Longenecker/Petty/Palich/Hoy

Small Business
Management, 18e

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 Promotional Planning
Chapter 17

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 Learning Goals:
Describe the communication model and the
factors that determine a promotional mix.
Explain methods of determining the
appropriate level of promotional
expenditures.
Explain how the Internet and social media
are changing promotional practices.
Describe personal selling activities.

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 Learning Goals (cont.):
Identifyadvertising options for a small
business.
Discuss the use of sales promotional tools.

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 The Communication Process in
Promotion

Personal Selling Advertising

Marketing communications that

inform and persuade consumers

Sales
Promotional
Tools

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 Promotion Is Communication
Promotion
Marketing communications that inform and
persuade consumers
Categories of Promotional
Communication
Internet and social media
Personal selling
Advertising
Sales promotion tools
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 Promotional Communications
Communication Process Components
Source—the message sender
Channel—the path the message travels
Receiver—the recipient of the message

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 Promotional Communications
(cont.)
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

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part, except for17–8
use as permitted in a license distributed with a certain product or service or otherwise on a
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 Determining the Promotional
Budget
“How much should a small business
spend on promotion?”
1. Budgeting a fixed percentage of sales
2. Deciding how much is left over after
other expenses are covered
3. Spending at the same level as
competitors
4. Determining how much is needed to
achieve objectives

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part, except for17–9
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 Determining the Promotional
Budget
Approaches to Sales
Promotion Budgets

Deciding how Determining

Budgeting
much is left Spending at how much is
a fixed
over after other the same level needed to
percentage
expenses are as competitors achieve
of sales
covered objectives

© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a
password-protected website for classroom use.
 Determining the Promotional Budget
Deciding how Determining
Budgeting
much is left Spending at how much is
a fixed
over after other the same level needed to
percentage
expenses are as competitors achieve
of sales
covered objectives

Comparing Approaches to Sales Promotion Budgets

Choice of Promotional Budget Approach

Setting of Promotional Spending Budget

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 Promotion Using the Internet
and Social Media
Developing a Small Business Web Site
Creating and registering a site name
Building a user-friendly Web site
Promoting the Web site
Search Engine Optimization (SEO)
Reasons for Website Failures
Slow site page downloads
Not meeting visitors’ information needs
Lack of integration with social media networks
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 17.1 Website Design Guidelines

o Select and register your domain name. Comply with registration rules, and choose a descriptive and
user-friendly name.
o Choose a Web host. Determine the primary purpose of your website, and then locate the host that best
fits that purpose, such as e-commerce, blogging, business, or some other option.
o Decide on the layout. Design a site that balances attractiveness with the ability to interact.
o Provide easy navigation. Do not overload a page. Enable users to access any content with as few clicks
as possible.
o Stay consistent in style. Inconsistency in headings, fonts, page layouts, color schemes, and terms only
confuses visitors and appears amateurish.
o Make sure the website can be accessed by multiple devices. Users may also search for your company
from smartphones and tablets, as well as desktops and laptops.
o Engage in search engine optimization (SEO) to improve your website’s visibility.
o Keep the website fresh. Review your site frequently to remove outdated material, introduce new links,
experiment with new formats, and make other changes.
o Include a call to action. Think again about your purpose, and invite users to take the action you are
seeking
o Supply contact information for visitors to know who you are and how to get in touch with you.

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website for classroom use.
 Social Media
Social Media
Social networking and microblogging
websites, and other means of online
communication, where users share personal
messages, information, videos, and other
content.
Social Networking
Interacting online with other users who share
common interests.
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 Social Media (cont.)
Microblogging
◦ Posting short messages or photos on a blog or
social networking site.

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part, except for17–15
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 Web Advertising
Basic Web Promotions
Banner ads
Advertisements that appear across a Web page,
often as moving rectangular strips
Pop-up ads
Advertisements that burst open
on computer screens
Direct e-mail promotion
Advertising delivered by means
of electronic mail
Spam: unsolicited e-mail
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 Online Advertising Terms
Hyperlink
A word, phrase, or image that a user may click
on to go to another part of a document or
website or to a new document or website.
Blog
An online journal that offers a writer’s
experiences, opinions, etc.

