Download Advertising and Sales Promotion

Chapter 15:
Business Marketing
Communications:
Advertising and
Sales Promotion
PowerPoint by:
Ray A. DeCormier, Ph.D.
Central Connecticut State University
Introduction
• Business has learned that not even the
best products sell themselves.
• Benefits, problem solutions and cost
efficiencies need to be sold through
effective communications to everyone
from users to influencers to decision
makers.
Most Important Component
 Due to…
a.
b.
c.
d.
Product complexities (technical),
The small number of buyers,
The high price products/services, and
Extensive negotiation process
…The primary communications vehicle for selling
Industrial/Business products/services is the:
 SALESPERSON! 
Other Non-Personal Components
 There is a need for other non-personal requisites such
as:





Advertising
Catalogs
Internet presence
Trade shows
Promotional spending
 All have a unique way of getting the message out,
however, they don’t close deals as well as personal
selling!
Advertising’s Role
•
Be an integral part of an integrated communication
programs
•
Enhance sales effectiveness
•
Increase sales efficiency
•
Create awareness
•
Create preferences for company, products, etc.
•
Facilitate interactive marketing communications
Integrated Communication Programs
• Integrated Communications is the intertwining of all
communication methods to include:
–
–
–
–
–
Advertising
Sales Promotion
Online Media
Public Relations
Personal Selling
• Of these promotional techniques, personal selling is most
important in B2B marketing!
Enhancing Sales Effectiveness
• Combining advertising and personal selling makes
the selling job easier and more efficient.
• People who were aware of the ad thought the
salesperson was more knowledgeable than
companies that don’t advertise.
• Profits and gross margins also increase when
advertising is employed.
Increased Sales Efficiency
• Advertising increases efficiency in two ways:
1.Serves as a reminder
2.Informs the market about new
products/developments
• Advertising is pennies when compared to
$100’s for a sales call.
Creating Awareness
• Business advertising creates:
1.Awareness
2.Brand preference
3.Conviction that a brand will meet their
requirements & hopefully
4.Facilitate purchase
9
What B2B Advertising Can’t Do!
• Effective B2B communication needs to be integrated
among all media methods; however, it does have its
limitations. It:
1. Cannot create product preference for many products.
2. Cannot close a sale!
3. Cannot substitute for personal selling.
4. Can supplement personal selling but not replace it.
The Decision Stages: Developing
Business-to-Business Advertising
Program
 Advertising is only one
aspect of an entire marketing
strategy.
 The advertising decision
process begins with
formulating advertising
objectives.
 Equally important: selection
and evaluation of media.
Figure 15.1
Decision Stages
Defining Advertising Objectives
• Marketing managers realize:
1. Advertising’s mission flows directly from
the overall marketing strategy.
2. Advertising’s job is to:
a.
b.
c.
d.
Create awareness
Provide information
Influence attitudes
Remind buyers about product and company
Top B2B Advertisers
Company
Total Advertising
Expenditures
(in millions)
AT&T Inc.
$419.4
Verizon Communications Inc.
$405.9
Sprint Nextel Corp.
$277.1
IBM
$236.3
Hewlett-Packard Co.
$219.6
Microsoft Corp.
$213.6
Monster Worldwide
$155.1
FedEx Corp.
$144.0
Citigroup
$137.6
J.P. Morgan Chase & Co.
$129.0
Source: “Largest U.S. B-to-B Advertising Buyers,”
Marketing News, July 15, 2008, pl.25.
Table 15.1
Dysfunctional Advertising Policies
• Advertising’s purpose is to inform and influence sales, but it is
not to create sales.
• A dysfunctional policy of tying advertising budgets to % of sales
defeats the purpose.
• For example:
• If there are no sales, then is there no advertising budget?
• If sales are declining, do you cut advertising costs too?
• Does that make sense?
Objective-Task Method
1. Establish objectives in terms of sales volume,
market share, profit contribution and market
segments.
2. Assess all communication functions to realize
these objectives.
3. Define specific measurements required to meet
these objectives such as market share.
4. Estimate the budget needed to accomplish them.
Problem with Advertising
• How much is enough?
• Advertising costs is like owning an old gold mine. It can return
millions, or be a bottomless pit.
• The only way to assure success is to establish and measure
against goals.
• Another matter is the political side of the decision. The
concern here is that internal politics often determine budgets,
not the technique-driven process.
Passing the Threshold
• In order for a message to be heard, it is
necessary to repeat it often.
• Of course, the question is: “How often?”
• Research suggests that advertising must pass
through a certain threshold before a
meaningful message can be understood by the
market to move product from awareness to
preference.
Developing B2B Advertising Message
1.Determine advertising objectives.
2.Evaluate target audience’s buying criteria.
3.Analyze most appropriate language, format
and style to present message.
4.Then consider the message!
Perception, Perception, Perception
 In business, perception is almost the same as truth.
 The message needs to attract the right person.
 In most cases, that is the decision maker.
