The Promotion

Strategy

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The Promotion Strategy

Chapter 12

The Promotion
Strategy

12.1

Developing a Promotion Strategy

12.2

Budgeting and Implementing

Promotional Plans

The Promotion Strategy

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

The Promotion Strategy

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

The Promotion Strategy

12.1

image
preselling
campaign
promotional mix
advertising
specialty item

Section 12.1 Developing a Promotion Strategy

publicity
news release
public relations
premium
rebate
sweepstakes

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

The Promotion Strategy

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.

Section 12.1 Developing a Promotion Strategy

Preopening Plan
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 products.

Section 12.1 Developing a Promotion Strategy

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

image the impression

people have of a
company; a companys
personality

Ongoing Plan
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.

Section 12.1 Developing a Promotion Strategy

10

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

preselling the act of

influencing potential
customers to buy before
contact is actually made

11

The Promotion Strategy

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.

Section 12.1 Developing a Promotion Strategy

campaign a series of
related promotional
activities with a similar
theme

12

The Promotion Strategy

Selecting a
Promotional Mix
Every business has a
unique promotional mix.

Section 12.1 Developing a Promotion Strategy

promotional mix the

combination of different
promotional elements
that a company uses to
reach and influence
potential customers

13

Ongoing Plan
When selecting elements for a promotional
mix, consider:
target market
product value
promotional channels
time frame
cost
Section 12.1 Developing a Promotion Strategy

14

The Elements of the Promotional Mix

personal
selling

advertising

Promotional
Mix
sales
promotion

Section 12.1 Developing a Promotion Strategy

publicity

15

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

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

16

Advertising
newspapers

magazines

specialty
items

direct mail

Types of
Advertising

Internet

radio

outdoor
advertising

directories

television
Section 12.1 Developing a Promotion Strategy

transit
advertising
17

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

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

18

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

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

19

The Promotion Strategy

Publicity
A news release should
answer these questions:

Who?

What?

When?

news release a brief

newsworthy story that is
sent to the media

Where?

Why?

Section 12.1 Developing a Promotion Strategy

20

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

public relations
activities designed to
create goodwill toward a
business or control
damage done by negative
publicity

21

Sales Promotion
displays

sweepstakes
and contests

Examples
of Sales
Promotion

samples

Section 12.1 Developing a Promotion Strategy

premiums

rebates

22

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

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

23

The Promotion Strategy

Sales Promotion
Some companies give a
rebate on purchases.

Section 12.1 Developing a Promotion Strategy

rebate a return of part

of the purchase price of
a product used as an
incentive for customers
to purchase the product

24

The Promotion Strategy

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

Section 12.1 Developing a Promotion Strategy

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

25

The Promotion Strategy

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.

Section 12.1 Developing a Promotion Strategy

26

The Promotion Strategy

12.1

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 the
business will have customers when it opens. Ongoing
promotional plans maintain and build sales after a
business is open.

Section 12.1 Developing a Promotion Strategy

27

The Promotion Strategy

12.1

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.

Section 12.1 Developing a Promotion Strategy

28

The Promotion Strategy

12.1

4. Describe the elements of a promotional mix.

The elements of the promotional mix are

advertising, sales promotion, publicity, and
personal selling.

Section 12.1 Developing a Promotion Strategy

29

The Promotion Strategy

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

30

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.

Section 12.2 Budgeting and Implementing Promotional Plans

31

The Promotion Strategy

12.2

industry average
cooperative advertising

advertising agency
consumer pretest

Section 12.2 Budgeting and Implementing Promotional Plans

32

The Promotion Strategy

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.

Section 12.2 Budgeting and Implementing Promotional Plans

33

The Promotion Strategy

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

Section 12.2 Budgeting and Implementing Promotional Plans

industry average the

standard used to compare
costs among companies;
usually expressed as a
percentage

34

Basic Media Formats

Print

Include a headline, copy, illustrations,

and a signature.

Radio

Include same elements as print, but

you may 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.

Section 12.2 Budgeting and Implementing Promotional Plans

35

The Promotion Strategy

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.

Section 12.2 Budgeting and Implementing Promotional Plans

36

The Promotion Strategy

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

Section 12.2 Budgeting and Implementing Promotional Plans

cooperative advertising
an arrangement in which
advertising costs are
divided between two or
more parties

37

The Promotion Strategy

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.

Section 12.2 Budgeting and Implementing Promotional Plans

advertising agency a
company that acts as
intermediary between a
business and the
media to communicate
a message to the
target market

38

The Promotion Strategy

Making Possible
Promotion Changes
There are three most common adjustments to
the promotion strategy:
adjust your advertising
generate publicity
promote sales

Section 12.2 Budgeting and Implementing Promotional Plans

39

Adjust Your Advertising

market
overall
results

budget

source

Factors
for
Evaluation

media

Section 12.2 Budgeting and Implementing Promotional Plans

motive

message

40

The Promotion Strategy

Adjust Your Advertising

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

Section 12.2 Budgeting and Implementing Promotional Plans

consumer pretest a
procedure in which a
panel of consumers
evaluates an ad before
its release

41

The Promotion Strategy

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.

Section 12.2 Budgeting and Implementing Promotional Plans

42

The Promotion Strategy

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.

Section 12.2 Budgeting and Implementing Promotional Plans

43

The Promotion Strategy

12.2

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.

Section 12.2 Budgeting and Implementing Promotional Plans

44

The Promotion Strategy

12.2

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.
Section 12.2 Budgeting and Implementing Promotional Plans

45

The Promotion Strategy

12.2

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.

Section 12.2 Budgeting and Implementing Promotional Plans

46

The Promotion Strategy

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

Section 12.2 Budgeting and Implementing Promotional Plans

47

The Promotion Strategy

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

Section 12.2 Budgeting and Implementing Promotional Plans

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The Promotion Strategy

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

Section 12.2 Budgeting and Implementing Promotional Plans

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End of

The Promotion
Strategy

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