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 Online Advertising Terms (cont.)
Mobile Device
A variety of wireless handheld computing
devices that allow people to access
information from wherever they are.

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part, except for17–18
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 17.2 Do’s and Don’ts of Social Media Marketing

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website for classroom use.
 Online Advertising Terms
App
A software application for business or
entertainment.
Quick Response (QR) Code
A square bar code that connects to a website, a video,
or some other web content.
QR code for the URL of the English Wikipedia
Mobile main page, "http://en.m.wikipedia.org"

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 Personal Selling: Prospecting
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.

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 Personal Selling: Prospecting
(cont.)
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.
 Using social media websites to target
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17–22
niche circles of users
part, except for use as permitted in a license distributed with a certain product or service or otherwise on a
password-protected website for classroom use.
 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.

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 17.3 Successful Sales Techniques
o Be honest. Your prospect has to discover only one misrepresentation to lose all trust and confidence in you.
You want customers who will come back to you and tell others how good you are.
o Know your audience. Are you talking with the decision maker, or does this person need approval from
someone else? How is your product or service used by this customer?
o Know how much time you have, and get to the point. Many people recognize that time is their most
valuable asset. Be sure to respect that. If you can’t make clear in the first sentence or two why you’re there,
you’ll lose your prospect’s interest.
o Prepare an outline, and rehearse. Be sure to cover all critical issues and logically order your presentation.
Then test your ideas on others. Do they understand your message?
o Be relevant, and engage the customer. Ask questions to know what is important to your prospective
customers and how you can help them. Think of your presentation as a conversation. Be a better listener than
a speaker.
o Believe in what you are selling, and be enthusiastic. Be able to genuinely convey what makes your product
or service better for the customer than anyone else’s. But recognize that the world’s best salespeople still hear
no more than yes. Do not let that burn you out.
o Use visuals. Size, technology requirements, safety and other issues might limit your ability to show your
product. Nevertheless, visual representations help project customers into a situation where they better
understand what the product will do for them.
o Get reactions from the prospect. If the prospect does not ask questions, it is a sign that you have not
communicated your message successfully. Be ready with questions of your own, questions that will solicit
more than yes-or-no answers. You want to know what is preventing you from getting the results that you seek.
You want to know how to make the prospect happy.

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website for classroom use.
 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

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 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.

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 Compensating Salespeople
Financial Rewards
Commissions
Compensation paid as percentage
of sales productivity.
Strong sales motivator
Straight salary
Compensation paid regardless
of sales made.

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 Compensating Salespeople (cont.)
Combination of commissions and salary
Balance of two compensation forms is adjusted
to provide an increasing proportion of
commission as salesperson gains experience.

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 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.
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 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 in order to make its product advertising
more credible and effective.
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 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

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 Advertising Decision Factors
(cont.)
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)

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 17.4 Advantages and Disadvantages of Major Advertising Media

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 Sales Promotional Tools
Sales Promotion
An inclusive term for any promotional
technique other than personal selling or
advertising that stimulates the purchase of a
particular product or service.
Used in combination with personal selling and
advertising.

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 Sales Promotional Tools (cont.)
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.

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 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.
 Apply for a speaking opportunity.
 Pick a good location for the booth.
 Prepare a professional-looking display.
 Have plenty of literature on hand.
 Bring the right staff.
 Have the right giveaways and/or coupons.
 Follow up!

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17–36
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 Sales Promotion Tools (cont’d)
Publicity
Is a promotional strategy that provides
visibility for a business at little or no cost.
Requires regular contacts with the news
media.
Can be used to promote both a product and a
firm’s image.
Is a vital part of public relations
for the small business.

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 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.
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 Key Terms
advertising product advertising
app promotion
blog promotional mix
e-mail promotion prospecting
hyperlink publicity
institutional advertising quick response (QR) code
personal selling sales promotion
social media
social networking

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license distributed with a certain product or service or otherwise on a password-protected website for classroom use.