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Chapter Chapter Chapter Chapter 66

Distribution, Promotion, and Selling 6.1 The Marketing Mix6.1 The Marketing Mix──DistributionDistribution

6.2 The Marketing Mix6.2 The Marketing Mix──PromotionPromotion

6.3 Selling and Promoting 6.3 Selling and Promoting

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 6Slide 2

Lesson 6.1

The Marketing Mix─Distribution Goals Describe the four basic options of

channels of distribution. Apply channels of distribution to the

specific needs of various types of businesses.

List factors to consider in the physical distribution of products.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 6Slide 3

Vocabulary supply chain management distribution channels of distribution direct channel indirect channel physical distribution

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Supply Chain Management

supply chain management the coordination of manufacturers,

suppliers, and retailers working together to meet a customer need for a product or service

Chapter 1Slide 4

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Chapter 6Slide 5

involves the locations and methods that are used to make products available to customers

channels of distribution the routes that products and services take

from the time they are produced to the time they are consumed

distribution

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Chapter 6Slide 6

Direct and Indirect Channels

direct channel moves product directly from the

manufacturer to the consumer

indirect channel uses intermediaries

people or businesses that move products between the manufacturer and the consumer

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Chapter 6Slide 7

Channel Options

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Chapter 6Slide 8

sales methods may include: the Internet direct mail television shopping channels

no intermediaries most cost-effective limited sales opportunities

Manufacturer to Consumer

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Chapter 6Slide 9

sales force sells goods to retailers retailers sell goods to consumers offers more sales opportunities

Manufacturer to Retailer to Consumer

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Chapter 6Slide 10

manufacturer sells large quantities to a wholesaler wholesaler stores and sells smaller quantities to

many retailers

lower production costs can lead to lower prices

Manufacturer to Wholesaler to Retailer to Consumer

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Chapter 6Slide 11

The manufacturer delegates the sales function to an agent.

frequently used in international marketing

Manufacturer to Agent to Wholesaler to Retailer to Consumer

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Chapter 1Slide 12

What are the four basic options of channels of distribution?

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Chapter 6Slide 13

Distribute Goods and Services

Distribution channels will vary based on business needs. market size type of product or service customer needs and wants

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Chapter 6Slide 14

Retail Businesses

Retail businesses can distribute products in a variety of ways. offer the product at a convenient location

during convenient times use advertising to reach customers

allow for phone or fax ordering

develop a website for online purchases

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Chapter 6Slide 15

Service Businesses

Most service businesses sell directly to customers. production and consumption of the service

happens at the same time the service needs to be provided to the

customer when the customer needs it some service providers sell through retail

stores

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Chapter 6Slide 16

Manufacturing Businesses

Manufacturers usually sell products to other businesses.

The other businesses sell to the final consumer.

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Chapter 1Slide 17

Why are channels of distribution different for different types of businesses?

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Chapter 6Slide 18

Physical Distribution

Physical distribution transportation storage handling packaging

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Chapter 6Slide 19

Transportation

The best and most cost efficient transportation method should be determined.

The type of product and the destination of the product will help guide the decision-making process.

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Chapter 6Slide 20

Product Storage and Handling

Benefits of efficient storage include: balancing supply and demand of products

Other considerations of storage include: adds to the cost of products increases the risk of damage or theft

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Chapter 6Slide 21

Packaging

The purpose of packaging is to protect the product from the time between production and consumption.

Effective packaging provides value by minimizing product damage.

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Chapter 6Slide 22

Receiving Goods to Sell

All types of businesses must receive goods from suppliers.

Sources that can be consulted to find suppliers include: The American Wholesalers and

Distributors Directory The ThomasNet website Trade magazines

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Chapter 1Slide 23

What factors are important to consider in the physical distribution of products?

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Chapter 6Slide 24

Lesson 6.2

The Marketing Mix─Promotion

Goals List the many forms of advertising and

discuss advantages and disadvantages of each.

Define publicity and describe ways to use publicity as a promotional tool.

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Chapter 6Slide 25

Vocabulary advertising publicity press release public relations

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Chapter 6Slide 26

Promotion Strategies

promotional mix advertising publicity personal selling sales promotion

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Chapter 6Slide 27

Advertising

advertising a paid form of communication sent out by

a business about a product or service

Advertising is very important for small and/or new businesses.

Advertising should clearly communicate your message and image.

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Chapter 6Slide 28

Online Advertising

Online advertising has increased as Internet usage has grown.

Online technology lets businesses interact with consumers via chat rooms blogs e-newsletters

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Chapter 6Slide 29

Banner Ad Floating Ad Wallpaper Ad Trick Banner Pop-Up Ad Pop-Under Ad

Common types of online advertising include the following:

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Chapter 6Slide 30

As it is easier to determine the effectiveness of online advertising than traditional advertising, new methods to charge for online advertising have been developed.

