Business Marketing Communications: Advertising and Sales Promotion

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Chapter 15 Business Marketing
Communications Advertising and Sales Promotion
PowerPoint by Ray A. DeCormier, Ph.D. Central
Connecticut State University
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Introduction
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• 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.

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Most Important Component
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• Due to
• 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! ?

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Other Non-Personal Components
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• 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 dont close deals as well as
  personal selling!

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Advertisings Role
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• 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

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Integrated Communication Programs
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• 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!

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Enhancing Sales Effectiveness
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• 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 dont advertise.
• Profits and gross margins also increase when
  advertising is employed.

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Increased Sales Efficiency
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• Advertising increases efficiency in two ways
• Serves as a reminder
• Informs the market about new products/developments
  
• Advertising is pennies when compared to 100s
  for a sales call.

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Creating Awareness
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• Business advertising creates
• Awareness
• Brand preference
• Conviction that a brand will meet their
  requirements hopefully
• Facilitate purchase

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What B2B Advertising Cant Do!
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• Effective B2B communication needs to be
  integrated among all media methods however, it
  does have its limitations. It
• Cannot create product preference for many
  products.
• Cannot close a sale!
• Cannot substitute for personal selling.
• Can supplement personal selling but not replace
  it.

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Decision Stages
The Decision Stages Developing
Business-to-Business Advertising Program
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• 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
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Defining Advertising Objectives
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• Marketing managers realize
• Advertisings mission flows directly from the
  overall marketing strategy.
• Advertisings job is to
• Create awareness
• Provide information
• Influence attitudes
• Remind buyers about product and company

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Top B2B Advertisers
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Table 15.1
Company Total Advertising Expenditures (in millions)
ATT 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.
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Dysfunctional Advertising Policies
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• Advertisings 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?

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Objective-Task Method
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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.

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Problem with Advertising
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• 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.

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Passing the Threshold
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• 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.

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Developing B2B Advertising Message
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• Determine advertising objectives.
• Evaluate target audiences buying criteria.
• Analyze most appropriate language, format and
  style to present message.
• Then consider the message!

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Perception, Perception, Perception
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• 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 persons attention,
• Be interpreted properly.
• For example, techies respond to technical ads
  and non-techies respond better to non-technical
  ads.

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Benefits
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• Industrial buyers focus on solutions to business
  problems that considers
• A better way to accomplish tasks
• A less expensive way to manufacture something
• A new approach to either make or save the company
  money
• A different way to free up time

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Shifting of Advertising to Digital Form
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• 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.

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Use of Search Engines
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• 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
• 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

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Direct Mail
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• Direct Mail is commonly used for
• Image, product and service promotion
• Sales force support by providing leads
• Distribution channel communications
• Getting pertinent information directly to
  influencials
• Direct mail is efficient providing the list is
  good.
• Much direct mail is considered junk mail.

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Direct E-Mail
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• 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

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Measuring Effectiveness
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• 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-of-mouth and understood perceptions.

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Evaluating Advertising
Five Primary Areas for Evaluating Advertising
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• Sound measurement program entails substantial
  advanced planning.
• The advertising strategist must determine
• What is to be measured
• How to measure it
• In what sequence
• Establish benchmarks in pre-evaluation phase

Figure 15.2
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Web Metrics
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• Define communication objectives.
• Desired action Does ad drive visitors to Web
  site to view an online video or download
  information?
• B2B marketers need to know which key terms
  results in a click-through.

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Evaluation Measures include
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• Knowledge
• Recognition
• Recall
• Awareness
• Preference
• Motivation
• It is not always possible to measure effects on
  actual sales.

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Trade Shows
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• 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.

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Trade Shows Strategy Benefits
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• 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.

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Trade Show Objectives
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1. Discover decision influencers.
2. Identify potential customers.
3. Provide company product, service and information.
4. Try to discover product application problems.
5. Create sales.
6. Handle customer problems.
7. Build corporate image.
8. Gather competitive intelligence.
9. Enhance sales force morale.

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Lead Generation
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• 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.
• Its just a way of life.

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Preparing for the Trade Show
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• 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.

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Trade Show Traffic Flow
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• Flows
  Tactical Activities

Show Attendees
Pre-Show At-Show Impersonal Promotional Activiti
es
Target Audience
Attracted To Booth
Personal Promotional Activities
Contact w/Salesperson
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
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Measuring the Success
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• Companies need to set measurable goals in advance
  of the trade show including
• Number of leads
• Likely effect on sales
• Potential effect on new accounts
• Effect on corporate image
• Expenditures that tie into an adequate ROI