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This chapter discusses the communication process, factors in determining a promotional mix, methods for determining promotional expenditure, personal selling activities, advertising options, and sales promotional tools for small businesses.
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Chapter 14 Promotional Strategy In the Spotlight: Professional Foot Care • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-1
Learning Objectives: Chapter 14 1. Describe the communication process and the factors determining a promotional mix. 2. Discuss methods of determining the appropriate level of promotional expenditure. 3. Describe personal selling activities. 4. Identify advertising options for a small business. 5. Describe sales promotional tools. • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-2
Personal and Small Business Communication (a)A PersonalCommunication Channel (b)A Small BusinessCommunication Channel Source XYZ Company Parents Message “Buy my product.” “We love you.” • Newspaper advertisement • Personal sales call • Business gift • Letter sent through the mail • Personal visit to campus • Flowers and a “care package” sent ChannelOptions Receiver Customer Daughter at college • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-3
A Flowchart for Comparing Alternative Promotion Expense Estimates START Key to 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 Compute WTDJ YES Proceed to develop promotion at WTDJ level Is WTDJ equal toor less than others? NO Compute average ofWTDJ, APS, WCS, and ACS Compare WCS with computed average YES NO Is WCS equal to orgreater than average? Proceed to develop promotion at average level Seek additional funds to supplement promotion • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-4
Objections by Clients with Responses OBJECTION RESPONSE “I had problems with a similar “Yes, I understand your attitude,product before and don’t want but have you considered . . . ?”to go through that again!” “I’m too busy.” “That’s why I want to explain how I can save you time by . . .” “The last salesperson I dealt with “That’s a regrettable situation. It’scaused me all kinds of trouble.” too bad all members of my profession aren’t honest, but . . .” “I like what you have said, but I “Let’s figure how much you canneed to wait.” save by acting now.” “Your product sounds just like “There are similarities, but we your competitor’s.” have . . . at a better price.” “I’m not sure if I can risk a “Let me tell you how one of yourchangeover to your product.” competitors decided to buy from me.” • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-5
Rewarding Salespeople Nonfinancial Rewards Pat on the back “Top Salesperson of the Month” New office Financial Rewards Commission Salary Bonuses • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-6
Advantages and Disadvantages of Traditional Advertising Media Newspapers Magazines Radio Television Outdoor media Geographic selectivity and flexibility; short-term commitments; short lead time; immediacy; year-round readership Good reproduction; demographic and regional selectivity; relatively long life; high pass-along rate Low cost; immediacy; highly port- able; short-term commitments; entertainment carryover Wide, diverse audience; creative opportunities for demonstration; immediacy; entertainment carry- over Repetition; moderate cost; flexibility; geographic selectivity Little demographic selectivity; limited color capabilities; low pass-along rate; may be expensive Long-term commitments; slow audience buildup; long lead time No visual treatment; short message life; commercial clutter Short message life; high campaign cost; long-term commitments; long lead times; commercial clutter Short message; lack of demographic selectivity; distracting noise levels Source: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Marketing (Cincinnati: South-Western, 1998), p. 509. • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-7
World Wide Web TelephoneDirectory DailyNewspaper Television Billboards DirectMail Radio LocalMagazine WeeklyNewspaper Shoppers’Guide Transit A Media Mix for Small Businesses • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-8
Calendar South-Western Publishing Company Pen South-WesternPublishingCompany Shirt S W O E U S T T H E R N Bookmark Selected Specialty Advertising Items 2000 • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-9
Tips on Trade Show Exhibits fromSales & Marketing Management • Create moving billboards. • Make the booth interactive. • Get quality leads immediately. • Create a presence on the show floor. • Plan ahead. • Recruit customers. • Small Business Management, 11th edition • Longenecker, Moore, and Petty • 2000 • South-Western College Publishing 14-10
