Business Marketing Communications:

Advertising and Sales Promotion

Introduction:
Communication with existing and potential customer is vital for firms success
The benefits, problem solution and cost efficiencies of those products must be
effectively communicated to everyone who are influencers
Due to technical complexity of industrial products, number of potential buyers are small
and extensive negotiation process, the primary communication vehicle in industrial
market is SALESPERSON
Non-personal communication like advertising, category, internet, trade show have a
unique effect
To maximize return on promotional spending, industrial firm are developing integrated
marketing campaigns that align marketing communications strategies to strategic
objectives
GEs rebranding effort-more than lighting and appliances like in jet engines, water
technology, health care technology, wind power, security system and financial systems.
The campaign Imagination At Work celebrates the magic of big ideas that highlights
the leading-edge technologies GE has pioneered
Overall objective was aligning our market position with our future and creating a truly
integrating campaign
Had to be global, touch our internal and external constituencies and use as many media
as possible

Role of Advertising
Advertising and sales promotion are rarely used
along
They are intertwined with total communication
strategy including personal selling
Personal and non personal forms of communication
interact to inform key buying influencers
Challenge is to create advertising and sales
promotions strategy that effectively blends with
personal selling in order to meet sale and profit
objectives
Advertising, online media and sales promotion tools
must be integrate to achieve desired results

Enhancing Sales
Effectiveness
Effective advertising can make personal selling more productive
Dollar sales per salesperson call was significantly higher when
customers had been exposed to advertising
In addition to increasing company and product awareness,
research indicates that buyers who had been exposed to supplier's
advertisement rated the supplier's salespeople substantially
higher on product knowledge, service and enthusiasm
Primary role of B2B advertising is to enhance reputation of
supplier
Increases sales efficiency as increases spending on advertising
lead to greater brand awareness for industrial products, which
results into larger market shares and higher profits
Study under controlled experimental design: Gross margins
ranged from 4-6 times higher with advertising than with no
advertising

Increased Sales Efficiency

Effect of advertising on marketing program's overall efficiency is evident
in two ways:
1) Industrial suppliers frequently need to remind actual and potential
buyers of their products or make them are of new products or servicesdone by salespeople but cost of reaching vast group is prohibitive
Carefully targeted advertising extends beyond the salesperson's reach to
indentifying buying influential's
A properly placed advertisement can reach 100s of buying influential's for
few cents each, the average cost of a business sales calls currently more
than $200
Sales cost are determined by sales person's wages, travel and
entertainment cost and fringe benefit costs
If these calls total up to $800 per day and salesperson makes 4 calls per
day, then each call costs $200.
2) Advertising appears to make all selling activities more effective
Advertising interacts effectively will all communication and selling
activities and it can boost efficiency for the entire marketing expenditure.

Create Awareness
From communications standpoint, the Buying process
takes potential buyers sequentially from unawareness of
a product or supplier to awareness, to brand preference,
to conviction that a particular purchase will fulfill their
requirements and ultimately to actual purchase.
Business advertising may also make some contribution
to creating preference for the product-all cost effectively.
Reply Cards-Many people are not aware of company till
they fill these reply cards.
Create cooperate identify or image
HP, IBM, Dell use ads in general business publciations
like Business Week

Interactive Marketing
Communications
Internet makes one way to two-way process marketing
communication that permits markets and consumer to more readily
exchange information
Consumers receive and provide information by navigating websites,
preferences and communicating with business marketers
Marketers can use communication to provide better service to
customers like personalized emails and information, customized
service solutions or links to providers of complementary products and
services
Herman Miller, Official furniture manufacturer provides a room
planner; that website visitor can us to blends various combinations
Internet allows business marketers to create value by customizing
their messages and offering, helping the consumer search for specific
products and gathering information about consumer preference to
improve future products and services by creating new customers

