CHAPTER 11
ADVERTISING AND SALES
PROMOTION STRATEGY
Important Topics of This Chapter
Business Vs Consumer Promotion Strategy
Types of Business promotion
Setting Goals and Objectives for Business Promotion Plans
Creating a Promotion Plan for Business market
Promotional Budgeting Techniques
Implementation of Promotion Mix: Media selection
Role of Advertising Agencies in Business Market
Business Publicity
Trade Shows and Exhibits
Measuring 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 Businessto-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 Businessto-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 awareness
Generating leads
Reinforcing company image
Creating interest
Reaching 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 budget
Implementing the Promotional Mix
• Business Advertising:
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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 – Desk clocks
– Calculator notepads
Pens
– Desktop business card holders
Posters
– Travel alarm clocks
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?
Steps in Creating a Promotional
Plan in Business Market
Setting objectives
Developing promotional budget
Developing and implementing promotional mix
Measuring effectiveness of promotional
program
Following 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:
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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
Examples
Horizontal
Design Engineering,
Purchasing
Vertical
Chemical Industry News,
Mechanical Contractor
Professional
Architectural Digest,
Dental Technology
Industrial
Thomas Register of
American Manufacturers
General Business
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 Exhibits
Trade 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 Exhibits
Like 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:
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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:
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Aided recall
Unaided recall
Recognition
Comprehension
Believability
Brand awareness