powerpoint presentation by charlie cook the university of west alabama longenecker moore petty...
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© 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:
© 2008 Cengage Learning. All rights reserved. 16–3
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
© 2008 Cengage Learning. All rights reserved. 16–4
Similarity of Personal and Small Business Communication Processes16-1
© 2008 Cengage Learning. All rights reserved. 16–5
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
© 2008 Cengage Learning. All rights reserved. 16–6
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
© 2008 Cengage Learning. All rights reserved. 16–7
Four-Step Method for Determining a Promotional Budget16-2
© 2008 Cengage Learning. All rights reserved. 16–8
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
© 2008 Cengage Learning. All rights reserved. 16–9
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
© 2008 Cengage Learning. All rights reserved. 16–10
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.
© 2008 Cengage Learning. All rights reserved. 16–11
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.
© 2008 Cengage Learning. All rights reserved. 16–12
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.
© 2008 Cengage Learning. All rights reserved. 16–13
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
© 2008 Cengage Learning. All rights reserved. 16–14
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.
© 2008 Cengage Learning. All rights reserved. 16–15
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.
© 2008 Cengage Learning. All rights reserved. 16–16
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.
© 2008 Cengage Learning. All rights reserved. 16–17
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.
© 2008 Cengage Learning. All rights reserved. 16–18
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.
© 2008 Cengage Learning. All rights reserved. 16–19
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.
© 2008 Cengage Learning. All rights reserved. 16–20
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.
© 2008 Cengage Learning. All rights reserved. 16–21
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
© 2008 Cengage Learning. All rights reserved. 16–22
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)
© 2008 Cengage Learning. All rights reserved. 16–23
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.
© 2008 Cengage Learning. All rights reserved. 16–24
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
© 2008 Cengage Learning. All rights reserved. 16–25
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
© 2008 Cengage Learning. All rights reserved. 16–26
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.
© 2008 Cengage Learning. All rights reserved. 16–27
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.
© 2008 Cengage Learning. All rights reserved. 16–28
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.
© 2008 Cengage Learning. All rights reserved. 16–29
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!
© 2008 Cengage Learning. All rights reserved. 16–30
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
© 2008 Cengage Learning. All rights reserved. 16–31
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
© 2008 Cengage Learning. All rights reserved. 16–32
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