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B2B Advertising The Role of Advertising 1 Integrated Communication Programs 2 Enhancing Sales Effectiveness 3 Increased Sales Efficiency 4 Creating Awareness 5 Inter

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B2B Advertising The Role of Advertising 1 Integrated Communication Programs 2 Enhancing Sales Effectiveness 3 Increased Sales Efficiency 4 Creating Awareness 5 Inter Powered By Docstoc
					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.
   The Decision Stages for      Advertising is only
 Developing the Business-to-     one aspect of the
Business Advertising Program
                                 entire marketing
                                 strategy.
                                The advertising
                                 decision process
                                 begins with the
                                 formulation of
                                 advertising
                                 objectives.
                                Equally important is
                                 the evaluation and
                                 selection of the
                                 media.
        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
       Setting Ad Budgets:
     Commonly Used Methods
       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.
 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

                Sales Manager


Salesperson A   Salesperson B   Salesperson C
A Two-Level Line Organization
                Sales Manager


  Region A        Region B        Region C
Sales Manager   Sales Manager   Sales Manager


 Salesperson     Salesperson     Salesperson
           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
                            Sales Manager

                Market Forecaster



  Region A          Region B           Region C      Training Director
Sales Manager     Sales Manager      Sales Manager


 Salespeople       Salespeople        Salespeople
   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
                                Sales Manager


  Region A        Region B      Training Director     Region C      Market Forecaster
Sales Manager   Sales Manager                       Sales Manager


 Salespeople     Salespeople                         Salespeople
      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
                                Sales Manager


    Account Development                     Account Maintenance
         Manager                                 Manager


Salesperson A   Salesperson B   Salesperson C   Salesperson D   Salesperson E
  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
                               N a tio n a l
                          S a le s M a n a g e r


W e s te rn R e g io n    C e n tra l R e g io n      E a s te rn R e g io n
S a le s M a n a g e r    S a le s M a n a g e r      S a le s M a n a g e r


D a lla s D iv is io n   C h ic a g o D iv is io n   N e w Y o rk D iv is io n
S a le s M a n a g e r    S a le s M a n a g e r       S a le s M a n a g e r


  S a le s p e o p le       S a le s p e o p le          S a le s p e o p le
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
                       Sales Manager


Advertising     Product A         Product B     Marketing Services
 Manager      Sales Manager     Sales Manager       Manager


                Product A         Product B
               Salespeople       Salespeople
       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

                        Industrial                                           Retail
                      Sales Manager                                      Sales Manager


Industrial Manager   Industrial Manager   Industrial Manager   Retail Manager     Retail Manager
      Farms             Construction            Mining          JC Penney's           Sears
      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

				
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