LEARNING MODULE SURIGAO DEL NORTE STATE UNIVERSITY

GE ENTREP
MODULE
6

Prepared by:

JULIAN DAVE S. TIU

Faculty, College of Engineering & Information Technology
SNSU Del Carmen | Del Carmen, Siargao Islands, Surigao del Norte

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MODULE 6
Title: Selected Topics on Determining the Right Location and Promoting the Small Business
Topic: What is the Right Location? General Criteria for Selecting a Business Location, Steps in Selecting a Business
Location Retailers What is Promotion? Promotion and Customer Demand, and Methods of Promotion
Time Frame: 9 hrs.
Introduction
One of the most important decisions the small business operator has to make is choosing the right location for his
business. The location decision must be made before actual operations begin. The wrong location will make it very difficult
for the SBO to achieve his business objectives.
If after a few years, the SBO realizes his error and considers moving to another site, he may find the idea too
difficult to execute because of the additional expenses involved. Yet, this is not the only problem brought about by the
wrong choice of business location. The preliminary concern should be "the lost opportunity to make profits.
After the small business operator has identified his target market, the product or service he will offer, and the right
location for his business, he still has to make some effort to finally realize his aim of producing a profitable sales volume.
This can be achieved if he makes concrete moves to convince the prospective customers to purchase what he is selling.
The SBO's actual involvement in convincing prospects to buy falls under the marketing activity of promotion.

Objectives
At the end of the lesson, the students are expected to:
 Define promoting the small business
 Identify methods of promotion
 Identify the right location
 Determine the steps in selecting a business location

Learning Activities

DETERMINING THE RIGHT LOCATION

What is the Right Location?
In any given area, there are many possible locations the SBO can consider as his business location? Plotting the
different locations in a spectrum, one will be situated on the extreme side of the "right location." Another will be on the
extreme side of the "wrong location." Those in-between the extremes may be classified as "nearly right" or "nearly wrong."
The right location refers to that one which will bring the highest possible benefits to the firm. The wrong location is
one which will bring the most disadvantages to the small business. The right location for one firm, however, may be the
wrong location for another firm and vice versa. A particular site where a restaurant is successfully operating, for instance,
may not be suitable for a men's apparel business. This does not mean, however, that a succession of successful business
of different types is not possible on a single site. The message is that the SBO should be very careful in choosing his
business location.
General Criteria for Selecting a Business Location
Different types of small business need to use different sets of criteria in deter mining the right business location.
The criteria for locating the retail business will be different from that of the manufacturing firm and the service business.
Some of the factors in the criteria set, however, are generally applicable to all types of small business. These refer those
which concern the region, the province, and the city or town (Figure 28).

Mode Criteria
 Population growth
Selecting the Region
 Average annual income of families
 Proximity to markets
 Proximity to supply of raw materials
Selecting the Province
 Labor supply
 Business climate

 Population trends
 Local laws and regulations
 Competition
 Compatibility with the community
Selecting the City or Town
 Transportation
 Public services
 Police and fire protection
 Reputation of the location

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Figure 28. General Criteria for Selecting Business Location

Selecting the Region
A mere look at the statistical reports on the growth patterns and economic performance of the nation's different
regions will reveal information that some regions are more desirable areas of investment than others. Some regions like
Metro Manila, Central Luzon, and Southern Luzon have higher rates of population growth and average family income.
Most prospective investors consider such information as plus factors.
Selecting the Province
In a given region, a province may be identified as more promising for a business than other provinces. The
following factors must be considered when identifying which province the small business will be located:

1. proximity to markets; 3. labor supply; and

2. proximity to supply of raw materials; 4. business climate.

