Radio

Radio follows the listener everywhere, in the home and on the highway. It is characterized by immediacy in scheduling, lower rates compared with other media, and little or no production costs.

Basic rates depend on the number of commercials contracted for, the time periods specified, and whether the station broadcasts on AM or FM frequencies. Some stations offer both Am and FM coverage. Usually FM broadcasting is more localized and offers wider tonal range, due to highly technical reasons.

In negotiating a contract, some stations may propose a "barter" arrangement in which part of the cost, sometimes as much as 50 percent, may be paid in merchandise. This is especially true where the retailer can provide material needed by the station in its own operation. One station offered such a deal to an office supply retailer. Another example concerned a printing establishment.

It is good business practice to:

Be sure that the commercials are broadcast at the times specified;

Instruct the station when to change the message if the "copy" refers to specific dates or occasions.

Ask of invoices in duplicate or triplicate when actual copies are required by cooperative arrangements with suppliers.

Direct Mail

An accurate, up-to-date mailing list plays the most important roll in direct mail advertising. Stores with charge accounts have a valuable list at their disposal, waiting to be used.

Direct mail has many purposes. It can be aimed at old customers, inviting them to pre-sale occasions. It can be focused on prospective customers for individual products. Or it can be used to create "goodwill."

Smaller stores, or stores without credit accounts, can build up their own lists from publications or directories.

Consult the post office in advance regarding fees, permits, and other requirements for direct mailings.

Benefit from Cooperative Retail Advertising Policies of Suppliers

Many manufacturers and wholesalers state that a significant part of the reserves they set up are for cooperative advertising are not used by their retailers. This is surprising because cooperative advertising results in substantially lower costs for the retailer.

For their own legal protection and to insure the greatest return from their investment, manufacturers set up specific requirements to be observed in cooperative advertising. The retailer should consult each vendor about the requirements which must be met to qualify. The retailer must also be aware of the procedures to follow to apply for and receive payments. Some vendors relate cooperative dollars to the amount of the retailer's business. Others do so on a percentage basis. So, you must be aware of how many cooperative dollars you have to spend. The amount and rules for payment of cooperative dollars are at the discretion of the vendor.

"Goodwill" Advertising

Every retailer receives requests and solicitations for advertising by all types of organizations including social groups, schools, churches, and fraternal societies. Often, friends and relatives make these requests. From the standpoint of maintaining good public relations, the retailer is frequently reluctant to turn them down. The cost of these donation should not be charged to advertising but to publicity or to "contributions" so that the advertising budget is not distorted.

Use Promotional Ideas in Your Advertising

Retailers featuring products without the benefit of low prices, novelty, or new features have found promotional techniques an excellent basis for their advertising. Action is the keynote for sales promotion ; however, merchandising ideas are the necessary prelude to action. If you coordinate promotion with advertising and personal selling, you can usually increase store traffic and thus produce good sales results.

The first requirement is a sound selling idea such as a "special sales" event, price discounts, a liberal credit plan, a contest, or a premium offer. There are many sources for promotional campaign suggestion, including trade journals, newsletters, and various books on the subject.

Once you have planned and scheduled the campaign, promote it through the use of newspaper and radio advertising, window and store displays, coupons, and literature. Promotions are especially necessary for retailers starting a new business.

Pack Your Ads with Selling Punch

Here are some tips you can use when you begin to work up your advertisements. When properly followed they will help inject selling punch into your advertising.

Make your ads easy to recognize. Give your copy and layout a consistent personality and style.

Use a simple layout. Your layout should lead the reader's eye easily through the message from the art and headline to the copy and price to the signature.

Use dominant illustrations. Show the featured merchandise in dominant illustrations. Whenever possible, show the product in use.

Show the benefit to the reader. Prospective customers want to know "what's in it for me." But, do not try to pack the ad with reasons to buy - give the customers one primary reason, then back it up with one or two secondary reasons.

Feature the "right" item. Select an item that is wanted, timely, stocked in depth, and typical of your store. Specify branded merchandise and take advantage of advertising allowances and cooperative advertising whenever you can.

State a price or range of prices. Don't be afraid to quote high prices. If the price is low, support it with statements which create belief, such as clearance or special purchase.

Include store name and address. Double check every ad to make sure it contains store name, address, telephone number, and store hours.

