MODULE 9: Promoting the Small Business

Learning Objectives:
By the end of this module, students will be able to:
 explain the importance of promotion and customer demand and the methods of promotion
 differentiate personal selling, publicity, sales promotion and word of mouth as ways in promoting the
small business.
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What Must Be Learned:
After the small business operator has identified his target market, the product or services he will
offer, and the right location for his business, he still have to make some effort to finally realize his aim of
producing a profitable sales volume. This can be achieved if makes concrete moves to convince the
prospective customers to purchase what he is selling. The SBO’s actual involvement in convincing
prospects to buy fall under marketing activity of promotion.

What is Promotion
Promotion maybe defined as activities, including advertising, personal selling, sales promotions,
public relations, and direct marketing used by SBO’s to persuade prospective customers to buy the
company’s product or services.

Promotion and Customer Demand

Promotion and customer demand are related in some ways. There are instances when promotion
increases the total customer demand for the firm’s products or services.

Types of Customer Demand

To understand the value of promotion, it is important for the SBO to know the types of customer
demand. They are the following:
1. established demand; and
2. newly created demand (also referred to as promoted demand)

Established Demand. This type of customer 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 firms products;
2. the convenient location of the firm; and the attractive appearance of the firm.
Newly Created Demand.
When the firm engages in in activities designed to attract people to buy from the firm, the resulting
demand is called “newly created demand” This is also sometimes referred to as a “promoted demand”.
Successful promotional activities made by some firms are able to create new demand.

Methods of Promotion
Promoting the small business may be undertaken by using any or all of the following methods:
1. advertising
2. personal selling
3. publicity
4. sales promotion
5. word of mouth
Advertising is any pai form of nonpersonal presentation and promotion of ideas, goods, and services by an
identified sponsor.
Types of Advertising
1. Retail advertising- those made by various retail stores such as grocery stores and bakeries to attract
customers
 2. Service advertising- those made by various service establishments such as transportation,
recreation, and insurance.
3. Trade advertising- those made by manufacturers to motivate wholesalers and retailers to carry their
products.
4. Industrial advertising- those made by manufacturers to motivate other manufacturers to use their
products and services.
5. Institutional advertising- those designed to create a favorable image for a firm.
Activity:
Cite or give one example each of the types of advertising mentioned above.

Personal selling- is that method of promotion that is direct, personal, and often a face-to-face interchange
between the company’s sales person and the customer.
Many small business rely on personal selling as a means of promoting their products and services.

Types of Sale Persons

1. order getters;
2. order takers; and
3. support personnel
The task of the “order getter” is to increase the firm’s sales by selling to new customers and by
increasing sales to present customers. It is classified into:
1. Current customer salesperson- he concentrates on current customers and seeks more sales from
them.
2. New-business salesperson- he locates prospects and converts them into buyers.
The responsibility of the “order taker” is to seek repeat sales from current customers by making sure
that product quantities are there where and when they are needed. It is classified into:
1. Inside order taker- he is one who stays inside the sales office and from there receives orders by
mail, telephone, or directly from person coming in.
2. Field order taker- he is one who travels to customers and from their places, orders are taken.
The job of the “support personnel” is to facilitate the selling function. Their functions include:
a. locating prospects;
b. educating customers;
c. building goodwill; and
d. providing service after sale
Support personnel may be classified into:
1. Missionary salesperson- he is usually employed by a manufacturer who wants to establish
presence in a certain area. He assists the producer’s customers in selling to their own
customers.
2. Trade salesperson- he helps the company’s customers, especially retail stores, promote the
product. His activities consist of:
a. restocking shelves;
b. obtaining more shelf space;
c. setting up displays;
d. providing in-store demonstrations; and
e. distributing samples to store customers.
3. Technical salesperson- he 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. It is consist of the following major steps.
1. Prospecting and qualifying;
2. Pre-approach;
 3. Approach;
4. Presentation and demonstration;
5. Handling objections;
6. Closing; and
7. Follow-up
Prospecting- involves researching potential buyers. The list of prospects may be derived from a variety of
sources
Qualifying- selecting from among the prospects those most likely to buy. To qualify prospects, the following
must be considered.
1. the ability to pay; and
2. the willingness to listen to a sale message.
Activity:
Explain the selling process. To further explain you have to cite/give a certain product which you woul
sell using the steps mentioned above.

Publicity
This is a method of promotion where news generated bout the firm or its products or services and
appearing in print, broadcast, or electronic media and not paid for by the firm.

Sales Promotion
A method of promotion other than advertising, personal selling, and publicity that increase sale
through temporary sale incentives. Sales promotion enhances and supplements the other form of
promotions.
The major tools of sales promotions are as follows:
1. point-of-purchase displays;
2. premium;
3. trading stamps;
4. sampling and demonstrations;
5. retailer coupons;
6. consumer contests and sweepstakes;
7. rebates; and
8. trade show

Word-of-Mouth
It is a 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. A word-of-mouth is regarded as a very powerful tool of promotion.
It is because consumers generally regard friends and relatives as more credible and trustworthy than other
sources of information. If the SBO want to reap the benefits of positive word-of-mouth, the following must be
maintained.
1. competent employees;
2. proper treatment of people;
3. not overcharging;
4. not using false claims in advertising;
5. keeping promise to customers;
6. having a good product or service; and
7. keeping customers happy.

Activity:
 One of the methods of promotion is “word-of-mouth”. As a requirement of this chapter, you’re going
to think of any thing either a product or service. Promote it yourself using word-of-mouth. You have to record
your promotion process and send the audio to my messenger.
Note: Maximum of 3 minutes only.

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Questions to Answer:

Assessment: Quiz online