Future Business Leaders of America (FBLA) Advertising Practice test

New small businesses, lacking funds for expensive forms of promotion, often rely on:

1. Endorsements.

2. Sales promotion.

3. Advertising.

4. Word-of-mouth promotion.

The correct answer is: Word-of-mouth promotion.

New small businesses, especially those just starting out and with limited budgets, often turn to word-of-mouth promotion as a primary marketing strategy. This approach harnesses the organic sharing of information and experiences among consumers, which can be particularly powerful and cost-effective. When customers talk about their positive experiences with a business, it creates a ripple effect that can significantly expand the reach and visibility of the business without the need for a large marketing budget. Word-of-mouth promotion thrives on trust and personal recommendations, making it an ideal strategy for small businesses aiming to build a loyal customer base. As people typically value the opinions of friends and family, this form of promotion can lead to new customers who are more inclined to visit or try out the business based on these recommendations. Consequently, it can be more impactful than other forms of promotion that require significant financial resources, such as traditional advertising or endorsements. In contrast, endorsements and advertising typically require more financial investment and established relationships, making them less feasible for small startups. Sales promotion may also incur costs that small businesses might not be ready to handle. Therefore, relying on word-of-mouth is a practical and strategic decision for new small businesses looking to grow without substantial expenditures on advertising.