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Module -4

Marketing mix – decision “Managing

Services”

Soul kitchen – New jersey

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SEVA CAFÉ , Ahmedabad

Product- to a Solution-Centered Approach

• Don’t start with product first. Instead, start with understanding the
customer’s problem and end with products and services that solve that
problem.

• The exchange should not be transaction-based but rather be an interactive

exchange with the objective of developing a relationship around co-creating
value with the customer.

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From a Product to a Solutions Perspective

Product Perspective Solutions Perspective

Value Win by creating innovative products Win by creating and delivering superior customer
Proposition and enriching features of existing solutions
products

Value Value is created by the firm Value is co-created by the customer and the firm
Creation

Designing Start with the product or service, and Start with the customer problem, and then
Offerings then target customer segments assemble required products and services to solve
the problem

Company- Transaction-based Interaction-based and centered on the co-

Customer creation of solutions
Relationship

Focus on Quality of internal processes and Quality of customer-firm interactions

Quality company offerings

Benefits of Solution Marketing

It offers:

I. New avenues of growth

II. New ways to differentiate
III. Higher customer loyalty

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Business Service Marketing – Special

Challenges

How Services Differ from Goods

Inseparable – produced and
consumed simultaneously

Non-standardized
Heterogeneous

Perishable –
Use it or Lose it

Intangible –
Lacks ownership

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5 Dimensions for Business Services

• Customers tend to focus on five dimensions in
evaluating business service quality.
1. Reliability
2. Responsiveness
3. Assurance
4. Empathy
5. Tangibles
• Among these dimensions, reliability – delivery on
promises – is most important to customers.

5 Dimensions of Service Quality

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Hybrid Offering
• Combination of one or more goods and one or more
services that together offer more customer benefits
than if the good and service were available separately

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Managing Business Marketing Channels

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Distribution Channel
• The link between the manufacturer and the customer is
called the Channel of Distribution

• The channel accomplishes all the tasks necessary to get

the product/service to market

• Tasks can be performed by the manufacturer or be

delegated throughout the channel

• The question is: “What is the best way to execute the

tasks?”

Channel Tasks Include:

• Contacting potential • Financing
buyers • Servicing the product
• Negotiating • Inventorying
• Selling
C • Transporting
• Contracting • Storage
• Transferring title
• Training

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Direct and Indirect Channels

• Who performs the TASKS?

• Direct is when the manufacturer performs all the marketing functions

• Indirect is when some type of intermediary sells or handles the

product

Fig. 10.1 – B2B Marketing Channels

Manufacturer

Direct Channels Indirect Channels

Direct Online Telemarketing

Sales Marketing
Manufacturers’
Representatives

Industrial
Distributors

Customer Segments

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Direct Sales Force Required When:

• Sale is complex • Then, seller must control
• Product/service is highly the process to ensure
customized proper implementation of
total product package
• Customers are large and to guarantee quick
• Products are complex responses to market
• Sales involve extensive conditions
negotiations
• Professionalism is required
• Customer requires direct
contact

Indirect Distribution:
Generally Found Where…

✓Markets are fragmented and widely dispersed.

✓Low transaction amounts prevail.

✓Buyers typically purchase a number of items.

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Typical Sales Cycle:

Tasks Performed Through Sales Process

Lead Generation Triggered by sales call, by customer’s response to direct mail, or by Web
request for information; firm makes initial contact with prospect.

Lead Qualification Potential customer screened: prospect’s need for product or service,
buying interest, funding, and timeframe for making the purchase are
assessed.

Bid and Proposal Bid and proposal prepared to meet customer’s requirements (a complex
task for large technical projects).

Negotiations and Negotiation of prices, terms, and conditions, followed by agreement on a

Sales Closure binding contract.

For standardized product or service, delivery of offering to customer.

Fulfillment Configuration, customization, and installation for more complex sales.

Post-sale problem resolution, customer guidance, and ongoing contact to

Customer Care and Support ensure customer retention, loyalty, and growth.

SOURCE: Adapted from Lawrence G. Friedman, Go To Market Strategy: Advanced Techniques and Tools for Selling More Products, To More Customer, More Profitably (Boston: Butterworth-Heinemann, 2002), pp. 234-236.