What industrial Advertising cannot

do
To develop an effective communication program, the
marketer must blend all communication fools into an
integrated program, using each tool where it is most
effective
Business marketing has obviously limitations-cannot be
Substitute for effective personnel selling.(it must
supplement, support and complement that effort)
In same way, personal selling is constrained by its cost
Advertising along cannot create product preference-that
requires demonstration, explanation and operational
testing
Conviction and actual purchase can be ensured only by
personal selling

The Decision Stages for Developing the Businessto-Business Advertising Program

Advertising is only one aspect
of the entire marketing strategy
and must be integrated with
other components to achieve
strategic goals.
The advertising decision
process begins with the
formulation of advertising
objectives, which is derived
from marketing goal.
Equally important is the
evaluation and selection of the
media used to reach desired
audience.
Evaluate the campaigns
effectiveness.

Defining Advertising
objectives
What advertising must accomplish enables manager to determine
advertising budget
1. Advertising mission flows directly from overall marketing strategy,
advertising must fulfill a marketing strategy objectives and its goal
must reflect the general aim an purpose of the entire strategy
2. Advertising program's objectives must respond to roles for which
advertising is suited: creating awareness, providing information,
influencing attitudes and reminding buyers of company and product
existence
. An advertising objective must be measurable, realistic and specify what
is to be achieved and when
. Purpose is to have single working direction for everyone involved in
creating, coordinating and evaluating the advertising program
. E.g.: Increase in partner association from 15% to 30%
. Objectives directs managers to create a message related to major
product benefit using media that reaches general contractor
. The objectives provides a way to measure accomplishment (awareness)

Advertising objectives
Industrial advertising objectives bear no direct relationship to specific dollar
sales target
All though dollar sales results would provide a hard measure of advertising
accomplishment
Personal selling, price, product performance and competitive actions have a
more direct relationship to sales levels.
Thus advertising goals are typically stated in terms of communication goals
such as brand awareness, recognition and buyer attitudes
The goals can be measured, it is presumed that achieving them stimulates
sales volume.
Target Audience:
Its Important to specify target audiences
Primary goal of advertising is to reach buying influential's which are
inaccessible to sales people
Each group of buying influential is concerned with distinct product and service
attributes, criteria's
Thus objectives must specify the intended audience and its relevant decision
criteria

Advertising objectives
Creating Strategy statement:
Specific Strategy statement
Once the objectives and targets are established, creative
strategy statement provides guidelines for the company
and the advertising agency on how to position the product
in marketplace I.e.,. How the target market perceives the
product
E.g.: AC-unfavorable product position with regard to
energy efficiency but due to recent product development,
the performance is enhanced, firm might use the following
strategy statement: Our basic creative strategy is to
reposition the product that of reliable air conditioner to
high-performance, energy-efficient air conditioners
All creative efforts-copy, theme, color, etc, should support
this statement

Determine Advertising Expenditure

Industrial marketers use blend of intuition, judgment, experience
and only occasionally, more advanced decision-oriented
technique to determine advertising budgets
Some of the techniques business markets most commonly used
are rules of thumb(past years sales) and objective-task methods
Rules of Thumb: (Percent of Sales)
Allocate some percent of sales to advertising as advertising is
relatively small parts of total marketing budget in industrial
marketing.
Makes advertising a consequence rather than a determinant of
sales and profits and easily give rise to dysfunctional policies
Suggest that industrial advertiser reduce advertising when sales
volume declines, just when increasing advertising may be
appropriate

Determine Advertising Expenditure

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
The objective-task method is applied by evaluating the tasks advertising will
perform, analyze the costs of each task and summing up the total costs to
arrive at a final budget. The process can be divided into 4 steps:
1. Establish specific marketing objectives for the product in terms of such
factors as sales volume, market share, profit contribution and market
segments,
2. Assess the communication functions that must be performed to realize the
marketing objectives and then determine the role of advertising and other
elements of the communication mix in performing these functions
3. Define specific goals for advertising in terms of measurable communication
response required to achieve marketing objective
4. Estimate the budget needed to accomplish the advertising goals
. Here advertising is determinant of those results and not a consequence
. Mangers allocate all funds necessary to accomplish a specific objective rather
than allocating some arbitrary percentage of sales

