B2b advertising

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B2b advertising

  1. 1. B2B Advertising
  2. 2. The Role of Advertising <ul><li>Integrated Communication Programs. </li></ul><ul><li>Enhancing Sales Effectiveness. </li></ul><ul><li>Increased Sales Efficiency. </li></ul><ul><li>Creating Awareness. </li></ul>
  3. 3. Advertising <ul><li>Cannot be a Substitute for effective personnel selling. </li></ul><ul><li>Cannot, by itself, create product preference. </li></ul>
  4. 4. <ul><li>Advertising is only one aspect of the entire marketing strategy. </li></ul><ul><li>The advertising decision process begins with the formulation of advertising objectives. </li></ul><ul><li>Equally important is the evaluation and selection of the media. </li></ul>The Decision Stages for Developing the Business-to-Business Advertising Program
  5. 5. Setting Ad Budgets: Commonly Used Methods <ul><li>Percentage of Sales </li></ul><ul><li>Allocate some percent of sales to advertising. </li></ul><ul><li>Makes advertising a consequence rather than a determinant of sales and profits. </li></ul><ul><li>Useful only if possess VALID historical data </li></ul><ul><li>Most commonly used method </li></ul>
  6. 6. Setting Ad Budgets: Commonly Used Methods <ul><li>Affordability Method </li></ul><ul><li>Firm spends on advertising what it has available to spend </li></ul><ul><li>Good cash flow control </li></ul><ul><li>Most common with small firms </li></ul><ul><li>Sales drive the advertising </li></ul>
  7. 7. <ul><li>Objective-Task Method </li></ul><ul><li>An attempt to relate advertising costs to the objective it is to accomplish. </li></ul><ul><li>Focuses on the communications effects of advertising, not on the sales effects. </li></ul><ul><li>Generally considered the “best” method. </li></ul>Setting Ad Budgets: Commonly Used Methods
  8. 8. Developing the B2B Advertising Message <ul><li>Determine advertising objectives. </li></ul><ul><li>Evaluate buying criteria of target audience. </li></ul><ul><li>Analyze most appropriate language for presenting message. </li></ul>
  9. 9. Organizing the Sales Force
  10. 10. Typical Methods of Organizing the Sales Force <ul><li>Line Organizations (& Line/Staff) </li></ul><ul><li>Functional Organizations </li></ul><ul><li>Specialization Organization </li></ul><ul><ul><li>Sales Activities </li></ul></ul><ul><ul><li>Geographic Areas </li></ul></ul><ul><ul><li>Products </li></ul></ul><ul><ul><li>Customers </li></ul></ul>
  11. 11. A Simple Line Organization
  12. 12. A Two-Level Line Organization
  13. 13. Line Organizations <ul><li>Characteristics </li></ul><ul><ul><li>Authority/responsibility for planning/implementing sales activities lie in hands of sales manager. </li></ul></ul><ul><ul><li>Each person has only one boss. </li></ul></ul>
  14. 14. Line Organizations <ul><li>Advantages </li></ul><ul><ul><li>Very simple to understand and use. </li></ul></ul><ul><ul><li>Easy to trace accountability. </li></ul></ul><ul><ul><li>Relatively inexpensive (only a few highly-paid executives are necessary) </li></ul></ul><ul><ul><li>Quick action possible since decision-making is in hands of relatively few people. </li></ul></ul>
  15. 15. Line Organizations <ul><li>Disadvantages </li></ul><ul><ul><li>As organization size increases, problems become more complex. </li></ul></ul><ul><ul><li>Specialized skills often needed. </li></ul></ul><ul><ul><li>Many sales managers cannot keep on top of all functions that relate to sales. </li></ul></ul><ul><ul><li>Lack of trained replacements. </li></ul></ul>
  16. 16. Line Organizations <ul><li>Implications </li></ul><ul><ul><li>Best used by small organizations where operations can be clearly divided into basic functions of sales, finance, and production. </li></ul></ul>