Multi-Channel Integration Map

Simple Example of High-Coverage Partnering Model
Sales
Lead Qualification Bid & Negotiation/ Fulfillment Customer care
task
generation proposal sale closure & support
Channel

$$$
Direct sales
channel
(field reps)

Business
partners

Tele-channels

Occasional support
by sales reps to
Direct mail help partners
close key
strategic deals
Internet
$

Sales Cycle
Fig. 10.3

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Distributors
• There are two primary intermediaries:
1.Industrial distributors
2.Manufacturers’ representatives

• These two groups handle a very sizeable share of

B2B sales.

Distributors
• Distributors are in every industry.
For example they are in:

1.Food and Beverage

2.Maintenance, Repair and Operations (MRO)

supplies

3.Hardware, Electronics and Fabrication

4.Furniture, Clothing, and Personal products

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Expanded Distributor
Roles
To add more value for their customers many
large distributors have expanded their roles to
include more services:

1. Inventory management
2. Automatic replenishment
3. Product assembly
4. In-plant stores
5. Design services

 Many charge a separate fee for additional

services

Primary Distributor Classifications

General-Line Distributors
• Stock extensive variety of low tech
(commodity) products

Specialists
• Focus on one or few related lines geared
around high tech or industries demanding
complex customer requirements

Combination House
• Operates in two markets: industrial and
consumer

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Choosing a Distributor
• Choosing a distributor depends upon the market a company
wishes to target

• What are some distributor qualifications?

1.Financial
2.Good functional operations
3.Skills & technical expertise
4.Contacts

• In other words, “What can they do & who do they know?”

• E-collaboration between manufacturer and distributor from

planning to servicing is a critical strategic force in the B2B arena

Manufacturers’ Reps
• Manufacturers’ Reps fill a different role than Industrial
Distributors.

• They perform a much higher level of service.

• They:
1. Are more technically advanced
2. Know their territory better
3. Are able to sell professionally
4. Are experienced in the industry
5. Usually represent several companies

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Manufacturers’ Reps are used when:

• Product is not standard—closer to made-to-order
• Reps do not take title nor hold inventory
• Reps are normally paid commission, however deals
can be made to be paid a monthly minimum
• Commission rates can range from 3%, 20% or more
• Gross margin is not large
• Relatively few customers or concentrated
geographically or concentrated in few industries
• Customers order relatively infrequently and allow
fairly long lead times

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Step 1: Define Customer Segments

• Primary goal is to satisfy (solve) end users’ needs

(problems)

• Define target market segments

• Isolate each segments’ buying and usage behavior

• What do they buy

• How do they buy
• How do they use their purchases

Step 2: Customers’ Channel Needs by Segment

Identify and prioritize channel functions

requirements for each segment.

Next, align the function with the customer’s needs.

Example: One customer may need product

information as their top priority while another may
need product quality assurance as their top priority.

Refer to Table 10.2 for list of channel functions.

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Step 2: Customers’ Channel Needs by Segment –Con’t.

Channel Function Customer Need Table 11.2
1. Product Information Customer seeks more information for new or more complex products
especially in rapidly changing environments.

2. Product Customization Some products must be technically modified or need to be adapted to

meet the customer’s unique needs.

3. Product Quality Assurance Because of its importance to a customer’s operation, product integrity &
reliability might be given special emphasis.

4. Lot Size Purchase of products with a high-unit value or those used extensively
represents a large dollar outlay, thus being important.

5. Assortment Customer may need a broad range of products and may assign special
importance to “one-stop shopping.”

6. Availability Some customers’ environment demands that the seller support a high
level of product availability.

7. After-Sale Service Customers require a range of services from installations and repair to
maintenance and warranty.

8. Logistics Customer may require special transportation and storage services to

support its operations strategy.

Step 3: Assess the Firm’s Channel Capabilities

• Once segment is defined, functional requirements

isolated and prioritized, the next step is to:
• Analyze the segment’s channel strengths and weaknesses
• Identify gaps between what the segment functionally desires
and what the channel is providing
• Fill that gap!

• Customers base their choice on the bundle of benefits

(channel functions) the channel offers.

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Step 4: Benchmark to Competitors

• What go-to-market strategies are key competitors using?

• Understanding what competitors are doing, or not doing, offers

opportunities to discover gap(s) that might need to be closed.

Step 5: Create Channel Solutions for Customer's

Latent Needs
• Sometimes, by reviewing what competitors are doing, or not
doing, latent customer needs emerge.

