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9
Promotional Strategy
McGraw-Hill/Irwin
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Agenda
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The Role of Promotion in Business Marketing
Setting Objectives for a Promotional Plan
Developing the Promotional Budget
Developing and Implementing the Promotional
Mix
Measuring the Effectiveness of the Business
Promotion Campaign
Following Up and Making Necessary Changes
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The Role of Promotion
in Business Marketing
Marketing Mix = Product, Price, Promotion, Place
(Distribution)
Business promotion = the use of seller-generated
promotional tools to deliver messages to business
markets.
Promotion Mix
Professional selling
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Advertising
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Public relations
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Sales promotion
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Direct marketing
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The Role of Promotion in B2B Marketing
Advertising, publicity (PR), sales promotion and
direct marketing are communication methods
used by marketers to inform, remind or persuade
current and potential customers… In the
business market, advertising, publicity, sales
promotion and direct marketing pave the way for
the sales call (professional selling).
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Integrated marketing communications (IMC) –
the coordination of the promotional mix elements
along with other marketing activities such that all
communication with the firm’s customers is consistent
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Promotional campaign – a sequence of
promotions reflecting a common theme and geared to
specific objectives.
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Steps in a Promotional Campaign
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5.
Setting objectives
Developing a budget
Developing and implementing the
promotional mix
Measuring the effectiveness of the
campaign
Following up and modifying the
campaign
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Step 1: Setting Objectives for a
Promotional Plan
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Communication objectives
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Building product awareness
Inducing trial and/or retrial of new products
Countering competitors’ offerings
Building product-line acceptance
Obtaining space with distributors
Intensifying usage
Aiding the sales staff
Reviving a brand
Confirming buyers’ purchase decisions
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Setting Objectives for a
Promotional Plan
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Sales objectives
• Increasing market share
• Stimulating short-term sales
• Sustaining product preference
Effective promotion helps sales; ineffective
promotion can waste money and even damage
company image.
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Step 2: Developing the Promotional
Budget
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Percentage of anticipated sales
Affordable/Arbitrary (very common)
Competitive parity/Market share
Objective-and-task (very common)
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Step 3: Developing and Implementing
the Promotional Mix
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Business Advertising
• Goals of Business Advertising
 To make current or potential customers
aware of the marketer’s firm.
 To convey information about the
characteristics of a particular product or
service offered by the marketer’s firm.
 To ease the salesperson’s job.
 To reduce overall selling costs.
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9-6
/e-mail
/e-mail
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Media Selection (media mix)
Print Media
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Horizontal publications, e.g., Design
Engineering, Purchasing
 Vertical publications, e.g., Chemical
Industry News, Mechanical Contractor
 Professional publications, e.g.,
Architectural Digest, Dental Technology
 Industrial trade directories, e.g.,
Thomas Register of American
Manufacturers
 General business publications, e.g.,
Fortune, Business Week
9-13
Media Selection (media mix)
Broadcast Media
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Radio and TV are sometimes used where market is
highly geographically concentrated and product is of
interest to broad range of business users.
• A roller bearing company in Ohio may use radio ads during
morning commute in highly industrialized city to reach buying
center influencers in local industries where roller bearings are
used.
• IBM, Hewlett-Packard, Xerox, or FedEx may use TV spot during
“Dilbert,” which is watched by professionals from a wide range of
industries, i.e., potential customers.
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Broadcast media would not be likely vehicle if products
were only used by a few companies in target area (which
is often the case).
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Business Advertising Content
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A good ad often is similar to a sales call
• Opener (headline) to catch interest
• Body to convey information and benefits
• Call for action to close
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Ad’s connection to customer’s buying and adoption
process should be clear.
A good ad:
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Is memorable
Is consistent with company’s image
Interests the right target audience
Is easy to read
Provides evidence of customer value
Motivates reader to want to learn more
Provides easy way for reader to learn more
9-15
Advertising Agencies
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Advertising agencies work on advertising
strategy and campaigns, prepare copy and
layouts, study markets, select media, and carry
out actual physical production of advertisement
and its placement in selected media.
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Agencies do not always understand technology
and particular buying process in business
markets. Even when using advertising
professionals, marketer must assure ad strategy
and content is appropriate and effective. How
can you do that?
(continued)
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Advertising Agencies
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When using an agency, marketer is responsible
for:
• Creating and measuring ad and campaign objectives.
• Understanding target market’s adoption process.
• Understanding how ad campaign fits into integrated
promotion mix that moves potential buyer through each
step in adoption process and supports continued
customer satisfaction and repurchase.
• Testing ads.
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Advertising Agencies
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Many business marketers don’t formally test advertising
effectiveness (as strange as that may seem!).
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Agencies are paid for their ad production costs, plus a
percentage (~15%) of every media placement. If a
marketer relies on the agency to recommend
placements, there may be a conflict of interest.
