Entrepreneur: Advertising – Entrepreneur Small Business Encyclopedia

Advertising provides a direct line of communication to your existing and prospective customers about your product or service. The purpose of advertising is to:

• Make customers aware of your product or service;
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• Convince customers that your company’s product or service is right for their needs;
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• Create a desire for your product or service;
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• Enhance the image of your company;
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• Announce new products or services;
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• Reinforce salespeople’s messages;
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• Make customers take the next step (ask for more information, request a sample, place an order, and so on); and
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• Draw customers to your business.

Your advertising goals should be established in your business plan. For example, you may want to obtain a certain percentage of growth in sales, generate more inquiries for sales, or build in-store traffic. The desired result can simply be increasing name recognition or modifying the image you’re projecting. Objectives vary depending on the industry and market you’re in.

All products and businesses go through three stages, with different advertising goals for each one.

1. The start-up business. You’re new in the market and need to establish your identity. Your company needs high levels of promotion and publicity to grab consumers’ attention.

2. The growing business. Once your identity is established, you need to differentiate yourself from your competition and convince buyers that yours is the service or product to try.

3. The established business. The purpose at this point is to remind consumers why they should continue buying from you.

No matter which stage your business is in, advertising follows four steps, according to the industry mnemonic, “AIDA: Awareness, Interest, Desire, Action.” Your job is to make prospective customers aware that your product or service exists, pique their interest in what your product or service can do for them, make them want to try your product or service, and finally take action, by asking for more information or actually buying the product.

When developing an advertising campaign, complete the following four-step procedure:

1. Define your market. Determine who your target market is (those customers most likely to buy your product or service). One magazine that’s fun to read, interesting and helpful in this regard is American Demographics.

2. Establish your budget. Know what you can afford to spend to reach your target audience.

3. Plan which media you’ll use. Figure out what are the best ways to reach your prospective customers with your message.

4. Create an advertising strategy. Choose the most effective message and visuals for your advertising campaign.