2 business discussions - due in 16 hours

Part V: Promotion and Distribution Decisions

Part IV of this text examined how the product and price elements of the marketing mix combined to provide an offering of value to a specific target market. Part V investigates the two remaining ele- ments of the marketing mix in detail: promotions and place. Specifi- cally, Chapter 11 explains how the value that is inherent in the good or service offered by an organization is communicated to prospective purchasers. This requires creating customer awareness for the spe- cific brand and conveying images and information that support the intended positioning strategy. Chapter 12 looks at the two central components of the place element within the marketing mix: channel and distribution decisions. Moving goods and services from where they are created to where they are demanded is the critical func- tion met through the place-related decisions made by marketing managers.

Contents:

Chapter 11: Promotions: Integrated Marketing Communication

Chapter 12: Marketing Channels and Distribution Decisions

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Learning Outcomes

By the end of this chapter, you should:

• Be able to identify the elements of the promotions mix and their basic characteristics.

• Know the essential objectives of marketing communications.

• Be able to compare and contrast the hierarchy-of-effects model and its implications to the Elabora- tion Likelihood Model.

• Be able to identify the major steps in the development of effective communications programs.

• Know the four general classifications of sales functions and be able to describe the sales process.

• Understand how the effectiveness and efficiency of the sales effort can be improved through sales training and appropriate compensation of the sales force.

11

Promotions: Integrated Marketing Communication

Hemera/Thinkstock

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CHAPTER 11Introduction

Introduction

Promotions serve a critical function within the marketing process. Their value rests in their ability to inform a selected audience of the benefits of buying one uniquely positioned brand from among the array of competitive offerings available. Conse- quently, the primary objective of marketing communications is to persuade prospective buyers by shaping their attitudes toward the brand. As we explored in Chapter 5, attitude change can be accomplished by the provision of brand-specific information and images. The path of progress in changing attitudes is mediated by the individual’s level of involve- ment or interest in the product being marketed.

This chapter focuses primarily on the role of promotions in the process of persuasion. The beginning sections of this chapter introduce the elements of the promotions mix and their characteristics. This is followed by an examination of the three fundamental goals of mar- keting communications and our understanding of the processes that govern and limit the effectiveness of promotions and advertising programs. The central section of the chapter presents a five-part model for designing effective advertising programs with a particular emphasis on product positioning objectives. The concluding sections focus exclusively on personal selling and sales management as essential weapons within the promotions arsenal. A sales process model is developed, and issues related to sales force recruitment, training, and compensation are discussed.

* * *

Most effective advertisements and sales presentations share one important similarity: They tell stories. The experiences of one metro Milwaukee family illustrate the difference that a story can make. The family was faced with the difficult task of finding the right skilled nursing facility for Lois, the 87-year-old family matriarch. They met with representatives of two suburban facilities who made very similar presentations. Each stressed the high quality of skilled nursing care, Medicare certification, recreational therapy programs, nutritious meal plans, pastoral care, and the availability of many special programs and activities. One offered a more comprehensive physical rehabilitation program and the other had a lower staff-to-resident ratio, but they seemed essentially the same. The third facility that they visited was not appreciably different from the other two. The services and facilities were of equally high caliber and the range of opportunities available was comparable. The presentation made to the family, however, was substantially different. Rather than meeting in a conference room, the center’s representative escorted the family throughout the complex, explaining how each of the areas and facilities would meet their family member’s needs. Women were having their hair and nails and done in the on-site salon. Wheelchair-bound residents were playing a game called balloon ball in a large recreation room. One small group of seniors was in the midst of a book club discussion while another was playing cards. The family and the guide also visited a few of the residents in their rooms.

At each stop along the way, the center’s representative related short personal vignettes about some of the residents’ interests and activities. She stopped to introduce some of the residents along the route and let them relate their own experiences and opinions about the facilities. She answered all of the family’s questions as they arose . . . questions that had not even occurred to them when visiting the other facilities.

The facility’s representative was effective because she was able to provide a living illustration of how this nursing home was the caring solution to the challenge the family confronted. Most of all, the family was able to visualize how this facility would meet their loved one’s needs. They made their decision that afternoon and felt far better about it than they had thought possible.

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CHAPTER 11Pre-Test

Pre-Test

1. What is the main disadvantage of sales promotions? a. They place a strong emphasis on price. b. They boost short-term product demand. c. They are only one part of the promotions mix. d. They are often used in markets where brand loyalty is low.

2. When promoting a new brand in a new market, which of the following market- ing communications objectives should occur first?

a. reinforcing brand preference b. promoting brand preference c. creating brand awareness d. underscoring past purchase behavior

3. At which stage of the marketing communications process does advertising of your product capture potential customers’ attention such that they see your product could fulfill certain needs or desires?

a. awareness b. interest c. desire d. action

4. Advertising a. is an investment in earning future sales. b. cannot be related directly to increases in sales. c. in the long run has only a marginal effect on brand awareness and positioning. d. is usually not necessary for the top-of-mind brand.

5. “Trade selling” typically occurs as part of this type of sales function: a. sales support b. customer service c. new business development d. current account maintenance

6. Your company manufactures a variety of complicated equipment used by biol- ogy research labs at universities and private companies. It makes the MOST sense to create a

a. product-driven sales structure. b. geographic-territory-driven sales structure. c. customer-driven sales structure. d. price-driven sales structure.

Answers 1. a. They place a strong emphasis on price. The answer can be found in Section 11.1. 2. c. Creating brand awareness. The answer can be found in Section 11.2. 3. b. Interest. The answer can be found in Section 11.3. 4. a. Is an investment in earning future sales. The answer can be found in Section 11.4. 5. d. Current account maintenance. The answer can be found in Section 11.5. 6. a. Product-driven sales structure. The answer can be found in Section 11.6.

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CHAPTER 11Section 11.1 The Promotions Mix

11.1 The Promotions Mix

The promotions mix is a term used to refer to “the various communication techniques such as advertising, personal selling, sales promotion, and public relations/prod-uct publicity available to a marketer that are combined to achieve specific goals” (American Marketing Association, 2012). In most instances, the goals relate to informing prospective buyers about specific brands and persuading them to buy. The significance of a promotions mix concept rests in understanding that although each of the ingredients has significant potential in its own right, the net impact of each ingredient can be significantly enhanced when used in conjunction with other elements. Integrated Marketing Com- munications (IMC) is a term sometimes used to refer to the coordination of the promo- tions mix, in support of a product or service, to maximize the persuasive impact on the intended audience in the most financially efficient manner possible.

Consistent with the IMC concept, all of the elements of the promotions mix should work together and reinforce each other to promote a brand such that the combined persuasive impact of the promotional parts is greater than the sum of the individual ingredients. That is, all of the parts of the marketing communications plan should be both comple- mentary to each other and synergistic in their combined impact. The four promotions options available to marketing managers are introduced in the sections that follow. Each alternative possesses specific strengths and is especially well-suited to specific situations and opportunities. Following this introduction, the balance of the chapter focuses on the two primary elements of the promotions mix: advertising and personal selling.

Advertising

Advertising refers to any paid form of nonpersonal communication between a seller and potential buyers. It is a paid form in the sense that it compensates media outlets to deliver the advertiser’s message. Traditional media include television, radio, newspapers, maga- zines, trade shows, catalogs, and direct mail. These media options have provided one-way communication from the seller to the consumer with very little interaction between the two. However, marketers are increasingly using the Internet and social media to interact with consumers and tailor the content of ads to relevant personal characteristics of the prospective buyer. The significance of these emerging media options to marketing com- munications is investigated in Chapter 13.

Marketing plans for both consumer and industrial goods have relied on mass media advertising to reach potential buyers for hundreds of years. It gives the advertiser com- plete control over the content of the message being delivered and can reach a very large audience very cost effectively.

Advertising also offers marketing managers substantial creative flexibility, depending on the specific class of media being considered. Television provides nearly limitless options in the expression of action, color, and sound. Radio is more restricted in its technical capa- bilities, but it often relies on appeals to the audience’s imagination or theater of the mind. Print, electronic, and online media possess specific inherent strengths and weaknesses as well. However, all media have the power to foster a wide range of emotions when used to their greatest potential. Consider the following examples. Each conveys substantially different emotional appeals while relying almost exclusively on a single image or photo- graph to communicate the intended impression or meaning.

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Think About It

Examine the following ads. Can you identify the emotional button that each is trying to press?

Why would the emotion triggered by the advertisement be an effective way to promote the product or message that is featured?

Though advertising offers several advantages over other promotions alternatives, its impact and value may be substantially limited due to the crowded media marketplace. Most consumers are bombarded daily by hundreds of advertisements. Breaking through the clutter to achieve a significant impact on your intended audience can be difficult. Although carefully selected advertising media vehicles can make reaching your audience cost effective, the success of an advertising campaign in influencing your target market is often dependent on the creative impact of your message and execution.