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Chapter 6Slide 31

Cost per Mil (CPM) the advertiser is charged based on the exposure

of the message to a specific audience priced per thousand viewers reached with the

message

Three common ways to charge for online advertising include:

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Chapter 6Slide 32

the advertiser is charged based on the number of user clicks on the advertisement

viewers respond to the ad by clicking on the hyperlink within the ad

Cost per Action (CPA) the advertiser is charged when a user takes

an action that leads to a sale the publisher of the ad assumes all the risk in

running this type of ad advertisers prefer this type of charge for

banner ads

Cost per Click (CPC)

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Chapter 6Slide 33

In an effort to combat excessive spamming, many Internet users now utilize software that blocks promotions from reaching their computers.

Disadvantages of Online Advertising

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Poll: What are three examples of online advert...

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Poll: What is the difference between CPC and C...

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Poll: An online ad that changes the background...

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Chapter 6Slide 37

Television Advertising

commercials last less than a minute

infomercials last a half hour or more provide in-depth coverage about a specific

product

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Chapter 6Slide 38

the fee paid to the station for airing the commercial based on the length of time the commercial plays

the costs of producing the commercial

Fees associated with television advertising include:

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Chapter 6Slide 39

it is very expensive the audience is too broad to be effective for

most businesses

Disadvantages of television advertising include:

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Chapter 6Slide 40

Radio Advertising

less expensive than television advertising

listener demographics are more specific than television easier to reach target audience

pay for air time pay for production costs

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Chapter 6Slide 41

the message is purely audio a visual of the product is not shown

listeners may forget what they hear listeners may “surf the airways” during

commercials

Disadvantages of radio advertising include:

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Chapter 6Slide 42

Newspaper Advertising

Historically, newspapers were the single largest form of advertising in the U.S.

Advantages of newspaper advertising include: relatively inexpensive targets a limited geographic area reaches a large number of people

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Chapter 6Slide 43

Many people in the audience may not be interested in your business.

Your ad faces a lot of competition from many other ads in the newspaper.

Disadvantages of newspaper advertising include:

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Poll: A radio station will provide a psychogra...

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Poll: What is a major advantage of newspapers ...

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Chapter 6Slide 46

Telephone Directory Advertising Consumers use telephone directories

repeatedly. Ads usually appear close to the listing

and phone number of the business placing the ad.

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Chapter 6Slide 47

People only look in the directory when they are already seeking a specific business.

It is hard to persuade a potential customer to use your business instead of your competitor’s business.

Disadvantages of telephone directory advertising include:

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Chapter 6Slide 48

Direct-Mail Advertising

promotional materials sent to target customers through the mail

Companies that specialize in maintaining targeted mailing lists can provide almost any type of list needed.

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Chapter 6Slide 49

Direct-mail is often considered to be “junk mail.” It often gets discarded without being read.

Disadvantages of direct-mail advertising include:

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Chapter 6Slide 50

Magazine Advertising

Magazines are an excellent way to aim products and services at specific markets.

Local magazines that target a limited geographic area are often the best choice for small businesses.

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Poll: What is an advantage of direct-mail adve...

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Chapter 6Slide 52

National distribution can make some magazines an inappropriate way to advertise a local business.

Disadvantages of magazine advertising include:

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Chapter 6Slide 53

Outdoor Advertising

billboards and signs can be effective as the name of your

business is located where many people can see it

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Chapter 6Slide 54

limited information can be included may not project the image you wish to

convey

Disadvantages of outdoor advertising include:

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Chapter 6Slide 55

Transit Advertising

signs on public transportation can provide more information than a

billboard effective if your target market includes

consumers who use mass transit

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Social Networking Sites

Business owners are using social networking sites for business promotion. Twitter LinkedIn YouTube Facebook Blogging

Chapter 1Slide 56

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Chapter 6Slide 57

Budgeting for Promotion

Obtain cost estimates for all advertising that is under consideration.

Calculate a projected budget. Determine whether your advertising

budget, as a percent of sales, is in line with industry averages.

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Poll: Why is promotion important to a business...

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Chapter 6Slide 59

Publicity

publicity a nonpaid form of communication that calls

attention to your business through media coverage

can be positive or negative Publicity is free.

Staging the events that generate publicity is usually not free.

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Chapter 6Slide 60

a written statement meant to inform the media of an event or product

press release

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Chapter 6Slide 61

Public Relations

public relations the act of establishing a positive

relationship with customers and the general public

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Chapter 6Slide 62

sponsoring a sports team donating to local charities supporting work-based programs at local

educational institutions supporting Big Brothers or Big Sisters organizing community programs

Ways to support your community include:

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Chapter 6Slide 63

Self-Promotion

Self-promotion is a way to keep the name of your business visible and in the forefront of people’s minds.