Determine Advertising Expenditure

Objective-Task Method- Disadvantage:
Management must have some instinct for the proper relationship between
expenditure level and communication response
It is difficult to know what produces a certain level of awareness amongst business
marketing busying influential E.g.: 12 two-page insertions in purchasing magazine
over next six months or 24 insertions over one year is necessary?
Budgeting for advertising must not ignore the political and behavioral aspects of
process.
What actually determines the advertising budgets are power interests in the
company and the political behavior of various parties in the budgeting process
So budget should be made from both technique driven process as well as to
include political activity
Passing the Threshold:
Brand must surpass a threshold level of awareness in market before meaningful
additions can be made in its brand preference share.
Small budget may not allow this as the managers may stop the program
prematurely thus wasting past investor rather than pressing on to pass threshold
awareness level.
Budgeting is so important to advertising effectiveness, managers should
evaluate the tasks required and their costs against industry norms

Developing the Message

Perception
Focus on Benefits
Understanding Buyer Motivations

Developing the Advertising Message

Complex, critical task-highlighting a product attribute that is unimportant to a
particular buying groups is waster of advertising dollars as well opportunity lost
Both appeal and the way it should be communicated is vital for successful
communication
Determine advertising objectives, evaluating buying criteria for target audience and
analyzing the most appropriate language, format, and style for presenting the
message
Perception:
For an advertising to be successful, an individual should first be exposed to it and
pay attention to it
Once attention is caught individual will interpret it as the advertiser intended
Perceptual barriers often prevent a perceiver form perceiving the intended message
Individual is exposed to message but not guaranteed if he or she processes the
message (may read but find a meaning opposite to that advertiser intended)
Two elements of perception: Attention and interpretation
Buyers tend to screen out messages that are inconsistent with their own attitudes,
needs and beliefs and they tend to interpret information in the light of those beliefs
Technical ads

Developing the Advertising Message

Focus on Benefits:
A better way to accomplish some task, a less expensive way to produce a final
product, a solution to a problem or a faster delivery time
Focus on benefits seeked by customer and persuade the reader that advertiser
can deliver them
Direct appeals or calls to action are viewed to be stronger than those with
diffuse or indirect appeal to action
Show them test report, offer product demonstration, direct them to speak
section of website-everyone is busy and if you offer something that expedite to
narrow their search, you were giving them something money cannot buy: free
time
Understanding buyer Motivations:
Which product benefits are important to each group of buying influential's?
No assumption that a standard set of classical buying motives applies in every
purchase situation can be accepted
Many business advertisers do not understand buying motives of important
market segments.
Do extensive marketing research in order to fully delineate the key buying
criteria of each buying influencer in each of the firm's different target segments.

Selecting Advertising media for

Industrial Markets
Media is selected by target audience
the particular purchase-decision
participants to be reached
First decision is whether to use trade
publications, direct mail or both.
Selection of media also involves
budgetary considerations.

Search Engine Marketing at Google:

The Right Message, The Right Time
Awareness stage to retention-e-marketing campaigns, including keyword adverting through
leading internet search engines-Google or Yahoo
As marketing managers face increased pressure on ROI, keyword advertising provides
compelling values it delivers qualified leads in the form of potential customers searching on
terms specifically related to your products and services. You pay only when users lick on your
ads
Keyword advertising provides Lowest average cost-per-lead of any direct marketing methods
Guidelines for successful key word advertising:
1.Ensure that your website is search-crawler friendly by providing a clear hierarchy, text links
and information rich content
2.Understand that relevance to the user is goal: the most successful ads connect customers to
the information or solution they are seeking
3.Create a relevant, targeted keyword list by choosing specific words that accurately reflect
your website and advertised products
4.Write clear and compelling ads that use the keywords and that isolate your unique value
proposition
5.Track results and measure everything:
.Monitor click -through rates to make adjustment to the campaign
.Test different keyword and ad copy
.Use free conversion tracking tools to analyze which keywords are providing the best returns
.Calculate the return on investment

