CHAPTER 11 ADVERTISING AND SALES PROMOTION STRATEGY.
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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
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