• Latent needs are those that are not obvious. Sometimes

discovering them can even lead to a whole new service.

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Step 6: Evaluate and Select Channel Options

• Channel options need to be considered in light of a

cost/benefit analysis.

• Some gaps may offer opportunities.

• More often, channel members can work together to better

align themselves with their customers.

• The idea is to enhance value for their customers.

• Channels must be open to change as customers and

competitors change.

• Channel management is an ongoing process.

Partnership
• The channel is motivated by the understanding that the relationship is a
partnership.

• Relationship Marketing demands:

a.Trust
b.Working together
c.Open communication
d.Support during “good” and “bad” times

• This relationship leads to meeting performance goals.

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CUSTOMER VALUE
• In B2B marketing, customer value is a cornerstone

• The unifying goal of marketers is to be “better than

your very best competitor” in providing value

• “You get what you pay for” is what many provide

• A better approach: “You get more than what you

pay for” by offering lower cost and higher quality

What is Customer Value?

• How do customer’s view value?

• Everything costs something (sacrifice)

• Everything of value adds something (benefits)

• What’s the difference?

• Benefits – Sacrifice = Value

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Differentiating Through value-creation

• Research suggests that most companies offer similar

services, however, the following seem to be more
prominent.

• 1. Service support
• 2. Personal interactions
• 3. Supplier know-how
• 4. Ability to improve customer’s time to market

• Moderate differentiating factors include:

• 1. Product quality
• 2. Delivery
• 3. Acquisition and operation costs

Setting the Price

• This is one of the most difficult issues that face companies:
What is the right price to charge?

• There is no easy solution or formula for proper pricing.

• Pertinent considerations include:

1.Pricing & profit objectives
2.Demand determinants
3.Cost determinants
4.Competition

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Key Components of the

Price-Setting Decision Process Fig. 12.1

• No easy formula for Set Strategic Pricing Objectives

pricing industrial
product or service
Estimate Demand and the
• Decision is Price Elasticity of Demand
multidimensional
• Each interactive variable
assumes significance Determine Costs and
their Relationship to Volume

Examine Competitors’ Prices and Strategies

Set the Price Level

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Price Objectives
 Pricing decision must be based on marketing
and overall corporate objectives.

 Marketer starts with principal objectives and

adds collateral pricing goals:
 Achieving target return on investment.
 Achieving market-share goal.
 Meeting competition.

 Other objectives include competition, channel

relationships and product-line considerations.

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Demand Determinants &

Assessing Value
• There are a number of issues when considering demand:
1. Usage and importance of the product/service by various segments
2. Price Sensitivity (elasticity of demand)
3. Assessing Value: Competitive Value comparisons
• Assume same product by 2 different competitors
• Assume: (“A” charges $24 ; “B” charges $20);

Why might a buyer prefer “A” over “B”?

Could it be that buyer prefers “A” more than “B” because “A’s” total
offering provides more value than “B”?

Assessing Value

• Economic Value: Represents cost saving and/or

revenue gains when purchasing a product
(instead of next best alternative)

• Commodity Value: Value customers assign to

features that resembles competitive offerings

• Differentiation Value: Represents the value of

features that are unique and different from
competitors

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Fig 12.3 A Value-Based Approach for Pricing

Define the key market segments

Isolate the most significant drivers of value

in customers’ business

Quantify the impact of your product or service

on each value driver in customers’ business

Estimate the incremental value created by your product

or service, particularly for those features that are
unique and different from competitors’ offerings

Develop pricing strategy and marketing plan

SOURCE: Adapted from Gerald E. Smith and Thomas T. Nagle, “How Much Are Customers Willing to Pay,”
Marketing Research 14 (winter 2002): pp. 20-25.

Value Drivers ref. Fig. 12.3

I. Goal is to identify significant drivers of value

a. Cost Drivers: Create value by economic savings

1. Example: Machine can process more widgets/hr. with
less electricity and labor costs

b. Revenue Drivers: Add incremental value by

facilitating revenue or margin requirements
1. Example: Packaging is more attractive thus increasing
sales

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Value Based approach ref. fig. 12.3

II. Quantify impact of firms product/service on

customer’s business model
a. Does it make or save money? How much?

