CHAPTER 11

ADVERTISING AND SALES PROMOTION STRATEGY

Important Topics of This ChapterBusiness Vs Consumer Promotion StrategyTypes of Business promotionSetting Goals and Objectives for Business Promotion PlansCreating a Promotion Plan for Business marketPromotional Budgeting TechniquesImplementation of Promotion Mix: Media selectionRole of Advertising Agencies in Business MarketBusiness PublicityTrade Shows and ExhibitsMeasuring the Effectiveness of Business Promotion Campaign

Business Vs Consumer Promotional Strategy

Very important to communicate with buyers

Major emphasis on personal selling

Major media are trade journals, direct mail and industrial/business directories

Advertising aimed at professional buyers

Packaging is for protection

Large budget with personal selling efforts

Partnership/alliances are more important

The Goals of Business Promotion

Building awareness

Inducing trial

Increasing market share

Stimulating sales

Buying space with distributor

Intensifying usage

Aiding the sales staff

Confirming purchase decision

Setting Objectives for Business-to-Business Promotion Plans

Marketing professionals are responsible for strategically setting marketing mix (4Ps), and that includes details of each element. In the case of promotion “P,” that responsibility includes setting details of promotion mix. As presented in Chapter 10 (Selling), business-to-business promotion relies heavily on personal selling. Why is that? The majority of our efforts and resources for business-to-business promotion typically go to personal sales. Some of the reasons include:

Need to develop personal relationship and trust.Complexity of product or service.Need for early supplier involvement in development stage.Great importance of customer satisfaction.Continuous need for customer-need monitoring and communication.

Setting Objectives for Business-to-Business Promotion Plans

But business marketers do utilize other promotion mix elements, often to support personal selling.Advertising, publicity, and sales promotion support personal selling by:

Creating awarenessGenerating leadsReinforcing company imageCreating interestReaching buying center influencers previously unidentified or inaccessible to salesperson

It is probably fair to say that most business-to-business marketers are more expert with personal selling element of promotion mix than with its advertising, publicity, and sales promotion elements.That makes this chapter all the more important!

Creating a Promotional Plan for Business Markets

Setting Objectives• sales• Market share• ROI

Developing a budgetImplementing the Promotional Mix

• Business Advertising: Product appeal. Greater emphasis on direct mail.. Print media. Broadcast media. Greater emphasis on personal selling. Internet and Web page communication.

Promotional Strategy in Business Marketing

Personal Selling

Advertising

Sales Promotion-trade shows, catalogs, POP

Publicity and public relations

Sales Promotion

Advertising specialty items:Calendars

Pens

Posters

Tape measures

Mugs

If company name is on item that is handy to buying center influencers, is it effective as goodwill or as a reminder?

– Desk clocks– Calculator notepads– Desktop business card holders– Travel alarm clocks

Steps in Creating a Promotional Plan in Business Market

Setting objectivesDeveloping promotional budgetDeveloping and implementing promotional mixMeasuring effectiveness of promotional programFollowing up and modifying promotional campaign, if necessary

Effective promotion helps sales; ineffective promotion can waste money and even damage company image.

Promotional Budget-Setting Techniques

Percentage of anticipated sales

Affordable/Arbitrary (most common)

Competitive parity/Market share

Objective-and-task (most common)

Implementing Promotion Mix: Media Selection

Advertising: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

Ad’s connection to customer’s buying and adoption process should be clear.

• A good ad: 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

Implementing Promotion Mix: Media Selection (cont.)

Print Media• Horizontal Publications-have similar functions

Industrial Maintenance and Plant Operations

• Vertical Publications-deals with single industry Frozen Food Field, Mechanical Contractor

• Professional Publications Medical and Engineering Journals

• Industrial Trade Directories Thomas Register of American Manufacturers

• General Business Publications Fortune, Business Week, The Wall Street Journal

Implementing Promotion Mix: Media Selection: Print Media

Publication Type

Horizontal

Vertical

Professional

Industrial

General Business

Examples

Design Engineering,Purchasing

Chemical Industry News,Mechanical Contractor

Architectural Digest,Dental Technology

Thomas Register of American Manufacturers

Fortune, Business Week

Implementing Promotion Mix: Media Selection (cont.)

Broadcast Media• It is popular in recent years

Direct Marketing• Cost effective• Targeting the right customers

Direct mail Data sheets Business catalogues Telemarketing

Media selection: Broadcast Media

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.

Broadcast media would not be likely vehicle if products were only used by a few companies in target area (which is often the case).

Media Selection: Direct Marketing

Business-to-business direct marketing is big business-Approximately $1 trillion/year.

Types:Direct mail

Telemarketing

E-mail/Internet

Role of Advertising Agencies in Business Market

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. 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?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.

Role of Advertising Agencies in Business Market (cont.)

Many business marketers don’t formally test advertising effectiveness (as strange as that may seem!).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.Some marketers are asking agencies to accept payment based on ad and campaign performance (pre- and post-testing). Agencies are resisting.

Business Publicity

Press Releases

Exclusive Features

Press Conference

Press Kits

Business Publicity (cont.)Publicity can:

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.

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.

Business Publicity (cont.)

Techniques for getting in the news:Press releases

Exclusive features

Press conferences

Press kits

Getting free publicity is nice, but it leaves you at mercy of poor placements, poor wording, or intentional negative spin. Use it with caution.

Trade Shows and ExhibitsTrade shows are often large component of total business marketing promotion budget allocation (behind personal selling and, possibly, trade journal advertising).Trade shows (large and small, industry-specific and general) are regularly scheduled in cities all across the world.COMDEX, the U.S. computer industry trade show, brings together 2,200+ companies and 220,000 attendees.

Trade Shows and ExhibitsLike all marketing expenditures, trade shows need to have measurable objectives and a budget.Using your business judgment, estimate the costs for a company in your area to exhibit at the annual “Manufacturing Week” trade show in Chicago. Expenses include:

Space rental– Hotel– Display booth– Shipping (2-way)– Set-up/dismantle

(union rate)

– Air travel for four– VCR– Meals– Entertainment– Catalogs to pass out to attendees– Chairs, tables, carpet rental

Trade Shows and Exhibits

Measuring the Effectiveness of Business Promotion Campaign

Pre-testing: • Measuring the awareness

Post-testing:• Aided recall• Unaided recall• Recognition• Comprehension• Believability• Brand awareness