Proximity to Markets. Small businesses must be as near to their markets as possible. This is most especially
true if the cost of moving the products from the firm to its customers is high in relation to their value.
Service and retailing firms need to be situated in sites within the areas of their respective target markets.
Proximity to Supply of Raw Materials. When the raw material requirements of a small firm are voluminous and
frequent acquisitions are made, the company must consider locating in the province where the raw materials are sourced.
This will provide the firm with the advantage of reducing considerably its raw material acquisition costs.
For food service establishments, they will have better chances of succeeding in densely populated areas. The
provinces comprising a particular region differ in terms of population density. If population density is the only deciding
factor, the prospective investor should choose the province with the highest density.
Labor Supply. The small business must be located in the province where its labor requirements will be supplied
sufficiently. The labor requirements that are classified as (1) managerial, (2) specialists, and (3) skilled laborers, must be
available. There are certain provinces where there is a dearth of certain classes of man power.
Business Climate. Small businesses are expected to thrive in places where they transact business more
efficiently. Some provinces are more business friendly than others. They are so because they provide certain incentives
for small business-like tax holidays, lower fees, minimum restrictions, and others. In choosing the province where to locate
one's business, a comparison of the business climate offered by each province must be made.
Selecting the City or Town
After identifying the province where the small business will be located, the specific city or town within the province
must be selected. In choosing a specific city or town, the following must be considered:

1. Population trends; 5. Transportation;

2. Local laws and regulations; 6. Public services;
3. Competition; 7. Police and fire protection; and
4. Compatibility with the community; 8. Reputation of the location.

Population Trends. In a given province, some towns grow faster than others, in terms of population and income.
One or two of these towns may be more appropriate as location for small business especially when any or all of the
following are considered:

1. Population size and density; 5. Education;

2. Growth trends; 6. Income levels;
3. Family size; 7. Sex religion; and
4. Age breakdowns; 8. Ethnic groups.

Towns or cities with large populations are likely candidates for locating many types of small businesses. Those
that have higher population densities are especially favorable to firms offering cable TV services, beauty shops, tutorial
services, laundry shops, and many others.
Population growth trends indicate whether the city or town is growing or dying A declining population will surely
affect demand for products and services. Growth trends are useful in determining the ranks of the cities or towns in terms
of growth.
Big families have some needs that are different from those of small families. Double-deck beds, for instance, are
more appealing to big than small families. Data on family size, therefore, will be very important to small business dealing
with products or services with significance like those of double-deck beds.
Age breakdowns provide better insights to the small business investor in making location decisions. If his product
offerings are for the elderly, he will prefer a city or town with sufficient number of elderly people.
The level of education of a city or town's population will be a relevant factor for small businesses producing or
selling books, magazines, newspapers, calculators, computers, and the like.

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The income level of the population of a city or town will provide the small business investor with data on
purchasing power. A population with high income levels will tend to have a higher purchasing power.
Although the population of most cities and towns are more or less evenly distributed between the sexes, it is
sometimes important for some small businesses to be assured that this is so. This concern is made more important with
the emergence of the idea that the third sex has needs that could be served. Knowing the exact number of target
customers in a given area, whether they are men, women, or gay, is an advantage to the prospective SBO, especially in
selecting a suitable location for business.
The religious beliefs of a city's population sometimes affect the way a small business operates. Some of the
needs of a Muslim-dominated town, for instance, will be different from the needs of a Christian-dominated town. For
example, a small business engaged in manufacturing images of saints will be more appropriately located in a city
populated by Catholics.
Different ethnic groups exhibit dissimilar needs. Some prefer to spend more on glamour products like make-up
kits and sunglasses, while some are more concerned with saving money. These needs will dictate which type of small
business will survive in a city or town. It will be wise for the small business investor to know about such peculiarities in the
behavior of some groups of people. This will help him choose a good location for his business.
Local Laws and Regulations. The small business investor must compare the local laws and regulations of the
different towns within the province of his choice. He will find out that some towns provide a climate conducive to small
business operation. Some towns, for instance, impose lower business taxes.
Competition. Some towns or cities are already saturated with certain types of business. If the small business
investor finds a town under consideration with too much competition in his line of business, he should shift his attention to
another town
Compatibility with the Community. The small business must be compatible with the community where it will be
located. For instance, a city where people do not care about developing their community is not a very good location for a
growth oriented small business. The opposite view, a city where people care about their health would be a good place to
locate a small business selling health foods.
Transportation. The cost of moving the firm's products contributes to the overall costs of operating the business.
It is, therefore, very important that the firm should be located in a town with adequate and reasonably priced transportation
services.
Public Services. Towns or cities which provide adequate services like those on water and sewerage, trash and
garbage collection, among others, must be regarded as plus factors in choosing a location. These will be added to the
cost of operation if these are not provided by the chosen city or town.
Police and Fire Protection. Towns or cities that do not provide adequate police and fire protection should be
ruled out in choosing a location. Any business that will provide itself with such protection will be able to do so at a cost,
and this will jack up the cost of operation which may result to a decline in profits.
Reputation of the Location. Some cities and towns have established reputations which may not contribute to the
achievement of the goals of the firm. However, cities like Makati, Cebu, or Davao lend their reputations to businesses
located in their areas. In a way, prospective customers are easily swayed to pay attention to whatever message small
businesses would want to convey to them.
Steps in Selecting a Business Location for Retailers
Some location criteria are uniquely applicable to retailers. They may be derived through three major business
location selection steps. The steps are classified as follows:

