PowerPoint Presentation by Charlie Cook The University of West Alabama Longenecker Moore Petty...

© 2008 Cengage Learning. All rights reserved.© 2008 Cengage Learning. All rights reserved.

PowerPoint Presentation by Charlie CookThe University of West Alabama

PowerPoint Presentation by Charlie CookThe University of West Alabama

Longenecker • Moore • Petty • Palich

CHAPTER 16

Promotional Planning

CHAPTER 16

Promotional Planning

Focusing on the Customer: Marketing Growth StrategiesPart 4

© 2008 Cengage Learning. All rights reserved. 16–2

Looking AHEAD

1. Describe the communication process and the factors determining a promotional mix.

2. Explain methods of determining the appropriate level of promotional expenditure.

3. Describe personal selling activities.

4. Identify advertising options for a small business.

5. Discuss the use of sales promotional tools.

After you have read this chapter, you should be able to:


The Communication Process in Promotion• Communication Process Components

Source—the message senderChannel—the path the message travelsReceiver—the recipient of the message

• Forms of Promotional CommunicationNonpersonal—advertisingPersonal—personal sellingSpecial forms—sales promotion


Similarity of Personal and Small Business Communication Processes16-1


Promotional Communications• Promotional Mix

A blend of nonpersonal, personal, and special forms for communication techniques aimed at a target market.

Makeup of the mix is determined by:

Geographical nature of target market

Size of promotional budget

Product’s characteristics


Determining the Promotional Budget• “How much should a small business spend on

promotion?”Allocating a percentage of salesDeciding how much can be sparedSpending as much as the competitionDetermining what it takes to do the job


Four-Step Method for Determining a Promotional Budget16-2


Proceed to develop

promotion at WTDJ level

Proceed to develop

promotion at WTDJ level

Comparing Alternative Promotion Expense Estimates

Compute WTDJCompute WTDJ

Is WTDJ equal toor less than others?

Is WTDJ equal toor less than others?

Compute average ofWTDJ, APS, WCS, and

ACS

Compute average ofWTDJ, APS, WCS, and

ACS

Compare WCS withcomputed average

Compare WCS withcomputed average

Is WCS equal to or

greater than average?

Is WCS equal to or

greater than average?

Proceed to develop

promotion at average level

Proceed to develop

promotion at average level

Seek additional funds to

supplement promotion

Seek additional funds to

supplement promotion

YESYES

NONO

NONOYESYES

Key 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

STARTSTART


Personal Selling in the Small Firm• Personal Selling

A sales presentation (promotion) delivered in a one-on-one manner.

Requires:

Product knowledge

Well-prepared sales presentation

Ability to build good will


Importance of Product Knowledge• Salespersons use product knowledge to:

Successfully educate customers about the product’s advantages, uses, and limitations.

Answer customer questions and counter customer objections.

Personal selling becomes order-taking whena salesperson lacks product knowledge.


The Sales Presentation: Prospecting• Prospecting

A systematic process of continually looking for new customers

• Prospecting TechniquesPersonal referrals

Salesperson initiates customer contact through referral by another party known to the customer.

Impersonal referralsInformation on potential new

customers developed from public records and published sources.


The Sales Presentation: Prospecting (cont’d)

• Prospecting Techniques (cont’d)Marketer-initiated contacts

Market surveys are used to identify prospectsCustomer-initiated contacts

Potential customers are identified through their contacts with the firm.


Practicing the Sales Presentation• Improves the salesperson’s success rate.

• Prepares salesperson for objections related to price, product, timing, source, service, or need.

• Techniques for dealing with objections:Direct denialIndirect denialBoomerang techniqueCompensation methodPass-up method


Overcoming Customer Objections

I had problems with a similar I had problems with a similar product before and don’t want to product before and don’t want to go through that again!go through that again!

I had problems with a similar I had problems with a similar product before and don’t want to product before and don’t want to go through that again!go through that again!

I’m too busy.I’m too busy.I’m too busy.I’m too busy.

I like what you have said, but I I like what you have said, but I need to wait.need to wait.

I like what you have said, but I I like what you have said, but I need to wait.need to wait.

Yes, I understand your attitude, but have you considered . . . ?

Yes, I understand your attitude, but have you considered . . . ?

That’s why I want to explain how I can save you time by . . .

That’s why I want to explain how I can save you time by . . .

Let’s figure how much you can save by acting now.

Let’s figure how much you can save by acting now.

Your product sounds just like your Your product sounds just like your competitor’s.competitor’s.

Your product sounds just like your Your product sounds just like your competitor’s.competitor’s.

There are similarities, but we have . . . at a better price.

There are similarities, but we have . . . at a better price.

I’m not sure I can risk a I’m not sure I can risk a changeover to your product.changeover to your product.

I’m not sure I can risk a I’m not sure I can risk a changeover to your product.changeover to your product.

Let me tell you how a competitor decided to buy from me.

Let me tell you how a competitor decided to buy from me.


Making the Sales Presentation• Adapting the sales approach to the customers’

needs:Avoid a “canned” sales talk.Speak the customer’s “language”.Answer every objection explicitly and adequately.Be enthusiastic, friendly, and persistent.Be personally supportive of

the customer.


Customer Goodwill and Relationship Selling• Relationship Selling

Building customer goodwill for future sales to satisfied customers through:

Maintaining a good personal appearance.

Having a pleasant personality.