Business Publications
More than 2700 business publications carry industrial advertising for a total exceed
USD 10 billion. E.g.: Drug Discovery and Development, Pharmaceutical Executive ,
Pharmaceutical Technology, Autocar, etc.
Business publications are either horizontal or vertical
Horizontal Publications: are directed at a specific task, technology or function,
whatever the industry. Advertising Age, Purchasing and Marketing News
Vertical Publications: May be read by everyone from floor supervisor to president
within a specific industry E.g.: Chemical Business or Computer Gaming World
Product with limited applications-Vertical
Products with many industries as potential users-Horizontal
Requester Publications-Offer free subscriptions to selected reader-publisher can
select reader in a position to influence buying decisions and offer the free
subscription in exchange for information such as title, function, buying
responsibilities. Thus advertiser can tell whether each publication reaches the
desired audience
Publication choice is predicated on complete understanding of range of purchase
decision participants and of industries where the product is used
Only then can target audience be matched to circulation statements of alternative
business publications

 Characteristics of an Effective Print Ad:

Marketing strategist should emphasize a RATIONAL APPROACH and provide a
clear description of the product and benefits if offers to customers
Effectiveness of ads are enhanced by detailing product quality and
performance information in a concrete and logical manner
Advertising Cost:
Circulation is important criterion in selection of publications, but circulation
must be tempered by cost.
Total advertising cost must be allocated to various advertising tools such as
business publications, sales promotion, direct marketing (mail & email) and
internet advertising--vary with company situation and advertising mission
Allocation of business publication budget among various journals depends on
their relative effectiveness and efficiency , usually measured in cost per
thousand using the following formula:
Cost per thousand=Cost per page/ circulation in thousands
To compare 2 publication by their actual page rate is misleading as
publication with lower circulation is usually less expensive
The cost per thousand circulation should be based on circulation to target
audience and not to total audience.
Some publications are high on cost per thousand basis, they may in face be
cost-effective, with little waster circulation
Some publication have popular website that advertisers can use to create
integrated marketing communications

Frequency and Scheduling of ads

Successful business publication advertisements are
seen by only a small percentage of people who
read the magazine, therefore one-time ads are
generally ineffective
Number of exposures are required before message
sinks in and reading audience varies from month
to month, a schedule of advertising insertions is
required
To build continuity and repetitive value, at least 6
insertions per year may be required in a month
publication and 26-52 insertions (with a minimum
of 13) in weekly publication

Direct Marketing Tools

Direct mail and email
Direct mails delivers the advertising message firsthand to selected individualslike sales introduction letter for a new product to a lengthy brochure or even a
product sample
Direct mail can accomplish all types of advertising functions but its real
contribution is in delivering the message to precisely defined prospect
Direct mail has substantial effect on creating and qualifying customer leads, if
some important rules are strictly followed-always seek permission to send
email and always provide the reception with the ability to opt out
Used for corporate image promotion, product and service promotions sales
force support, distribution channel communication and special marketing
problems
In promoting corporate image-direct mail helps to establish a firm's reputation
of technological leadership
Product adverting by direct mail can put specific product information in hand
of buying influential's
E.g.: UPS-from ground shipping company to a supply chain leader-strong
results, 10.5% response rate with 36% of those respondents buying service

Direct Mail : Benefits and trade-offs

Benefits :
Supports salespeople by providing leads from returned inquired card and paving
way for first sales call
Used effectively to notify potential customers where to find local distributors
Direct mail applies to identifying new customers and markets, meeting competitor
claims and promoting items that are not receiving enough sales support
Direct mail: Trade-offs:
Form cost point of view, direct mail is efficient when compared to other media
It can be wasteful if prospects list are so general that its difficult to find common
denominator among the prospects
It is feasible only if potential buyers can be clearly identified and easily reached
through mail
It is also cost effective in making contact with buying center members
When combined with telemarketing follow-up even inaccessible buying center
members can be exposed to promotional efforts
Gains full attention to reader-so greater impact than trade publication (except for
top executives)
Timing of direct mail advertising is flexible, a new price schedule or new service
innovation can be communicated to the buyer as needed
Easier for buyer to respond-reply post card

