CHA PT E R 1 2: P R O M O T IN G

THE SMAL L B U S IN E S S
DELA C RUZ, M IC K IE L YN H.

BSBA-MMIV
WHAT IS PROMOTION
•ACTIVITIES INCLUDING ADVERTISING, PERSONAL SELLING,
SALES PROMOTIONS, PUBLIC RELATIONS AND DIRECT
MARKETING, USED TO PERSUADE PROSPECTIVE
CUSTOMERS TO BUY THE COMPANY’S PRODUCTS AND
SERVICES
PROMOTION AND CUSTOMER DEMAND
• ARE RELATED IN SOME WAYS.
• LITTLE PROMOTIONAL EFFORT BRINGS LARGE INCREASES IN CUSTOMER
DEMAND.
• PROMOTION DOES LITTLE TO IMPROVE THE COMPANY’S TOTAL REVENUE.
• WILL DEPEND ON THE NATURE OF THE PRODUCT OR SERVICE, THE STAGE OF
THE FIRM’S DEVELOPMENT AND THE NATURE OF COMPETITION.
TYPES OF CUSTOMER DEMAND
•ESTABLISHED DEMAND- REFERS TO PURCHASES MADE BY PEOPLE
FROM A CERTAIN FIRM AS A RESULT OF ANY OR ALL OF THE
FOLLOWING:
1. POSITIVE EXPERIENCE WITH THE FIRM’S PRODUCTS
2. THE CONVENIENT LOCATION OF THE FIRM
3. THE ATTRACTIVE APPEARANCE OF THE FIRM
•NEWLY CREATED DEMAND- THE FIRM ENGAGES IN ACTIVITIES
DESIGNED TO ATTRACT PEOPLE TO BUY FROM THE FIRM, THE
RESULTING DEMAND IS CALLED NEWLY CREATED DEMAND. THIS
IS ALO SOMETIMES REFERRED TO AS “PROMOTED DEMAND”.

•SUCCESSFUL PROMOTIONAL ACTIVITIES MADE BY SOME FIRMS

ARE ABLE TO CREATE NEW DEMAND.
METHODS OF PROMOTION

1. ADVERTISING
2. PERSONAL SELLING
3. PUBLICITY
4. SALES PROMOTION
5. WORD-OF-MOUTH
1. ADVERTISING- ANY PAID FORM OF NONPERSONAL PRESENTATION AND PROMOTION OF IDEAS, GOODS AND
SERVICES BY AN IDENTIFIED PERSON. GREAT NUMBER OF PRODUCT OR SERVICE ENDORSEMENT WE SEE, HEAR,
OR READ ON TELEVISION, NEWSPAPERS, OR RADIO ARE ADVERTISING EFFORTS.

• TYPES OF ADVERTISING:
1. RETAIL ADVERTISING- MADE BY RETAIL STORES SUCH AS GROCERY STORES AND BAKERIES TO ATTRACT
CUSTOMERS.
2. SERVICE ADVERTISING- MADE BY SERVICE ESTABLISHMENT SUCH AS TRANSPORTATION, RECREATION AND
INSURANCE.
3. TRADE ADVERTISING- MADE BY MANUFACTURERS TO MOTIVATE WHOLESALERS AND RETAILERS TO CARRY
THEIR PRODUCTS.
4. INDUSTRIAL ADVERTISING- MADE BY MANUFACTURERS TO MOTIVATE OTHER MANUFACTURERS TO USE THEIR
PRODUCTS AND SERVICES.
5. INSTITUTIONAL ADVERTISING- DESIGNED TO CREATE A FAVORABLE IMAGE FOR A FIRM.
• TYPES OF ADVERTISING MEDIA
1. TELEVISION
2. RADIO
3. NEWSPAPER
4. MAGAZINES
5. OUTDOOR BILLBOARDS
6. SPECIALTY ADVERTISING
(PENCILS, CALENDARS, SHOPPING
BAGS, WALL CLOCKS AND
1. PUBLIC TRANSPORTATION
2. YELLOW PAGES
3. DIRECT MAIL
4. LOCAL CABLE TV
5. CINEMA (MOVIE HOUSES)
6. OTHERS (CATALOGS, SAMPLES,
HANDOUTS
2. PERSONAL SELLING- DIRECT, PERSONAL AND OFTEN A FACE-TO-FACE INTERCHANGE BETWEEN THE COMPANY’S
SALESPERSON AND CONSUMER. VERY IMPORTANT COMPLEMENT METHOD. WHEN A POTENTIAL CUSTOMER CANNOT
BE MOTIVATED TO MAKE A FINAL PURCHASING DECISION WITH THE USE OF OTHER PROMOTIONAL METHODS.

