The Promotion Strategy

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Chapter 12
The Promotion Strategy
Developing a Promotion Strategy
12.1
Budgeting and Implementing Promotional Plans
12.2
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12.1

• Explain the role of the promotion strategy.
• Explain how to formulate promotion plans.
• Describe considerations for putting together a
  promotional mix.
• Describe the elements of a promotional mix.

Section 12.1 Developing a Promotion Strategy
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12.1

• The promotion strategy is the most visible
  marketing strategy.
• It is designed to get the attention of
  prospective customers and convince them to buy
  from your business.

Section 12.1 Developing a Promotion Strategy
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12.1

• image
• preselling
• campaign
• promotional mix
• advertising
• specialty item

publicity news release public relations premium re
bate sweepstakes
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Drawing Up Promotional Plans

• As a new business owner, you need two kinds of
  promotional plans

• a preopening plan to lay the groundwork
• an ongoing plan to support your operation once it
  is under way

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The Role of Promotion Strategy

• Promotion is communication intended to persuade,
  inform, or remind a target audience about a
  business or its products.
•  
• The promotion strategy involves planning,
  determining the right promotional mix, and
  selecting specific promotional activities.

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Objectives of a Preopening Plan
Preopening Plan
Establish a positive image.
Let potential customers know you are opening for
business.
Bring in customers or have them contact your
business.
Interest customers in your new company and
products.
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Preopening Plan

• The image you establish in your preopening plan
  sets the tone for your promotional plan.

image the impression people have of a company
a companys personality
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Objectives of an Ongoing Promotional Plan
Ongoing Plan
Explain major features and benefits of your
products.
Communicate information about sales.
Clear up customers questions and concerns.
Introduce new goods or services.
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Ongoing Plan

• An ongoing promotional plan helps in preselling
  your goods or services.

preselling the act of influencing potential
customers to buy before contact is actually made
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Promotional Plan Format

• Both a preopening and an ongoing plan can be
  organized around a promotional campaign,
  independent promotional activities, or a
  combination of the two.

campaign a series of related promotional
activities with a similar theme
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Selecting a Promotional Mix

• Every business has a unique promotional mix.

promotional mix the combination of different
promotional elements that a company uses to reach
and influence potential customers
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When selecting elements for a promotional mix,
consider
Ongoing Plan
target market
product value
promotional channels
time frame
cost
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The Elements of the Promotional Mix
personal selling
advertising
PromotionalMix
sales promotion
publicity
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Advertising

• In the United States, most businesses spend about
  one-fourth of their advertising dollars on
  newspaper ads.

advertising the paid nonpersonal presentation
of ideas, goods, or services directed at a mass
audience by an identified sponsor by means of
print and broadcast
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Advertising
magazines
newspapers
specialtyitems
direct mail
Types ofAdvertising
outdoor advertising
Internet
directories
radio
transit advertising
television
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Advertising

• A specialty item serves as a reminder of a
  business.

specialty item an advertising device that
includes giveaways, such as pens, T-shirts, and
caps, printed with a business name or logo
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Publicity

• Taking advantage of publicity means calling
  attention to yourself and your business.

publicity placement in the media of newsworthy
items about a company, product, or person
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Publicity

• A news release should answer these questions

news release a brief newsworthy story that is
sent to the media
?
?
?
?
?
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Publicity

• Public relations may generate unsolicited
  publicity when such activities are reported by
  the media.

public relations activities designed to create
goodwill toward a business or control damage done
by negative publicity
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Sales Promotion
displays
sweepstakes and contests
premiums
Examplesof SalesPromotion
rebates
samples
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Sales Promotion

• One type of sales promotion may be to include a
  premium with a purchase.

premium any item of value that a customer
receives in addition to the good or service
purchased designed to attract new customers or
build loyalty among existing customers, they may
include coupons and gifts
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Sales Promotion

• Some companies give a rebate on purchases.

rebate a return of part of the purchase price
of a product used as an incentive for customers
to purchase the product
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Sales Promotion

• A sweepstakes is a sales promotion that can draw
  attention to a business.

sweepstakes a simple game of chance used by a
business to get customers interested in what the
company has to offer
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12.1

1. Explain the role of the promotion strategy.

The role of the promotion strategy is to set the
course for and coordinate all aspects of
promotion. It involves planning, determining the
right mix, and selecting specific activities.
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12.1

1. Explain preopening and ongoing promotional
   plans.

Preopening promotional plans establish the
companys image, let customers know the business
is opening, bring in customers, and create
interest in the business so the business will
have customers when it opens. Ongoing promotional
plans maintain and build sales after a business
is open.
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12.1

1. Describe considerations for putting together a
   promotional mix.

When selecting elements for a promotional mix
consider the target market, product value,
promotional channels, time frame, and cost.  
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12.1

1. Describe the elements of a promotional mix.

The elements of the promotional mix are
advertising, sales promotion, publicity, and
personal selling.
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12.2

• Describe how to determine promotional costs for a
  start-up business.
• Describe approaches to implementing your
  promotion strategy.
• Discuss options for short-term changes in your
  promotion strategy.
• Name considerations for updating the promotion
  strategy.

