersonal referrals from media, public records, and directories.
- Use of social media like Facebook and Twitter.
- Marketer-initiated contacts (phone calls, surveys).
- Customer-initiated contacts (online inquiries).
Sales Practice & Presentation
"Practice makes perfect." A salesperson should practice and be prepared for common objections (price, product, timing, etc.). The sales approach must be adapted to meet customer needs.
Advertising Practices for Small Firms
Advertising is the impersonal presentation of a business idea through mass media. Its purpose is to inform, persuade, and remind customers.
Advantages and Disadvantages of Major Advertising Media
| Medium | Advantages | Disadvantages |
|---|---|---|
| Newspapers | Geographic selectivity, short-term commitments, high market coverage. | Little demographic selectivity, limited color, may be expensive. |
| Magazines | Good color reproduction, demographic selectivity, long advertising life. | Long-term commitments, slow audience buildup. |
| Radio | Low cost, immediacy of message, highly portable. | No visual treatment, short advertising life, background sound distractions. |
| Television | Wide reach, creative opportunities, demographic selectivity with cable. | Short message life, high campaign cost. |
| Outdoor | Repetition, moderate cost, flexibility. | Short message, lack of demographic selectivity, high "noise" level. |
| Internet | Fastest growing medium, ability to target. | Difficulty in measuring effectiveness, not all consumers have access. |
10 Website Essentials
- A clear description of who you are.
- A simple, sensible Web address.
- An easily navigated site map.
- Easy-to-find contact information.
- Customer testimonials.
- An obvious call to action.
- Know the basics of Search Engine Optimization (SEO).
- Fresh, quality content.
- A secure hosting platform.
- A design and style that’s friendly to online readers.
Sales Promotional Tools
Sales promotion is an inclusive term for any promotional technique, other than personal selling and advertising, that stimulates the purchase of a particular product or service.
Examples of Sales Promotion Tools:
- Specialties: Items such as pens, key chains, coffee mugs, and shirts.
- Trade Show Exhibits: Potential cost savings over personal selling.
- Publicity: Information about a firm and its products or services that appears as a news item, usually free of charge.
Case Study: Panchero’s Mexican Grill
The founder of Panchero’s Mexican Grill, Rodney Anderson, felt the company ought to be involved in social networking, but he and his management team weren’t sure how to do it. Along came 22-year-old Joel Johnson, who was looking for a job and very comfortable with social media.
Now an employee of Panchero’s, Johnson spends most of his day on Twitter, Facebook, and other networking sites. He visits chat rooms regularly, looking for people who are talking about burritos or where they might go to eat. He then recommends Panchero’s. Johnson also works with Panchero’s franchisees, teaching them how to get visitors to their websites to become in-restaurant guests who then post comments about their experiences.
From watching Johnson at work, Anderson has learned that social networking is not something you can push. He says, “You have to let it have a life of its own.”
Questions for Discussion:
- There is more than a 10-year age difference between members of Panchero’s top management team and Joel Johnson. Do you think that difference has contributed to Johnson’s effectiveness in social networking? Why or why not?
- Is it ethical for Johnson to be recommending the restaurant chain where he works? Why or why not?
- Have you ever posted any comments on a website about a business that you have visited? Do you check for customer comments before you shop at a particular business?