10.00 Identify the function of promotion in small business.
10.02 Describe the elements that make up the promotional mix.
1. Promotion: Any form of communication a business or organization uses to inform, persuade, or remind consumers about its products/services.
2. Product promotion: Used to persuade consumers to buy a particular product or service.
3. Institutional promotion: Used to create a favorable image of the business in the eyes of the consumers instead of promoting a particular product or service.
4. Promotional mix: The combination, or blend, of the different types of promotion.
5. Media: Agencies, means, or instruments used to deliver promotional messages to the public.
Any PAID form of
NONPERSONAL presentation of ideas, goods, or services.
1) Promotional advertising-
Communication designed to increase sales or products and services.
(examples: Buy One Get One Free, Free gift with $20.00 purchase)
2) Institutional advertising-
Promotion designed to create a favorable image and goodwill for a business or organization.
(examples: Coke with Polar Bear ads at Christmas; Phillip-Morris regarding quitting smoking; or alcohol ads with Don’t Drink and Drive massages.)
1) Print media: Oldest and most effective.
Ex: Newspapers, magazines, direct mail, signs, billboards
2) Broadcast media: Uses verbal communication.
Ex: Radio and TV
3) Specialty: Inexpensive, useful items with the advertiser’s name printed on them.
Ex: hats, t-shirts, cups, pencils, pens.
4) Online: An advertising message placed on the
5) Other media: Creative means of advertising such as in movie theaters, on video rentals, skywriting, air balloons, airplane banners, sports arenas, etc…
– a large number of people to view the message with a high rate of frequency of exposure.
– The costs per potential customer are usually lower than other forms of promotion.
– Advertising messages can be controlled by the business.
– not being able to select a specific target market.
– Some media are too expensive for small business owners (TV).
– The advertisement can be too short or not give enough information about a product.
– Some types of print advertisements are perceived negatively.
The form of promotion that uses PLANNED,
PERSONALIZED communication in order to influence purchase decisions and to ensure satisfaction.
1) Retail selling-
Customer comes into store and the salesperson’s job is to help customer and answer questions about the product.
2) Business to Business selling-
The salesperson goes to the customer and the selling takes place in the manufacturer’s/ wholesaler’s showroom or in the customer’s place of business.
- Process of selling over the phone.
1) Product knowledge-
To better serve customers, the sales person should be knowledgeable of the product/service
2) Selling skills-
Each salesperson should be trained and knowledgeable of the steps of selling.
3) Positive personal traits-
To interact effectively with customers, the salesperson should behave ethically and responsibly and have a positive attitude and awareness of professional appearance.
4) Communication skills-
It is important that a salesperson be skilled at verbal and nonverbal language to better serve the customer.
3. Determining needs
4. Product presentation/demonstration
5. Overcoming objections
6. Closing the sale
7. Suggestion selling
8. Relationship building
– Flexibility of being able to communicate with the consumer to influence purchases.
– Get immediate feedback
– Most expensive form of promotion.
Any activity designed to create a favorable image toward a business, its products, or its policies. Includes such things as donations to charity and sponsoring a little league team.
Information that is provided to the public by the media or other sources usually at no cost to the business.
A prepared statement or story that provides newsworthy information about the business or organization providing it. It should answer the five basic questions of who, what when, where and why.
A meeting to which a business or organization invites media for the purpose of distributing information about a newsworthy event.
A folder containing feature stories, articles, photographs, and/or news releases about the company, product or persons which has been prepared to assist the media.
•It can be positive or negative and cannot be controlled.
•It reaches a mass audience because many people follow the news.
•It provides believable, valid news often viewed as an endorsement.
•It is intended to inform about a business not to sell a product/service.
•No sponsor is identified. There is usually no cost unless the business pays for a press kit to be assembled.
– Helping to create positive image, therefore increasing profits and saving advertising money.
– Introduces new products and fosters good human relations.
– Timing and method of presentation may fail to reach the target market
– Inaccurate or negative information could be released.
The variety of activities other than personal selling, advertising, and public relations that are used to increase consumer purchases.
1) Increase demand and stimulate sales
2) Inform customers about new and/or improved products.
3) Create positive business image.
Designed to promote to businesses instead of consumers.
: Money paid by a manufacturer to the retailer for placing a product in the store, perhaps in a specific location.
: Price discount given by a manufacturer to increase the desire of a wholesaler or retailer to purchase the product.
: Provide the manufacturer a place to introduce new items and to gain support for new and existing products.
: Awards given to salespersons for meeting or exceeding sales goals.
Designed to increase consumer desire to buy products.
: Low cost items given to the consumer at a discount or free. Ex: coupons, free samples, redemptions.
: Products earned through contests, sweepstakes, and rebates.
3) Product samples
: Trial size products generally sent through the mail or distributed at the business at no cost to the consumer.
Examples of Trade Promotions
4) Promotional tie-ins
: A strategy in which two or more businesses combine promotional resources to increase sales.
5) Product placement
: Increasing product recognition by featuring the item in movie theaters, on TV or at special events.
6) Visual merchandising and display
Coordination of the physical elements of a business (or product) to project the desired image to the consumer.
– Stimulating sales raising customer awareness of the product
– Cost involved in promotion of image and product
– Negative attitudes towards some activities such as coupons, rebates, because of expiration dates.