The Only Purpose Is To Sell

If you try to be clever, humorous or subtle in your advertising, you handicap its objective which is to help you sell your products. The elements of good copy are sometimes summarized in the term: AIDCA. This is, attract Attention, develop Interest, Describe the product, Convince the reader, and get Action.

For effective copy-writing, make each word count. Avoid unnecessary words. Keep sentences short. Put action in your words. Use terms your readers will understand. Don't use introduction, get right to the point of your message. Make use of imaginative ideas, variety, or colorful references only when they do not interfere with or slow your sales message.

Prior to opening your Company you must decide upon the general price Amount you expect to maintain. Are you going to cater to
individuals buying in the large, medium, or low price range? Your choice of location, look of your establishment, quality of goods
handled, and services to be offered will depend on the customers you would like to attract, and so will your prices.

After establishing this overall price level, you are ready to cost Individual items. Generally, the price of an item has to cover
the cost of the item, the other costs, and a profit. Therefore, you'll need to markup the thing by a specific sum to cover costs
and make a profit. In a business that sells few things, total costs can easily be allocated to each item and a markup immediately
ascertained. With many different items, allocating costs and determining markup might require an accountant. In retail operations,
goods tend to be marked up by 50 to 100 percent or more simply to make a 5 percent to 10% gain!

Let us work through a markup illustration. Suppose your organization sells 1 product, Merchandise A. The supplier sells Product A
to you for $5.00 each. You and your accountant determine the costs entailed in selling Merchandise A are $4.00 per item, and you
also desire a $1 per item profit. What is your markup? Well, the selling price is: $5 and $4 and $1 or $10; the markup
consequently is 5. As a percentage, it's 100%. So you need to markup Merchandise A by 100% to make a 10% gain!

Many small business managers are interested in knowing what Industry markup standards are for a variety of products. Wholesalers,
distributors, trade institutions and company research firms publish a huge variety of such ratios and company statistics. They are
useful as recommendations. Another ratio (in addition to the markup percentage) important to small businesses is your Gross Margin
Percentage.

The GMP is similar to your markup percent but whereas markup Refers to the percentage above the price to you of each item that you
must set the selling cost in order to cover the other costs and make profits, the GMP shows the relationship between sales
revenues minus the cost of the item, which is your gross margin, and your sales revenues. What the GMP is telling you is that your
markup bears a certain relationship to your sales revenues. The markup percentage along with the GMP are essentially the same
formula, together with the markup speaking to individual item pricing and GMP referring to this item costs times the amount of
items sold (volume).

Maybe an illustration will clarify the purpose. Your firm sells Product Z. It costs you $.70 each and you choose to sell it for $1
per cent to cover costs and gain. Your markup is 43%. Now let up say you sold 10,000 Merchandise Z's Last month hence producing
$10,000 in earnings. Your cost to buy Product Z was $7000; your gross profit margin was $3,000 (earnings minus cost of goods
sold). This is also your gross mark for the month's volume. Your GMP would be 30 percent. Both of these percentages utilize the
same basic amounts, differing only in division. Both are used to establish a pricing method. And both are printed and can be
utilized as guidelines for smaller businesses beginning out. Often managers determine what Gross Margin Percentage they will need
to make a profit and simply go to a published Markup Table to discover the percent markup which correlates with that margin
requirement.

While this discussion of pricing may appear, in certain respects, to Be directed only to the pricing of retail product it can be
applied to other kinds of companies as well. For solutions the markup must cover selling and administrative costs as well as the
direct cost of performing a specific service. If you are producing a product, the costs of direct labour, materials and supplies,
parts purchased from different issues, special equipment and tools, plant overhead, selling and administrative expenses have to be
carefully estimated. To compute a cost per unit needs an estimate of the amount of components you intend to produce. Before your
factory becomes too large it would be wise to consult a lawyer in a cost accounting system.

Not all things are marked up by the typical markup. Luxury articles Will require more, staples . For example, increased sales
volume from a lower-than-average markup on a specific item - a"loss leader" - may bring a higher gross profit unless the purchase
price is reduced too much. Then the consequent increase in earnings will not raise the entire gross profit enough to compensate
for the low cost.

Sometimes you may wish to market a particular item or service in a lesser Markup in order to boost store traffic with the
expectation of increasing sales of Regularly priced merchandise or generating a large number of new service contracts.
Competitors' costs 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
product or each service all the time. But You ought to remember the overall average markup that you want to make a Profit.

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