  17. 17. Line and Staff Organizations <ul><li>Characteristics </li></ul><ul><ul><li>Same as line organization except staff positions added </li></ul></ul><ul><ul><li>Staff positions don’t have authority over line positions </li></ul></ul><ul><li>Advantages </li></ul><ul><ul><li>Staff provide sales manager with specialized skills </li></ul></ul><ul><ul><li>Allows sales manager to be more efficient/ effective. </li></ul></ul><ul><ul><li>Doesn’t dilute his/her authority/contact w/salespeople. </li></ul></ul>
  18. 18. A Line & Staff Organization
  19. 19. Line and Staff Organizations <ul><li>Disadvantages </li></ul><ul><ul><li>Can be more expensive than a line organization. </li></ul></ul><ul><ul><li>Conflicts may arise between line & staff executives. </li></ul></ul><ul><ul><li>Staff executives may attempt to exert authority over line personnel. </li></ul></ul><ul><ul><li>Line executives may ignore the counsel of the staff </li></ul></ul>
  20. 20. Line and Staff Organizations <ul><li>Implications </li></ul><ul><ul><li>If sales managers find themselves spending less time working with subordinates and more time performing planning & evaluating functions, may want to consider this organization </li></ul></ul>
  21. 21. Functional Organizations <ul><li>Characteristics </li></ul><ul><ul><li>Organization divided by function. </li></ul></ul><ul><ul><li>Functional specialists have line authority. </li></ul></ul><ul><ul><li>Salespeople report to multiple bosses. </li></ul></ul><ul><li>Advantages </li></ul><ul><ul><li>Specialist ensure their functions are carried out. </li></ul></ul><ul><ul><li>Should improve performance in each functional area due to the specialization. </li></ul></ul>
  22. 22. A Functional Organization
  23. 23. Functional Organizations <ul><li>Disadvantages </li></ul><ul><ul><li>Breakdown in the unity of command due to conflicting orders </li></ul></ul><ul><ul><li>Each salesperson is no longer accountable to only one boss </li></ul></ul><ul><li>Implications </li></ul><ul><ul><li>Typically used in large firms that feature numerous functions and that have the need for several specialists. </li></ul></ul>
  24. 24. Centralized vs. Decentralized? Factors That Influence <ul><li>Size of Sales Force </li></ul><ul><ul><li>As sales force size increases, the need to decentralize increases. </li></ul></ul><ul><ul><li>Span-of-control problems emerge </li></ul></ul><ul><ul><li>More field managers will be necessary </li></ul></ul><ul><ul><li>Decentralization more feasible </li></ul></ul>
  25. 25. Organizing by Sales Activities <ul><li>Characteristics </li></ul><ul><ul><li>Usually employ simple line organizations </li></ul></ul><ul><ul><li>Separate selling functions (present account maintenance and new account development) </li></ul></ul><ul><li>Advantages </li></ul><ul><ul><li>Allows salespeople to become proficient in their respective sales functions. </li></ul></ul><ul><ul><li>Places special emphasis on searching out and selling new accounts. </li></ul></ul>
  26. 26. Line Organization Structured by Sales Activities
  27. 27. Organizing by Sales Activities <ul><li>Disadvantages </li></ul><ul><ul><li>Customers may resent being turned over to a different salesperson. </li></ul></ul><ul><ul><li>Salespeople may want to cultivate the accounts they have developed. </li></ul></ul>
  28. 28. Organizing by Sales Activities <ul><li>Implications </li></ul><ul><ul><li>Use when there is a large turnover of customers </li></ul></ul><ul><ul><li>Use when there is a significant difference in the skills needed in each separate area </li></ul></ul><ul><ul><li>Use when fast growth through new account acquisition is deemed necessary </li></ul></ul>
  29. 29. Organizing by Geographic Areas <ul><li>Characteristics </li></ul><ul><ul><li>Sales force is reorganized on a geographic basis </li></ul></ul><ul><ul><li>Salespeople sell all the company’s present products to all customers within their assigned territories </li></ul></ul>