III. Compare firm’s product/service to next best

alternative (competitor’s product/service)
a. Isolate unique features that differ from competitor
b. Do those features provide value that customer cannot
get elsewhere?
c. How much value does it create?

Target Pricing & Costing

• Many companies base price off of costs

• Problem: Method is internally driven, not market

driven

• A better approach is to use Target Pricing

1.It starts by examining and segmenting the market
2.Determine what type, quality and attributes each segment
wants at a pre-determined target price
3.Understand the perception of value to the target selling
price
4.Then calculate costs considering margins

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Hyper-Competitive Situations
In some industries rivals are fairly stable and the
competitive strategy is “don’t rock the boat.”

Other industries, especially high-tech or high profit

industries, the competitive environment is wrought with
short-term and temporary advantages. These are
hypercompetitive environments with strong rivalries.

The strategy to succeed is to create a temporary

advantage and destroy rival advantages by constantly
disrupting market equilibrium with new products, lower
prices, and strategic relationships.

Competitive Responses
• In analyzing competitors’ responses to any strategic
move, a good idea is to consider direct competitors and
substitute their actions from a cost perspective.

• For example, one idea is to view competition as

Followers vs. Pioneers. More often, pioneers face
higher entry costs than followers for various reasons.

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Followers vs. Pioneers

By failing to recognize potential cost advantages of late entrants, the

business marketer can dramatically overstate costs differences
between earlier and later entrants.

What might be the result of this mistake?

Followers vs. Pioneers

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Pricing Strategies
• 3 Major Pricing Strategies

1.Follow the Crowd

2.Price Skimming

3.Penetration Pricing

Price Skimming
➢Price Skimming is charging a high initial price

➢Price Skimming:
• Appropriate for distinctly new products
• Provides the firm with opportunity to profitably reach market
segments not sensitive to high initial price
• Enables marketer to capture early profits
• Enables innovator to recover high R&D costs more quickly

➢Strategy: As the product goes through its product life cycle,

the strategy is to lower the price in line with production
and demand capacity.

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Penetration Pricing
Penetration Pricing is charging a very low initial
price.

Penetration Pricing is appropriate when there is:

› High price elasticity of demand
› Strong threat of imminent competition
› Opportunity for substantial production cost
reduction as volume expands

Price Discrimination

The Robinson-Patman Act of 1936:

“…holds that it is unlawful to ‘discriminate’ in price

between different purchasers of commodities of like
grade and quality…where the effect of such
discrimination may be substantially to lessen
competition or tend to create a monopoly, or to injure,
destroy or prevent competition..”

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Evaluating a Competitive Threat

• When a PRICE WAR occurs, what should
you do?

• Should you:
• Lower your price?
• Ignore it?
• Raise it?

• That is what a competitive threat is all about.

Evaluating A Competitive Threat

Competitive price
or “low cost”
product entry

If you
respond, is
Is your competition
No No Is there a response that Yes No
Accommodate position in willing and
would cost less than the Respond
or Ignore other markets able to
preventable sales lost?
at risk? reestablish the
price
difference?
Yes

Does the value

of the markets Yes
No
at risk justify
Will the multiple responses
the cost of No required to match a
response?
competitions cost less than the
preventable sales loss?
Yes Yes

Respond
Respond

Source: Figure from “How to Manage an Aggressive Competitor” by George E. Cressman, Jr. and
Thomas T. Nagle from BUSINESS HORIZONS 45 (March-April 2002): p. 25. Reprinted with permission from Elsevier.

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Case study –VRL logistics

https://www.youtube.com/watch?v=-vNLpU-47UE

Bluedart-Delhivery-Vrl Logistics
Blue Dart Delhivery VRL
Segment Express Delivery Main express + PTL Only PTL and TL
and TL
Segment (Breakup) Air and surface Express Parcel-63% PTL- 89%
express Delivery PTL-16% FTL-8%
(100%) TL-6% Courier-6%
SCS-11%
Business Model Semi Asset Light Asset light Heavy Assets
Assets 8 aircraft 2347 11105 vehicles and 56771 vehicles and
facilities 2880 centers 1126 centeres
Revenue 5172 7225 2649
5 yr revenue 13% 48% 7%
growth
Operating profit
19% -ve 16%

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Competitive Bidding
• Certain groups do bidding

1.Governments
2.Large companies (using preferred suppliers) bid for:
a. Non-standard material
b. Complex designs and difficult manufacturing methods

Types of Bidding
• Closed bidding: Suppliers submit a written bid on a
specific contract and all bids are opened
simultaneously and often job goes to lowest
bidder…

• On-line sealed bids: on-line auctions

• Open bidding: more informal.

