Store traffic. Specialty advertising can help develop patronage. All it takes is a little imagination.

Example: Owners of a restaurant specializing in French cuisine and fine wines believed the best way to increase their patronage was to go after the affluent market. They targeted 500 upper income families new to the area and sent them a linen wall calendar on which was imprinted the recipe of the restaurant's famous shrimp Creole. Recipients were told they could get a free cocktail for each member of their party with purchased meals if they presented the hanger string of the calendar. Fifty-two percent of the targeted households took advantage of the free cocktail offer, and many respondents became regular customers.

Developing leads. Who is really in the market for your product or service? They need to be identified and made aware of what you have to offer.

Example: A personnel placement agency ran an ad in a business journal announcing The Grant Texas Type-off in which secretaries and other typists could compete for a prize trip to Acapulco. Specialties were chosen to conform to the promotion's western theme. Agency employees wore T-shirts imprinted with the Wanted-poster theme of the Type-off, and name badges resembling sheriff's stars were issued to the fast-typing finalists, judges and members of the press. Media reporters were also issued theme-imprinted tote bags and T-shirts. The competition produced good media coverage and 400 entrants. The sponsoring agency obtained 100 new placement candidates and 50 new companies for its client list.

Promoting image and goodwill. Reliability, quality products, fair prices, fast service; concern for customers are typical images businesses like to portray. Specialties can help, too.

Example: A plumbing supply company mailed a survey questionnaire to plumbing contractors. Copy on an accompanying cartoon explained the firm valued the recipients' business and wanted their opinion of the company's performance, because We want to be sure to measure up. To elicit a response, the mailer contained a logo-imprinted tape measure, chosen because of its association with the theme-Measure Up. The mailing generated a 35 percent return, enabling the company to correct service deficiencies.

Introducing new promotional products and services. When you're offering prospects something they haven't seen before from you (or perhaps from anyone else), you've got to tell them about it.

Example: a purchaser of a materials-handling equipment distributorship quickly sought to divorce itself from the previous owner's reputation for poor service. The new owner mailed to 425 prospects a card introducing a cartoon character, Super Hustler, who was described as being faster than a speeding piston, more powerful than a C-500, and able to cut overhead in a single call. The new service policy was amplified in a second mailing that guaranteed a repair man on the scene within three hours of a call. Imprinted on the enclosed specialty, a shoulder phone rest, was the number to call for service. The final mailing promised another specialty, a coffee mug, for those who returned a reply card. Approximately 50 percent of the recipients requested a coffee mug, which was delivered by a salesperson. The new service policy and its imaginative proclamation helped increase the distributor's service business 27 percent.

Opening doors for salespeople. Few salespeople are so presumptuous as to think prospects are waiting to receive them with a brass band. More often, the prospect is "in conference," "out of town," "can't be disturbed," or is otherwise unavailable to the salesperson. And when direct mail is used, often there is a secretary who is screening the mail. What is needed is a door opener.

Example: Telephone solicitation was being used by a sales training organization to arrange appointments for its salespeople. Because it was securing only four appointments for every ten calls, the company decided to try something else. The firm's specialty advertising counselor recommended designing a custom specialty-an 11 ounce bar of chocolate molded into the shape of a giant baby pacifier. The item tied in nicely to the accompanying copy: Instead of trying to pacify salesmen whose sales are declining, show them how to improve. Attractively gift-wrapped, the pacifier was delivered to the target audience without the sender's name on the box so the recipient would have to open the package to find out who sent it. The idea worked. It achieved for the sales trainer a 90 percent appointment rate, and these calls produced an 80 percent closing rate.

Success stories like these do not come about by accident. These advertisers wanted results and looked for someone who could deliver them.

Before opening your Company you Need to decide upon the general Cost Amount you expect to keep. Will you cater to individuals
buying in the large, moderate, or low budget? Your choice of location, appearance of your institution, quality of goods handled,
and solutions to be offered will depend on the clients you would like to bring, and so will your costs.

After establishing this overall price level, You're ready to price Individual products. In general, the purchase price of an item
must cover the price of this item, all other costs, and a profit. Thus, you will have to markup the thing by a certain amount to
cover costs and earn a profit. In a business that sells few things, total prices can easily be allocated to each item and a markup
immediately determined. With a variety of things, allocating costs and determining markup may require an accountant. In retail
operations, goods tend to be marked up by 50 to 100 percent or more simply to earn a 5% to 10% gain!

Let us work through a markup example. Suppose your company sells 1 product, Product A. The supplier sells Product A for you for
$5.00 each. You and your accountant determine the prices involved in selling Product A are $4.00 per item, and you desire a $1 per
item gain. What is your markup? The selling price is: $5 plus $4 plus $1 or $10; the markup consequently is 5. As a percentage,
it's 100%. So you have to markup Merchandise A by 100% to produce a 10% profit!

Many small business managers are interested in understanding what Industry markup standards are for various products. Wholesalers,
distributors, trade associations and business research companies publish a huge variety of these ratios and business statistics.
They're useful as guidelines. Another ratio (in addition to the markup percent ) important to small businesses is the Gross Margin
Percentage.

The GMP is comparable to your markup percent but whereas markup Refers to the percentage above the cost to you of each item that
you must set the selling cost so as to cover the other expenses and earn profits, the GMP shows the relationship between sales
revenues minus the expense of the item, which is your gross margin, along with your earnings earnings. What the GMP is telling you
is that your markup bears a certain relationship to your sales revenues. The markup percent along with the GMP are essentially the
exact same formula, together with the markup referring to individual product pricing and GMP referring to the product prices times
the number of items sold (volume).

Maybe an example will clarify the point. Your firm sells Product Z. It costs you $.70 each and you decide to sell it for $1 per
cent to cover costs and gain. Your markup is 43%. Let up state you sold 10,000 Merchandise Z's Last month thus producing $10,000
in earnings. Your price to buy Product Z was $7000; your gross profit margin was $3,000 (earnings minus cost of goods sold). This
is also your gross markup for the month's volume. Your GMP will be 30%. Both of these percentages utilize the exact same basic
numbers, differing only in division. Both are utilized to establish a pricing method. And both are published and can be used as
guidelines for small businesses beginning out. Often managers determine what Gross Margin Percentage they will have to make a
profit and just go to a published Markup Table to find the percentage markup that correlates with that margin condition.

While this discussion of pricing might seem, in some respects, to Be directed just to the pricing of retail product it can be
applied to other kinds of companies too. For solutions the markup has to cover administrative and selling costs as well as the
direct cost of doing a particular service. If you're producing a product, the costs of direct labor, materials and supplies,
components purchased from other concerns, special equipment and tools, plant overhead, selling and administrative expenses have to
be carefully anticipated. To compute a price per unit needs an estimate of the amount of units you plan to produce. Before your
factory becomes too big it would be smart to consult an accountant about a cost accounting system.

Not all things are marked up from the average markup. Luxurious articles Will take more, staples less. For instance, increased
sales volume by a lower-than-average markup on a certain thing - a"loss leader" - can bring a higher gross profit unless the price
is lowered too much. Then the consequent increase in sales will not increase the entire gross profit enough to compensate for the
low price.

Sometimes you may wish to market a certain item or service at a lower Markup so as to boost store traffic with the expectation of
increasing sales of Regularly priced product or creating a large number of new service contracts. Competitors' prices will also
govern your prices. You Can't sell a Product if your competition is greatly underselling you. These and other Factors May make you
vary your markup one of items and services. There is no magic Formula which will work on each item or each service all the time.
However, You ought to remember the general average markup which you want to make a Profit.

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