Personal Selling

In contrast to advertising, personal selling is a form of promotion that involves personal interactions between company representatives and prospective customers. More specifically, the seller ’s direct contact may be with any individual at the buyer ’s organization who is likely to have a role in the purchasing decision. Personal selling can take place via face-to-face meetings, telephone conversations, videoconferencing, or other interactive media.

Personal selling is a process of persuading others that often relies on a combination of spoken and written communication. It almost always plays a more prominent role in the promotions mix for business-to-business than those selling directly to end consumers. The most common exceptions occur for “big ticket” consumer items such as cars, real estate, and investments. The greatest advantage to be found in personal selling is its interactive

Associated Press

Associated Press Associated Press

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nature. Salespeople can refine and reshape their message to prospective buyers based on the feedback they receive during the sales call. Each sales message can be uniquely tai- lored to the needs of the individual customer, and the buyer’s specific questions or objec- tions enable the seller to focus its energies on addressing those issues of greatest concern. This is particularly critical when the product being promoted can be custom designed and the terms of sale are negotiable.

The primary limitation of personal selling relative to other forms of promotion is cost. Recruitment-, training-, and compensation-related expenses make sales calls far more expensive on a per-customer basis than advertising. The impact, however, should also be substantially greater. Whether personal selling is a viable option for a given product is simply a function of the costs of selling relative to the profitability of each sale. Consider how cars have been traditionally sold. They are sufficiently sophisticated and complex to warrant having a trained professional assist prospective buyers. The profit margin real- ized from the sale of new cars is sufficient to compensate a salesperson for his or her work. We’ll discuss personal selling and advertising in more detail in upcoming sections.

Sales Promotions

Sales promotions are short-term price incentives intended to encourage customers to buy a specific brand within a specified time frame. The objective of most sales promotions is to build sales volume in the near term by lowering the price paid by the buyer. Com- mon forms of business-to-consumer sales promotions include discount coupons, rebates, and point-of-purchase savings. Other types of B2C sales promotions are intended to boost sales by providing nonprice incentives. These include contests, sweepstakes, loyalty programs, free product trials, and free prod- uct samples.

Sales promotions aimed at dis- tribution channel intermediar- ies (wholesalers and retailers) are also used extensively in business- to-business marketing programs. Usually termed trade promotions, they include different types of manufacturers’ efforts to support existing channels of distribution and encourage the development of new ones. These include cash incentives, sales contests, mer- chandising support, and quan- tity discounts on purchases made within a fixed interval.

Sales promotions can be very effective in generating short-term sales for a product. They can be particularly effective in markets where brand loyalty is low. Many types of B2C sales promotions can be effective in stimulating customers to try new brands and new products, especially when paired with corresponding B2B incentives to support channel

Associated Press

Quantity discounts, like these 2 for $4 promotions on Smucker’s products, are intended to build sales volume at a reduced price.

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participation. Loyalty programs such as frequent shopper cards and buy-one-get-one-free promotions, in turn, are often used to reinforce brand loyalty.

The primary disadvantage to most forms of sales promotions is the emphasis on price. Discount coupons, for example, are intended to stimulate sales by reducing the buyer’s cost to purchase. The satisfaction derived from the purchase is intended to come from the product, not the savings. However, in product markets where discount coupons are fre- quently used by competing brands, customers come to expect them and may be unwilling to make a purchase without one. The loyalty, purchase satisfaction, and positive reinforce- ment in this instance have been transferred to the coupon redemption experience rather than a brand. If all competitors engage in competitive couponing, each brand suffers a corresponding loss in per-unit profit margins and no one wins.

In most marketing contexts, sales promotions are subordinate to other elements of the marketing mix rather than operating independently to achieve specific goals. They are most commonly used in support of related pricing and advertising tactics to provide short-term incentives. As illustrated in Chapter 9, consumer-directed sales promotions such as coupons and price dealing are often used in the introductory stage of the Prod- uct Life Cycle (PLC) to encourage innovators to try the product and early adopters to accelerate the process of building sales volume. Sales promotions targeting resellers can also be effective during this stage of the PLC by promoting the development of distribution networks.

A distributor’s commitment to promote and distribute a new brand is often a direct response to the incentives provided by the manufacturer. The stimulus to buy and resell throughout the channel of distribution is usually a function of pricing and the strategic use of promotions to either push or pull the product through the channel. Chapter 12 provides a detailed examination of the role played by sales promotions in managing and promoting product distribution.

In later stages of the PLC, sales promotions are a tactic used primarily in conjunction with advertising to battle for brand sales in fast-growing product markets. As competitive rivalries heat up in the growth stage, the role of sales promotions is primarily oriented toward building and protecting market share. Similarly, the primary role of sales promo- tions in the maturity phase of the cycle is to capture market share from competitors in relatively stagnant product markets. As market growth turns negative, brands often rely on sales promotions to reinforce existing levels of sales volume.

Public Relations

Public relations are nonpaid, impersonal promotional communications distributed via the news media or other vehicles outside the direct control of the seller. Publicity is the most common form of public relations used to disseminate information about a company or product, and traditional news media provide the most common medium of commu- nication. The public relations, or PR, activity usually takes the form of feature articles or broadcast stories intended for customers, shareholders, or other stakeholders. However, companies are increasingly reliant on the Internet and nontraditional media to reach their intended audience. Many companies employ public relations firms to assist in the place- ment of stories in media that will most efficiently and effectively reach their target audience.

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The Johnson & Johnson Campaign for Nursing is a multimedia public relations program intended to reinforce the company’s image as a leading producer of health care products. The focus of its message is that the company supports nurses as the pivotal players in providing direct, hands-on care for patients. Its website (http://www.campaignfornur sing.com), press releases, instructional materials, and scholarship programs emphasize the company’s dedication to supporting caregivers rather than promoting the products it sells. This linkage between the company and a commitment to nursing is designed to enhance the target audience’s appreciation of Johnson & Johnson as a trusted name that truly cares for its customers.

Public relations has the potential to provide favorable exposure for a company or product without direct payment to the publisher or distributor of the information. Since the infor- mation reaches the audience from an independent and trusted news source, it tends to be regarded as more credible than paid advertisements in the minds of receivers. It also has the advantage of being relatively inexpensive to produce.

The primary drawback associated with public relations as a promotional tool is that it is not reliable. The sponsoring firm has little control over independent media’s decision to carry the stories. The media outlet may choose to ignore it, use only a portion of it, or release it at a time that is not well suited to the needs of the sponsor. The growing influ- ence of the Internet as a form of nontraditional media, however, has provided a wide array of alternatives. In addition to creating unique, issue-specific websites, companies can collaborate with a vast range of potential partners in both the for-profit and nonprofit sectors to get their message to the intended audience.

Adverse events beyond the immediate control of the firm always have the potential to produce negative publicity for an organization. Financial misconduct on the part of company officials, catastrophic product failures, environmental disasters, and human resource–related failures can all create unwanted news events. In those instances, many companies will rely on public relations firms to assist them in damage control operations and managing the flow of information from inside the firm.

Think About It

Each of the four elements of the promotions mix has certain advantages and disadvantages, depend- ing on your objectives in using them.

Which of the four would be best if your goal were simply to reach as many people as possible with a message for the lowest possible cost?

Which ones would probably be most cost effective if you wanted to target horse owners with an advertisement for cowboy boots?

If selling these boots really depended on having an interactive conversation with prospective buyers to explain why they are so special, which option would be best? If you had no money to spend on pro- moting these amazing new boots?

What if the objective were to sell as many cowboy boots as quickly as possible? What combination of promotions might work best?

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CHAPTER 11Section 11.2 Advertising Communication Objectives

The balance of this chapter focuses exclusively on two primary elements of the promo- tions mix: advertising and personal selling. The first sections examine the rationale and marketing logic that support the development of effective advertising programs. This is based on a five-part process model that depends on the meaningful translation of the brand’s target market to a clearly defined target audience. The concluding sections of the chapter focus on personal selling with an emphasis on working with prospective clients to meet their needs as the cornerstone of effective sales programs.

11.2 Advertising Communication Objectives

As noted in Chapter 6, the final outcome of strategic planning at the brand level will always be a positioning strategy. In that sense, positioning will also always be the primary objective for marketing communications. Positioning is a complex construct based on understanding how target consumers’ preferences are shaped by their perceptions of product attributes and brand-specific benefits. The execution of the promo- tions mix plays a critical role in operationalizing this strategy through ad messages, sales presentations, sales promotions, and public relations efforts. That is, the promotions mix for a given brand reflects the marketing manager’s plan for how the organization and brand will relate to its customers and competitors.