1. Choosing a viable community; 3. Evaluating the specific site.

2. Selecting the trading area; and
Choosing a Viable Community
A viable community is one that has the capacity to provide an adequate and profitable sales volume for the small
business.
In terms of viability, there are three general factors used to determine the best geographic area or city for the
business. They are the following:

1. Economics; 3. Competition.
2. Population; and
Economics. Areas with a stable economic base must be chosen by the SBO rather than those without a stable
economic base. An economically stable area is one which has a balanced mix of business establishments Areas with few
types of businesses must be viewed with some concern.
Areas that are predominantly agricultural may not be able to support even a small manufacturing concern.
However, businesses that will complement or supplement farming or fishing may be relevant in those areas. Examples
are the wholesaling and retailing of fertilizer and pesticides.
Population. Information about the characteristics of the population relevant to the location decision must be
obtained. The following are important population aspects that must be reviewed:

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1. Size of population of the area under consideration;
2. Growth trend of the population;
3. Average income of the potential customers; and
4. Population changes in recent years.

Competition. No matter how large an area is, it can only support a certain number of competing firms. If too
many of the same types of business are located in one area, they may have difficulty in obtaining the sales volume they
desire. Some may get bankrupt in the process.
The small business owner should know if the area under study can no longer support another business. It will be
different, however, if the prospective small business will have a very unique advantage over its prospective competitors.
An excellent location is an example of unique advantage.
Selecting the Trading Area
The trading area is the geographic area from which a business draws its customers. In choosing a business
location, several trading areas must be considered and evaluated.
The following aspects must be considered in trading area analysis:

1. Demographic and socioeconomic characteristics of consumers;

2. Focus of promotional activities;
3. Determination of whether the proposed location will service new customers or take away business from
existing competitors;
4. Determination of the number of outlets that can be operated; the geographic weaknesses of the proposed
trading area; and
5. Other factors like competition, availability of financial firms, availability of labor, location of suppliers, legal
restrictions, and the like.

Composition of the Trading Area. The trading area consists of the following parts

1. Primary trading area is where 50 to 60 percent of the retailer's customers come from. It is closest to where the
retailing firm is located and possesses the highest density of customers of the firm.
2. Secondary trading area is where 20 to 25 percent of the firm's customers come from.
3. Fringe trading area is where the remaining customers of the firm come from.

Types of Location. Locations are of various types and it is to the best interest of the retailer to determine which
type is best suited for his or her product or service offerings.
Location may be classified as follows:

1. Central business district; 3. Free-standing retailer.

2. Shopping center; and
Central Business District
The central business district (CBD) refers to an unplanned shopping area around the geographic point at which all
public transportation systems converge. In a typical provincial city, the center of the CBD is the public market which is
surrounded by bus and jeepney stations. Adjacent to these stations are the traditional department stores, grocery stores,
minimarts, and some specialty shops.
The advantages of locating in the CBD are the following:

1. Easy access to public transportation;

2. Wide product assortment;
3. Variety in images, prices, and services, and
4. Proximity to commercial activities.

The disadvantages of locating in the CBD are the following:

1. Inadequate parking:
2. Older stores;
3. High rents and taxes;
4. Traffic and delivery congestion;
5. Potentially high crime rate; and
6. The generally decaying conditions of CBDs in many cities.

Apart from the CBD, larger cities have developed secondary business districts (SBDS) and neighborhood
business districts (NBDs). An SBD is a shopping area small er than a CBD and which revolves around at least one
department or variety stores at a major street intersection. An SBD is a shopping area that evolves to satisfy the
convenience-oriented shopping needs of a neighborhood.
Shopping Center
A shopping center refers to a centrally owned and/or managed shopping district which is planned, has balanced
tenancy (the stores complement each other in merchandise offerings), and is surrounded by parking facilities.

