Promotional Planning

Dr. Nazatul Shima Abdul Rani (PhD)

 Learning Outcomes
• After studying this chapter, you should be able
to:
1. Describe the communication process and the
factors determining a promotional mix.
2. Explain methods of determining the appropriate
level of promotional expenditures.
3. Describe personal selling activities.
4. Identify advertising options for a small business.
5. Discuss the use of sales promotional tools.
 Introduction
• How does a customer know that you have something to sell?
• Does she or he randomly drive by your store and see your sign?
• Stumble across your website while surfing the Internet?
• Hear about your from a friend or neighbor?
• The way you get that message across is called promotion.
• Promotion : marketing communications that inform and persuade
consumers.
• A key decision in developing a promotional strategy is determining
what you want to get out of it.
• This decision will drive what you choose to communicate to
prospective customers and the means for getting your message out
to them.
The Communication Process in Promotion
• Promotion is based on communication.
• Promotional mix – a blend of non personal, personal and special forms of
communication aimed at a target market.
• Promotional methods – advertising, personal selling and sales promotional are
determined by:
– Geographical nature of the market to be reached.
– The size of the promotional budget.
– Product’s characteristics
 Similarity of Personal and Small Business
Communication Process
A Personal A Small Business
Communication Communication
Channel Channel
SOURCE Daughter XYZ Company
MESSAGE “I love you and please “Buy my product”
send money”
CHANNEL OPTIONS E-mail message Newspaper
Personal visit home advertisement
Greeting card for Personal sales call
wedding anniversary Blog posting
RECEIVER Parents Customers
Determining the Promotional Budget

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 Four Step Method for Determining a
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 Personal Selling in the Small Firm
• Personal selling- a sales presentation
delivered in a one-on-one manner.
• Personal selling includes the
activities of both the inside
salespeople of retail, wholesale, and
service establishments and the
outside sales representatives, who
call on business customers and final
consumers.
 The Importance of Product Knowledge
• Effective selling is built on a
foundation of product knowledge.
• If a salesperson is well acquainted
with a product’s advantages, uses,
and limitations, she or he can
educate customers by successfully
answering questions, and
countering objections.
• Customers expect a salesperson to
provide knowledgeable answers.
 Using Prospecting Techniques
• Prospecting: a systematic process of continually looking for new
customers.
• Obtaining personal referrals from friends, customers, and other
businesses.
• Impersonal referrals from media publications, public records, and
directories.
• Newspapers and magazines, trade magazines often identify
prospects by reporting on new companies and new products.
• Public records of property transactions and building permits can
be impersonal referrals for a garbage pick-up service.
• High tech variations of impersonal referrals on social websites
such as Facebook, Twitter, and MySpace, where more and more
subscribers are providing reviews of the establishments they
patronize.
• Prospects can be identified without referrals through marketer-
initiated contacts. Telephone calls or mail surveys.
• Customer initiated contacts, can be followed up by telephone
calls, Twitter account notification, and websites can follow up with
the visitors who have made inquiries online.
 Practicing the Sales Presentation
• “practice makes perfect”
• Salesperson should give his or her “pitch” in front of a spouse, friend
or mirror.
• Salesperson must do their homework to identify possible objections
such as:
– 1. price, 2. product, 3. timing, 4. source, 5. service and 6. need.
• What to do when potential object:
– 1. direct denial,
– 2. indirect denial,
– 3. answer objections with the words feel, felt, and found,
– 4. take notes,
– 5. compensation method,
– 6. pass up method,
– 7. find the true objection,
– 8. follow up and follow through
 Making the Sales Presentation
• Salespeople must adapt sales approach to
meet customers’ needs.
• A “canned” sales talk will not succeed with
most buyers.
• Successful selling involves a number of
psychological elements. Personal enthusiasm,
friendliness, and persistence are required.
• 20 percent of salespeople have those
elements and they bring 80 percent of sales.
• Personal conduct and treating others with
respect were elements of the sales process.
 Cost Control in Personal Selling
• Cost consideration are important for a new business that
have limited resources.
• Entrepreneur must she or he is first and foremost a
salesperson for the enterprise.
• Nothing can substitute for the entrepreneur’s personal
efforts to sell products and services and to represent the
image and reputation of the firm.
• Most cost-efficient mode selling may be to use sales or
marketing representatives.
• Provide any sales aids they may need to make their job
easier.
• Keep communication channels open, and let them know
that you are committed to making them successful.
 The Compensation Program for Salespeople
Personal
Personal recognition
recognition and
and satisfaction
satisfaction of
of reaching
reaching aa sales
sales quota
quota Commissions
Commissions

