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INDUSTRIAL MARKETING
ADVERTISING AND SALES PROMOTION
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INDUSTRIAL ADVERTISING
Any paid form of non personal presentation by an identified
sponsor( of industrial goods,services or ideas )
Its management is like that of consumer goods advertising,
in that the advertiser must
--Measure his potential market
--Study buying habits and motives of possible users
--Determine advertising objectives
--Setup budget
--Select media
--Prepare and place Ads
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If it can show above
Will help in salesmen tasks
Salesman can convince buyers that company
is desirable source of supply
2.Task often complicated because
Loses identity in the end product
e.g. Raw material, Semi finished products, components
Hence difficult or impossible to make Brand preference.Basic Industrial products are sold at competitive prices
hence lower gross margins.
3.Multiple influence buying
e.g. Substitution of machined part by casting
Effect on quality)
Analyse-Buying policies and practices of industry
individual plants, Key influencing people and media to
reach these people most effectively and at minimum cost
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4.When introducing new product or improved product
Go to customer's customer to convince him tospecify this product in his order
OBJECTIVES
Advertising-A marketing tool
User to know what tasks it is suited forand what for he wi II use it
Overall company objective Goals of marketing activity
Objectives of advertising
Advertising goals vary from company to companyand time to time
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Some general objectives are
1.To Inform
Primary objectives of all advertisers is to inform abouthis products and services
More important in industrial goods since bought on factual basis
If industrial advertisement is read, it is read carefully,
as a part of the job, to stay informed.( not emotional or only for pleasure)
It should contain more facts. Facts should be precise, documented and
provable. Facts should be solid.
2.To bring in orders
This is an end earnestly to be hoped but hardly to be expected.
No buyer commits to buy on advertising, may place trial order. Lot of work
needed afterwards to ensure that product gets fair trial
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3. Toget enquiries
Every industrial advertisement has this objectiveEnquiry expected from
Not currently user of this product
Current users not conversant with other uses
Users or prospects where salesman has failed to gain
access
4.To get name in buyer's resource file
File mainly for standard equipments
Keeps pertinent information-Quality, service, financial
standing, prices, reliability etc.
Selected from list when bid or existing buyingrelationships are disturbed
Registration needed when moving to new markets, new
products or new group of buyers
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Trade journals generally referred when buyer's product
processes or product lines are changed or has to buy
unfamiliar products.
5.To reach personnel inaccessible to salesman
When cant contact all persons-Research
scientists/Engineers, Outside directors
Very large number of persons, who influence buying e.g.
Steel mill
Ad may convince them of product virtues at least to theextent that they don't seriously object to recommendation
6.To provide supporting programme to Salesman
Important objective-Prepare prospective customer
to salesman
Already informed-New products, how profitably used,company's position and policies, hence saves
salesman's time to close the order
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Advertising company's salesman are received more
cordially as compared to others. It can open many closed doors.
More appropriate when new prospects or new industryis to be reached.
7. To reduce selling expense
Reduces salesman's work hence cut costs
Regular contacts necessary otherwise even loyalcustomers leave. Salesman's visit expensive. Advertisement
(Low cost per contact) keeps touch
When goodwill is to be built or keep product dominant
in customer eyes, ad is more effective
8. To help get news items
Even in Trade journals,news is read more than ads
When new product or new usage of old product
Heavy & consistent-get editorial attention
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9.To establish recognition and reputation
Straight product advertising doesn't help
Company reputation and Brand recognition required,
since more familiar brands specifiedPeople in plant no less
Distributor less profit
10.To motivate distributors
To get middleman's sufficient time and effort( Since competitors products also handled)
Advertisement copy-Directed to middlemen of
advantages, wide margins, large scale potential,
rapid turnover or relatively small investments
Enquiries from advertisement-may be forwarded,
can refer names in adCooperative promotion-Subsidised,name printed
on catalogue
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11. To create company image
Established in one field, difficulty for breaking in to other
field, because primary market overshadows e.g.