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The shopping center offers the following advantages to the retailers:

1. Heavy customer traffic resulting from the wide range of product offerings;
2. Nearness to population;
3. Cooperative planning and sharing of common costs;
4. Access to highway and availability of parking;
5. Lower crime rate;
6. Clean, neat environment; and
7. More than adequate parking space.

The disadvantages of the shopping center are the following:

1. Inflexible store hours;

2. High rents;
3. Restrictions as to the merchandise the retailer may carry
4. Inflexible operations;
5. Possibility of too much competition; and
6. Dominance of smaller stores by the lead (or anchor) store.

Free-standing Retailer
A free-standing retailer is generally located along major traffic arteries without any adjacent retailers selling
competing products to share traffic.
The following advantages are inherent to free-standing retailers:

1. Lack of direct competition;

2. Generally lower rents;
3. Freedom in operation and hours;
4. Facilities that can be adapted to individual needs of retailers; and
5. Inexpensive parking.

Free-standing retailers have the following disadvantages:

1. Lack of drawing power of complementary stores;

2. Difficulties in attracting customers for the initial visit;
3. Higher advertising and promotional costs;
4. Operating costs that cannot be shared with others;
5. Possible cash outlays in constructing the store instead of renting; and
6. Zoning ordinances that may restrict some activities.

Evaluating the Specific Site

After determining the trading area where the small retail business will be located, the specific site must be
pinpointed. But first, a listing of possible specific sites must be made. This will be followed by evaluation of the listed sites
considering the following: pedestrian traffic, vehicular traffic, parking facilities, transportation, store composition, internal
characteristics of the specific sites, and terms of occupancy.
A site that has more people passing by is preferable over one with less pedestrian traffic.
Certain types of business-like car parts retailing are more appropriate in sites with heavy vehicular traffic.
Parking facilities provide convenience to customers and should be regarded as a plus factor in the selection of a
site.
The availability of mass transportation, access from major highways and ease of deliveries, are desirable
characteristics of a site.
As some stores complement each other in a given area, the composition of stores along the same area must be
analyzed.
The internal characteristics of the proposed site must be evaluated. Among those that must be considered are: (1)
visibility of the site, (2) placement in the location, (3) size and shape of the lot, (4) size and shape of the building, and (5)
condition of the lot and building.
The terms of occupancy of the site must also be evaluated. The following must be scrutinized: (1) ownership and
lease options, (2) operations and maintenance costs, (3) taxes, (4) zoning restrictions, and (5) voluntary restrictions like
uniform store hours and cooperative security forces.
Locating the Small Manufacturing Firm
The small manufacturing firm is saddled with certain limitations in choosing a location. Big cities are desirable
locations because of proximity to a bigger percentage of the population. However, zoning laws implemented in big cities
are more restrictive than those imposed by small towns. To avoid the said difficulty, some manufacturing firms locate in a
small town just outside the boundary of the city. This makes the manufacturing firms very near the market but out of reach
of the restrictive ordinance of the city.
Even if some manufacturing firms wanted to be near their market, they cannot afford to be situated away from the
source of their raw materials. This may be because of the following:

1. The factory produces waste in processing the materials;

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2. The raw materials are perishable and so the factory should be situated close to the source of raw materials;
3. The raw materials such as iron and stone are very bulky; and
4. Distribution methods or expenses make one site more cost-effective than another.

A sugar mill is an example of a factory producing much waste. If the mill is located in an urban area, waste
disposal may be very costly. The processing of tomatoes is an example of a firm using perishable raw materials. Tomato
processing plants must be located near tomato farms. If the farms are located far away from the processing plant, losses
from spoilage and transportation may be expected.
Manufacturers of marble slabs must locate their plants near the raw material source. The bulky nature of marble
boulders makes transporting very costly and difficult.
When proper evaluation is made, the least expensive site can be identified. One of the important factors in
evaluation is the acquisition cost of the land.
Procedure in Locating a Small Manufacturing Firm
In locating a small manufacturing firm, the following specific steps are recommended:

1. Determine if the proposed area allows the type of manufacturing under consideration.
2. Determine the following:
a. adequacy of shipping facilities;
b. types of buildings available for lease or rent; and
c. distance from factory to market and resulting shipping costs.
3. Determine the availability of the following:
a. cheap fuel;
b. power and water;
c. skilled labor (if required); and
d. financing facilities.