Photograph
Photograph of
of best
best salesperson,
salesperson, engraved
engraved plaques
plaques for
for sales
sales achievement
achievement

Straight
Straight salary
salary

Career
Career advancement
advancement

Non
Financial
financial
compensati
compensa
Opportunities
Opportunities for
for promotion,
promotion, advanced
advanced education
education and
and training
training
on tion
Combining
Combining commissions
commissions and
and straight
straight salary
salary

Assurance
Assurance of
of job
job security
security
 Advertising Practices for Small Firms
• Advertising – the impersonal presentation of a business idea through mass media.
• Advertising objectives – advertising seeks to sell by informing, persuading and
reminding customers of the availability or superiority of a firm’s product or service
• 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
• Obtaining assistance with advertising –advertising agency –
– 1. furnish design, artwork, and copy for specific advertisements and/or commercials;
– 2. evaluate and recommend the advertising media with the greatest “pulling power”;
– 3. evaluate the effectiveness of different advertising appeals;
– 4. advise on sales promotions and merchandise displays;
– 5. conduct market-sampling studies to evaluate product acceptance or determine the sales
potential of a specific geographic area;
– 6. furnish mailing lists
• Frequency of advertising – should be done regularly
• Where to advertise- advertising media should reach, but not over reach- a firm’s
present or desired target market. Where to advertise, dependent on the strengths
and weaknesses of each advertising medium.
• Web advertising – color graphics, two-way information exchanges, streaming video,
and 24 hour availability. Basic methods for small firm:
– 1. company website; 2. banner ads and pop-ups; 3. e-mail; 4. reciprocal advertising and
hyperlinks; 5. blogs
 Advantages and Disadvantages of Major Advertising Media
Medium Advantages
Newspapers Geographic selectivity and flexibility; short-
term advertiser commitments; news value
and immediacy; year-round readership; high
individual market coverage; co-op and local
tie-in availability; short lead time
Magazines Good reproduction, especially for color;
demographic selectivity; regional selectivity;
local market selectivity; relatively long
advertising life; high pass-along rate
Radio Low cost; immediacy of message; can be
scheduled on short notice; relatively no
seasonal change in audience; highly
portable; short term advertiser
commitments; entertainment carryover
Television Ability to reach a wide, diverse audience;
low cost per thousand; creative
opportunities for demonstration; immediacy
of messages; entertainment carryover;
demographic selectivity with cable stations
Outdoor Repetition; moderate cost; flexibility;
Media geographic selectivity
Internet Fastest growing medium, including
smartphones and tablets; ability to target
Disadvantages
Little demographic selectivity; limited color capabilities; low
pass-along rate; may be expensive
Long-term advertiser commitments; slow audience
buildup; limited demonstration capabilities; lack of urgency;
long lead time
No visual treatment; short advertising life of message; high
frequency required to generate comprehension and
retention; distractions from background sound; commercial
clutter
Short life of message; some consumer skepticism about
claims; high campaign cost; little demographic selectivity
with network stations; long-term advertiser commitments;
long lead times required for production; commercial clutter
Short message; lack of demographic selectivity; high
“noise” level distracting audience
Possible difficulty in measuring ad effectiveness and return
on investment; not all consumers have access; rapidly
changing technologies may result in product obsolescence
(smartphones/tablets); service issues
 Website Essentials
Components
1. A clear description of who you are.
2. A simple, sensible Web address.
3. An easily navigated site map.
4. Easy-to-find contact information.
5. Customer testimonials.
6. An obvious call to action.
7. Know the basics of Search Engine
Optimization.
8. Fresh, quality content.
9. A secure hosting platform.
10. A design and style that’s friendly to
online readers.
Descriptions
Clearly state your name and sum up your products or services right on the
homepage.
Do not make things complicated.
Clear links to the most important pages and a site map are crucial for
guiding visitors to the information they are looking for.
You would not want to lose a customer to a competitor just because you