Using professional etiquette in customer contacts.

Understanding the customer’s point of view.

Maintaining ethical standards in the relationship.


The Compensation Program for Salespeople• Nonfinancial Rewards

Personal recognition of employees by the firmPlaques and “Employee of the Month” awardsProviding “perks” to superior performers.

Personal satisfaction drawn by salespersons from doing their work well.


Compensating Salespeople• Financial Rewards

CommissionsCompensation paid as percentage of

sales productivity.Strong sales motivator

Straight salaryCompensation paid regardless of

sales made.Combination of commissions and salary

Balance of two compensation forms is adjusted to provide an increasing proportion of commission as salesperson gains experience.


Advertising Practices for Small Firms• Advertising

The impersonal presentation of a business idea through mass media.

• Advertising Objectives To sell by informing, persuading, and reminding. To serve as a complement to product quality and

efficient service. To properly reflect changes in customer needs and

preferences.


Types of Advertising• Product Advertising

The presentation of a business idea designed to make potential customers aware of a specific product or service and create a desire for it.

• Institutional AdvertisingThe presentation of information

about a particular firm, designed to enhance the firm’s image.


Obtaining Assistance with Advertising• Advertising Agencies

Furnish design, artwork, and copy for adsEvaluate/recommend media with “pulling power”Evaluate the effectiveness of advertising appealsAdvise on promotion and merchandise displaysConduct market sampling studiesFurnish mailing lists

• Other SourcesSuppliersTrade Associations


Advertising Decision Factors• Frequency of Advertising

With regularity for effectiveness and continuityIntroduction of new uses for established productsIntroduction of new products and services

• Where to AdvertiseAppropriate media mix determined by:

Geographical area for target market coverageCustomer type targeted by advertising campaignAdvertising media customarily used by industry Type of businessWeb advertising on the World Wide Web (Internet)


Advantages and Disadvantages of Major Advertising Media16-3

Source: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Marketing, 9th ed. (Cincinnati: South-Western, 2008), p. 475.


Web Advertising• Basic Web Promotions

Banner adsAdvertisements that appear across a Web page,

often as moving rectangular stripsPop-up ads

Advertisements that burst open on computer screens

Direct e-mail promotionAdvertising delivered by means

of electronic mailSpam: unsolicited e-mail


Web Advertising (cont’d)• Basic Web Promotions (cont’d)

Web sponsorshipsA type of advertising in which the firm pays another

organization for the right to be part of that organization’s Web page.

LinkagesOne firm pays another to include a click-on (click-

through) advertising link on its Web site.A corporate Web site on the Internet

Creating and registering a site nameBuilding a user-friendly Web sitePromoting the Web site


Website Design Tips16-4

Tip 1: Make It Easy to Buy

Tip 2: Make a Strong First Impression

Tip 3: Minimize Distractions: Advertising Isn’t Always Necessary

Tip 4: Make It Personal

Tip 5: Avoid Long Instructions

Tip 6: Provide Visual Clues to Location

Tip 7: Show Off Products

Tip 8: Encourage Spontaneous Purchases

Tip 9: Alternate Background Colors in Long Lists

Tip 10: Allow Users to Collect ItemsSource: Nadja Vol Ochs, “Easy-to-Buy E-Commerce Site Design Tips,”http://www.microsoft.com/technet/prodtechnol/sscomm/reskit/sitedes.mspx, accessed July 13, 2007.


Options for Getting Your Website Listed in Search Engines16-5

1. Use a Free Submission Service

2. Use a Low-Cost, Automated Submission Service

3. Do It Yourself by Manually Submitting Your Website to Individual Search Engines

4. Use a Professional Search Engine Consultant

5. Use Submission Software

Source: Adapted from the Internet Marketing Center’s website, http://www.marketingtips.com/newsletters/search-engines/search-engine_strategies.html, accessed July 13, 2007.


Sales Promotional Tools• Sales Promotion

An inclusive term for any promotional techniques that are neither personal selling or advertisingUsed in combination with personal selling and

advertising.

• SpecialtiesTangible and enduring functional items of worth

distributed personally to recipients that serve as reminders of the firm.Pens, key chains, magnets, and clothing imprinted

with the name, logo, or slogan of the firm.


Sales Promotion Tools (cont’d)• Trade Show Exhibits

Provide hands-on experience with products.Are less costly than personal selling.

• Making Trade Show Exhibits EffectiveCheck out the trade show’s history.Prepare a professional-looking display.Have a sufficient quantity of literature on hand.Make sure you have a good product.Do pre-show promotion.Have a giveaway or gimmick.Train booth personnel.Follow up!


Sales Promotion Tools (cont’d)• Publicity

Information about a firm and its products or services that appears as a news item, usually free of charge.Provides visibility for the firmRequires regular contacts with

the news media


Sales Promotion Tools (cont’d)• When to Use Sales Promotion

For manufacturersTo stimulate channel members—retailers and

wholesalers—to market a firm’s products. For wholesalers

To induce retailers to buy inventories earlier than they normally would.

For retailersTo persuade customers to make a purchase.

• Strategic Alliances and Sales Promotion Joining with another firm to promote products by

sharing marketing resources and customers


Key TERMS

• promotion• promotional mix• personal selling• prospecting• advertising• product advertising• institutional advertising

• banner ads• pop-up ads• e-mail promotion• Web sponsorship• linkage• sales promotion• publicity

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