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B2B Advertising

B2B Advertising. The Role of Advertising. Integrated Communication Programs. Enhancing Sales Effectiveness. Increased Sales Efficiency. Creating Awareness. Interactive Marketing Communications. Advertising Cannot. Substitute for effective personnel selling.

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B2B Advertising

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  1. B2B Advertising

  2. The Role of Advertising • Integrated Communication Programs. • Enhancing Sales Effectiveness. • Increased Sales Efficiency. • Creating Awareness. • Interactive Marketing Communications.

  3. Advertising Cannot • Substitute for effective personnel selling. • Advertising alone cannot create product preference.

  4. The Decision Stages for Developing the Business-to-Business 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.

  5. 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

  6. 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

  7. 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.

  8. 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.

  9. Developing the Message • Perception • Focus on Benefits • Understanding Buyer Motivations

  10. Organizing the Sales Force

  11. 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

  12. A Simple Line Organization

  13. A Two-Level Line Organization

  14. Line Organizations • Characteristics • Authority/responsibility for planning/implementing sales activities lie in hands of sales manager. • Each person has only one boss.

  15. 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.

  16. 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.

  17. Line Organizations • Implications • Best used by small organizations where operations can be clearly divided into basic functions of sales, finance, and production.

  18. 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.

  19. A Line & Staff Organization

  20. 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

  21. 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

  22. 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.

  23. A Functional Organization

  24. 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.

  25. 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.

  26. 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

  27. 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

  28. 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.

  29. Line Organization Structured by Sales Activities

  30. 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.

  31. 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

  32. 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

  33. Line Organization Structured by Geographic Area

  34. 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

  35. 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

  36. Organizing by Products • Characteristics • Sales force is reorganized on a product basis • Salespeople specialize in particular products carried by the sales organization

  37. Sales Force Organized by Products

  38. 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

  39. 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

  40. 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

  41. Organizing by Customers • Characteristics • Sales force is reorganized on a customer basis • Salespeople specialize in selling to/ servicing particular customer types

  42. Sales Force Organized by Customers

  43. 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

  44. 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

  45. 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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