Locating the Service Firm

Service firms are those specifically sought by customers. If the customers are satisfied with the services they
provide, they will be continuously patronized even if a competitor is more accessible. Even if this is so, however, there is a
point where the customer will be indifferent to the quality of service if the firm providing is too far enough.
The choice of a location for service firms will depend on the traits of the target customer. Information on where the
target customers want to be served may be determined through market research.
Schools may be located at the peripheral sections of urban areas where they can be easily reached by students
from nearby districts and towns. Motels depend upon some types of travelers, so they must be located along the highway,
not necessarily in the center of the town. Shoe repair shops, barber shops, and appliance repair shops are better located
at or near residential areas. Roads that are traversed by vehicles of various types are good sites for car maintenance and
repair shops.

PROMOTING THE SMALL BUSINESS

What is Promotion?
It is not surprising for someone to find out that promotion is an activity taken by successful companies. In terms of
using promotion as a tool, firms differ on the intensity of usage. Some firms use it extensively, while others only
superficially. Some firms use a single method of promotion, while others use a variety of methods. In any case, the SBO
must know what promotion is and how it can help him achieve his sales and profit objectives.
Promotion Defined
Promotion may be defined as activities, including advertising, personal selling. sales promotions, public relations,
and direct marketing, used by SBOS to persuade prospective customers to buy the company's products 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. In some cases, a little promotional effort brings large increases
in customer demand. Sometimes, however, promotion does little to improve the company's total revenues. These results
will depend on the nature of the product or service, the stage of the firm's development, and the nature of competition. It
will be very useful to the SBO to know how he can use the various methods of promotion to his advantage (Figure 30).
CUSTOMER DEMAND SALES
EXPOSURE RESULT OUTCOME

Positive Established Certain Level

Contacts Demand of Sales
with the Firm

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Newly
Certain Level
Promotion Created
of Sales
Demand

Positive
Contacts
with the Firm Established
plus Newly Higher Level
Plus Created of Sales
Demand
Promotion

Figure 30. Promotion and Its Relationship with Demand and Sales
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 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; and
3. The attractive appearance of the firm.

Even without the use of promotion, established demand will materialize.

Newly Created Demand. When the firm engages 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 "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; and
5. Word-of-mouth.

Advertising
Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by an
identified sponsor. The great number of product or service endorsements we see, hear, or read on television,
newspapers, or radio are advertising efforts designed to motivate prospective customers to patronize certain products,
services, or companies.
Types of Advertising. Advertising may be classified as follows:

1. Retail advertising is made by various retail stores such as grocery stores and bakeries to attract customers.
2. Service advertising is made by various service establishments such as transportation, recreation, and
insurance.
3. Trade advertising is made by manufacturers to motivate wholesalers and retailers to carry their products.
4. Industrial advertising is made by manufacturers to motivate other manufacturers to use their products and
services.
5. Institutional advertising is designed to create a favorable image for a firm.

Types of Advertising Media. The types of advertising media are the following:

1. Television; 4. Magazines;
2. Radio; 5. Outdoor billboards;
3. Newspapers;

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6. Specialty advertising (distribution of items 9. Direct mail;
such as pencils, calendars, shopping bags, 10. Local cable TV;
wall clocks, and others); 11. Cinema ( movie houses); and
7. Public transportation; 12. Other means such as catalogs, samples,
8. Yellow pages; handouts, and the like.