To be effective, all of the elements of the promotions must be integrated, targeting the same goals. Brand positioning provides the broad strategic objective for the promotions mix. However, the means by which this ultimate goal can be achieved depends on a mix of three specific communication objectives that must be met over the life cycle of the product: creating brand awareness, promoting brand preference, and reinforcing past purchases. Although each of the elements of the promotions mix can make significant contributions toward achieving these goals, our focus for this section of the chapter will be on the role of advertising.

Creating Brand Awareness

Recall from Chapter 9 that a fundamental role of advertising and other forms of promo- tions in the introduction stage of the Product Life Cycle is to inform prospective custom- ers of the brand’s existence. This is true for both the initial stage of wholly new product categories as well as the introduction of a new brand to an established product market.

The initial objective of advertising aimed at reaching innovators and early adopters with information about the availability of a new, innovative product is typically geared toward informing prospects about its existence. A shift in emphasis to relaying informa- tion about brand-specific attributes and benefits will take place once competitors enter the market. When yogurt was first introduced to the United States as a specialty health food in the 1950s, the initial promotional objective was to build product-level aware- ness, stimulate consumer interest, and create primary demand. The importance of creat- ing brand awareness grew as category sales developed over time and competing brands entered the market.

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Once the category was established, brands such as Dannon, Breyers, Colombo, and Yoplait sought to establish unique identities within the competitive market. Even in a seemingly stable market, the process of creating and reinforc- ing brand awareness continues to evolve. In 2011, the Breyers yogurt brand was discontinued in favor of Yo Crunch. In that same year, the Colombo brand name (the old- est of the U.S. brands) was discon- tinued in favor of General Mills’ exclusive focus on the Yoplait brand (Unilever USA, 2012). New flavors, brands, and varieties (e.g., light yogurt, Chobani Greek Yogurt) also require advertising and other promotions to build ini- tial awareness.

Promoting Brand Preference

Promoting brand-specific preference in competitive markets is not entirely independent of building brand awareness—consumers cannot prefer brands of which they are not aware. The desired outcome in promoting brand preference is to build and reinforce selec- tive demand for a specific brand by promoting favorable attitudes toward the brand. This requires persuasion. Persuasion within the context of marketing is defined as “changes in consumers’ beliefs and attitudes caused by promotion communications” (American Marketing Association, 2012).

As discussed extensively in Chapter 5, attitudes are the powerful personal factors that direct which brands consumers will buy. The multi-attribute model of attitude forma- tion defines attitudes toward brands as a composite of beliefs about attributes that the buyer regards as essential to the product, weighted by the importance of those categories of beliefs. In short, attitudes measure how prospective customers evaluate the bundle of benefits provided by competing brands relative to their specific needs. Marketers’ under- standing of this multi-attribute perspective on persuasion is readily evident in advertising strategies that are used in every area of B2B and B2C marketing. In fact, it is difficult to find ads within competitive product markets that do not rely on the promotion of specific attributes and benefits to create a favorable positioning strategy. Each of the following ads emphasizes a specific attribute or benefit as the basis for persuading readers to buy their brand instead of competitors’ brands.

In some instances, advertisers will use comparative advertising to draw explicit and direct contrasts between their brand’s unique characteristics and those of competitors. The distinctive feature of comparative ads is that competing products are identified by name. To make comparative ads maximally effective, the point of contrast between brands

Associated Press

Even in a seemingly stable market like yogurt, marketers continue to create and reinforce brand awareness. How does the introduction of new brands and varieties play into this process?

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Reinforcing Brand Preference

In many mature markets, the absence of overall sales growth for the category fuels aggres- sive competitive rivalry for market share. Consequently, brand managers rely on advertis- ing to defend their position and share against the threat posed by established competitors and occasional new entrants. Prevailing levels of customer satisfaction within the estab- lished target market depend on the perceived value of the brand and buyers’ perceptions of value relative to competing brands. In this sense, successful positioning represents both the building up and the maintenance of a desired brand identity, as well as successfully defending it against the attacks posed by competitors.

Reinforcing brand preference within one’s existing customer base is an essential advertis- ing function. A brand image created and maintained by years of extensive promotions and positive customer experience represents a tremendous investment to create positive brand equity. Consequently, reinforcing brand preference and positioning through ongo- ing investments in the promotions mix is a financially sound decision. This basic goal can be pursued by marketing managers in several ways.

needs to be on the product features that the target audience regards as most critical to their satisfaction with the purchase. Consequently, comparative ads for food products typically focus on taste. However, better nutrition or greater convenience would be appropriate claims if these attributes represent key considerations for the target market. Similarly, comparative ads for cars should stress economy, performance, or safety in accord with the priorities of the target customer.

Think About It

Select a product category and collect ads from four of the leading brands. Based on these messages, define how they are being positioned relative to each other.

Are any of the companies using a comparative ad strategy?

Associated Press

These ads highlight what sets their products apart from the competitors. How might a guarantee or novelty shell distinguish these products from others in their category?

Jeff Waskowiak/Cobb Cycling

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Reminder advertising is a term sometimes used to identify ads intended to keep already familiar products readily available in the minds of consumers. This effort to promote top- of-mind awareness is intended to trigger the desired brand choice when the buyer is ready to purchase. The emphasis is on reinforcing the familiarity of a trusted brand name rather than providing reasons to buy the product.

Some reminder advertising is linked to specific purchase occasions. Cross brand pen and pencil sets are often promoted as high school graduation gifts. Samsonite brand organiz- ers and briefcases are sometimes featured as gifts for new college graduates. Prestone antifreeze focuses reminder ads near the start of winter, while Contac allergy-relief prod- ucts place more emphasis on the early spring.

For more frequently purchased products, advertising messages are sometimes used to remind customers to stock up on their favorite brand. Stock-up sales encourage multi- ple purchases and build sales volume over specified periods. Sales promotions and price discounts are often used to reinforce the call to buy now. But these types of events also have the potential to protect a brand’s core customer base by blocking out competitors for several purchase cycles. Consider Campbell’s annual back-to-school sales on a wide range of soups and shelf-stable healthy meal ideas. The changes in daily routines that come with a new school year pro- vide a good opportunity to fea- ture several products. However, encouraging customers to stock up on several months’ worth of tomato soup or sloppy joe mix also locks competitors out of these households and provides opportu- nities to reinforce brand preference through direct experience and sat- isfaction with the brands. This technique is sometimes referred to as pantry management, since the goal is to directly influence the range of brands and products in the customer’s home.

Well-designed advertising programs have the potential to accomplish these three types of objectives: creating brand awareness, promoting brand preference, and reinforcing past purchases. The section that follows investigates how advertising works and the processes that govern the impact of advertising messages. The two alternative types of models considered here are hierarchy-of-effects models and the Elaboration Likelihood Model. Following the presentation of these process models, the final section on this topic delves into the specifics of how to design efficient and effective advertising programs.

Associated Press

Campbell’s annual back-to-school sales aim to lock out competitors by encouraging consumers to stock up on an affordable meal option that fits into their busy schedules.

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11.3 The Marketing Communications Process

Sustained levels of profitability and acceptable rates of return on invested financial resources are two of the primary goals driving brand management decisions. Within this context, expenditures on advertising and promotions can be regarded as invest- ments in future sales. However, there are intermediate communication goals that must be accomplished to build the brand and achieve the desired positioning strategy that ulti- mately drives product sales and profitability. Throughout its history, the discipline of mar- keting has developed several models that try to describe how advertising creates positive sales responses within target audiences. This section introduces two alternative perspec- tives on the process: hierarchy-of-effects models and the Elaboration Likelihood Model.

Hierarchy-of-Effects Models

Hierarchy-of-effects models of communication include several conceptual representa- tions of how advertising elicits responses from an audience. This concept is “based on the premise that advertising moves individuals systematically through a series of psy- chological stages such as awareness, interest, desire, conviction, and action” (American Marketing Association, 2012). Each step of the hierarchy represents a cognitive stage or mental state that the message recipient must move through before deciding to purchase the advertised brand. Each step represents a response hurdle or threshold that must be overcome for the ad to be effective in persuading a prospect to buy.

Although several models have been proposed, they typically share four common steps, as shown in Figure 11.1: awareness, interest, desire, and action.

Figure 11.1: The AIDA hierarchy-of-effects model

Awareness

Interest

Action

Desire

Adapted from AIDA sales funnel, http://www.mediacontour.com/blog/2012/07/the-marketing-landscape-aida-and-social-media/#more-854

The premise of all hierarchy-of-effects advertising models is that the message must move its audience through a sequence of stages in order to effectively impact behavior.

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Another characteristic that hierarchy-of-effects models share is that the proportion of pro- spective buyers remaining subject to the influence of the advertisement declines as the audience moves through each of the stages. That is, each successive stage eliminates some percentage of prospects from considering the advertising message any further.