• When it is hard rigidly define requirements
• Prices may be negotiated.

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Advertising and promotion

Most Important Component

 Due to…

a. Product complexities (technical),

b. The small number of buyers,
c. The high price products/services, and
d. Extensive negotiation process

…The primary communications vehicle for selling

Industrial/Business products/services is the:

 SALESPERSON! ☺

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Other Non-personal Components

There is a need for other non-personal requisites such as:

Advertising
Catalogs
Internet presence
Trade shows
Promotional spending

All have a unique way of getting the message out, however, they don’t
close deals as well as personal selling!

B2B Social Media

Channels of the social web where prospects and businesses
communicate across diverse platforms

Key Platforms:
1. Discussion Forums
2. Blogs
3. Wiki
4. Social Networks

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Use of Social Media in B2B

❑ Monitor what prospects are saying about the company

❑ Capture interest from prospects looking for products

❑ Coordinate follow-up to social media interactions

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Advertising’s Role
• Be an integral part of an integrated communication programs

• Enhance sales effectiveness

• Increase sales efficiency

• Create awareness

• Create preferences for company, products, etc.

• Facilitate interactive marketing communications

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Integrated Communication Programs

• Integrated Communications is the intertwining of all
communication methods to include:
• Advertising
• Sales Promotion
• Online Media
• Public Relations
• Personal Selling

• Of these promotional techniques, personal selling is most

important in B2B marketing!

Increased Sales Efficiency

• Advertising increases efficiency in two ways:

1.Serves as a reminder
2.Informs the market about new products/developments

• Advertising is pennies when compared to $100’s for a sales call.

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Creating Awareness

• Business advertising creates:

1. Awareness
2. Brand preference
3. Conviction that a brand will meet their requirements & hopefully
4. Facilitate purchase

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The Decision Stages: Developing

Business-to-Business
Advertising Program
Decision Stages
✓Advertising is only one
aspect of an entire
marketing strategy.

✓The advertising decision

process begins with
formulating advertising
objectives.

✓Equally important: selection

and evaluation of media.

Figure 13.1

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Defining Advertising Objectives

• Marketing managers realize:

1.Advertising’s mission flows directly from the overall marketing

strategy.
2.Advertising’s job is to:
a. Create awareness
b. Provide information
c. Influence attitudes
d. Remind buyers about product and company

Advertising Objectives

• Advertising objectives must be:

1.Realistic
2.Measurable
3.Specific outcomes during specific times

• Example: To be effective, the advertising campaign

shall increase awareness from 15% to 30% during
the period from April 1st to June 31st.

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Defining the Target Market

• One objective of advertising is to reach influentials
who are often difficult to contact via personal selling.

• Influentials are interested in specific features and

attributes that solve certain problems. Advertising
needs to focus upon that issue.

• Marketers must understand who the target market is

and how to reach them for an advertising campaign
to be effective.

Creative Strategy Statements

• Provide guidelines for the company and advertising
agency to position (or reposition) the product.

• All creative efforts should include:

1.Copy
2.Theme
3.Color, design, etc.
4.Media
5.Tactics

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Determining Advertising Expenditures

Managers tend to employ the following rule of thumb:

1. Allocate some percent of sales to advertising

2. However, this is a dysfunctional rule!

Dysfunctional Advertising Policies

• Advertising’s purpose is to inform and influence sales, but it is
not to create sales.

• A dysfunctional policy of tying advertising budgets to % of

sales defeats the purpose.

• For example:
• If there are no sales, then is there no advertising budget?
• If sales are declining, do you cut advertising costs too?

• Does that make sense?

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Objective-Task Method

• A better approach for allocating advertising costs is

to relate them to advertising objectives.

• The Objective-Task Method focuses on the

communications effects of advertising…

• Not on the sales effects.

Objective-Task Method
1. Establish objectives in terms of sales volume, market
share, profit contribution and market segments.

2. Assess all communication functions to realize these

objectives.

3. Define specific measurements required to meet these

objectives such as market share.

4. Estimate the budget needed to accomplish them.

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Problem with Advertising

• How much is enough?