Personal Selling
Personal selling is that method of promotion that is direct, personal, and often a face-to-face interchange between
the company's salesperson and the consumer.
Personal selling is a very important complement of the other methods of promotion. When a potential customer
cannot be motivated to make a final purchasing decision with the use of other promotional methods, personal selling may
be able to finally clinch a sale.
Many small businesses rely on personal selling as a means of promoting their products and services.
Types of Salespersons. To effectively attain the sales goals, the company hires salespersons. There are various
types of salespersons (Figure 31) and the firm must take a decision on which type is appropriate for its needs.
The types of salespersons are the following:

1. Order getters; 3. Support personnel.

2. Order takers; and
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. Order getters may be classified as follows:

1. Current customer salesperson - concentrates on current customers and seeks. more sales from them.
2. New-business salesperson - locates prospects and converts them to 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. Order takers are classified as follows:

1. Inside order taker - stays inside the sales office and from there receives orders: by mail, telephone, or directly
from persons coming.
2. Field order taker - 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 locating prospects,
educating customers, building goodwill, and providing service after sale, Support personnel may be classified as follows:

1. Missionary salesperson - 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 - helps the company's customers, especially retail stores, promote the product. His
activities consist of restocking shelves, obtaining more shelf space, setting up displays, providing in-store
demonstrations, and distributing samples to store customers.
3. Technical salesperson - gives technical assistance to the firm's current customers in the form of advice on
product characteristics and applications, system designs, and installation procedures.

The Selling Process. Selling is a process consisting of the following major steps:

1. Prospecting and qualifying; 5. Handling objections;

2. Pre-approach; 6. Closing; and
3. Approach; 7. Follow-up.
4. Presentation and demonstration;
Prospecting involves researching potential buyers. The list of prospects may be derived from a variety of sources.
Qualifying means selecting from among the prospects those most likely to buy. To qualify prospects, the following
must be considered:

1. Ability to pay; and

2. Willingness to listen to a sales message.

After shortlisting qualified prospects, further research must be made about them. A mental picture of the qualified
prospects must be drawn indicating their needs and wants. This will guide the salesperson on the right moves to make in
the subsequent steps.
After completing the requirements of the pre-approach, an actual, face-to-face communication with the prospect
follows. The timing of the approach and the personal appearance of the salesperson are very important factors that must
be considered. The actual product or service needs of the prospect will be verified at this stage.
After the requirements of the approach stage has been made, the salesperson will proceed to the presentation of
the product or service. If the product is portable, presentation may be done at the prospect's residence or place of
business.
Most often, customers have some lingering doubts about their needs or about the products and services
presented to them. These will effectively prevent the closing of a sale. Most of the doubts or objections, however, can be

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cleared when the salesperson provides more explanations about specific concerns. An example is the situation where the
customer states that he cannot make a purchase because he lacks sufficient funds to buy the product. If the company
sells on installment basis, the salesperson will just provide the information that an installment plan is available.
In the two stages, the salesperson must be on the alert to "discern" signals that the prospect has already made up
his mind. To find out, the salesperson must attempt to "close a sale." Test questions like "which of the two models would
you prefer?" are useful. If the reply is positive, the next statement of the salesperson would be "if you will please sign this
form so I will have this unit delivered immediately."
After a sale is made and the product is delivered or the service is rendered, the work of the salesperson is not yet
over. He will have to make some follow-up calls to be sure that the customer is happy. If this is so, the next sale with the
same customer will be easier. In addition, a satisfied customer, oftentimes, influences the purchasing decision of other
prospects.
Publicity
Publicity is a method of promotion where news is generated about the firm or its products or services and
appearing in print, broadcast, or electronic media and not paid for by the firm.
Publicity is one of the promotional methods which can be tapped by the cash. strapped small businessman. The
only requirement is a prepared publicity release describing any of the following:

1. Existence of the firm and the products or services offered;

2. Unique characteristics of the new products or services of the firm; and
3. Firm's unique method of doing business.

The publicity release will be published free by the various media if they are found to be interesting or newsworthy.
Criterion must then be the guide of those preparing publicity releases.
Types of Publicity
There are various types of publicity that the small business may use for its pro motional efforts. They are the following:

1. News publicity - deals with events of national, regional, or local interest. Kinds of news publicity:
a. Spontaneous news publicity - one made as a result of a fire, union strike, lahar onslaught, bank
holdups, and other major occurrences; and
b. 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 care, household items, and recipes which
find their way in the pages of newspapers and magazines.
4. Finance releases - are 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 - refer to illustrations or pictures distributed to media
7. Background editorial releases - refer to extra information (such as the biography of the firm's general
manager) given to media writers and editors.
8. Emergency publicity - refers to special media releases regarding disasters of serious
9. problems like the 2009 swine flu threat.

