1. Promotional Planning
PART 4 Focusing on the Customer: Marketing Growth Strategies

2. Looking Ahead After studying this chapter, you should be able to:
Describe the communication process and the factors determining a promotional mix.
Explain methods of determining the appropriate level of promotional expenditures.
Describe personal selling activities.
Identify advertising options for a small business.
Discuss the use of sales promotional tools.

3. Promotion: Getting the Message Across
Personal Selling
Advertising
Marketing communications that inform and persuade consumers
Sales Promotional Tools

4. The Communication Process in Promotion
Communication Process Components
Source—the message sender
Channel—the path the message travels
Receiver—the recipient of the message
Forms of Promotional Communication
Nonpersonal—advertising
Personal—personal selling
Special forms—sales promotion

5. Exhibit 17.1 Similarity of Personal and Small Business Communication Processes

6. 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

7. Determining the Promotional Budget
“How much should a small business spend on promotion?”
Allocating a percentage of sales
Deciding how much can be spared
Spending as much as the competition
Determining what it takes to do the job

8. Exhibit 17.2 Four-Step Method for Determining a Promotional Budget

9. Comparing Alternative Promotion Expense Estimates
START
Compute WTDJ
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
Proceed to develop promotion at WTDJ level
YES
Is WTDJ equal to or less than others? NO
Compute average of WTDJ, APS, WCS, and ACS
Compare WCS with computed average
Proceed to develop promotion at average level
Seek additional funds to supplement promotion
YES
Is WCS equal to or greater than average? NO

10. Personal Selling in the Small Firm
A sales presentation (promotion) delivered in a one-on-one manner.
Requires:
Product knowledge
Well-prepared sales presentation
Ability to build good will

11. 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 when a salesperson lacks product knowledge.

12. Personal Selling: Prospecting
A systematic process of continually looking for new customers
Prospecting Techniques
Personal referrals
Salesperson initiates customer contact through referral by another party known to the customer.
Impersonal referrals
Information on potential new customers developed from public records and published sources.

13. Personal Selling: Prospecting (cont’d)
Prospecting Techniques (cont’d)
Marketer-initiated contacts
Market surveys are used to identify prospects
Customer-initiated contacts
Potential customers are identified through their contacts with the firm.

14. Practicing the Sales Presentation
Improves the salesperson’s success rate.
Prepares salesperson for objections:
Price, product, timing, source, service, or need.
Techniques for dealing with objections:
Direct denial
Indirect denial
Empathetic response
Compensation method
Pass-up method
Find true objection
Follow up and follow through

15. Overcoming Customer Objections
I had problems with a similar product before and don’t want to go through that again!
Yes, I understand your attitude, but have you considered ?
I’m too busy.
That’s why I want to explain how I can save you time by . . .
I like what you have said, but I need to wait.
Let’s figure how much you can save by acting now.
Your product sounds just like your competitor’s.
There are similarities, but we have at a better price.
I’m not sure I can risk a changeover to your product.
Let me tell you how a competitor decided to buy from me.

16. Making the Sales Presentation
Adapting sales approach to 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.

17. Customer Goodwill and 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.

18. Cost Control in Personal Selling
Reducing Selling Costs
Efficiently and economically schedule sales calls
Push products that contribute to seller’s cost economies
Emphasize sales of high-margin products
Partner with outside sales and marketing representatives

19. Compensation for Salespeople
Nonfinancial Rewards
Personal recognition of employees by the firm
Plaques and “Employee of the Month” awards
Providing “perks” to superior performers.
Personal satisfaction drawn by salespersons from doing their work well.

20. Compensating Salespeople
Financial Rewards
Commissions
Compensation paid as percentage of sales productivity.
Strong sales motivator
Straight salary
Compensation 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.

21. Advertising Practices for Small Firms
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.

22. Institutional Advertising
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 Advertising
The presentation of information about a particular firm, designed to enhance the firm’s image.

23. Obtaining Assistance with Advertising
Advertising Agencies
Furnish design, artwork, and copy for ads
Evaluate/recommend media with “pulling power”
Evaluate the effectiveness of advertising appeals
Advise on promotion and merchandise displays
Conduct market sampling studies
Furnish mailing lists
Other Sources
Suppliers
Trade Associations

24. Advertising Decision Factors
Frequency of Advertising
With regularity for effectiveness and continuity
Introduction of new uses for established products
Introduction of new products and services
Where to Advertise
Appropriate media mix determined by:
Geographical area for target market coverage
Customer type targeted by advertising campaign
Advertising media customarily used by industry
Type of business
Web advertising on the World Wide Web (Internet)

25. Exhibit 17.3 Advantages and Disadvantages of Major Advertising Media
Source: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Marketing, 9th ed. (Cincinnati: South-Western, 2008), p. 475.

26. Web Advertising Basic Web Promotions Banner ads Pop-up ads
Advertisements that appear across a Web page, often as moving rectangular strips
Pop-up ads
Advertisements that burst open on computer screens
Direct promotion
Advertising delivered by means of electronic mail
Spam: unsolicited

27. Web Advertising (cont’d)
Basic Web Promotions (cont’d)
Web sponsorships
A type of advertising in which the firm pays another organization for the right to be part of that organization’s Web page.
Linkages
One firm pays another to include a click-on (click-through) advertising link on its Web site.

28. Web Advertising (cont’d)
Basic Web Promotions (cont’d)
A corporate Web site on the Internet
Creating and registering a site name
Building a user-friendly Web site
Promoting the Web site
Blogs
An interactive website in which an individual can maintain a personal online journal, post comments and reflections, and provide hyperlinks.

29. Exhibit 17.4 Website Design Tips
Tip 1: Know your purpose
Tip 2: Think like your customer
Tip 3: Make it easy to navigate
Tip 4: Reduce the load time
Tip 5: Avoid surprises
Tip 6: Document everything
Sources: Gary Klingsheim, “How to Create an Attractive, User Friendly Website,” March 20, 2009, accessed April 11, 2009; and accessed June 30, 2009.

30. Exhibit 17.5 Options for Getting Your Website Listed in Search Engines
Use a free submission service
Use a low-cost, automated submission service
Do it yourself by manually submitting your website to individual search engines
Use a professional search engine consultant
Use submission software
Pay for inclusion.
Sources: Adapted from the Internet Marketing Center’s website, search-engines/search-engine-strategies.html, accessed July 13, 2007; and Joe Burns, “So, You Want to Register Your Pages, Huh?” accessed April 11, 2009.

31. Sales Promotional Tools
An inclusive term for any promotional techniques that are neither personal selling or advertising
Used in combination with personal selling and advertising.
Specialties
Tangible 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.

32. Sales Promotion Tools (cont’d)
Trade Show Exhibits
Provide hands-on experience with products at less cost than personal selling.
Making Trade Show Exhibits Effective
Check 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!
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33. 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 firm
Requires regular contacts with the news media

34. Sales Promotion Tools (cont’d)
When to Use Sales Promotion
For manufacturers
To 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 retailers
To persuade customers to make a purchase.

35. Key Terms promotion promotional mix personal selling prospecting
advertising
product advertising
institutional advertising
banner ads
pop-up ads
promotion
Web sponsorship
linkage
blog
sales promotion
publicity