• TYPES OF SALESPERSONS:
1. ORDER GETTERS- TASK IS TO INCREASE THE FIRM’S SALES BY SELLING TO NEW CUSTOMERS AND BY INCREASING
SALES TO PRESENT CUSTOMERS.

• CURRENT CUSTOMER SALESPERSON- CONCENTRATES ON CURRENT CUSTOMERS AND SEEKS MORE SALES FROM THEM.
• NEW BUSINESS SALESPERSON- LOCATE PROSPECTS AND CONVERTS THEM TO BUYERS.
2. ORDER TAKERS- SEEK REPEAT SALES FROM CURRENT CUSTOMERS BY MAKING SURE THAT PRODUCT QUANTITIES ARE
THERE WHERE AND WHEN THEY ARE NEEDED.

• INSIDE ORDER TAKER- STAYS INSIDE THE SALES OFFICE AND FROM THERE RECEIVES ORDERS BY MAIL, TELEPHONE, OR
DIRECTLY FROM PERSONS COMING IN.

• FIELD ORDER TAKER- TRAVELS TO CUSTOMERS AND FROM THEIR PLACES, ORDERS ARE TAKEN.
3. SUPPORT PERSONNEL- FACILITATE THE SELLING FUNCTION. INCLUDES LOCATING PROSPECTS,
EDUCATING CUSTOMERS, BUILDING GOODWILL AND PROVIDING SERVICE AFTER SALE.

• MISSIONARY SALESPERSON- USUALLY EMPLOYED BY A MANUFACTURER WHO WANTS TO

ESTABLISH PRESENCE IN A CERTAIN AREA. HE ASSISTS THE PRODUCER’S CUSTOMER IN
SELLING TO THEIR OWN CUSTOMERS.

• TRADE SALESPERSON- HELPS THE COMPANY’S CUSTOMERS, ESPECIALLY RETAIL STORES,

PROMOTE THE PRODUCT. HIS ACTIVITIES CONSIST OF RESTOCKING SHELVES, OBTAINING MORE
SHELF PLACE, SETTING UP DISPLAYS, PROVIDING IN-STORE DEMONSTRATIONS AND
DISTRIBUTING SAMPLES TO STORE CUSTOMERS.

• TECHNICAL SALESPERSON- GIVES TECHNICAL ASSISTANCE TO THE FIRM’S CURRENT

CUSTOMERS IN THE FORM OF ADVICE ON PRODUCT CHARACTERISTICS AND APPLICATIONS,
SYSTEMS DESIGNS AND INSTALLATION PROCEDURES.
• THE SELLING PROCESS: 1. HANDLING OBJECTIONS
1. PROSPECTING AND QUALIFYING 2. CLOSING
2. PREAPPROACH 3. FOLLOW UP
3. APPROACH
4. PRESENTATION AND DEMONSTRATION

1. PROSPECTING INVOLVES RESEARCHING POTENTIAL BUYERS.

2. QUALIFYING MEANS SELECTING FROM AMONG THE PROSPECTS THOSE MOST LIKELY TO BUY.
THOSE WHO HAVE ABILITY TO PAY AND WILLINGNESS TO LISTEN TO A SALES MESSAGE.
3. PREAPPROACH AN ACTUAL, FACE TO FACE COMMUNICATION WITH THE PROSPECT FOLLOWS.
4. APPROACH STAGE HAS BEEN MADE, SALESPERSON WILL PROCEED TO THE PRESENTATION OF
THE PRODUCT AND SERVICE.
4. PUBLICITY- WHERE NEWS IS GENERATED ABOUT THE FIRM OR ITS PRODUCTS AND SERVICES AND APPEARING IN
PRINT, BROADCAST OR ELECTRONIC MEDIA AND NOT PAID FOR BY THE FIRM.
REQUIREMENT PREPARED PUBLICITY
5. EXISTENCE OF THE FIRM AND THE PRODUCTS OR SERVICES OFFERED.
6. UNIQUE CHARACTERISTICS OF THE NEW PRODUCTS OR SERVICES OF THE FIRM
7. FIRM’S UNIQUE METHOD OF DOING BUSINESS

• TYPES OF PUBLICITY
1. NEWS PUBLICITY- DEALS WITH EVENTS OF NATIONAL, REGIONAL OR LOCAL INTEREST.
• SPONTANEOUS NEWS PUBLICITY- ONE MADE AS A RESULT OF A FIRE, UNION STRIKE, BANK HOLDUPS AND OTHER MAJOR
OCCURENCES.