Awareness The minimum requirement for any advertisement to impact the attitude or behavior of a message recipient is awareness. This represents the first hurdle or prerequisite that an ad must surmount to be effective. If the brand is unfamiliar to the audience, building brand name recognition or awareness may be the primary objective of initial messages within an advertising campaign. This is often accomplished through the presentation of simple messages with high levels of brand name repetition.

Advertisers have a vast array of techniques at their disposal to gain an audience’s atten- tion. The use of attractive stimuli (babies, puppies, fashion models, humor, action, excit- ing sporting events, etc.) can momentarily secure the attention of many viewers. However, for the ad to create brand awareness, these unconditioned stimuli must be successfully paired in the viewer’s mind with the brand being advertised. This principle of classi-

cal conditioning was introduced in Chapter 5. The brand itself must be featured as the focal point of the message and not get lost by the impact of the attention-getting devices. This problem plagued early advertisements that featured a finicky cat named Morris. Every- one seemed to recognize and like the persnickety cat that was very particular about the food he ate. They remembered the antics and plot lines for the short Morris-the- Cat vignettes that went into the 30-second television ads. But rela- tively few people remembered the brand name of the cat food. Morris is still the official spokesman for the brand after more than 40 years on television, and his face is still on the product packaging (Del Monte Foods, 2012). But can you name the brand he represents?

Interest Simply being aware of the advertisement at a relatively low level of attentiveness can effec- tively make prospective customers aware of the seller’s brand name. However, a deeper level of involvement with the message is required to make the prospect interested in what you have to say. Consequently, once an audience’s attention is initially captured, the next objective is to convey information or images that relate to the target audience’s product- related wants and needs. In a sense, the goal at this stage is for the advertisement to con- vince the recipient that what it has to say is worth the audience’s time and commitment.

Bettmann/Corbis

Brand must remain the focus of an advertisement. Morris the Cat provides a good example of how brand can become lost when too much emphasis is placed on capturing the consumer’s attention.

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Action If an advertisement has been successful in moving some members of the target audience through the first three stages of the hierarchy of effects, a significant portion of these prospects is available to purchase the advertised brand. The probability of following through with this intention usually increases with successive exposures to the same or similar messages.

Marketing managers need to be realistic and sometimes skeptical when considering the sales potential that is directly attributable to an advertising message or campaign. To bol- ster the impact of advertising, sales promotions (e.g., coupons, sweepstakes) are some- times used to stimulate the desire for a product when the core advertising message is ineffectual or the brand is difficult to differentiate from competitors.

Continuing with the Morris the Cat example, the brand name behind this celebrity feline is 9 Lives cat food. If the use of the world’s most finicky, yet adorable, cat is initially successful in capturing the audience’s attention, the brand then needs to provide information of inter- est and direct relevance to the prospective customers. If the target audience is new cat own- ers, then information on the nutritional needs of cats and corresponding characteristics of 9 Lives Daily Essentials would be appropriate. For the owners of older cats, messages related to the particular benefits of the Long Life or Plus Care lines would be of greater interest.

Desire Once the target audience has acquired information about the brand, the question remains: Based on the advertisement, do they like it? Well-designed ad messages seldom alienate prospective customers, but most of them fail to create a real desire to purchase the brand. Creating an initial preference for the brand over others in the category is a very lofty goal for an advertising campaign. However, if consumers are unfamiliar with the specific brands within a category, a tentatively positive impression and speculative level of prefer- ence may be enough to prompt a trial purchase. If the buyer attends to the message and perceives a close fit between his or her product-related needs and the promises made by the brand being advertised, this is a feasible outcome.

Think About It

Let’s consider the odds against advertising. Several formulations of the hierarchy-of-effects model include provision for the statistical likelihood of moving from one stage to the next. Assume that you have 100,000 cat owners in a television audience of 1 million.

What is the likelihood or probability that cat owners would pay attention to your ad? Fifty percent? So now you have 50,000 prospects. What is the likelihood that any one of those 50,000 will have an interest in cat food that specifically promotes the urinary tract health of older cats? Ten percent? So now you have 5,000 prospects. How many of them would cross the threshold from interest to desire to buy this brand after seeing the ad? Five percent? That leaves you with 250 prospects from the ini- tial audience of 1 million viewers. How many of them are likely to follow through and remember to buy the product the next time they’re shopping for cat food?

If you spent $3.5 million for the 30-second message on television to reach the total audience of 1 million, how good is your return on investment likely to be?

In what ways is this one isolated example likely to underestimate the potential power and value of advertising?

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Arriving at this final stage of the model requires that consumers have become aware of the featured brand, grown interested enough to attend to its unique benefits, and devel- oped the desire to buy the brand. The fundamental principle underpinning the hierarchy- of-effects models is that attitudes toward brands are initially shaped and subsequently altered by an advertisement’s ability to lead a prospect through this sequence of cognitive steps or hurdles. The model requires that the cognitive activity required to overcome the obstacle posed by each stage be completed before progress to the next level is possible. Ultimately, hierarchy-of-effects models assume that persuasion is contingent on learn- ing and recalling specific information from an advertisement. An alternative model for understanding how advertising communications work to impact buyers’ attitudes is the Elaboration Likelihood Model.

Elaboration Likelihood Model

The Elaboration Likelihood Model (ELM), depicted in Figure 11.2, proposes that there are two distinct paths by which an advertisement may persuade a prospective customer: central route and peripheral route (Petty and Cacioppo, 1986). The central route to persua- sion closely resembles the hierarchy-of-effects model insofar as it requires the thoughtful evaluation of the message contents. It is sometimes called the high involvement route since it requires the active cognitive participation or message elaboration on the part of the receiver. It is operative when the audience is motivated to pay attention to the advertise- ment and acquire meaning from it.

Figure 11.2: The Elaboration Likelihood Model

Lasting change that resists fading

and counterattacks

Temporary change that is susceptible

to fading and counterattacks

Audience Factors

Processing Approach

Persuasion Outcome

Message

Deep processing, focused on the quality of the

message arguments

Superficial processing focused on surface

features such as the communicator’s attractiveness or the number of

arguments presented

High motivation and ability to

think about the message

Low motivation or ability to

think about the message

Persuation Attempt

DUAL ROUTES TO PERSUASION

http://mypages.valdosta.edu/mwhatley/7670/activity/attitude.htm

The Elaboration Likelihood Model of persuasion illustrates alternative paths to shaping attitudes via the central route and peripheral route.

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The peripheral route is engaged if the audience responds to the message based on cues in the advertisement other than the relative merits or quality of the arguments or concepts being presented. This would be the case if someone looking at a magazine advertisement for nonprescription pain relievers found the claims made for the brand to be credible based on the photo of a distinguished looking man in a white coat seated in front of a microscope. The image has no direct bearing on the product claims. However, if the illus- tration of scientific research makes the reader trust the message, this result is due to these cues in the ad rather than the informational content of the message.

Many types of peripheral cues may influence an audience’s response to an advertised product. These include the use of attractive and expert spokespeople. The use of cultural celebrities and athletes as either implicit or explicit product endorsers can make the mes- sage more impactful. Similarly, babies, puppies, and kittens can also make a positive impression. Pleasant sensory stimuli such as landscapes, fine art, and music can also be used. The number of concepts or arguments presented in an ad, rather than the content of those arguments, can also impact the persuasiveness of an advertising message.

In contrast to the relatively high level of involvement evident in the central route, the peripheral route is engaged when the audience lacks the motivation to actively think about the information content of the message. In some instances, attitude shifts are attrib- utable to the repeated pairing of the brand with a positive sensory or emotional stimulus via classical conditioning.

The persuasive power related to each alternative route is substantially different. Attitudes that are shaped or changed via the central route tend to be more persistent, more resis- tant to the effects of competing advertising claims, and more directly predictive of actual buying behavior (Petty and Cacioppo, 1986). Attitude shifts that result from peripheral route processing tend to be weaker and less reliable over time, since the changes are based on non-product-related cues within the ad. The lack of involvement or audience motivation associated with the peripheral route also contributes to the relative weakness of these effects.

However, the significance of attitude change facilitated via the peripheral route should not be dismissed. As discussed in Chapter 5, consumers learn a great deal about the brands they buy via classical conditioning. The repeated pairing of favorably viewed stimuli with the advertised brand can make significant contributions to establish the brand’s market position independent of the brand’s performance attributes and characteristics. The rela- tive significance of peripheral route persuasion to the successful positioning of a brand is also enhanced by consumers’ general lack of interest advertisements. Consequently, attitude change strategies that can be effective even when buyer involvement with the message is low are important strategy options.

The value of the ELM of advertising effectiveness lies primarily in its recognition of the two alternate routes to persuasion. It complements the traditional hierarchy-of-effects models insofar as it explicitly recognizes that audiences do not necessarily have to be involved and actively thinking about advertisements for them to be persuasive. It acknowledges that advertising can be effective, even when received passively—the way that most peo- ple engage most advertising. The final section on the topic of advertising explores how to translate this understanding of how advertising works into specific guidelines on the design of effective advertising programs.

