B2B Advertising
The Role of Advertising
1.
2.
3.
4.
Integrated Communication Programs.
Enhancing Sales Effectiveness.
Increased Sales Efficiency.
Creating Awareness.
Advertising
• Cannot be a Substitute for
effective personnel selling.
• Cannot, by itself, create
product preference.
The Decision Stages for
Developing the Business-toBusiness Advertising Program
 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.
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 buying criteria of target
audience.
• Analyze most appropriate language
for presenting message.
Organizing the Sales Force
Typical Methods of Organizing
the Sales Force
• Line Organizations (& Line/Staff)
• Functional 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
Sales Manager
Region B
Sales Manager
Region C
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
Sales Manager
Region B
Sales Manager
Region C
Sales Manager
Salespeople
Salespeople
Salespeople
Training Director
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
Sales Manager
Region B
Sales Manager
Salespeople
Salespeople
Training Director
Region C
Sales Manager
Salespeople
Market Forecaster
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
• 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
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
Manager
Salesperson A
Salesperson B
Account Maintenance
Manager
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
S a le s M a n a g e r
C e n tra l R e g io n
S a le s M a n a g e r
E a s te rn R e g io n
S a le s M a n a g e r
D a lla s D iv is io n
S a le s M a n a g e r
C h ic a g o D iv is io n
S a le s M a n a g e r
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 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
Manager
Product A
Sales Manager
Product B
Sales Manager
Product A
Salespeople
Product B
Salespeople
Marketing Services
Manager
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
Sales Manager
Industrial Manager
Farms
Industrial Manager
Construction
Retail
Sales Manager
Industrial Manager
Mining
Retail Manager
JC Penney's
Retail Manager
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