B2B Advertising. The Role of Advertising 1.Integrated Communication Programs. 2.Enhancing Sales...
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Transcript of B2B Advertising. The Role of Advertising 1.Integrated Communication Programs. 2.Enhancing Sales...
B2B Advertising
The Role of Advertising
1. Integrated Communication Programs.
2. Enhancing Sales Effectiveness.
3. Increased Sales Efficiency.
4. Creating Awareness.
5. Interactive Marketing Communications.
Advertising Cannot
• Substitute for effective personnel selling.
• Advertising alone cannot create product preference.
Advertising is only one aspect of the entire marketing strategy.
The advertising decision process begins with the formulation of advertising objectives.
Equally important is the evaluation and selection of the media.
The Decision Stages for Developing the Business-to-
Business Advertising Program
Setting Ad Budgets:Commonly Used Methods
Percentage of Sales• Allocate some percent of sales to
advertising.
• Makes advertising a consequence rather than a determinant of sales and profits.
• Useful only if possess VALID historical data
• Most commonly used method
Setting Ad Budgets:Commonly Used Methods
Affordability Method
• Firm spends on advertising what it has available to spend
• Good cash flow control
• Most common with small firms
• Sales drive the advertising
Objective-Task Method• An attempt to relate advertising costs to
the objective it is to accomplish.
• Focuses on the communications effects of advertising, not on the sales effects.
• Generally considered the “best” method.
Setting Ad Budgets:Commonly Used Methods
Developing the B2B Advertising Message
• Determine advertising objectives.
• Evaluate the buying criteria of the target audience.
• Analyze the most appropriate language for presenting the message.
Developing the Message
•Perception
•Focus on Benefits
•Understanding Buyer Motivations
Organizing the Sales Force
Typical Methods of Organizing the Sales Force
• Line Organizations (& Line/Staff)
• Functional Organizations
• Centralized vs. Decentralized Organizations
• Specialization Organization– Sales Activities– Geographic Areas– Products– Customers
A Simple Line Organization
S a lesp erson A S a lesp erson B S a lesp erson C
S a les M an ag er
A Two-Level Line Organization
S a lesp erson
R eg ion AS a les M an ag er
S a lesp erson
R eg ion BS a les M an ag er
S a lesp erson
R eg ion CS a les M an ag er
S a les M an ag er
Line Organizations• Characteristics
– Authority/responsibility for planning/implementing sales activities lie in hands of sales manager.
– Each person has only one boss.
Line Organizations• Advantages
– Very simple to understand and use.– Easy to trace accountability.– Relatively inexpensive (only a few highly-paid
executives are necessary)– Quick action possible since decision-making is in
hands of relatively few people.
Line Organizations• Disadvantages
– As organization size increases, problems become more complex.
– Specialized skills often needed.– Many sales managers cannot keep on top of all
functions that relate to sales.– Lack of trained replacements.
Line Organizations• Implications
– Best used by small organizations where operations can be clearly divided into basic functions of sales, finance, and production.
Line and Staff Organizations• Characteristics
– Same as line organization except staff positions added
– Staff positions don’t have authority over line positions
• Advantages– Staff provide sales manager with specialized skills– Allows sales manager to be more efficient/ effective.– Doesn’t dilute his/her authority/contact
w/salespeople.
A Line & Staff Organization
M arke t F orecas te r
S a lesp eop le
R eg ion AS a les M an ag er
S a lesp eop le
R eg ion BS a les M an ag er
S a lesp eop le
R eg ion CS a les M an ag er
Tra in in g D irec to r
S a les M an ag er
Line and Staff Organizations• Disadvantages
– Can be more expensive than a line organization.– Conflicts may arise between line & staff
executives.– Staff executives may attempt to exert authority
over line personnel.– Line executives may ignore the counsel of the
staff
Line and Staff Organizations• Implications
– If sales managers find themselves spending less time working with subordinates and more time performing planning & evaluating functions, may want to consider this organization
Functional Organizations• Characteristics
– Organization divided by function.– Functional specialists have line authority.– Salespeople report to multiple bosses.
• Advantages– Specialist ensure their functions are carried out.– Should improve performance in each functional
area due to the specialization.
A Functional Organization
S a lesp eop le
R eg ion AS a les M an ag er
S a lesp eop le
R eg ion BS a les M an ag er
Tra in in g D irec to r
S a lesp eop le
R eg ion CS a les M an ag er
M arke t F orecas te r
S a les M an ag er
Functional Organizations• Disadvantages
– Breakdown in the unity of command due to conflicting orders
– Each salesperson is no longer accountable to only one boss
• Implications– Typically used in large firms that feature
numerous functions and that have the need for several specialists.
Centralized vs. Decentralized?