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Think About It

Consider the following advertisements.

Which elements of each ad will be most effective for an audience actively engaged in central route processing of information?

Which features would be more likely to influence people passively responding to the ads via the peripheral route?

Associated Press

Associated Press

Associated Press

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11.4 Designing Effective Advertising Programs

Advertising is one of the most common and vital methods by which companies com-municate with current and prospective customers. It also represents a tremendous investment for many organizations relative to their size. Consequently, it needs to be designed to be as effective and as efficient as possible. There is a wide array of step-by- step models to assist marketing managers in creating effective advertising programs. The one briefly presented here focuses on the five essential issues that a marketing manager needs to address when developing an advertising program blueprint for a specific brand. Those issues include specifying the target audience, establishing a budget, designing the message, selecting and planning media, and measuring results.

Specify the Target Audience

The deployment of advertising and other promotional resources for a given brand is dependent upon the strategic goals for market segmentation, product differentiation, and positioning. The marketing manager’s understanding of the typical target customer’s preferences and motivations provides the platform developing an effective advertising program. The first step in the process is to translate this understanding of the target mar- ket into a meaningful target audience description.

In Depth: Influential Works on Advertising Strategy

Two publications from the 1980s have had an enduring and profound impact on the way marketers think about advertising strategy. Communication and Persuasion: Central and Peripheral Routes to Attitude Change (Petty and Cacioppo, 1986) introduced the Elaboration Likelihood Model. This model addresses the question of how audience involvement impacts advertising effectiveness and was dis- cussed in the previous section on the process of communication.

Positioning: The Battle for Your Mind (Ries and Trout, 1981) popularized the concept of product posi- tioning as a fundamental objective of the marketing process. The essential argument made by the authors is that marketers need to appreciate the limitations of mass media advertising and design messages that can be effective within these constraints. They point to information overload as the biggest challenge confronting brand managers. Consumers are simply overwhelmed by competing mass media advertising messages and overcrowded markets that are populated by too many compet- ing brands. Compounding the effect of these unfavorable factors is that most consumers are simply not motivated to pay much attention to product advertisements.

The authors’ solution to effectively promoting a brand within the context of all this noise is to focus on delivering simplified, easily understood messages that capture the vital essence or distinctive mean- ing of the brand in ways that break through the clutter. This provides the basis for competing for one’s place, or position, in the mind of the consumer. These simplified messages or themes provide the plat- form from which to pursue all three of the primary goals of promotions: inform, persuade, and remind.

Many classic ad campaigns that initially pursued this strategy long ago are still in use today. Wheat- ies: Breakfast of Champions. Avis: We Try Harder. Seven-Up: The Uncola. BMW: The Ultimate Driving Machine. Visa: It’s Everywhere You Want to Be. Maxwell House Coffee: Good to the Last Drop. American Express: Don’t Leave Home Without It. Maytag: The Dependability People. Can you think of any others?

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The target market profile developed through extensive and detailed market research usu- ally provides more information than can be meaningfully used in planning an advertising campaign. The target audience needs to be defined in terms that relate to the selection of both efficient advertising media and effective advertising messages.

The target audience for an advertising campaign is typically defined in terms of market demographics and psychographics. Syndicated media rating and research services such as The Nielsen Company, Simmons Market Research Bureau, and Mediamark Research provide data on several key audience demographics. These include sex, age, household income, marital status, education, employment status, type of residence, and family size. If an advertiser sought to reach a target audience composed of households with annual incomes greater than $70,000 and children under 5 years of age, the information necessary to match a good advertising vehicle to this description is readily available. In addition to relying on syndicated data sources, the media outlets themselves readily provide detailed demographic and psychographic audience profiles to prospective advertisers.

Although psychographic data can be important to the selection of media, they are criti- cal to the development of advertising messages. The benefits that prospective buyers are seeking from the brands they purchase are easily the most central consideration when creating the advertising message. However, other psychographic factors can be used to enhance our understanding of how consumers related to products. These factors include personality traits, social attitudes, shopping habits, and other personal interests. Incorpo- rating this knowledge into the development of messages enables advertisers to make the ad more personally relevant.

Think About It

Go to YouTube.com and select a television advertisement at random. Watch the ad two or three times and pay careful attention to the scene, setting, music, use of imagery, etc.

Based on your analysis, what psychographic considerations went into the development of this message?

Do you think they helped the advertisement communicate more effectively with its intended audience?

Establish a Budget

Advertising budgets should be based primarily on the marketing and communication goals for the brand. However, planners also need to recognize that the funds allocated to advertising need to be treated as an investment against future sales rather than sim- ply a cost of doing business. The level of expenditure should reflect an understanding of the cause-and-effect relationship between advertising expenditures and the consequent impact on brand awareness, positioning, and sales. Ideally, marketing managers would like to know what is being gained from each dollar spent on advertising.

Several types of considerations should be reflected in the process of setting promotional budgets. These include the prevailing intensity of competitive rivalry, growth rates within the product category, and level of brand loyalty within the target audience. Ultimately the question that needs to be answered is how an investment in advertising can improve the brand’s position relative to consumer preferences and increase sales.

There are several methods that can be used to facilitate the budget setting process.

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The percentage of sales method is commonly used, particularly by small businesses. This simple method only requires the advertiser to assign a fixed percentage of either past or anticipated sales and allocates those funds to advertising. The percentage is often chosen to achieve proportional parity with budgets for rival brands. However, this conservative approach fails to explicitly consider the objectives of the advertising campaign and may stunt market share growth by failing to recognize greater sales potential. A closely related variant of this method is simply to decide on an appropriate amount to allocate toward advertising each unit to be sold and multiplying this figure by the number of units anticipated to sell.

The objective and task method is favored by most large companies. Though it can take many forms, the basic premise is to fit advertising expenditures to overall marketing objec- tives. And although correct in principle, the practical limitation of this approach is that it requires determining the level of advertising investment required to achieve specific goals. This task increases in difficulty when the firm lacks experience in a given market or is confronting an unusually volatile competitive environment. The level of advertising required to achieve market share targets, for example, will depend in part on how aggres- sively the brand’s closest rivals pursue the same objectives.

The competitive parity method sets spending at an amount proportionate to one’s closest competitors. Brand market shares are often used to establish the budget ratios. The logic underpinning this strategy is that if spending for a brand is comparable to that of its com- petitors, it can defend the status quo within the market. Though unconventional, this type of strategy can be appropriate at times, particularly in latter stages of the Product Life Cycle.

The all available funds method—in which the firm devotes all financial resources not specified for other purposes to advertising—is an aggressive and risky approach to setting promotional budgets. Though not uncommon for startup businesses trying to increase brand awareness, it sacrifices alternative uses of funds (e.g., product development, acquir- ing new technologies, hiring specialists) and makes the company more vulnerable to unex- pected problems. On the other hand, the pursuit of this strategy sometimes reflects market conditions where the anticipated rate of return on advertising expenditures is very high.

Design the Message

Although the creative work of designing advertising messages for large organizations is often assigned to specialists at advertising agencies, marketing managers need to be very involved clients. They must provide the direction to creative specialists by specifying the objectives of the campaign. Working within this role, it is essential to know the answer to two questions: What change is the advertisement intended to make in the minds of the audience and by what route is that change expected to take place?

The question of specific positioning-related goals has been addressed extensively through- out this chapter. The intention of the advertiser is to improve the perceived fit between the needs of the prospective buyer and the benefits or attributes associated with the purchase of the brand. This may include the need to build brand awareness, change perceptions of brand performance, or simply enhance the overall perception of the brand’s image. Whether the advertisement is expected to accomplish its goals via the central or periph- eral route has a profound bearing on how the message should be designed. In general, the creative design of all advertising messages is based on one of two appeal types: informa- tional appeals and emotional appeals.

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Advertisements frequently play on our emotions—the most common being fear, sexual attraction, and humor. Can you tell what emotions these ads play to?

Informational advertising appeals relate primarily to the ELM central route to persuade the audience by emphasizing facts and arguments about the brand being sold. The strat- egy behind the message is to rely on cognitive reasoning and thinking to convince some- one to agree with the point that the ad is making. This approach is sometimes referred to as either the rational or logical approach since it relies on the thoughtful consideration of a motivated recipient. The informational appeals that are most commonly used in advertis- ing campaigns stress the specific product features and benefits of greatest direct relevance to the audience. Making the content personally relevant is likely to increase the viewer’s involvement with the message being delivered.

