INDUSTRIAL MARKETING

ADVERTISING AND SALES PROMOTION

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

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
5

4.When introducing new product or improved product Go to customer's customer to convince him to specify this product in his order OBJECTIVES

Advertising-A marketing tool User to know what tasks it is suited for and what for he wi II use it
Overall company objective Goals of marketing activity Objectives of advertising Advertising goals vary from company to company and time to time

Some general objectives are 1.To Inform Primary objectives of all advertisers is to inform about his 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
7

3. To get enquiries Every industrial advertisement has this objective Enquiry 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 buying relationships are disturbed Registration needed when moving to new markets, new products or new group of buyers
8

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 the extent 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

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 industry is to be reached. 7. To reduce selling expense Reduces salesman's work hence cut costs Regular contacts necessary otherwise even loyal customers 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
10

9.To establish recognition and reputation Straight product advertising doesn't help Company reputation and Brand recognition required, since more familiar brands specified People 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 ad Cooperative promotion-Subsidised,name printed on catalogue

11

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 corrected Synthetic product/ Natural product Polyamide cage /Steel cage

12

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 objectives Several objectives could be in one campaign but weightage may be different Goals must be clearly understood and advertising tools should be effectively used
13

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 year Neither 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 do Decide the tasks-Budget the costs Management will decide-Which tasks worth the cost and within financial resources Better method
14

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
15

APPEALS USED 1.Economy- Does not mean low selling price(Low cost in use) 2.Quality- Catchall appeal 3. Efficiency 4.Dependability 5. Power 6.Strength 7.Durability 8.Accuracy 9.Service 10.Complete line 11.Experience Patronage appeals 12.Popularity
16

Which appeal? Choice will depend upon 1.The particular characteristics of the featured product that distinguish 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

17

INDUSTRIAL ADVERTISING COPY Orientation Fundamental difference-In point of view from consumer advertising Consumer-Reads for pleasure Industrial consumer-Primary to help him Reads 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
18

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 and practical 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
19

Trademark VIS Institutional 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
20

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 Purchase Foreman

Different magazines

21

ROLE OF ADVERTISING AGENCIES

Specialist organizations, equipped to provide range of advertising services to their clients Advertising 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 charges Lump sum payment made Many do not use advertising agencies, have their own department Copy technical, catalogue difficult
22

MEASURING ADVERTISING EFFECTIVENESS

Advertising--marketing management tool, Use effectively with other tools To the extent--Noticed, read and recalled Essence--Influence on thinking and action to make/influence buying decision Check 1.To bring in orders--Change in sales volume Cost of selling added volume 2.To get enquiries--Cost per enquiry, then cost per order 3.Create attitude/Dispel bias--Attitude surveys 4.To inform-- Before and after surveys
23

PUBLICITY Non personal stimulation of demand for a product, services or business unit, by planting commercially significant news about 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
24

Some--Very powerful tool Company made known to potential customers Enhances prestige Introduction 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 press Write technical articles

25

Write books

Speaking before other organization

Papers on current research and new product development

Plant visit by people

26

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
27

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
28

Demonstrating non portable equipments Meeting competitive effort Hiring personnel Establishing 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 policies Rates charged Restrictions on exhibitors Number & types using show regularly

29

Planning and operating the exhibit Proper selection and dramatising the theme Preparation and display of headlines, illustrations Background of booth Operations--By sales Take help from technical Samples, give aways Follow up Mail what is asked for, Salesman visit Critically review--Design, layout,registration,handling of traffic, presentation, accuracy Analyse and redefine objectives, usefulness

30

Sampling To introduce new product To 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
31

Direct mail Specialised form of correspondaftce Objectives-- Wide, varied 1.Quick distribution of new product 2.Build prestige for company name

3.Paving way for salesman's call

4.Substitute for salesman 5.Followup for salesman's call 6.Sales aid for distributors--Convincing them to handle product 7.Testing , acceptance of new product
32

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 adopted To get product recommendations To help get approval

33

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

34

Advertising novelties It is the necessary means of promotion. Advertising novelties are small,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

35

Entertainment to customers Very important Depends upon product May be viewed negatively

It is contrary to good business judgement

Consideration of propriety

**************

36