2The Role of Advertising Integrated Communication Programs.Enhancing Sales Effectiveness.Increased Sales Efficiency.Creating Awareness.
3AdvertisingCannot be a Substitute for effective personnel selling.Cannot, by itself, create product preference.
4Advertising is only one aspect of the entire marketing strategy. The Decision Stages for Developing the Business-to-Business Advertising ProgramAdvertising 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.
5Setting Ad Budgets: Commonly Used Methods Percentage of SalesAllocate some percent of sales to advertising.Makes advertising a consequence rather than a determinant of sales and profits.Useful only if possess VALID historical dataMost commonly used method
6Setting Ad Budgets: Commonly Used Methods Affordability MethodFirm spends on advertising what it has available to spendGood cash flow controlMost common with small firmsSales drive the advertising
7Setting Ad Budgets: Commonly Used Methods Objective-Task MethodAn 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.
8Developing the B2B Advertising Message Determine advertising objectives.Evaluate buying criteria of target audience.Analyze most appropriate language for presenting message.
13Line Organizations Characteristics Authority/responsibility for planning/implementing sales activities lie in hands of sales manager.Each person has only one boss.
14Line 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.
15Line 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.
16Line Organizations Implications Best used by small organizations where operations can be clearly divided into basic functions of sales, finance, and production.
17Line and Staff Organizations CharacteristicsSame as line organization except staff positions addedStaff positions don’t have authority over line positionsAdvantagesStaff provide sales manager with specialized skillsAllows sales manager to be more efficient/ effective.Doesn’t dilute his/her authority/contact w/salespeople.
19Line and Staff Organizations DisadvantagesCan 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
20Line and Staff Organizations ImplicationsIf sales managers find themselves spending less time working with subordinates and more time performing planning & evaluating functions, may want to consider this organization
21Functional Organizations CharacteristicsOrganization divided by function.Functional specialists have line authority.Salespeople report to multiple bosses.AdvantagesSpecialist ensure their functions are carried out.Should improve performance in each functional area due to the specialization.
23Functional Organizations DisadvantagesBreakdown in the unity of command due to conflicting ordersEach salesperson is no longer accountable to only one bossImplicationsTypically used in large firms that feature numerous functions and that have the need for several specialists.
24Centralized vs. Decentralized? Factors That Influence Size of Sales ForceAs sales force size increases, the need to decentralize increases.Span-of-control problems emergeMore field managers will be necessaryDecentralization more feasible
25Organizing by Sales Activities CharacteristicsUsually employ simple line organizationsSeparate selling functions (present account maintenance and new account development)AdvantagesAllows salespeople to become proficient in their respective sales functions.Places special emphasis on searching out and selling new accounts.
26Line Organization Structured by Sales Activities
27Organizing by Sales Activities DisadvantagesCustomers may resent being turned over to a different salesperson.Salespeople may want to cultivate the accounts they have developed.
28Organizing by Sales Activities ImplicationsUse when there is a large turnover of customersUse when there is a significant difference in the skills needed in each separate areaUse when fast growth through new account acquisition is deemed necessary
29Organizing by Geographic Areas CharacteristicsSales force is reorganized on a geographic basisSalespeople sell all the company’s present products to all customers within their assigned territories
31Organizing by Geographic Areas AdvantagesSalespeople and managers become more familiar with their territoriesLocal problems may be solved more quicklySales force can rapidly react to changes in the local competitive environmentCan provide better service at lower costLower chance for customer confusion
32Organizing by Geographic Areas DisadvantagesDiversity/magnitude of product line may limit salesperson’s knowledge of any one productDuplication of overhead expenseGreater level of salesperson control (which products to push, which customers to service)ImplicationsBest used if product line is relatively homogeneousBest used if customers are widely dispersed
33Organizing by Products CharacteristicsSales force is reorganized on a product basisSalespeople specialize in particular products carried by the sales organization
35Organizing by Products AdvantagesEach product line receives a higher degree of specialized attentionAllows for decentralization of both authority & responsibility for each product lineAllows decisions to be made closer to the problems with any particular product line
36Organizing by Products DisadvantagesIf specialization occurs above salesperson level, additional overhead expense may be suffered.More than 1 salesperson may be calling on customersDifficult to maintain a consistent image
37Organizing by Products ImplicationsBest used if product line is relatively heterogeneousBest used if have a wide variety of customers with quite different needsBest used if products are technically complexBroad, in-depth knowledge of product essential for the sales task
38Organizing by Customers CharacteristicsSales force is reorganized on a customer basisSalespeople specialize in selling to/ servicing particular customer types
40Organizing by Customers AdvantagesMost consumer oriented approachOrganization of sales force is based on customer needsControl remains at the management level (which customers to call on, etc)Allows salespeople to specialize in customer needs
41Organizing by Customers DisadvantagesPotential for overlapping territories is highHence, overhead costs may riseSalespeople must become knowledgeable about company’s entire line of products
42Organizing by Customers ImplicationsCustomers in a given market buy several different products/lines from single supplierSame buying factors apply across product linesSignificant proportion of income is derived from a small number of accounts who require high service levels