D. Marketing a Small Business

10.03 Identify promotional media activities used by small businesses.

10.00 Identify the function of promotion in small business.

Channels of communication that serve as tools for promoting ideas, goods, and services to consumers.

Factors affecting the costs of advertising media

• Types of media

• Circulation

• Production costs

• Preferred space positions

•Demographics of target audience

•Editorial credibility and prestige (image)

• Ability to obtain response rate

Types of media

• Newspaper

• Magazine

• Internet

• Radio

• Television

•Circulation

Primary circulation: The total number of copies sold.

Secondary circulation: The number of pass along readers (those who read the newspaper but do not purchase it).

•Production costs: Usually low; the advertiser is not charged for the actual production costs of the ad.

•Color requirements: Usually poor quality in the newspaper; the cost for color is normally very expensive—can increase cost by 40%.

•Production costs: High costs are passed along to the advertisers.

•Preferred position: Most desirable positions include the front and back covers both inside and outside.

•Color: Runs approximately 30% higher.

•Bleed pages: These are pages that have no white border; the ad is printed to the edge of the page. This feature can increase cost by 15 to 20%.

Circulation •CPM = Cost of an ad X 1000 divided by audience

•Only part of the audience exposed to an advertisement would be considered likely prospects for a product.

•Extensive coverage means reaching a larger audience.

•Intensive coverage means reaching a smaller group of people more often.

Circulation

•Reach is the number of different people in a target audience who are exposed at least one time to a promotional message. Each person is included only once, even if they view the message more than once.

•Frequency is the average number of times a person in the target audience is exposed to a promotional message.

Production Costs• Color rates – Each time a color is added

to the advertisement the rate increases. Four color or Full-color ads are the most expensive.

• Black & White rates – Lowest rates that are offered for advertisements.

Run-of-paper (ROP): The ad appears wherever there is room for it.

Premium position: For higher rates, the ad will appear in the space thought to attract the greatest audience attention such as first page or back cover.

Internet• Fast growing media for

advertising

• Product information easily available

• Advertising rates are based on type of format desired:

• Banner ads

• Button/text links

• Pop ups

•Audience size

•Time availability

•Commercial length

•Production costs are less than for television and vary widely

•Audience

•The larger the audience, the higher the rate will be.

•Network time which reaches national audiences is higher than that for regional or local television.

•Charge time is based on audience ratings.

•Audience demographics influence the rate.

•Audience size and composition are affected by time of day, season of the year, program quality, and program popularity.

Demographics of Target Market

Media selected should be able to reach the desired target market.

Editorial credibility & image

• Positive media image is important.

• The media must have the ability to present a believable product.

Ability to Obtain Response Rate

Media should be able to reach a large number of customers and obtain a high response rate.