• Advertising costs is like owning an old gold mine. It can

return millions, or be a bottomless pit.

• The only way to assure success is to establish and measure

against goals.

• Another matter is the political side of the decision. The

concern here is that internal politics often determine
budgets, not the technique-driven process.

Passing the Threshold

• In order for a message to be heard, it is necessary to repeat it often.

• Of course, the question is: “How often?”

• Research suggests that advertising must pass through a certain

threshold before a meaningful message can be understood by the
market to move product from awareness to preference.

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Passing the Threshold

• A small budget is not enough
• A large budget is like throwing money away

• Because budgeting advertising is so important,

marketing managers should:
• 1. Set clear objectives
• 2. Evaluate tasks required
• 3. Compare costs against industry norms
• 4. Allocate a proper budget
• 5. Design an effective advertising message

Developing the Message

Three Considerations:

Perception

Benefits focus

Understanding buyer motivations

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Developing B2B Advertising Message

1. Determine advertising objectives

2. Evaluate target audience’s buying criteria
3. Analyze most appropriate language, format and
style to present message.
4. Then consider the message!

Perception, Perception, Perception

In business, perception is almost the same as truth.

The message needs to attract the right person.

In most cases, that is the decision maker.

For an advertising messages to be considered, it has to:

Attract the right person’s attention, &
Be interpreted properly.

For example, techies respond to technical ads and non-techies

respond better to non-technical ads.

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Benefits
 Industrial buyers focus on solutions to business
problems that considers:

a. A better way to accomplish tasks

b. A less expensive way to manufacture something

c. A new approach to either make or save the company

money

d. A different way to “free” up time

Buying Motives

• Of all the challenges, this is one of the most difficult to understand.

• Understanding the buyer is a very complex matter because “the standard rules”
change as the environment changes.

• One way to address this problem is to employ marketing research to delineate

influencers’ criteria for buying in each segment.

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Effective Ads
 Effective ads are:

A. Logical
B. Rational
C. Provide a clear description of the product
D. Present product benefits clearly
E. Details product quality
F. Provide performance measures

Selecting Advertising Media

for Business Markets
• B2B media are selected by target audiences

• Should we use trade publications, direct mail, Internet

or all of them?

• What is the best way to spend advertising money to

generate the desired response (customer contacts)?

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Shifting of Advertising to Digital Form

• B2B marketers are always looking for ways to
communicate better with customers & prospects.

• Use of Internet microsites (specialized web pages that

prospects jump to from an email or PR piece that contain
videos) is providing excellent results.

• Use of online videos help customers and prospects from

around the world solve their business problems.

• Videos are particularly effective for telling the story and

producing serious leads.

Use of Search Engines

• Using proper key words or key phrases within the site is an
absolute necessity for driving leads to that site. Ideas for
successful Internet advertising include:

1. Make sure site is search-crawler friendly

2. Good key words must tie into solutions sought
3. Create a relevant, targeted keyword list that reflects problem,
product, etc.
4. Write clear, compelling ads that use key words and isolate
your “value proposition”
5. Track results and measure everything

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Business Publications
• There are more than 2700 business
publications—selecting the right ones is another
difficult task.

• Horizontal Publications are directed at the

specific task, function or technology regardless
of industry.

• Vertical Publications are oriented to readers in a

specific industry.

Business Publications
 Many trade publications are requester publications.

 This is where the reader is interested in a certain

subject and receives a certain publication for free in
exchange for demographic information such as title,
function and buying responsibilities.

 Advertisers know who their desired audience are!

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Cost of Advertising

• Companies need to allocate an advertising

budget for:

• Business Publications
• Sales Promotions
• Direct Marketing (mail & e-mail)
• Internet Advertising

Advertising Considerations
• Include:

➢Cost/1000 contact is one consideration

➢Circulation based on the TARGET audience

➢Does the medium also have Internet viewing?

➢Frequency and scheduling is another complicated issue

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Direct Mail
➢Direct Mail is commonly used for:

a.Image, product and service promotion

b.Sales force support by providing leads
c.Distribution channel communications
d.Getting pertinent information directly to influencials

➢Direct mail is efficient providing the list is good.

➢Much direct mail is considered junk mail.

Direct E-Mail
• Direct mail is 10 times more expensive than e-mail

• E-mail campaigns often yield more responses and results are

quicker
• Example: 1/3 of all responses were generated within 24hrs.

