Mastering Promotion Strategies for Business Success

2. Chapter 12 The Promotion Strategy Developing a Promotion Strategy 12.1 Budgeting and Implementing Promotional Plans 12.2

3. 12.1 • Explain the role of the promotion strategy. • Explain how to formulate promotion plans. • Describe considerations for putting together a promotional mix. • Describe the elements of a promotional mix. Section 12.1 Developing a Promotion Strategy

4. 12.1 The promotion strategy is the most visible marketing strategy. It is designed to get the attention of prospective customers and convince them to buy from your business. Section 12.1 Developing a Promotion Strategy

5. 12.1 image preselling campaign promotional mix advertising specialty item publicity news release public relations premium rebate sweepstakes Section 12.1 Developing a Promotion Strategy

6. Drawing Up Promotional Plans As a new business owner, you need two kinds of promotional plans: • a preopening plan to lay the groundwork • an ongoing plan to support your operation once it is under way Section 12.1 Developing a Promotion Strategy

7. The Role of Promotion Strategy Promotion is communication intended to persuade, inform, or remind a target audience about a business or its products. The promotion strategy involves planning, determining the right promotional mix, and selecting specific promotional activities. Section 12.1 Developing a Promotion Strategy

8. Preopening Plan Objectives of a Preopening Plan Establish a positive image. Let potential customers know you are opening for business. Bring in customers or have them contact your business. Interest customers in your new company and products. Section 12.1 Developing a Promotion Strategy 8

9. Preopening Plan The image you establish in your preopening plan sets the tone for your promotional plan. imagethe impression people have of a company; a company’s personality Section 12.1 Developing a Promotion Strategy

10. Ongoing Plan Objectives of an Ongoing Promotional Plan Explain major features and benefits of your products. Communicate information about sales. Clear up customers’ questions and concerns. Introduce new goods or services. Section 12.1 Developing a Promotion Strategy 10

11. Ongoing Plan An ongoing promotional plan helps in preselling your goods or services. presellingthe act of influencing potential customers to buy before contact is actually made Section 12.1 Developing a Promotion Strategy

12. Promotional Plan Format Both a preopening and an ongoing plan can be organized around a promotional campaign, independent promotional activities, or a combination of the two. campaignaseries of related promotional activities with a similar theme Section 12.1 Developing a Promotion Strategy

13. Selecting a Promotional Mix Every business has a unique promotional mix. promotional mixthe combination of different promotional elements that a company uses to reach and influence potential customers Section 12.1 Developing a Promotion Strategy

14. Ongoing Plan When selecting elements for a promotional mix, consider: target market product value promotional channels time frame cost Section 12.1 Developing a Promotion Strategy 14

15. The Elements of the Promotional Mix personal selling advertising PromotionalMix sales promotion publicity Section 12.1 Developing a Promotion Strategy 15

16. Advertising In the United States, most businesses spend about one-fourth of their advertising dollars on newspaper ads. advertisingthe paid nonpersonal presentation of ideas, goods, or services directed at a mass audience by an identified sponsor by means of print and broadcast Section 12.1 Developing a Promotion Strategy

17. Advertising magazines newspapers specialtyitems direct mail Types ofAdvertising outdoor advertising Internet radio directories television transit advertising Section 12.1 Developing a Promotion Strategy 17

18. Advertising A specialty item serves as a reminder of a business. specialty iteman advertising device that includes giveaways, such as pens, T-shirts, and caps, printed with a business name or logo Section 12.1 Developing a Promotion Strategy

19. Publicity Taking advantage of publicity means calling attention to yourself and your business. publicityplacement in the media of newsworthy items about a company, product, or person Section 12.1 Developing a Promotion Strategy

20. Who? What? Where? When? Why? Publicity A news release should answer these questions: news releasea brief newsworthy story that is sent to the media ? ? ? ? ? Section 12.1 Developing a Promotion Strategy

21. Publicity Public relations may generate unsolicited publicity when such activities are reported by the media. public relationsactivities designed to create goodwill toward a business or control damage done by negative publicity Section 12.1 Developing a Promotion Strategy

22. Sales Promotion displays sweepstakes and contests premiums Examplesof SalesPromotion samples rebates Section 12.1 Developing a Promotion Strategy 22

23. Sales Promotion One type of sales promotion may be to include a premium with a purchase. premiumany item of value that a customer receives in addition to the good or service purchased; designed to attract new customers or build loyalty among existing customers, they may include coupons and gifts Section 12.1 Developing a Promotion Strategy

24. Sales Promotion Some companies give a rebate on purchases. rebatea return of part of the purchase price of a product used as an incentive for customers to purchase the product Section 12.1 Developing a Promotion Strategy

25. Sales Promotion A sweepstakes is a sales promotion that can draw attention to a business. sweepstakesa simple game of chance used by a business to get customers interested in what the company has to offer Section 12.1 Developing a Promotion Strategy

26. 12.1 • Explain the role of the promotion strategy. The role of the promotion strategy is to set the course for and coordinate all aspects of promotion. It involves planning, determining the right mix, and selecting specific activities. Section 12.1 Developing a Promotion Strategy

27. 12.1 • Explain preopening and ongoing promotional plans. Preopening promotional plans establish the company’s image, let customers know the business is opening, bring in customers, and create interest in the business so the business will have customers when it opens. Ongoing promotional plans maintain and build sales after a business is open. Section 12.1 Developing a Promotion Strategy