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Some marketers are asking agencies to accept payment
based on ad and campaign performance (pre- and
posttesting). Agencies are resisting.
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Developing and Implementing the
Promotional Mix
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Business Publicity
• Publicity can:
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Help build or add to company’s visibility or image.
Introduce a new product, service, or improvement.
Provide salespeople with easier entry into office of
current or prospective customers.
Can also be negative
(continued)
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Developing and Implementing the
Promotional Mix
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Business Publicity
• Good publicity doesn’t just happen; it is managed. PR
department will create relationships with appropriate
media representatives and provide them with
newsworthy information presented from the
company’s perspective. If all goes well, that is how it
will appear.
• Because media are not paid to present publicity, there
is little control over how it is presented. Marketers
tend to have more influence with media outlets they
regularly use to advertise.
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Developing and Implementing the
Promotional Mix
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Business Publicity
• Techniques for getting in the news:
 Press releases
 Exclusive features
 Press conferences
 Press kits
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Business Publicity (Example)
In a recent example of the lack of control over publicity, a
university put out a news release concerning the student
government’s new honor code. Acting on their own, the
students created a set of honor standards and
administration plan that are among the most rigorous in the
nation. As a final step in the process, the faculty voted their
support of the code.
The news item was picked up by the region’s leading paper
which ran the story under the bold headline:
University Faculty Approves Cheating Plan
At best, the headline is poorly worded.
(continued)
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Business Publicity (Example)
Roger E. Axtell, a past Vice President of Marketing for the Parker Pen
Company tells of one his first assignments with the company. He sent
out a news release announcing a new company president and
management team. The newspaper ran the item with the new
management team’s pictures by the side of the article. Unfortunately,
directly under the pictures the newspaper had placed an unrelated
article with the headline:
Local Men Arrested in Pig Theft
Getting free publicity is nice, but it leaves you at mercy
of poor placements, poor wording, or intentional
negative spin. Use it with caution and try to build longterm relationships.
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Developing and Implementing the
Promotional Mix
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Business Sales Promotion - Trade Shows
and Exhibits
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Deciding Whether to Participate
Trade Show Budgeting
Contests, Sweepstakes, and Games
Advertising Specialties
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Trade Shows and Exhibits
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Trade Shows and Exhibits
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Trade shows are often large component of total
business marketing promotion budget allocation
(behind personal selling and, possibly, trade
journal advertising).
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Trade shows (large and small, industry-specific
and general) are regularly scheduled in cities all
across the world.
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COMDEX, the U.S. computer industry trade
show, brings together 2,200+ companies and
220,000 attendees.
(continued)
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Trade Shows and Exhibits
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Like all marketing expenditures, trade shows need to have
measurable objectives and a budget.
Expenses include:
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Space rental
Hotel
Display booth
Shipping (2-way)
Set-up/dismantle
(union rate)
VCR/PC/internet/phone
Travel
Meals
Entertainment
Give-aways/Catalogs/Brochures to pass out to attendees
Chairs, tables, carpet rental
Pre-show promotion/advertising
Post-show follow-up
(continued)
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Sales Promotion
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Advertising specialty items:
• Desk clocks
• Calendars
• Pens
• Calculator notepads
• Posters
• Desktop business card
• Tape measures holders
• Mugs
• Travel alarm clocks
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If company name is on item that is handy to
buying center influencers, is it effective as
goodwill or as a reminder?
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Winning Sales through
Cooperative Promotion
At Montana State University, Pepsi is out and Coke is in. In a
competitive bid, Coca-Cola has won the five-year contract to be the
exclusive soft drink supplier for the entire MSU campus. To win the
contract, Coke offered the school a combination of cash payments
and value through cooperative promotion.
These promotions included:
• $250,000/year payments plus a commission on sales
• Cooperative marketing program including radio advertising
• New soccer field scoreboard and ice machine
• Coke cans across the region to carry MSU logo
• Off-campus vending machines with MSU logo, plus
commission on those sales
• (From Marketing News, November 8, 1999, p. 9.)
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Developing and Implementing the
Promotional Mix
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Business Direct and Interactive Marketing
• Business-to-business direct marketing is big
business—approximately $1 trillion/year.
• Types
 Direct mail
 Telemarketing
 e-mail/Internet
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Step 4: Measuring the Effectiveness of the
Business Promotion Campaign
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Pretesting and Posttesting
Responses to Business Advertising
Effectiveness can be hard to measure
without investment in market research
And how do you measure branding?
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Step 5: Following up and Making
Necessary Changes
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Set good objectives
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Quantifiable
Specify target market
Realistic/attainable
Specify time frame
Put measurement tools in place
Provide quick feedback loop to relevant
parties
This is otherwise known as the “control” process.
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