""Doing business without advertising is like winking at a girl in the dark. You know what you're doi

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Lesson 5- Promotion Distribution
""Doing business without advertising is like
winking at a girl in the dark. You know what
you're doing, but nobody else does!
..Stewart Britt
Introduction   Identify marketing methods you
have seen that are particularly effective to
catch your attention.
  Objective  Describe ways a business can
attract customers to purchase its
products/services, including advertising,
promotion, and personal sales. Identify the
appropriate pricing strategy--based on consumer
demand, and appropriate for your target market.
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Lecture Point One
Marketing communication is accomplished first
through listening to the target market's needs.
This listening process includes, just that,
encouraging customers to talk to you about their
needsand whether or not you are able to
effectively meet them. You can periodically get
them to complete questionnaires (an incentive
for them to do this helps), observe how they
shop and look for points of frustration. Then, a
business owner will communicate through a
combination of efforts that might include
advertising, sales promotion, publicity/PR,
personal sales, and packaging.
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Advertising is done through selected media that
focuses on the qualities of your product/service.
You see it in many forms every day. A small
business must consider who and where their
central target is located when selecting
advertising media. Usually, television is
not chosen because its reach exceeds the
practical draw of the business. It doesn't
make sense to pay for an expensive TV ad that
covers the entire state when your business
draws from a 10-mile radius. The per-person
cost for the ad will appear okay, but then only
divided by the target customers within that
10-mile radius, it's extravagant!
Yellow Pages
Radio
Newspaper
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On the other end of the spectrum is your business
card. It will probably be your most used form of
communication with potential customers. Take
the time needed to make sure its design and
printing quality clearly reinforce the
nature of your business venture. If you
can acquire specific information on your
target that helps you can pinpoint their
location, you may be well-advised to use
direct mail advertising. But as you
know, mailers, like the one shown, contain a
large volume of advertisers which creates a
condition called ad clutter. You could
get lost in the process. Direct mail lists are
available from marketing firms that can
sort your customers by categories such as
income, house value, age, etc. and even print the
mailing labels for you.
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The cost per "hit" is larger, but your aim is
more specific. To be sure, the better your
market research, the better you can target your
advertising efforts--to catch your customers'
attention accurately and efficiently. Once
their attention is acquired, be sure you "lead"
with your specialty--what makes you different
from your competition, and be sure to include
how to easily get in-touch with you (especially
in a yellow pages ad).
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Speaking of "attention", this is the first
requirement of all advertising efforts. Every
advertisement should contain the following
elements
Attention (just as it implies--get the customer
to stop look)
Interest (demonstrate understanding of
customer's interests)
Desire (tie your product/service to the
customer's interests)
Action (get the customer to commit to doing
something)
Remember the acronym AIDA. The first letters of
each of the stages of the customers thinking
process that you must address. Each
advertisement or personal sales effort should
analyze how your target customer will react, and
hopefully move toward a buying decision.
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Promotion is similar to advertising and many
people interchange them. The primary difference
is that while advertising focuses on the
product's qualities, promotion gets the
customer's attention by offering incentives to
enter the store or try the product. This is
done by using coupons or other special pricing
offers. An excellent example is the frequent
purchase card--you know--when you buy ten
items, you will get the next one free. Customers
will seek-out the store that will give them
points toward the free item rather than visit
the store that doesn't.
Promotion can also be accomplished through the
sponsorship of worthwhile activities. Here, Race
for the Cure acquires contributions of and
prizes from many local and national businesses.
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Public Relations and publicity should also be a
part of your communications with your customer
base. These efforts include doing things for
your community that merit recognition through
media sources. Examples of public service
activities include donating goods and services
to local schools or churches, purchasing "adopt
a highway" clean-up effort, participating in
service organizations, supporting local youth
athletic teams, and speaking at schools and
senior centers.
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Publicity can be acquired by providing local news
organizations (print, radio, and TV) with news
releases that highlight newsworthy events or
efforts your business has done, or will do in the
near future. This is accomplished by
submitting a news release that outlines
the nature of the event to the local
media--usually your local newspaper. Be sure
to include a picture with the news release
that is an action-shot that has high
visual interest. The photo, if
published, will have more attention-getting
quality than the accompanying story
(remember AIDA?). Here is a sample
news release, and the specific instructions of
how to construct one. Now, proceed to Study Quiz
5. This section will coach you on how to
package your business. And yes, even a service
should be packaged by providing a unique
collection of customer service options. It is
important, regardless of the type of business, to
differentiate your offering and position your
business to be effective.
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Lecture Point Two
Pricing of your product/service is not only one
of the most important decisions you will make,
it's probably the most difficult one you'll
make. Clearly, a usual starting-point is to
price your product or service to meet the price
of your competition--so, shop around to find-out
what they are doing. Keep in mind, also, that
your suppliers are a valuable resource in this
regard. They see what others are charging and
have a sense for the market demand. Other
sources of good information on pricing are your
trade associations. They have probably already
provided some of this information in the trade
journals you will receive from them if you pay
for the membership fee to their organization.
MCCs library has an association reference guide
to locate the association that is working with
your type of business, and here is a link that
has a searchable index for associations (not as
complete as the print version). Click here to
get to the online association directory.
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You should also examine your personal
situation--it may be different than your
competitors from a cost standpoint. Examine
your costs for overhead and variable costs for
each transaction. If you provide a service,
value each function that is done to determine
this. By evaluating your overhead (fixed costs)
and your variable costs, you will be able to
establish the groundwork for a breakeven
analysis (this will be your assignment in
Lesson 06). Overhead costs, for most
enterprises, is the most significant factor.
These include costs that, once committed, must
be paid regardless of sales volume (e.g.
electricity, equipment and computers).
Computer
Equipment
Electricity
Variable Costs, on the other hand, are paid only
when a sale is made. Replacement inventory,
product packaging, and Shipping costs are in
this category.
Inventory
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Once set, pricing is dynamic. It changes
regularly. Continue to check your
competition on a regular basis-- especially if
economic conditions affecting your customers
have hanged. Be sure when setting your
initial price that you do not set it too low.
It is easier to discount a high price than
to raise prices once customers get
established.
If you are producing a service, like landscaping,
you should consider using an itemized schedule to
estimate your costs, then prepare your bid for
each job (which includes a fair profit margin) to
be presented to the customer. Your project for
Lesson 05 is to analyze your market situation and
determine how to price your product and then
develop an initial approach to communicating (a
mix of advertising, promotion, personal sales)
with your target market. Please proceed to the
Price Determination Marketing Approach project.