Sales Promotion
Sales promotion is a 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.
The major tools of sales promotion are the following:

1. Point-of-purchase display; 6. Retailer coupon;

2. Premium; 7. Consumer contest;
3. Trading stamp; 8. Sweepstakes;
4. Sampling; 9. Rebates; and
5. Product demonstration; 10. Trade show.

Point-of-Purchase Display
These are items used by sellers to attract attention, inform, and persuade prospective customers to buy. They
consist of items such as signs, window banners, display racks, and self-service containers.
Premium
A premium is a special incentive in the form of a gift that is made available to customers who buy certain products
of the firm. An example is the free small size bath soap attached to the box of a large toothpaste. Another example is the
free tuition fee granted to the fourth brother or sister enrolling in a school where his or her other three siblings are
enrolled.

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Trading Stamps
Trading stamps are sales promotion tools in which customers are given in relation to the amount of their
purchase. These stamps can be redeemed later for merchandise or cash.
A variation of the trading stamps as incentives is the Customer Value Card. Cardholders are entitled to discounts,
promotional items, and other privileges. Points are accumulated by the cardholder when he makes purchases which can
be used later as payment discounts.
Sampling
Sampling refers to the process by which manufacturers give away free samples to introduce a new product.
Customers are given the opportunity to use the product on a limited basis before purchasing.
The use of samples as a promotional tool is very popular with companies selling cigarettes, soaps, toothpaste,
soft drinks, shampoo, and the like Book publishers provide free examination copies of their publications to teachers to
stimulate demand.
Product Demonstration
In product demonstration, customers are given the opportunity to observe the product benefits and performance
before purchasing Music stores effectively demonstrate the sound clarity of the electronic organ and the electric guitar by
allowing qualified employees to play them in full view of passers-by.
Retailer Coupons
A coupon is a sales promotion device that motivates consumers to buy from the retailer. The coupon entitles the
buyer to a discount (or a free item). Coupons are distributed in packages, mailings, print ads, or at the store. A recent
modification is the set of coupons printed in calendars distributed free by Mercury Drug.
Consumer Contests
This is a type of sales promotion where customers compete for prizes by completing a contest such as supplying
a missing word in a phrase or sentence, or describing a positive attribute of the product or service. Customers joining the
contest usually send in their entries accompanied by some proof of product purchase like labels, caps, or a part of the
product's packaging.
Sweepstakes
These are sales promotion tools which require the participants to submit some kind of entry form but are purely
games of chance requiring no analytical or creative effort by the consumer. Small businesses can use this promotional
tool to attract attention from passers-by.
Rebates
A rebate offers the return of money based on proof of purchase. Rebates are very useful promotional tools
because the benefits derived are direct and immediate.
Trade Shows
These are temporary exhibitions of products and services. It is where direct purchases are made. It is also in
trade shows where salespersons get leads on potential customers.
Word-of-Mouth
Word-of-mouth 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
As personal communication often happens between friends and relatives, word of-mouth is regarded as a very
powerful tool of promotion. It is so because consumers generally regard friends and relatives as more credible and
trustworthy than other sources of information.
Positive word-of-mouth attracts new customers and retains existing ones. If the SBO wants to reap the benefits of
positive word-of-mouth, the following must be maintained:

1. Competent employees; 5. Keeping promises to customers;

2. Proper treatment of people; 6. Having a good product or service; and
3. Not overcharging; 7. Keeping customers happy.
4. Not using false claims in advertising;

References:

 Medina, R. G. (2016). Entrepreneurship and Small Business Management. Manila: Rex Book Store, Inc.
 Kuckertz, A. (2015). Management: Entrepreneurial marketing. Gabler Verlag.
 Nielsen, S. L., Klyver, K., Evald, M., & Bager, T. (2017). Entrepreneurship in theory and practice: paradoxes in
play. 2nd Edition. Edward Elgar Publishing, Cheltenham, UK
 Bygrave, W and Zackarakis, A, Corbett A. (2016) Entrepreneurship, 4th Edition, John Wiley Co.

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 Hisrich, R. D., Peters, M. P., and Sheperd, D. (2016) Entrepreneurship, 10th Edition. McGraw-Hill Irwin, Boston.
 Frederick, H., Kurakto, D. & O’Connor, A. (2018) Entrepreneurship: Theory, Process, and Practice, Asia Pacific
5th Edition, Cengage.

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