made it difficult for them to get in touch with you.
Honest words from customers help to make your products or services more
tangible and desirable to those who are visiting you online.
Tell online visitors what you want them to do with clear tones of command.
Your website would not do you much good if no one can find it. Become
familiar with the SEO basics to make it more accessible by search engine.
For many businesses, their website makes their first impression on a
customer. Give customers what they are looking for- and a reason to keep
coming back.
Having your online information hijacked is a nightmare, and should it
happen to you business, it could cost you customers.
Keep in mind 3 style points for online writing:
1. Break things down into short paragraphs, with headers of necessary.
2. Use bullet points.
3. Highlight important words or phrases.
 Web Advertising
• The small business website
– 1. creating and registering a site name
– 2. building a user-friendly site
– 3. promoting the site
Web Advertising Descriptions
Banner ads and pop-ups Banner ads – advertisements that appear across a Web page, most often as moving
rectangular strips
Pop-up ads – advertisements that burst open on computer screens.
Direct e-mail promotion E-mail promotion – advertising delivered by means of electronic mail.
Reciprocal advertising and Hyperlink- a word, phrase, or image that a user may click on to go to another part of a
hyperlinks document or website or to a new document or website.
Blogs An interactive website where an individual can maintain a personal online journal, post
and receive comments and reflections, and provide hyperlinks
Mobile devices Mobile device – a generic term used to refer to a variety of wireless handheld
computing devices.
App – abbreviation for a software application for business or entertainment.
Social Media Web 2.0 – a term referring to the second generation of the World Wide Web, which
allows for online collaboration, social interactions, and information sharing.
Social media – websites and applications used for social networking
Social networking – the use of dedicated websites and applications to communicate
informally with other users
 Sales Promotional Tools
• Sales promotion: an inclusive term for any promotional technique, other
than personal selling and advertising, that stimulates the purchase of a
particular product or service.
• Specialties: items such as pens, key chains, coffee mugs, and shirts.
• Trade show exhibits: potential cost savings over personal selling.
• Publicity: information about a firma and its products or services that
appears as a news item, usually free of charge.
• When to use sales promotion – sales promotion to accomplish various
objectives such as to stimulate channel members such as retailers and
wholesalers to market their product.
 Class Discussion
1. Describe the parallel relationship that exists
between a small business communication
and a personal communication.
2. Discuss some recommendations for designing
an effective website.
 Case Study
• The founder of Panchero’s Mexican Grill, Rodney Anderson, felt the company ought to be
involved in social networking, but he and his management team weren’t sure how to do
it. Along came 22 year old Joel Anderson, who was looking for a job and very comfortable
with social media.
• Now an employee of Panchero’s, Johnson spends most of his day on Twitter, Facebook,
and other networking sites. He visits chat rooms regularly, looking for people who are
talking about burritos or where they might go to eat. He then recommends Panchero’s.
Johnson also works with Panchero’s franchisees, teaching them how to get visitors to
their websites to become in-restaurant guests who then post comments about their
experiences.
• From watching Johnson at work, Anderson has learned that social networking is not
something you can push. He says, “You have to let it have a life of its own.”

1. There is more than a 10 year age difference between members of Panchero’s top
management team and Joel Johnson. Do you think that difference has contributed
to Johnson’s effectiveness in social networking? Why or why not?
2. Is it ethical for Johnson to be recommending the restaurant chain where he works?
Why or why not?
3. Have you ever posted any comments on a website about a business that you have
visited? Do you check for customer comments before you shop at a particular
business?
 References
• Petty, J.W., Palich, L.E., Hoy, F., and
Longenecker, J.G. (2012). Managing Small
Business: An Entrepreneurial Emphasis, 16th
edition, South Western-Cengage Learning.