• Many firms integrate their CRM programs with e-mail

• Many firms provide an e-mail alert service and/or an e-mail

newsletter

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Interactive Marketing
• In order to successfully accomplish this, it is important to
have all the systems in place first.

• They include:
a.E-mail acknowledgements
b.Order entry
c.Order fulfillment
d.Money exchanges
e.Follow-up contact
f. Q&A service
g.Troubleshooting systems

Measuring Effectiveness
• Rarely do ads result in immediate business.
• But, it does create awareness hopefully leading
to preference.
• Measurements can be direct or indirect.
• Direct communication is measured by:
“percent awareness.”
• Indirect communications are measured by:
“word-of-mouth” and “understood perceptions”.

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Five Primary Areas for

Evaluating Evaluating Advertising
Advertising
1. Sound measurement
program entails substantial
advanced planning.

2. The advertising strategist

must determine:
• What is to be measured
• How to measure it
• In what sequence

3. Establish benchmarks in pre-

evaluation phase

Figure 13.2

Evaluation Measures include:

• Knowledge
• Recognition
• Recall
• Awareness
• Preference
• Motivation

• It is not always possible to measure effects

on actual sales.

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Trade Shows
• Another important form of promotion is trade shows.

• Effective selling message can be delivered to a

relatively large and targeted audience at one time.

• Firm can identify potential clients and provide sales

personnel with qualified leads.

• Trade shows can also be used to introduce new

products.

Trade Shows: Strategy Benefits

• Customers can get hands-on experience with product in one-
on-one selling situation.

• Company can enhance general goodwill.

• Company often benefits from free publicity.

• Trade shows allow competitors to look at each other.

• International business can be facilitated resulting in quicker

entry into foreign markets.

• Many sales are also made at these shows too!

• Cost of meeting prospects is around $250 which is much less

than making a personal sales call.

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Trade-Show Communications Strategy

• To develop an effective trade show communications strategy,

certain questions need to be addressed:

• What functions should trade show perform in total

marketing communications program?
• To whom should trade show marketing effort be
directed?
• What is company’s appropriate communication mix at
the show?
• How should trade show investments be audited?

Trade Show Objectives

1. Discover decision influencers.

2. Identify potential customers.
3. Provide company product, service and information.
4. Try to discover product application problems.
5. Create sales.
6. Handle customer problems.
7. Build corporate image.
8. Gather competitive intelligence.
9. Enhance sales force morale.

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Selecting the Trade Show

 Challenge Question: What trade show to attend?

 Answer: Attend trade shows that are attended by

prospective customers.

 To find trade shows, use leading trade show

directories such as:
a. American Trade Show Directory
b. ExhibitNet.com database
c. Exhibit Surveys, Inc.

Selecting/Evaluating Trade Shows

Exhibit Surveys, Inc. publishes data on:

Net Buying Influences

• Measures percentage of show audience that have
decision authority for product types being
exhibited

Total Buying Plan

• Measures percentage of audience planning to buy
exhibited products within 12 months

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Lead Generation
• Trade shows are probably most important for lead
generation.

• Attaining leads is so important to companies

because without them, a company cannot survive.

• There is a natural turnover of customers so a

company has to constantly be looking for new
business.

• It’s just a way of life.

Preparing for the Trade Show

 Trade shows are different than personal selling even though

one is selling never-the-less.

 The trade show is more theatrical, and contact is very short

(5-10 min.), therefore the process is to:

 Sell the product first,

 Sell the company next,
 Sell the salesperson last.

 This is opposite to traditional selling situations.

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Trade Show Traffic Flow

Flows Tactical Activities

Show Attendees
Pre-Show &
At-Show
Target Audience Impersonal
Promotional
Activities
Attracted To Booth

Personal
Contact w/Salesperson Promotional
Activities

Sales Leads

Source: Gopalakrishna & Lilien, A Three-Stage Model of Industrial Trade Show Performance,”
Working Paper #20, Marketing Science 14 (Winter 1995) :pp.22-42

Measuring the Success

• Companies need to set measurable goals in advance of
the trade show including:

a.Number of leads
b.Likely effect on sales
c.Potential effect on new accounts
d.Effect on corporate image
e.Expenditures that tie into an adequate ROI

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