Interactive Marketing
Devote larger share of their advertising bus in budgets to online marketing
IBMs customer relationship program, called Focusing on You, rests on
simple but powerful ideas-ask customers what information they want and
give it to them.
By giving customer the choice, IBM learns about customers unique
preferences and is better equipped to tailor product and service information
to that of customer's specific needs
The program relies on email marketing, which is less costly than direct mail.
Email Campaigns have higher response than direct mail campaigns and
results are generated more quickly
Challenge: How customer want to interact with company and really taking
advantage of web and power.. there for self-service
Centralized database
1. CRM software capture data from all corners (Salespersons, call center
employees, marketing managers)
2. Offering an email alert service, email newsletter asking for email addressed
in direct mail campaign and collecting email addresses at trade shows

Measuring Advertising Effectiveness

Rarely get orders from adverting as advertising is done to create awareness,
stimulate loyalty to company or create favorable attitude towards a product
But still advertising programs must be held accountable and marketing managers are
facing increased pressure to demonstrate actual Returns on marketing expenditures
Thus the industrial advertiser must be able to measure results of current advertising
in order to improve future advertising and evaluate the effectiveness of advertising
expenditure against expenditures on other element so marketing strategy
Measuring impact on the purchase decision
To measure effect on what intervenes between the stimulus (advertising) and the
resulting behavior (Purchase decision)
Gauge advertisings ability to move an individual through purchase decision process
Business marketer should measure the indirect communication effects of advertising:
Advertising affects Word-of-mouth communications and such communication lay an
important role in buyer decision making
Advertising indirectly affects buyers on the basis of its effect on overall company
reputation and on the sale force's belief that advertising aids selling
Advertising effectiveness measurement includes procedure for tracking and
measuring advertising's effect on indirection communication effects
Also judged in finally analysis on cost per level of achievement and must be on line
with objectives.

1.

2.

3.

4.

A sound measurement
program entails substantial
advanced planning.
The advertising strategist
must determine;
1.
what is to be measured,
2.
how,
3.
in what sequence.
A pre-evaluation phase is
required to establish a
benchmark. E.g.: To capture
the existing level of
awareness a firms product
enjoys in defined target
market
After advertisement
campaign, its awareness
against this benchmarked is
meaured-5 parameters
Markets, Motives, Messages,
Media, Results

The Primary Areas for

Advertising Evaluation

Evaluation of industrial marketing is demanding and complex and

budgetary constraints are generally the limiting factors
Professional can be called for field research
Evaluations usually measure knowledge, recognition, recall,
awareness, preference and motivation

Trade Shows: Strategy

Benefits
Most industries stage an annual business show or exhibition to display new advances and
technologies in the industry
Typical exhibitor contacts 4-5 potential purchases per hour on the show floor
Opportunity to Publicize a significant contribution to technology or to demonstrate new and
old products
Major expenses (sales force and distributors)
An effective selling message can be delivered to a relatively large and interested audience
at one time.
New products can be introduced to a mass audience.
Customers can get hands-on experience with the product in a one-on-one selling situation.
Potential customers can be identified, providing sales personnel with qualified leads.
General goodwill can be enhanced.
Free publicity is often generated for the company.
Cost is very much lower than cost of making a personal sales call for manyu firms
Exhbition offers excellent cost effective short term method for intorudcing new products in
new forieng markets
To meet buyers directly, observe competiton and gatehr market research data
Entry time from 6 years can be brought down to 6 months by attending foreing trade fairs

Trade-Show Investment
Returns
Research in controlled experiment indicates:
New product sales could be traced tocustomer both attending and not
attending the show, saleas levesl were higher among attendes
Proption fo customers who bough the proudct was highter among those
who had visited booth during the show
Postive return on trade-show investment (23%) based on icnremantal
profits related to the cost of trade shows
Improving Sales Efficiency:
Personal selling and trade shows work together in an integrated
marketing communciations straregy
Follow-up sales efforts generate higher sales productivity when
customers have alreadybeen exposed to the companys prodcut at trade
whow
Return on sales figuers are higher amiong show attendees than non
attendees
Trade shows can be extermely costly and myust be carefully planned


1.
2.
3.
4.
5.