Bloomberg/Getty Images

PR Newswire/Associated Press PR Newswire/Associated Press

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Emotional advertising appeals relate primarily to the ELM peripheral route to persuade the audience by using both words and images to evoke an emotional response. Most often this type of advertising message tries to relate the product and brand being sold to the audience’s basic psychological needs. These essential human desires include safety, accep- tance, interpersonal interaction, love, happiness, and beauty. Simple messages make a promise to the audience that the featured brand can make their lives better in ways that relate to these needs. In contrast to informational appeals that seek to provide specific rationale to support the purchase of the brand, emotional appeals are not rational. They rely on the perception of positive associations between the advertised brand and other stimuli within the message. Among the emotions most commonly used in these types of ad campaigns are fear, sexual attraction, and humor.

The temptation is to draw a sharp and inviolable distinction between the two routes to persuasion and to assign each of the two types of appeals exclusively to one of these alternatives. However, this would not be accurate. Humor, for example, can be a very effective basis for making a positive brand impression via the central route to persuasion. Conversely, noting the impressive appearance of a list of reasons to buy a given brand may influence a prospect’s attitude toward the advertised brand via the peripheral route.

Select and Plan Media

Media alternatives from broadcast, print, and online sources are evaluated according to their capacity to reach an audience efficiently. Managers assess alternative media channels by comparing their associated costs of reaching 1,000 viewers, readers, or listeners. This cost-per-thousand (CPM) ratio is computed by multiplying the advertising cost times 1,000 and dividing by the total audience.

However, not all television programs, magazines, radio broadcasts, and websites have comparable audiences. Consequently, the ability of each option to efficiently reach the target customer for a given brand is dependent on the composition of the audience. Based on the demographic and psychographic profile developed for the brand, each alterna- tive advertising channel or vehicle can be evaluated based on the cost-per-thousand prospects (CPM-P).

In addition to identifying the most efficient media alternatives, media planners need to develop advertising schedules based on reach (R) and frequency (F). Reach is simply the number of different or unique prospects (individuals or households) that is exposed to a given advertisement over a specified interval. The most commonly used time frame is four weeks. Frequency is the average number of times that an average prospect will be exposed to the ad over the same time period. When multiplied (R x F) to provide an assessment of the overall impact from a series of advertisements over a specific period of time, the resulting measure is referred to as gross rating points (GRP). Media planners can define the communication objectives for a given media plan using these three inter- related measures.

Reach targets are set to reflect the ad campaign’s goal in terms of the total number or per- centage of prospects intended to receive the marketing communication. It is most often expressed as a percentage of the total target audience. If a media plan is designed to reach 25 percent of the total potential target audience for a brand over a four-week period, it has a reach of 25. Reach measures the accumulation of total prospects over time.

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Just as reach measures the level of message diffusion within the target audience, frequency illustrates the rate of message repetition. In light of understanding how the central and peripheral routes of the Elaboration Likelihood Model work, it is evident that some types of advertisements require higher levels of repetition than others to be effective. For exam- ple, image-based ads intended to shape attitudes via the repeated pairing of stimuli over time (classical conditioning) may require a high number of exposures per prospect to be effective. Messages that require higher levels of repetition per prospect to influence brand attitudes via the peripheral route will require higher average frequency.

In practice, media plans need to identify the desired combination of reach and frequency. Higher reach goals mean that more people will be exposed to the message. Consequently, the scope of the ad’s potential impact is expanded. Higher frequency may be a priority if relatively high levels of repetition are required to achieve brand-specific goals. Gross rating points reflect the combined weight of these two considerations. Given a limited budget, however, higher levels of one can be obtained only by sacrificing higher levels of the other.

A channel’s ability to efficiently reach the target audience is not the only factor planners must consider when selecting media options. Characteristics that are intrinsic to the nature of the media itself must be taken into account as well. Television, for example, is an excel- lent option when the combination of sight, sound, and motion is required to convey the essential attributes of product. Local and regional radio stations offer excellent geographic selectivity but cannot illustrate the performance of a sports car in the same way that tele- vision can. The Internet offers the potential for direct interaction with customers in ways that cannot be matched by other options. However, it provides limited opportunities to reach some older and poorer segments of consumer markets.

Measure Results

For marketing managers, the most significant measurement of advertising effectiveness usually takes place in assessing the results of a whole campaign rather than an individ- ual advertisement. The basic measurement task requires assessing campaign outcomes against original objectives. Consequently, the meaningful assessment of an advertising campaign requires two sets of metrics: precampaign and postcampaign measures of the campaign’s objectives.

Two levels or types of measurements are frequently used to evaluate campaign results. Communication tests refer to pre- and postcampaign comparisons on non-sales-related objectives. These could include goals such as increasing brand awareness, improving attitude-related measures, or increasing the level of brand loyalty. Though not directly reflected by product sales, these types of factors are readily subject to direct measurement through the use of consumer ratings.

Sales tests refer to the direct assessment of an advertising campaign’s impact on brand sales. They reflect the need to recognize the significance of advertising expenditures as an investment in future sales and profitability. Though it may seem counterintuitive, it can be more difficult to accurately gauge the sales effects of advertising than the communica- tion effects, since sales are influenced by a wide range of factors unrelated to advertising. The behavior of competitors with respect to pricing, product distribution, and all forms

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of promotion represent potentially confounding influences. Other environmental factors, such as extreme weather or momentous events, can also make it difficult to cleanly inter- pret the meaning of pre- and postcampaign sales data.

Despite the obstacles associated with measuring the impact of advertising, it is impor- tant to remember that the effective and efficient management of advertising is essential to achieving brand objectives. This, in turn, is dependent on reliable information; the relationship between communication and sales tests may help bridge the gap between short-term and long-term brand management issues. As suggested by the hierarchy-of- effects models, achieving the communication goals related to a brand (awareness, inter- est, desire) are prerequisites to the ultimate goal of action or sales. In some instances, the failure of a campaign to produce short-term sales improvements may mask its value in building the foundation for improvements at a later date. If a campaign is able to build brand awareness and interest in the near-term, it is likely to pay sales dividends at a later date. Consequently, relying on both types of measures will enable marketing managers to make better decisions about the true costs and benefits of advertising.

11.5 Personal Selling and Sales Management

Personal selling spans the promotions and distribution elements of the marketing mix. As part of the promotional program, the message communicated by salespeo-ple must be consistent and integrated with advertising, sales promotions, and public relations. By directly serving the needs of channel intermediaries, the sales force provides a direct product distribution path to customers in many instances. In every instance, the sales force represents a critical, personal link between the buyer and seller.

Although sales positions fall into a wide range, it is useful to distinguish between four general classifications of sales functions: new business development, current account maintenance, sales support, and customer service.

New business development refers to the process of converting prospective buyers into current customers. This is a challenging task in highly competitive markets, but an essen- tial one. Individuals who are particularly effective in bringing new customers to an orga- nization are typically very well compensated. In many businesses, once an initial sale with a new customer is closed, the responsibility for maintaining a productive relationship with a satisfied customer is transferred to people specifically trained in account maintenance.

Current account maintenance, sometimes referred to as account management, is directly responsible for maintaining the majority of sales revenue in most business organizations. This sales function is responsible for creating satisfied, loyal customers. In most compa- nies, sales representatives involved in account maintenance have frequent opportunities to introduce new product lines to current customers. A particularly important sales func- tion for this category is trade selling. Trade selling is focused primarily on maintaining the support of distribution channel intermediaries. Rather than selling to final consumer markets, the primary activity for sales representatives working in this area is to provide merchandising and promotional support for current customers. For some firms, this may include gaining the initial sales and product distribution support for new products.

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Sales support describes several types of sales-related activities intended to facilitate the selling activities of other sales representatives. Groups in this category include technical specialists such as engineers and scientists who provide special product-related exper- tise in industrial sales contexts. Another form of sales support is missionary selling. This refers to company representatives who provide product-related informa- tion and advise prospective buy- ers on the merits of the company’s brands, but do not make sales. This practice is most familiar in the pharmaceutical sales field.

Customer service includes a vast array of functions related to sales support and service to buyers after the initial sale. Company repre- sentatives working in this cat- egory primarily assist customers who are experiencing problems or have questions related to a recent purchase. Though not directly involved in sales, their contribu- tion to promoting customer sat- isfaction makes this an important sales-related function.

The Selling Process

The fundamental advantage that personal selling has over other promotional alternatives is that it is a personal and interactive method of communication. This enables the sales representative to adjust and refine their message as they receive feedback from the pro- spective buyer. The most potentially effective salespeople are those who are best able to make the adjustments necessary to convincingly satisfy the objections, questions, and concerns raised by the customer. However, skilled sales reps can significantly improve their results by starting with the “right customer.”

Beginning with the need to identify the right customer, this section identifies a six-step model of the selling process, as illustrated in Figure 11.3. To be clear, this is not a model about how to be a star salesperson; the focus here is to provide a model illustrating the steps involved in making a sale. Though presented as a step-by-step process, there are instances in which some steps are skipped or the successive order of stages is disrupted.