Self-promotion methods include the distribution of goods with your company’s identifying information on it. t-shirts office supplies

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Poll: What are the advantages and disadvantage...

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Poll: What's one thing a business can do to im...

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Chapter 6Slide 66

Lesson 6.3

Selling and Promoting

Goals Explain the role of selling in a business. Determine how to meet customer needs

and wants. Discuss other types of promotional

activities. Evaluate the effectiveness of promotional

categories.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 6Slide 67

Vocabulary personal selling rational buying decisions emotional buying decisions sales promotion rebate telemarketing visual marketing

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Chapter 6Slide 68

Selling

Entrepreneurs need selling skills for many reasons. It is necessary to sell business ideas to

potential investors when selling a business.

For many customers, the salesperson is the business. a positive image should be conveyed

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Chapter 6Slide 69

a direct communication between a buyer and a sales person

the sales person tries to influence the prospective buyer’s purchasing decision

personal selling

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Chapter 6Slide 70

features the physical characteristics or capabilities of the

product or service

benefits the advantages that could result from the use of

those features

Product Knowledge

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Chapter 1Slide 71

What are some selling strategies an entrepreneur can employ?

Salespeople should represent company well Identify customers’ needs, issues, & concerns Turn features into benefits Train salespeople well (product, market,

industry)

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Chapter 6Slide 72

Determine Customer Needs and Wants A salesperson must determine what

need the customer is seeking to satisfy. lower-level needs usually do not require

personal selling upper-level needs often require better

selling skills

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Chapter 6Slide 73

Needs Assessment

need satisfying fulfilling the needs of a customer who

knows exactly what they want

problem resolution helping the customer find products or

services when they are not quite sure what they want

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Chapter 6Slide 74

Buying Decisions

rational buying decisions based on the logical reasoning of

customers customers evaluate alternatives purchase after careful thought

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Chapter 6Slide 75

based on the desire to have a specific product or service

little time or thought is used when making the buying decision

emotional buying decisions

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Chapter 6Slide 76

Customer Decision-Making Process A problem-solving approach for helping

customers includes the following steps: define the problem gather information

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Chapter 6Slide 77

evaluate alternatives select the best option take action evaluate the action

identify various solutions

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Chapter 1Slide 78

Why is it important to meet customer needs and wants in the selling process?

Customers purchase goods and services to satisfy needs and wants. If their needs cannot be met, a sale will not be made.

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Chapter 1Slide 79

What are some emotional buying motives?

Fear Protection Appearance Recreation Improved health Comfort

Recognition Pride of ownership Imitation Prestige Popularity

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Chapter 1Slide 80

What are some rational buying motives?

Safety Simplicity Quality Reliability Economy Convenience

Service Durability Knowledge Money gain Ease of operation

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Chapter 6Slide 81

Other Types of Promotion

sales promotion an incentive offered to customers in order to

increase sales

rebate a refund offered to people who buy a product

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Telemarketing

telemarketing using the phone to market your product or

service

Chapter 1Slide 82

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Visual Marketing

visual marketing the use of visual media to promote, sell,

and distribute a product or service to a targeted audience logo signage promotional tools company vehicles uniforms

Chapter 1Slide 83

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Chapter 1Slide 84

What is the purpose of sales promotions?

Sales promotions offer incentives to customers in order to increase sales

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Evaluation Strategies

1. Is the volume of sales increasing? New leads/appointments

2. How are you getting new customers?

3. Does your advertising and/or promotional activity produce direct responses? Are you using the right media for target

market?

Chapter 1Slide 85

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Chapter 6Slide 86

4. Do your networking activities create new opportunities for you? Need to know source of new business

5. Do your marketing tactics make it easier to sell your services?

6. What is your sales conversion rate?

7. Does your plan have a positive return on investment (ROI)?

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Chapter 1Slide 87

How can you determine the effectiveness of promotional activities?

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What’s Next?

p.176: #4 in groups HW: 6.3 Assessment (1-3)

Chapter 1Slide 88

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Chapter 6Slide 89

PERFORMANCE INDICATORS Demonstrate knowledge and understanding of

entrepreneurship Engage in activities that clarify and enhance

understanding of entrepreneurship Plan and implement presentation/activities to

educate and promote entrepreneurship to targeted groups

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Chapter 6Slide 90

Demonstrate critical-thinking skills Develop a concept from an idea to reality Plan, organize, and conduct a group project Determine priorities and set deadlines

Derive facts from data, findings from facts, conclusions from findings, and recommendations from conclusions

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Chapter 6Slide 91

THINK CRITICALLY

1. What are the benefits of presenting this project to elementary or middle school students?

2. Why is it important to explain risks associated with entrepreneurship?

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Chapter 6Slide 92

4. What are three characteristics of successful entrepreneurs?

3. Who are popular examples of entrepreneurs?