 For an advertising messages to be considered, it has to:
 Attract the right person’s attention, &
 Be interpreted properly.
 For example, techies respond to technical ads and non-techies
respond better to non-technical ads.
Benefits
 Industrial buyers focus on solutions to business
problems that considers:
a. A better way to accomplish tasks
b. A less expensive way to manufacture something
c. A new approach to either make or save the
company money
d. A different way to “free” up time
Shifting of Advertising to Digital Form
• B2B marketers are always looking for ways to communicate
better with customers & prospects.
• Use of Internet microsites (specialized web pages that
prospects jump to from an email or PR piece that contain
videos) is providing excellent results.
• Use of online videos help customers and prospects from
around the world solve their business problems.
• Videos are particularly effective for telling the story and
producing serious leads.
Use of Search Engines
• Using proper key words or key phrases within the site is an
absolute necessity for driving leads to that site. Ideas for
successful Internet advertising include:
1.
2.
3.
4.
5.
Make sure site is search-crawler friendly
Good key words must tie into solutions sought
Create a relevant, targeted keyword list that reflects
problem, product, etc.
Write clear, compelling ads that use key words and isolate
your “value proposition”
Track results and measure everything
Direct Mail
 Direct Mail is commonly used for:
a. Image, product and service promotion
b. Sales force support by providing leads
c. Distribution channel communications
d. Getting pertinent information directly to influencials
 Direct mail is efficient providing the list is good.
 Much direct mail is considered junk mail.
Direct E-Mail
• Direct mail is 10 times more expensive than e-mail
• E-mail campaigns often yield more responses and results are
quicker
– Example: 1/3 of all responses were generated within 24hrs.
• Many firms integrate their CRM programs with e-mail
• Many firms provide an e-mail alert service and/or an e-mail
newsletter
Measuring Effectiveness
• Rarely do ads result in immediate business.
• But, it does create awareness hopefully leading to
preference.
• Measurements can be direct or indirect.
• Direct communication is measured by: “percent
awareness.”
• Indirect communications are measured by: “word-ofmouth” and “understood perceptions”.
Evaluating
Advertising
1.
Sound measurement
program entails
substantial advanced
planning.
2.
The advertising strategist
must determine:
–
What is to be
measured
–
How to measure it
–
In what sequence
3.
Establish benchmarks in
pre-evaluation phase
Figure 15.2
Five Primary Areas for
Evaluating Advertising
Web Metrics
1. Define communication objectives.
2. Desired action: Does ad drive visitors to Web
site to view an online video or download
information?
3. B2B marketers need to know which key
terms results in a click-through.
Evaluation Measures include:
•
•
•
•
•
•
Knowledge
Recognition
Recall
Awareness
Preference
Motivation
• It is not always possible to measure
effects on actual sales.
Trade Shows
• Another important form of promotion is trade
shows.
• Effective selling message can be delivered to a
relatively large and targeted audience at one time.
• Firm can identify potential clients and provide sales
personnel with qualified leads.
• Trade shows can also be used to introduce new
products.
Trade Shows: Strategy Benefits
• Customers can get hands-on experience with product in
one-on-one selling situation.
• Company can enhance general goodwill.
• Company often benefits from free publicity.
• Trade shows allow competitors to look at each other.
• International business can be facilitated resulting in
quicker entry into foreign markets.
• Many sales are also made at these shows too!
• Cost of meeting prospects is around $250 which is much
less than making a personal sales call.
Trade Show Objectives
1.
2.
3.
4.
5.
6.
7.
8.
9.
Discover decision influencers.
Identify potential customers.
Provide company product, service and information.
Try to discover product application problems.
Create sales.
Handle customer problems.
Build corporate image.
Gather competitive intelligence.
Enhance sales force morale.
Lead Generation
• Trade shows are probably most important for
lead generation.
• Attaining leads is so important to companies
because without them, a company cannot
survive.
• There is a natural turnover of customers so a
company has to constantly be looking for new
business.
• It’s just a way of life.
Preparing for the Trade Show
 Trade shows are different than personal selling even
though one is selling never-the-less.
 The trade show is more theatrical, and contact is
very short (5-10 min.), therefore the process is to:
 Sell the product first,
 Sell the company next,
 Sell the salesperson last.
 This is opposite to traditional selling situations.
Trade Show Traffic Flow
Flows
Tactical Activities
Show Attendees
Target Audience
Attracted To Booth
Contact w/Salesperson
Pre-Show &
At-Show
Impersonal
Promotional
Activities
Personal
Promotional
Activities
Sales Leads
Source: Gopalakrishna & Lilien, A Three-Stage Model of Industrial Trade Show Performance,”
Working Paper #20, Marketing Science 14 (Winter 1995) :pp.22-42
Measuring the Success
• Companies need to set measurable goals in
advance of the trade show including:
a. Number of leads
b.Likely effect on sales
c. Potential effect on new accounts
d.Effect on corporate image
e.Expenditures that tie into an adequate ROI