Factors That Influence• Costs
– Decentralized can be expensive due to duplication
– Expenses increase as the numbers at each location increase in terms of specialists, inventory, and service facilities
– Can offset with lower delivery costs, greater customer satisfaction or a higher sales volume.
Centralized vs. Decentralized?
Factors That Influence• Size of Sales Force
– As sales force size increases, the need to decentralize increases.
– Span-of-control problems emerge– More field managers will be necessary– Decentralization more feasible
Centralized vs. Decentralized?
Factors That Influence• Geographic Size of Market
– As size of market grow geographically, need for decentralization increases
– More difficult to efficiently/effectively supervise sales activities from central location
– Sales expenses increase; such as transportation, lodging, and meals
– Supervisors have less opportunities to work with individual salespeople
Organizing by Sales Activities• Characteristics
– Usually employ simple line organizations– Separate selling functions (present account
maintenance and new account development)
• Advantages– Allows salespeople to become proficient in their
respective sales functions.– Places special emphasis on searching out and
selling new accounts.
Line Organization Structured by Sales Activities
S alesp erson A S a lesp erson B
A ccou n t D eve lop m en tM an ag er
S a lesp erson C S a lesp erson D S a lesp erson E
A ccou n t M a in ten an ceM an ag er
S a les M an ag er
Organizing by Sales Activities• Disadvantages
– Customers may resent being turned over to a different salesperson.
– Salespeople may want to cultivate the accounts they have developed.
Organizing by Sales Activities• Implications
– Use when there is a large turnover of customers– Use when there is a significant difference in the
skills needed in each separate area– Use when fast growth through new account
acquisition is deemed necessary
Organizing by Geographic Areas• Characteristics
– Sales force is reorganized on a geographic basis– Salespeople sell all the company’s present
products to all customers within their assigned territories
Line Organization Structured by Geographic Area
S alesp eop le
D a llas D ivis ionS a les M an ag er
W es tern R eg ionS a les M an ag er
S a lesp eop le
C h icag o D ivis ionS a les M an ag er
C en tra l R eg ionS a les M an ag er
S a lesp eop le
N ew Y ork D ivis ionS a les M an ag er
E as te rn R eg ionS a les M an ag er
N ation a lS a les M an ag er
Organizing by Geographic Areas• Advantages
– Salespeople and managers become more familiar with their territories
– Local problems may be solved more quickly– Sales force can rapidly react to changes in the
local competitive environment– Can provide better service at lower cost– Lower chance for customer confusion
Organizing by Geographic Areas
• Disadvantages– Diversity/magnitude of product line may limit
salesperson’s knowledge of any one product– Duplication of overhead expense– Greater level of salesperson control (which
products to push, which customers to service)
• Implications– Best used if product line is relatively
homogeneous– Best used if customers are widely dispersed
Organizing by Products• Characteristics
– Sales force is reorganized on a product basis– Salespeople specialize in particular products
carried by the sales organization
Sales Force Organized by Products
A d vertis in gM an ag er
P rod u c t AS a lesp eop le
P rod u c t AS a les M an ag er
P rod u c t BS a lesp eop le
P rod u c t BS a les M an ag er
M arke tin g S ervicesM an ag er
S a les M an ag er
Organizing by Products• Advantages
– Each product line receives a higher degree of specialized attention
– Allows for decentralization of both authority & responsibility for each product line
– Allows decisions to be made closer to the problems with any particular product line
Organizing by Products• Disadvantages
– If specialization occurs above salesperson level, additional overhead expense may be suffered.
– More than 1 salesperson may be calling on customers
– Difficult to maintain a consistent image
Organizing by Products• Implications
– Best used if product line is relatively heterogeneous
– Best used if have a wide variety of customers with quite different needs
– Best used if products are technically complex– Broad, in-depth knowledge of product essential
for the sales task
Organizing by Customers• Characteristics
– Sales force is reorganized on a customer basis– Salespeople specialize in selling to/ servicing
particular customer types
Sales Force Organized by Customers
In d u s tria l M an ag erF arm s
In d u s tria l M an ag erC on s tru c tion
In d u s tria l M an ag erM in in g
In d u s tria lS a les M an ag er
R eta il M an ag erJC P en n ey's
R eta il M an ag erS ears
R eta ilS a les M an ag er
Organizing by Customers• Advantages
– Most consumer oriented approach– Organization of sales force is based on customer
needs– Control remains at the management level (which
customers to call on, etc)– Allows salespeople to specialize in customer
needs
Organizing by Customers• Disadvantages
– Potential for overlapping territories is high– Hence, overhead costs may rise– Salespeople must become knowledgeable about
company’s entire line of products
Organizing by Customers• Implications
– Customers in a given market buy several different products/lines from single supplier
– Same buying factors apply across product lines– Significant proportion of income is derived from
a small number of accounts who require high service levels