Stockbyte/Thinkstock

Customer service representatives assist customers who are having problems related to recent purchases. They make important contributions to satisfying customers and building brand loyalty.

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Figure 11.3: Six-step model of the selling process

Prospecting The first step in the process of selling is to identify prospective customers for your goods and services. Prospecting is the set of activities required to identify potential buyers and generate sales leads. From the outset, it is important to recognize that the first priority should be to find customers that represent the potential for long-term relationships. Work- ing from an understanding of the target market, the sales representative may rely on a variety of information sources to acquire the names of potential leads.

Though shown here as a step-by-step progression, the selling process can differ in number and order of stages.

Prospecting

Qualifying the Prospect

Initiating Contact

Making the Sales Presentation

Closing the Sale

Maintaining Relationships

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The potential sources of information for prospecting include referrals from current cus- tomers, suppliers, and other salespeople within the firm. Sales support and customer ser- vice representatives within the organization often identify potential prospects for field sales representatives. Other professional, business, and social contacts may also be valu- able sources in the search for potential buyers. Impersonal sources used to generate sales leads include lists or directories from trade associations and business groups. Internet searches can also provide a wealth of opportunities to identify prospective customers based on the specific attributes of the target market.

Qualifying the Prospect Before contacting a potential buyer, sales representatives need to determine if the individ- ual or company truly represents a worthwhile investment of time and effort. Qualifying refers to the process of determining whether a sales lead has the potential to be regarded as a viable prospect. This is a critical determination, since salespeople have limited time to invest in the process of developing new customers. Salespeople must judge the value of the potential buyer relative to several considerations.

Ideally, a sales lead can be initially qualified or rejected by a salesperson prior to a first meeting based on company research. Otherwise-attractive potential customers can often be rejected at this preliminary stage based on two considerations. Customers whose finan- cial situation makes them unable to afford or unlikely to pay for the product being sold are rejected without the need to investigate further. Upon closer inspection, some potential buyers are eliminated from further consideration if they lack the basic productive capacity, infrastructure, or other minimum standards required to make effective use of the product.

Consider a salesperson evaluating a new lead for the sale of high-capacity industrial paint spraying equipment. The company may be initially regarded as a potential cus- tomer because it operates a shop that applies custom finishes to earthmoving equipment. However, closer investigation may demonstrate that the type of powder coating being applied is incompatible with the spraying equipment being sold. Alternatively, the cus- tom finishes may be a relatively small part of the company’s operations and would not warrant making an expensive investment in a high-capacity system. However, in many instances, the judgments required to qualify a prospect cannot be made without contact- ing the potential customer.

Initiating Contact Salespeople are often unable to fully qualify leads prior to making an initial contact; some information required to form a judgment can only be acquired through direct interac- tion. This preliminary stage of the selling process may include initial introductions, e-mail exchanges, telephone conversations, and face-to-face meetings. The salesperson’s goal is to determine as much relevant information about the prospect as possible with as little time investment as possible.

Salespeople will try to determine several things about the prospect’s situation at this stage. Does the buyer have a need that our products and services can fill? Do our products suit this customer’s unique needs and situation better than competitors’ brands? Has the com- pany recently purchased a comparable product from a competitor?

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Acquiring as much information as possible about how decisions are made is also of criti- cal importance to the steps that follow. This includes learning who the key decision mak- ers are and who has the authority to approve purchases. Learning more about the culture of the company and its structure may also be useful. In many instances, the amount of effort required to make the initial contact and qualify a prospect can be comparable to the level of work required in the stage which follows: making the sales presentation.

Making the Sales Presentation The sales presentation usually takes the form of a scheduled meeting where the salesper- son attempts to persuade the prospect to become a customer. Though the sales message is often built around the delivery of a prepared presentation, the occasion usually allows for an exchange of information between the parties. The formal, prepared elements of the sales presentation should serve as a platform to illustrate the product’s attributes and benefits in light of the seller’s understanding of what the buyer needs. The interactive give-and-take exchange between the parties enables both to refine their understanding of the potential fit between the product and buyer’s requirements.

There are hundreds if not thousands of books on the art of selling and techniques for making persuasive presentations. However, the demands of each market and each cus- tomer interaction are unique. Consequently, developing a set of generic guidelines on the universally best sales tactics would be misleading. Nonetheless, the ability to listen to the concerns of the customer and adapt the content of the presentation to the situation is essential.

In many situations, sales representatives do not anticipate securing a commitment to buy from the prospect during the initial sales presentation. The first face-to-face meeting enables the seller to develop a personal relationship and rapport with the prospect. It can be an occasion to gather additional information about the buyer’s needs and expectations. It also provides the opportunity to gauge the prospect’s genuine level of interest in the product being sold.

In most situations, buyers will express concerns or raise questions about the specifics of the proposition being presented. These objections provide essential information to sales representatives insofar as they identify points of resistance or obstacles to making the sale. These objections may be expressed verbally or evidenced in the prospect’s body language. The ability of the seller to overcome buyers’ objections is not simply essential to eventu- ally making the sale. Satisfying concerns raised by the buyer provides him or her with many of the most compelling reasons and persuasive arguments for buying the product.

Closing the Sale Closing the sale refers to the point at which the salesperson attempts to get a customer to commit to buying a product or service. If the customer is unwilling to make a com- mitment, the relationship may end at this point unless the seller works to keep the door open to further discussions. If the invitation to close the deal is accepted by the prospect, the occasion marks the starting point for building an ongoing and mutually advanta- geous relationship.

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Understanding when to attempt to close is among the salesperson’s most difficult challenges. Even highly experienced professionals sometimes wait too long to ask for the order and lose the sale as their customer’s enthusiasm or confi- dence starts to fade. Many sales representatives who are uncertain of the best time to close the deal will use a trial close.

A trial close is a technique used by salespeople to assess the buy- er’s readiness to make a pur- chase decision. It often begins by soliciting the buyer’s agreement on minor selling points such as dates of delivery or credit terms. If the salesperson gets a positive response to these questions, he or

she can be more confident in moving the buyer closer to making a commitment on the final sale. It is a low-risk strategy in the sense that a negative response does not terminate the discussion.

Flirt/SuperStock

The initial interaction with a prospective customer usually determines the likelihood of making a sale.

Think About It

Imagine that you’re at a big-box electronics store talking to a salesperson about buying a new televi- sion set. After you seem to have identified the one you like best, she could simply try to close the sale by asking if you would like to buy it. Do you think that happens very often?

Isn’t she more likely to ask if you’d like to take it home yourself or have it delivered? Or which room you think you’ll put this set in? If you think this will look great in your living room? Or if you can imag- ine how much you’ll enjoy watching the World Series on this television?

Retail salespeople rely on trial close techniques quite a bit. Why do you suppose they do that?

Maintaining Relationships The initial sale to a new customer should be seen as a customer satisfaction challenge. Though it certainly represents current, one-time revenue for the firm, this transaction also holds the potential for subsequent sales to a loyal customer if the seller is able to reli- ably deliver on the promises that closed the initial sale. For this reason, this final stage in the model can be thought of as the starting point for the next sale. In simplest terms, checking back with customers to be certain they are satisfied is a fundamental obligation that companies often relegate to their customer service personnel. In many circumstances, however, it is desirable to have the salesperson who reached the agreement with the buyer maintain personal contact to be sure he or she is satisfied with the product purchased.

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The level of customer service that is required to keep customers happy varies substan- tially with the product being sold. Complex, technical purchases that require expert instal- lation or training may call for extensive interaction between the company’s sales staff and the client long after the actual transaction has closed. Support for the sale of simpler prod- ucts, however, can often be handled through existing customer service channels. In either case, creating opportunities to reinforce a positive relationship with the buyer promotes a sense of confidence in the seller and brand loyalty. This, in turn, generates opportunities for future sales that are advantageous to both parties.

11.6 Organizational Sales Structure

A company’s sales force provides a personal connection to current and prospective customers. It is literally the face of the organization. For many firms, the costs associated with creating and maintaining their own full-time sales teams claim a substantial portion of the revenue generated from product sales. For all of these reasons and others, the efficient recruitment, training, and deployment of the sales force is essen- tial to the survival and success of the firm.

The design of the sales organization within any firm reflects the strategic priorities of the company. The primary criterion driving the choice of organizational sales models is the efficient and effective allocation of the sales effort. The three most common options for arranging and coordinating the company’s sales force organization are by product, by geographic territory, and by customer type.

A product-driven sales structure is common within firms that manufacture a range of com- plex products. High-tech and medical equipment companies, for example, are likely to organize salespeople according to the products they sell. This places a primary emphasis on making certain that each salesperson has the requisite technical knowledge and prod- uct familiarity to sell effectively. The primary disadvantage associated with this approach is that requiring sales reps to specialize on selling only one product or product type cre- ates redundancy of effort as several salespeople often must serve the same account.