HMT , a watch supplier( Consumer product) TO
Components for weapon (Industrial product)
Advertisement--Directed to top management
Directed to R & D , Production
In business publications of technical capabilities
12.To overcome prejudice
To overcome unfavourable attitude because of past
problem
Advertise--Explaining reasons and how it has been correctedSynthetic product/ Natural product
Polyamide cage /Steel cage
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13.To influence users of customers end product
Induce the use of new products made out of materials or by
machinery manufactured by the advertiser. ( Excello machines)
Increase the sales of end products made of materials or
machine manufactured by the advertiser. ( SAIL steel, Salem steel
for home appliances )
When a material or component is branded and retains its
identity in the finished end product-inducing end users
to insist to the products containing branded items
General considerations
Not all objectives in every campaign
Advertising objectives change from time to time
Different companies have different objectivesSeveral objectives could be in one campaign but
weightage may be different
Goals must be clearly understood and advertising tools
should be effectively used
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ADVERTISING BUDGET
Half the money spent on advertising is waste but no one
knows which half.
How much to spend on advertising?
1. % of sales method
Some firms--%
of expected sales or last yearNeither assure-It will result in greater profit or will attain
non profit marketing objective
2. Task method
Some firms-Based on tasks,advertisement is expected to doDecide the tasks-Budget the costs
Management will decide-Which tasks worth the cost and
within financial resources
Better method
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3. Task & % method
Budget determination by tasks
Management imposes limit as % of sales
It can vary with changed circumstances
Amount to be spent
Gross profit cash inflow-Limit on all expenditure
Each rupee spent adds to profit> Rupee spent
Difficult to apply-Since unknown variables use
mathematical formula
When advertising objective other than profit-Allocate
money as per estimate to achieve that objective
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,)
APPEALS USED
1.Economy- Does not mean low selling price(Low cost in
use)
2.Quality- Catchall appeal
3. Efficiency
4.Dependability
5. Power6.Strength
7.Durability
8.Accuracy
9.Service
10.Complete line
11.Experience Patronage appeals
12.Popularity
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Which appeal? Choice will depend upon
1.The particular characteristics of the featured product thatdistinguish it from other products of the same kind
2.General plan of personal sales force
3. Types of functional group of people in customer's firm, the ad is
designed to influence
4.The part of overall job assigned to advertisement
Purchase-Attractive, quick to read-Company, product,services
Plant people-Clear descriptions
Design-Specific details-Capacity, circuits etc
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INDUSTRIAL ADVERTISING COPY
Orientation
Fundamental difference-In point of view from consumer
advertising
Consumer-Reads for pleasure
Industrial consumer-Primary to help himReads in company time
Read intensively
Want facts
Art work and catch phrases-To increase readability
Contents
1.Nature and distinctive characteristics of the product
2.Advantages over competing products
3.Adaptability to buyer's needs
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4.Experience of others in use
5.Gain to result from purchases
6.Dependability of supplier
a.As to claims made of product
b.As to delivery and fulfilment of contract
c.As to servicing and repair and replacement
Long copy will not disinterest reader provided it is of interest andpractical value
Sequence of elements
Short headlines--Presents an interesting and intriguing idea with
enough significance to make reader pursue idea further
Explanation or amplification of headline--With limited specific
appeals how his need will be fulfilled
Copy--Contents as above
Finally--Reader urged for some action; Specific courses of action
suggested
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Trademark VISInstitutional copy
Whether trademark or company name?