Section 12.2 Budgeting and Implementing
Promotional Plans
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12.2

• Thorough planning and information gathering can
  help you arrive at a realistic promotional
  budget.
• That budget will have a direct affect on how you
  implement your promotional plans.

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Promotional Plans
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12.2

• industry average
• cooperative advertising

advertising agency consumer pretest
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Promotional Plans
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Budgeting for Promotion

• To plan the promotional budget for a new venture,
  you must take these steps

• Cost out promotional activities.
• Compare industry averages.
• Make final adjustments.

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Promotional Plans
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Compare Industry Averages

• You can find out the industry average for
  promotional expenses from such sources as trade
  associations or the SBA.

industry average the standard used to compare
costs among companies usually expressed as a
percentage
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Promotional Plans
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Basic Media Formats
Print
Radio
Television
Internet
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Promotional Plans
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Getting Help

• You can carry out your promotional plans yourself
  or you can hire professionals to implement some
  or all of your promotional activities.
•  
• Professional help can come from the media,
  manufacturers and suppliers, and advertising
  agencies.

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Promotional Plans
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Getting Help

• You may be able to save on your promotional
  budget by arranging for cooperative advertising.

cooperative advertising an arrangement in which
advertising costs are divided between two or more
parties
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Promotional Plans
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Getting Help

• An advertising agency can handle all phases of
  your advertising, including writing the copy,
  creating the artwork, choosing the media, and
  producing the ad.

advertising agency a company that acts as
intermediary between a business and the media to
communicate a message to the target market
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Promotional Plans
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Making Possible Promotion Changes

• There are three most common adjustments to the
  promotion strategy

• adjust your advertising
• generate publicity
• promote sales

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Promotional Plans
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Adjust Your Advertising
market
overall results
source
Factors for Evaluation
budget
motive
message
media
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Promotional Plans
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Adjust Your Advertising

• One way to reduce the risk involved in an
  expensive advertising campaign is to conduct a
  consumer pretest.

consumer pretest a procedure in which a panel
of consumers evaluates an ad before its release
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Promotional Plans
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Revising the Promotion Strategy

• Conduct a formal review of your promotion
  strategy on a regular basis.
•  
• Use your sales forecast to arrive at a
  promotional budget to support that level of
  sales.
• Then revise your promotional mix promotion plan.

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Promotional Plans
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12.2

1. Describe how to determine promotional costs for
   a start-up business.

Promotional costs for a start-up business are
determined by costing out the planned activities,
comparing the costs to industry averages, and
adjusting the budget if necessary.
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Promotional Plans
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12.2

1. Describe approaches to implementing your
   promotional strategy.

Two approaches to implementing a promotion
strategy are developing your own promotion items
and hiring professionals to do the job.
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Promotional Plans
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12.2

1. Discuss options for short-term changes in your
   promotion strategy.

Options for short-term changes are increasing the
effectiveness of your advertising expenditures,
capitalizing on publicity opportunities, and
stimulating sales through sales promotions or
changes in the sales force.
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Promotional Plans
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12.2

1. Name considerations for updating the promotion
   strategy.

To update the promotional plan consider the sales
forecast for the upcoming period, make budget
adjustments required by the forecast, and study
changes in the target market, research results,
and experiences to date. On the basis of those
considerations, a new mix can be determined and a
new plan developed.
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Promotional Plans
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Web SitePersonalization

• Today, the technology exists for companies to
  personalize their Web Sites for each visitor.
•  
• Tailoring a Web page by using rules-based or
  inference-based personalization and cookies
  increases customer satisfaction and promotes
  sales.

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Promotional Plans
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Tech Terms
cookie a file sent to a Web browser by a Web
server that is used to record and store
information for later use   inference-based
personalization a data analysis tool that is
used to suggest products that are similar to the
products a customer has viewed or
purchased   personalization the process of
tailoring Web pages to individual users
characteristics
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Promotional Plans
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Tech Terms
privacy policy a statement on a Web site that
explains how a company collects, uses, protects,
and shares customers personal information   rules
-based personalization a data analysis tool that
is used to recommend products that go with
products a customer has viewed or purchased on a
Web site
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Promotional Plans
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