• PLANNED NEWS PUBLICITY- ONE BASED ON NEWS RELEASES PREPARED AND DISTRIBUTED BY THE SMALL BUSINESS ON
A REGULAR BASIS.
2. BUSINESS FEATURE ARTICLES- REFER TO DETAILED STORIES ABOUT THE FIRM OR ITS OFFERINGS, MOST OFTEN
APPEARING IN BUSINESS MAGAZINES.
3. SERVICE FEATURE ARTICLES- REFER TO LIGHTER STORIES FOCUSING ON PERSONAL CASE, HOUSEHOLD ITEMS AND
RECIPES WHICH FIND THEIR WAY IN THE PAGES OF NEWSPAPERS AND MAGAZINES.
4. FINANCE RELEASES- STORIES THAT ARE TARGETED TO APPEAR IN THE BUSINESS SECTIONS OF NEWSPAPERS AND
MAGAZINES.
5. PRODUCT RELEASES- REFER TO NEW PRODUCTS AND PRODUCT IMPROVEMENTS AND AIMED AT ALL FORMS OF
MEDIA FOR PUBLICITY.
6. PICTORIAL RELEASES- ILLUSTRATIONS OR PICTURES DISTIBUTED TO MEDIA.
7. BACKGROUND EDITIORIAL RELEASES- EXTRA INFORMATION (SUCH AS THE BIOGRAPHY OF THE FIRM’S GENERAL
MANAGER) GIVEN TO MEDIA WRITERS AND EDITORS.
8. EMERGENCY PUBLICITY- SPECIAL MEDIA RELEASES REGARDING DISASTERS OR SERIOUS PROBLEMS .
4. SALES PROMOTION- METHOD OF PROMOTION OTHER THAN ADVERTISING, PERSONAL SELLING, AND PUBLICITY
THAT INCREASE SALE THROUGH TEMPORARY SALES INCENTIVES. SALES PROMOTION ENHANCES AND
SUPPLEMENTS THE OTHER FORMS OF PROMOTION.
MAJOR TOOLS OF SALES PROMOTION:

5. POINT OF PURCHASE DISPLAY- TO ATTRACT ATTENTION, INFORM AND PERSUADE PROSPECTIVE BUYERS. SIGNS, WINDOW BANNERS, DISPLAY.

6. PREMIUM- SPECIAL INCENTIVE IN THE FORM OF A GIFT THAT IS MADE AVAILABLE TO CUSTOMERS WHO BUY CERTAIN PRODUCTS OF THE FIRM.

7. TRADING STAMPS- SALES PROMOTION TOOLS IN WHICH CUSTOMERS ARE GIVEN IN RELATION TO THE AMOUNT OF THEIR PURCHASE.

8. SAMPLING- GIVE AWAY SAMPLES TO INTRODUCE A NEW PRODUCT.

9. PRODUCT DEMONSTRATION- OBSERVE THE PRODUCT BENEFITS AND PERFORMANCE BEFORE PURCHASING.

10. RETAILER COUPON- SALES PROMOTION DEVICE THAT MOTIVATES CONSUMERS TO BUY FROM THE RETAILER.

11. CONSUMER CONTEST- CUSTOMERS COMPETE FOR PRIZES BY COMPLETING A CONTEST.

12. SWEEPSTAKES-TOOLS WHICH REQUIRE THE PARTICIPANTS TO SUBMIT SOME KIND OF ENTRY FORM BUT ARE PURELY GAMES OF CHANCE.

13. REBATES- OFFERS THE RETURN OF MONEY BASED ON PROOF OF PURCHASE.

14. TRADE SHOW- TEMPORARY EXHIBITIONS OF PRODUCTS AND SERVICES.

5. WORD-OF-MOUTH – METHOD OF PROMOTION WHEREIN PEOPLE ARE ENCOURAGED TO TELL OTHER
PEOPLE PRODUCTS OR SERVICES THEY HAVE ENJOYED. WHEN PEOPLE HAVE POSITIVE EXPERIENCES
ABOUT A PRODUCT OR SERVICE, THEY HAVE A TENDENCY TO RELATE THESE TO OTHER PEOPLE.

• POSITIVE WORD-OF-MOUTH:
1. COMPETENT EMPLOYEES
2. PROPER TREATMENT OF PEOPLE
3. NOT OVERCHARGING
4. NOT USING FALSE CLAIMS IN ADVERTISING
5. KEEPING PROMISES TO CUSTOMERS
6. HAVING A GOOD PRODUCT OR SERVICE
7. KEEPING CUSTOMERS HAPPY