The Promotion
Strategy
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The Promotion Strategy
Chapter 12
The Promotion
Strategy
12.1
Developing a Promotion Strategy
12.2
Budgeting and Implementing
Promotional Plans
2
The Promotion Strategy
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
3
The Promotion Strategy
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
4
The Promotion Strategy
12.1
image
preselling
campaign
promotional mix
advertising
specialty item
Section 12.1 Developing a Promotion Strategy
publicity
news release
public relations
premium
rebate
sweepstakes
5
The Promotion Strategy
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
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The Promotion Strategy
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
7
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
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The Promotion Strategy
Preopening Plan
The image you establish
in your preopening plan
sets the tone for your
promotional plan.
Section 12.1 Developing a Promotion Strategy
image the impression
people have of a
company; a company’s
personality
9
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
The Promotion Strategy
Ongoing Plan
An ongoing promotional
plan helps in preselling
your goods or services.
Section 12.1 Developing a Promotion Strategy
preselling the act of
influencing potential
customers to buy before
contact is actually made
11
The Promotion Strategy
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.
Section 12.1 Developing a Promotion Strategy
campaign a series of
related promotional
activities with a similar
theme
12
The Promotion Strategy
Selecting a
Promotional Mix
Every business has a
unique promotional mix.
Section 12.1 Developing a Promotion Strategy
promotional mix the
combination of different
promotional elements
that a company uses to
reach and influence
potential customers
13
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
The Elements of the Promotional Mix
personal
selling
advertising
Promotional
Mix
sales
promotion
Section 12.1 Developing a Promotion Strategy
publicity
15
The Promotion Strategy
Advertising
In the United States, most
businesses spend about
one-fourth of their
advertising dollars on
newspaper ads.
Section 12.1 Developing a Promotion Strategy
advertising the paid
nonpersonal presentation
of ideas, goods, or
services directed at a
mass audience by an
identified sponsor by
means of print and
broadcast
16
Advertising
newspapers
magazines
specialty
items
direct mail
Types of
Advertising
Internet
radio
outdoor
advertising
directories
television
Section 12.1 Developing a Promotion Strategy
transit
advertising
17
The Promotion Strategy
Advertising
A specialty item serves as
a reminder of a business.
Section 12.1 Developing a Promotion Strategy
specialty item an
advertising device that
includes giveaways, such
as pens, T-shirts, and
caps, printed with a
business name or logo
18
The Promotion Strategy
Publicity
Taking advantage of
publicity means calling
attention to yourself and
your business.
Section 12.1 Developing a Promotion Strategy
publicity placement in
the media of newsworthy
items about a company,
product, or person
19
The Promotion Strategy
Publicity
A news release should
answer these questions:
?
?
Who?
?
What?
?
When?
news release a brief
newsworthy story that is
sent to the media
Where?
?
Why?
Section 12.1 Developing a Promotion Strategy
20
The Promotion Strategy
Publicity
Public relations may
generate unsolicited
publicity when such
activities are reported by
the media.
Section 12.1 Developing a Promotion Strategy
public relations
activities designed to
create goodwill toward a
business or control
damage done by negative
publicity
21
Sales Promotion
displays
sweepstakes
and contests
Examples
of Sales
Promotion
samples
Section 12.1 Developing a Promotion Strategy
premiums
rebates
22
The Promotion Strategy
Sales Promotion
One type of sales
promotion may be to
include a premium with a
purchase.
Section 12.1 Developing a Promotion Strategy
premium any 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
23
The Promotion Strategy
Sales Promotion
Some companies give a
rebate on purchases.
Section 12.1 Developing a Promotion Strategy
rebate a return of part
of the purchase price of
a product used as an
incentive for customers
to purchase the product
24
The Promotion Strategy
Sales Promotion
A sweepstakes is a sales
promotion that can draw
attention to a business.
Section 12.1 Developing a Promotion Strategy
sweepstakes a simple
game of chance used by
a business to get
customers interested in
what the company has
to offer
25
The Promotion Strategy
12.1
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
26
The Promotion Strategy
12.1
2. 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
27
The Promotion Strategy
12.1
3. 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
28
The Promotion Strategy
12.1
4. 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
29
The Promotion Strategy
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
30
The Promotion Strategy
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
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The Promotion Strategy
12.2
industry average
cooperative advertising
advertising agency
consumer pretest
Section 12.2 Budgeting and Implementing Promotional Plans
32
The Promotion Strategy
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
33
The Promotion Strategy
Compare Industry
Averages
You can find out the
industry average for
promotional expenses from
such sources as trade
associations or the SBA.
Section 12.2 Budgeting and Implementing Promotional Plans
industry average the
standard used to compare
costs among companies;
usually expressed as a
percentage
34
Basic Media Formats
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.
Section 12.2 Budgeting and Implementing Promotional Plans
35
The Promotion Strategy
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
36
The Promotion Strategy
Getting Help
You may be able to save
on your promotional
budget by arranging for
cooperative advertising.
Section 12.2 Budgeting and Implementing Promotional Plans
cooperative advertising
an arrangement in which
advertising costs are
divided between two or
more parties
37
The Promotion Strategy
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.
Section 12.2 Budgeting and Implementing Promotional Plans
advertising agency a
company that acts as
intermediary between a
business and the
media to communicate
a message to the
target market
38
The Promotion Strategy
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
39
Adjust Your Advertising
market
overall
results
budget
source
Factors
for
Evaluation
media
Section 12.2 Budgeting and Implementing Promotional Plans
motive
message
40
The Promotion Strategy
Adjust Your Advertising
One way to reduce the risk
involved in an expensive
advertising campaign is to
conduct a consumer
pretest.
Section 12.2 Budgeting and Implementing Promotional Plans
consumer pretest a
procedure in which a
panel of consumers
evaluates an ad before
its release
41
The Promotion Strategy
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
42
The Promotion Strategy
12.2
1. 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
43
The Promotion Strategy
12.2
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
44
The Promotion Strategy
12.2
3. 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
45
The Promotion Strategy
12.2
4. 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
46
The Promotion Strategy
Web Site
Personalization
Today, the technology exists for companies to personalize
their Web Sites for each visitor.
Tailoring a Web page by using rules-based or inferencebased personalization and cookies increases customer
satisfaction and promotes sales.
Section 12.2 Budgeting and Implementing Promotional Plans
47
The Promotion Strategy
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
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The Promotion Strategy
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
End of
The Promotion
Strategy
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