  30. 30. Line Organization Structured by Geographic Area
  31. 31. Organizing by Geographic Areas <ul><li>Advantages </li></ul><ul><ul><li>Salespeople and managers become more familiar with their territories </li></ul></ul><ul><ul><li>Local problems may be solved more quickly </li></ul></ul><ul><ul><li>Sales force can rapidly react to changes in the local competitive environment </li></ul></ul><ul><ul><li>Can provide better service at lower cost </li></ul></ul><ul><ul><li>Lower chance for customer confusion </li></ul></ul>
  32. 32. Organizing by Geographic Areas <ul><li>Disadvantages </li></ul><ul><ul><li>Diversity/magnitude of product line may limit salesperson’s knowledge of any one product </li></ul></ul><ul><ul><li>Duplication of overhead expense </li></ul></ul><ul><ul><li>Greater level of salesperson control (which products to push, which customers to service) </li></ul></ul><ul><li>Implications </li></ul><ul><ul><li>Best used if product line is relatively homogeneous </li></ul></ul><ul><ul><li>Best used if customers are widely dispersed </li></ul></ul>
  33. 33. Organizing by Products <ul><li>Characteristics </li></ul><ul><ul><li>Sales force is reorganized on a product basis </li></ul></ul><ul><ul><li>Salespeople specialize in particular products carried by the sales organization </li></ul></ul>
  34. 34. Sales Force Organized by Products
  35. 35. Organizing by Products <ul><li>Advantages </li></ul><ul><ul><li>Each product line receives a higher degree of specialized attention </li></ul></ul><ul><ul><li>Allows for decentralization of both authority & responsibility for each product line </li></ul></ul><ul><ul><li>Allows decisions to be made closer to the problems with any particular product line </li></ul></ul>
  36. 36. Organizing by Products <ul><li>Disadvantages </li></ul><ul><ul><li>If specialization occurs above salesperson level, additional overhead expense may be suffered. </li></ul></ul><ul><ul><li>More than 1 salesperson may be calling on customers </li></ul></ul><ul><ul><li>Difficult to maintain a consistent image </li></ul></ul>
  37. 37. Organizing by Products <ul><li>Implications </li></ul><ul><ul><li>Best used if product line is relatively heterogeneous </li></ul></ul><ul><ul><li>Best used if have a wide variety of customers with quite different needs </li></ul></ul><ul><ul><li>Best used if products are technically complex </li></ul></ul><ul><ul><li>Broad, in-depth knowledge of product essential for the sales task </li></ul></ul>
  38. 38. Organizing by Customers <ul><li>Characteristics </li></ul><ul><ul><li>Sales force is reorganized on a customer basis </li></ul></ul><ul><ul><li>Salespeople specialize in selling to/ servicing particular customer types </li></ul></ul>
  39. 39. Sales Force Organized by Customers
  40. 40. Organizing by Customers <ul><li>Advantages </li></ul><ul><ul><li>Most consumer oriented approach </li></ul></ul><ul><ul><li>Organization of sales force is based on customer needs </li></ul></ul><ul><ul><li>Control remains at the management level (which customers to call on, etc) </li></ul></ul><ul><ul><li>Allows salespeople to specialize in customer needs </li></ul></ul>
  41. 41. Organizing by Customers <ul><li>Disadvantages </li></ul><ul><ul><li>Potential for overlapping territories is high </li></ul></ul><ul><ul><li>Hence, overhead costs may rise </li></ul></ul><ul><ul><li>Salespeople must become knowledgeable about company’s entire line of products </li></ul></ul>
  42. 42. Organizing by Customers <ul><li>Implications </li></ul><ul><ul><li>Customers in a given market buy several different products/lines from single supplier </li></ul></ul><ul><ul><li>Same buying factors apply across product lines </li></ul></ul><ul><ul><li>Significant proportion of income is derived from a small number of accounts who require high service levels </li></ul></ul>

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