Planning Trade Show

Strategy
To develop an effective
trade-show communications
strategy, managers must address four questions:
What functions should the trade show perform in the
total marketing communications program?
To whom should the marketing effort at trade shows
be directed?
What is the appropriate show mix for the company?
What should the trade show investmentaudit
policy be? How should audits be carried out?
Answering these questions helps managers
crystallize their thinking about target audiences,
about expected results and about how funds should
be allocated

Trade Show Objectives

Generating sales include:
Indentifying decision influencers
Identifying potential customers
Providing product, service and company information
Learning of potential application problems
Creating actual sales
Handling customer problems
Besides selling:
Building corporate image
Gathering competitive intelligence
Enhancing sales force moral
Specific objectives are needed to guide the development of trade-show
strategy and to specify activities of company personnel while there
Once objectives are finalized evaluate the alternative trade shows in
light of target market

Selecting the Show

Which show to participate and how much of promotion budget to spent
Shows frequented by its most important customer segments so marketers have to
solicit ideas form sales people and customers, leading trade show directions or from
web-based trade show searchable database-www.exhibitnet.com
Exhibit Surveys, Inc., a company that surveys trade shows audiences-developed
two importance measures-Net buying influences and total buying Plans.
Net Buying Influences
Measures the percentage of the show audience that has decision authority for the
types of products being exhibited.
Total Buying Plan
Measures the percentage of the audience planning to buy the products being
exhibited with the next 12 months.
Many firms survey their target prospects before the trade show to learn which
trade-show they will attend and what they hope to gain from attending
Firm rank order various shows based on expected profitability-calculated by
calibrating a model of lead efficiency using firm's historical sales led and lead
conversion-to-sakes data, gross margin information and total attendance at past
shows
Lead Efficiency is number of sales leads obtained at the show divided by total
number of show visitors with definite plans to buy the exhibitors product or one
similar to it.

Managing Trade Show

Exhibit
To generate interest in an exhibit business marketing firm run
advertisements in business publications profiling new projects
they will exhibit at the show
Trade show strategies should also be linked to interactive
marketing communications-enables many exhibitors to schedule
appointments with prospects and customers during show
Salesperson has to be trained as he has 5-10 minutes to make
presentation (reverse of you sell yourself, then company and
finally product)
System to respond effectively to inquiries generated at the show
Close loop with HO so that when prospects return to their offices
after the show, the material is immediately available to them

Evaluating Trade-Show Performance

Evaluate performance by considering traffic flow though firms both as a
sequence of 3 stages
3 different indices of performance-attraction, contact and conversion efficiency
Link is better performance indices and key decision variables that firm must
control
Attraction efficiency is the proportion of interested visitors that booth is able to
attract (usually smaller than total number of attendees at the show)
It is function of space (square fee). Show promotion, use of attention getting
techniques and so on
Similarly contact and conversion efficiencies are modeled as function of
number of booth personnel and their level of training
For an individual firm, trade-show expenditures should be tied to concrete
marketing communication goals to secure an adequate ROI-carefully evaluate
each trade show and its expenses in terms of likely effect of sales, profit and
corporate image
Like other promotional vehicles, the planning and budgeting must focus on
specific objectives-once these objectives are determined, rational approach will
then identify what has to be done and how will be spent

Representation of Traffic Flow Model at Trade

Shows as a Sequence of Stages
FLOWS

TACTICAL
ACTIVITIES

Show
Attendees

Target
Audience
Attracted to the
Booth

Contact with Sales

Person

Sales Lead

Pre-Show and AtShow Impersonal

Promotional
Activities
Personal
Promotional
Activities