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The Promotion Strategy Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy Budgeting and Implementing Promotional Plans 12.1.

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Presentation on theme: "The Promotion Strategy Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy Budgeting and Implementing Promotional Plans 12.1."— Presentation transcript:

1 The Promotion Strategy Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy Budgeting and Implementing Promotional Plans 12.1 Section 12.2 Section 12

2 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy Explain the role of the promotion strategy. Explain how to formulate promotional plans. Identify considerations for putting together a promotional mix. Describe the elements of a promotional mix. Section Objectives

3 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy The promotion strategy is the most visible marketing strategy, designed to get the attention of prospective customers and convince them to buy from you. Promotional activities must be in the right mix. The Main Idea

4 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy Content Vocabulary image preselling campaign promotional mix advertising specialty item publicity news release public relations premium rebate sweepstakes

5 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy As a new business owner, you need two kinds of promotional plans: a preopening plan to lay the groundwork for your opening a second plan to support your operation once it is under way Drawing Up Promotional Plans

6 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The 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. The Role of Promotion Strategy

7 Preopening Plan 7 Objectives of a 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 your products or services.

8 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Preopening Plan

9 Ongoing Plan 9 Objectives of an Ongoing Promotional Plan Explain major features and benefits of your products. Communicate information about sales. Clear up customers questions and concerns. Introduce new goods or services.

10 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Ongoing Plan

11 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Ex: Introduce your new service, a clown act, on a billboard, with flyers, and in the newspaper. OR Introduce your Electronic Pen on a billboard, but run an advertisement in the newspaper for a sale on your Microsoft Office tablet Promotional Plan Format

12 The Elements of the Promotional Mix 12 Promotional Mix publicity sales promotion personal selling advertising Internet Marketing

13 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Ex: You advertise in a magazine, you have sales, frequent buyer cards, and knowledgeable sales people Selecting a Promotional Mix

14 Ongoing Plan 14 When selecting elements for a promotional mix, consider: target market product value promotional channels time frame cost

15 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Advertising

16 16 newspapersmagazines direct mail outdoor advertising directories transit advertising television radio Internet specialty items Types of Advertising

17 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Advertising

18 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Ex: Derek Rose comes for a visit to meet and greet customers. Publicity

19 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy A news release should answer these questions: news release a brief newsworthy story that is sent to the media Publicity is both free & not free Ex: If Derek Rose comes to your store, you will have to pay for that, However, Its free because you dont pay for the news story that you sent a news release for Publicity ??? ?? Who?What?Where? When?Why?

20 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Ex: BP creating Facebook and Twitter accounts for people to vent their frustrations and concerns and for them to have a way to get information out that didnt involve the media. Publicity

21 Sales Promotion 21 Examples of Sales Promotion displays premiums rebatessamples sweepstakes and contests

22 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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,. Ex: With a purchase of $25 or more you get a free CD. Kohls Cash Sales Promotion

23 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Ex: New cell phone purchase Sales Promotion

24 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy 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 Sales Promotion

25 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy After You Read 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.

26 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy After You Read 2.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 that the business will have customers when it opens. Ongoing promotional plans maintain and build sales after a business is open.

27 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy After You Read 3.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.

28 Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy SECTION 12.1 Chapter 12 The Promotion Strategy After You Read 4.Describe the elements of a promotional mix. The elements of the promotional mix are advertising, sales promotion, publicity, and personal selling.

29 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 Determine promotional costs for a start-up business. Describe ways to implement your promotion strategy. Examine options for short-term changes in your promotion strategy. Identify considerations for updating the promotion strategy. Section Objectives

30 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 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. The Main Idea

31 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 Set goals for your promotional activities so you can better evaluate how successful they were. –Ex: To increase sales by 10%

32 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 Content Vocabulary industry average cooperative advertising advertising agency consumer pretest

33 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 Cost out promotional activities. Allocate money available for promotional activities. Make final adjustments. Budgeting for Promotion

34 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 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 Compare Industry Averages

35 Print Radio Television Internet Basic Media Formats 35 Print Include a headline, copy, illustrations, and a signature. Radio Include same elements as print, but can add music or sound effects. Television Same elements apply, but it requires casting, set design, sound, and filming. Internet Same components as print, but may also have audio, video, and animation.

36 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 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. Getting Help

37 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 Advertising Laws Federal Trade Commission (FTC) –Protects consumers from false advertising When a company says something that is not supported by fact Bait & Switch which is offering a sale price for an item and then not stocking the item and convincing customers to buy a more expensive substitute. –Will issue a Cease & Desist Order to stop and may even fine company

38 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 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 Getting Help

39 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 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 Getting Help

40 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 The three most common adjustments to the promotion strategy are: Section 12.2 Budgeting and Implementing Promotional Plans adjust your advertising generate publicity promote sales Making Possible Promotion Changes

41 Adjust Your Advertising 41 Factors for Evaluation market media budget results source motives messages Section 12.2 Budgeting and Implementing Promotional Plans

42 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 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 Adjust Your Advertising

43 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 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. Revising the Promotion Strategy

44 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 After You Read 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.

45 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 After You Read 2.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.

46 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 After You Read 3.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.

47 Budgeting and Implementing Promotional Plans Glencoe Entrepreneurship: Building a Business SECTION Chapter 12 The Promotion Strategy 12.2 After You Read 4.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.

48 The Promotion Strategy Glencoe Entrepreneurship: Building a Business Developing a Promotion Strategy Budgeting and Implementing Promotional Plans 12.1 Section 12.2 Section 12 End of Chapter 12 The Promotion Strategy


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