28. 12.1 • Describe considerations for putting together a promotional mix. When selecting elements for a promotional mix consider the target market, product value, promotional channels, time frame, and cost.   Section 12.1 Developing a Promotion Strategy

29. 12.1 • Describe the elements of a promotional mix. The elements of the promotional mix are advertising, sales promotion, publicity, and personal selling. Section 12.1 Developing a Promotion Strategy

30. 12.2 • Describe how to determine promotional costs for a start-up business. • Describe approaches to implementing your promotion strategy. • Discuss options for short-term changes in your promotion strategy. • Name considerations for updating the promotion strategy. Section 12.2 Budgeting and Implementing Promotional Plans

31. 12.2 Thorough planning and information gathering can help you arrive at a realistic promotional budget. That budget will have a direct affect on how you implement your promotional plans. Section 12.2 Budgeting and Implementing Promotional Plans

32. 12.2 industry average cooperative advertising advertising agency consumer pretest Section 12.2 Budgeting and Implementing Promotional Plans

33. Budgeting for Promotion To plan the promotional budget for a new venture, you must take these steps: • Cost out promotional activities. • Compare industry averages. • Make final adjustments. Section 12.2 Budgeting and Implementing Promotional Plans

34. Compare Industry Averages You can find out the industry average for promotional expenses from such sources as trade associations or the SBA. industry average the standard used to compare costs among companies; usually expressed as a percentage Section 12.2 Budgeting and Implementing Promotional Plans

35. Print Include a headline, copy, illustrations, and a signature. Radio Include same elements as print, but you may add music or sound effects. Television Same elements apply, but it requires casting, set design, sound and filming. Internet Same components as print, but may also have audio, video, and animation. Basic Media Formats Print Radio Television Internet Section 12.2 Budgeting and Implementing Promotional Plans 35

36. Getting Help You can carry out your promotional plans yourself or you can hire professionals to implement some or all of your promotional activities. Professional help can come from the media, manufacturers and suppliers, and advertising agencies. Section 12.2 Budgeting and Implementing Promotional Plans

37. Getting Help You may be able to save on your promotional budget by arranging for cooperative advertising. cooperative advertising an arrangement in which advertising costs are divided between two or more parties Section 12.2 Budgeting and Implementing Promotional Plans

38. Getting Help An advertising agency can handle all phases of your advertising, including writing the copy, creating the artwork, choosing the media, and producing the ad. advertising agency a company that acts as intermediary between a business and the media to communicate a message to the target market Section 12.2 Budgeting and Implementing Promotional Plans

39. Making Possible Promotion Changes There are three most common adjustments to the promotion strategy: • adjust your advertising • generate publicity • promote sales Section 12.2 Budgeting and Implementing Promotional Plans

40. Adjust Your Advertising market overall results source Factors for Evaluation budget motive message media Section 12.2 Budgeting and Implementing Promotional Plans 40

41. Adjust Your Advertising One way to reduce the risk involved in an expensive advertising campaign is to conduct a consumer pretest. consumer pretest a procedure in which a panel of consumers evaluates an ad before its release Section 12.2 Budgeting and Implementing Promotional Plans

42. Revising the Promotion Strategy Conduct a formal review of your promotion strategy on a regular basis. Use your sales forecast to arrive at a promotional budget to support that level of sales. Then revise your promotional mix promotion plan. Section 12.2 Budgeting and Implementing Promotional Plans

43. 12.2 • Describe how to determine promotional costs for a start-up business. Promotional costs for a start-up business are determined by costing out the planned activities, comparing the costs to industry averages, and adjusting the budget if necessary. Section 12.2 Budgeting and Implementing Promotional Plans

44. 12.2 • Describe approaches to implementing your promotional strategy. Two approaches to implementing a promotion strategy are developing your own promotion items and hiring professionals to do the job. Section 12.2 Budgeting and Implementing Promotional Plans

45. 12.2 • Discuss options for short-term changes in your promotion strategy. Options for short-term changes are increasing the effectiveness of your advertising expenditures, capitalizing on publicity opportunities, and stimulating sales through sales promotions or changes in the sales force. Section 12.2 Budgeting and Implementing Promotional Plans

46. 12.2 • Name considerations for updating the promotion strategy. To update the promotional plan consider the sales forecast for the upcoming period, make budget adjustments required by the forecast, and study changes in the target market, research results, and experiences to date. On the basis of those considerations, a new mix can be determined and a new plan developed. Section 12.2 Budgeting and Implementing Promotional Plans

47. Web SitePersonalization Today, the technology exists for companies to personalize their Web Sites for each visitor. Tailoring a Web page by using rules-based or inference-based personalization and cookies increases customer satisfaction and promotes sales. Section 12.2 Budgeting and Implementing Promotional Plans 47

48. Tech Terms cookie a file sent to a Web browser by a Web server that is used to record and store information for later use inference-based personalization a data analysis tool that is used to suggest products that are similar to the products a customer has viewed or purchased personalization the process of tailoring Web pages to individual users’ characteristics Section 12.2 Budgeting and Implementing Promotional Plans 48

49. Tech Terms privacy policy a statement on a Web site that explains how a company collects, uses, protects, and shares customers’ personal information rules-based personalization a data analysis tool that is used to recommend products that go with products a customer has viewed or purchased on a Web site Section 12.2 Budgeting and Implementing Promotional Plans 49

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