Different school of thoughts
Company name
Once confidence,will buy
Efforts & expenses to establish brand name not required
On diversification, brand name create confusion and make
promotional task difficult
Brand name
Easy to correlate
Brand can bring reputation or even lose it
Excellent headline attraction
Editorial type copy more effective
Legal requirements--General prohibition on false claims
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MEDIA
Medium is a vehicle through which advertisers message is carried
to its audience
Limited scope--Trade journals, General management publications
Catalogues, Direct mail, exhibits
Choice of media--Depends upon audience to reach
Complex--Multiple influence buying
Top management--One type magazine
Operating management
Design Different magazinesPurchase
Foreman
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ROLE OF ADVERTISING AGENCIES
Specialist organizations, equipped to provide range of
advertising services to their clientsAdvertising strategy and campaigns
Prepare copy and layouts
Study markets
Select media
Carryout actual physical production of advertisement
up to time it is sent to media
Generally serve non competing clients
They get 15% commission from media
Does not cover cost--Less chargesLump sum payment made
Many do not use advertising agencies, have their own department
Copy technical, catalogue difficult
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PUBLICITY
Non personal stimulation of demand for a product, services or
business unit, by planting commercially significant newsabout it in a published medium, or obtaining favourable
presentation of it on Radio, television or stage, that is not
paid for by the sponsor
Activity supplement to advertising
Publicity more effective than advertising--People read more news
Some--influence editors
Some--Editors look for material worth the news
Some--indifferent to publicity
When market concentrated and easily reached
Product is fabricated material or process material which
can't be identified in end product
Monopoly position--To protect from competition
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Some--Very powerful tool
Company made known to potential customers
Enhances prestigeIntroduction of new product
New development or improvement in existing product
Easy access to salesman,more effective, less costly
Techniques of securing publicity
Wants to publicise
Technical information of products
General merits of products
Publicity function to individual
For newsworthy information from company & industry
and pass on to the pressWrite technical articles
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Write books
Speaking before other organization
Papers on current research and new product
development
Plant visit by people
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SALES PROMOTION
Sales promotion are those marketing activities, other
than personal selling, advertising & publicity that
stimulate consumer purchasing and dealer effectiveness
In Industrial marketing, generally the following sales
promotion activities are used
1.Scheme for traders
Higher discount for limited period
Target bonus
2.Scheme for opinion leaders
Exhibitions, shows, expositions Samples
Correspondance
Direct mail
Catalogues
Advertising novelties
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3.By giving incentives to consumers (Cartons back)
1.EXHIBITIONS & INDUSTRIAL SHOWS
It offers manufacturers, an opportunity to display and demonstrate
his products to a large number of prospects, within a short period
of time, which otherwise would not be possible because of
widespread nature of his market
Exhibitor's obiective
Since it is usually hard to trace sales that result from this type
of promotion, the show's value to the exhibitor must often be
measured in terms of more limited objectives as under
Meeting potential customers
Making direct sales
Building prospects list
Discovering new applications for existing products
Introducing new products
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Demonstrating non portable equipments
Meeting competitive effort
Hiring personnelEstablishing new representatives or dealers
Scheduling trade shows
Problem--When products sold to several industries
Evaluation of trade show
Frequency and location of each show Audience
Acceptance in trade
Management reputation in good publicity and sound
operating policiesRates charged Restrictions on exhibitors
Number& types using show regularly
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Planning and operating the exhibit
Proper selection and dramatising the themePreparation and display of headlines, illustrations
Background of booth
Operations--By sales
Take help from technicalSamples, give aways
Follow up
Mail what is asked for, Salesman visit
Critically review--Design, layout,registration,handlingof traffic, presentation, accuracy
Analyse and redefine objectives, usefulness
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Sampling
To introduce new productTo gain prospects attention and interest
To gain an entry ( Medical rep )
Overdoing this is expensive but it should be viewed as
incremental expense
By mailing--may not examine
some--by coupon through ad
some--small cost
Correspondance
Auxiliary promotional device
To be handled carefully by a person who has complete
knowledge of the subject
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Catalogues
It is basic promotional tool. It is a sort of written material,describing the characteristics of a product, to place in the
hands of prospective customers
It is one of the largest item in sales promotion budget
Objectives
To get orders
To develop recognition by buyers
To get request for detailed information
To get invitation to bid or to solicit business
To get specification adoptedTo get product recommendations
To help get approval
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Preparing a catalogue
Which functional group of customers want
Purchase, engineering, maintenance
What information is sought, language
Who makes and sells what?Physical and operating characteristics
Application details
Dimensions, service needs, assembly
procedures, Drawings, facilities, distributor address
Distributing a catalogue
Very important to know persons whom to distribute
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Advertising novelties
It is the necessary means of promotion. Advertising novelties aresmall,interesting or personally useful items on which are
imprinted the name and advertising message of the issuing company
It should meet four requirements
1.Inexpensive--Expensive may be viewed differently.Give to maximum people, concerned persons
2.Unusual and eye catching
3.Multiple impact--Advertising message should be seen by a
number of people over a period of time
4.Useful
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Entertainment to customers
Very important
Depends upon product
May be viewed negatively
It is contrary to good business judgement
Consideration of propriety
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