A geographic territory-driven sales structure is a very common design in which each rep- resentative is assigned to an exclusive territory. Consequently, each individual is respon- sible for performing a wider array of sales tasks across a broader spectrum of company products than is typical of product-driven models. However, this also allows for the designation of smaller sales territories and lower travel-related expenses, and it enables salespeople to become better acquainted with their customers. In the interest of promot- ing equity between sales representatives, territories are usually created to provide either roughly equal sales potential or equivalent workloads.

A customer-driven sales structure organizes the sales force according to industry or cus- tomer type. In contrast to the product-driven model, the primary emphasis in this system is that it permits salespeople to become experts in different segments of the markets the company serves. The objective behind this approach is to make each individual sales rep an expert in the unique needs and expectations of one type of buyer. This approach is particularly attractive in markets where buyer preferences and requirements tend to shift substantially over time. However, this design also tends to create the potential for very large sales territories and high travel-related costs if customers are widely dispersed.

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Sales Force Recruitment and Training

The successful application of any of these designs is fundamentally dependent on the caliber of the salespeople recruited and trained by the organization. In fact, the survival of many organizations is dependent on the effectiveness of the sales force. Despite these high stakes, there are few generalizations that can be drawn about the personal characteristics or personality traits that make a good salesperson. Instead, the best type of person for a specific sales position will depend on the unique demands of the situation.

Different types of selling require different sets of abilities, skills, and character traits. Some of the most effective people involved in new business development are often persuasive, confident, ambitious, and aggressive. These qualities contribute to their potential for suc- cess in converting prospects into customers. However, customer services salespeople need to be emotionally steady, patient, and empathetic. By contrast, sales support staff members need to rely on technical knowledge and product-specific training. An aptitude for learning and innate intelligence are among the traits that will make them most effec- tive in facilitating the selling activities of other sales representatives in the field.

Recruiters need to have a clear sense of the criteria that are most appropriate to use when evaluating applicants for the sales force. Feedback from current buyers can help to identify the selection criteria that directly relate to develop- ing effective customer relations in different contexts. Critically evaluating the traits and quali- fications of the most successful salespeople within the firm can also provide useful inputs. After reconciling these sets of informa- tion, companies should carefully evaluate the unique requirements of the vacant position to fine-tune their selection criteria.

The process of recruiting may include building a list of referrals from knowledgeable sources both within and outside the organiza- tion. Large firms often rely on pro- fessional employment agencies such as the Robert Half Agency and KAS Sales Recruiting to develop and evaluate an initial pool of applicants. Many recruitment firms and human resources departments within large corporations also require applicants to complete writ- ten examinations to provide an assessment of job-related personality traits. As with all vacant positions, employers also give due consideration to personal references, employ- ment history, and interview performance as well.

Formal sales training is essential to make sure that all salespeople within the organiza- tion are equipped with the product knowledge and sales skills to represent the company

Getty Images News/Getty Images

The effective training and ongoing development of the sales staff is essential to the long-run success of the firm.

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effectively. This applies to the veteran salespeople within an organization just as it does to newly hired employees. The expense and time invested in sales training differs substan- tially between companies and industries. More startup and ongoing training is required for individuals expected to sell complex products that compete in highly dynamic mar- kets. In addition to learning about the company and its products, all salespeople need to understand their competitors and their products if they expect to provide the customer with superior value.

Sales Force Compensation

A key ingredient to attracting outstanding salespeople to work for an organization is the compensation package. Most sales representatives who work in new business devel- opment and current account maintenance are compensated under one of three types of plans: straight salary, straight commission, or a combination of salary plus commission.

A straight salary compensation plan provides the salesperson with a reliable, stable source of income that he or she can depend on receiving on a regular schedule. This is most appropriate when the company expects the representative to spend a significant portion of work time on nonselling activities. It also reduces the likelihood of the sales rep inten- tionally overstocking customers’ inventories for the sake of earning more money from sales commissions in the near term.

Straight salary is often favored for situations in which it is difficult to specifically assign product sales to individual sales reps. This would be the case, for example, in missionary selling, where company representatives provide information, advise buyers, and facilitate the sale for others to actually close. This would also apply any time that multiple sales- people are working with a customer or sales are routinely being made on a referral basis.

The fundamental disadvantage to straight salary plans is that compensation is not directly linked to selling performance. Although year-end bonuses and annual salary increases can be tied back to the individual’s overall performance, it is essential that all parties understand how that performance will be measured.

A straight commission compensation plan rewards salespeople exclusively on the basis of either unit or total dollar sales volume. It provides a focused motivation restricted only to sales performance and is most appropriately used when aggressive selling behavior is desired. Positions advertised with this type of compensation package may be more likely to attract high-performing, ambitious sales professionals than other types of plans. Although this approach provides an unambiguous incentive to maximize sales productiv- ity, it can have some undesirable consequences.

Given the straightforward incentive structure, management tends to have relatively lit- tle control over the behavior of the salesperson. Acting exclusively on the basis on self- interest, he or she may not be willing to take the time required to convert difficult pros- pects into customers. Similarly, he or she may neglect making follow-up calls after a sale even when this practice is essential to establishing lasting relationships between the buyer and seller. Some salespeople working on a straight commission basis may also be inclined to focus their efforts on maximizing sales to the current customer base rather than pros- pecting for new leads.

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CHAPTER 11Post-Test

Combination compensation plans are the result of mixing salary plus commissions. This approach is very attractive to both employers and their sales reps to the extent that it can effectively retain the best characteristics and overcome the worst limitations of the straight salary and straight commission alternatives. Combination plans usually include the payment of bonuses as well for sales performance levels that exceed preestablished goals or quotas. It has been estimated that some form of a combination plan is used in about 68 percent of all sales forces (Spiro, Stanton, and Rich, 2002).

Combination plans provide a stable base income to the employee in recognition of non- selling activities while also rewarding strong sales performances via the payment of sales commissions. Flexibility in designing the mix of incentives from these two streams of income gives management the means to adjust the relative importance of sales and non- selling tasks for the salesperson. That is, increasing the salary component should signal a shift toward supporting more non-selling-related activities for that period. Conversely, increasing commissions should motivate the employee to pursue higher sales objectives.

Conclusion

Although the elements of the marketing mix are necessarily interrelated in the plan-ning and execution of marketing programs, there is a unique linkage between the promotions mix and product distribution strategy. As discussed in the next chap- ter, advertising can play a significant role in generating demand at the retail level, thereby creating an incentive to “pull” product through the channels of distribution. Alternatively, aggressive selling and the use of sales promotions aimed at channel intermediaries can effectively “push” a product through channels to the retail product markets.

Post-Test

1. Which of the following statements about public relations is NOT true? a. It is often quite expensive to produce. b. Its distribution is out of the company’s direct control. c. It increasingly involves the Internet. d. It is often perceived as more credible than advertising.

2. What is the primary objective of marketing communications? a. highlighting the benefits of company’s brand b. maximizing short-term profits c. creating a high degree of brand awareness d. implementing an optimal positioning strategy

3. The central route of the Elaboration Likelihood Model a. does not require active cognitive processing by ad viewers. b. is quite similar to the hierarchy-of-effects models. c. relies primarily on behavioral conditioning that associates attractive images

with the product. d. is less likely than the peripheral route to create repeat customers.

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4. Why is it often more difficult to assess the impact of an advertising campaign with sales tests than with communication tests?

a. Few marketing managers know how to interpret sales tests correctly. b. Few marketing departments know how to conduct sales tests correctly. c. Many factors besides advertising affect sales figures. d. Sales figures are often difficult to measure accurately.

5. Of the following steps in the selling process, which occurs the earliest? a. initiating contact b. making the sales presentation c. qualifying the prospect d. maintaining relationships

6. Which type of compensation method is most likely to result in a sales force that focuses on converting easy prospects now rather than on focusing on converting all potential customers over the long term?

a. straight commission b. straight salary c. combined compensation plan d. all three types

Answers 1. a. It is often quite expensive to produce. The answer can be found in Section 11.1. 2. d. Implementing an optimal positioning strategy. The answer can be found in Section 11.2. 3. b. Is quite similar to the hierarchy-of-effects models. The answer can be found in Section 11.3. 4. c. Many factors besides advertising affect sales figures. The answer can be found in Section 11.4. 5. c. Qualifying the prospect. The answer can be found in Section 11.5. 6. a. Straight commission. The answer can be found in Section 11.6.

Key Ideas

• The promotions mix informs target audiences of the benefits associated with buying one uniquely positioned brand from among the competitive offerings available.

• The primary objective of marketing communications is to persuade prospective buyers by shaping their attitudes toward the brand.

• The Integrated Marketing Communications, or IMC, concept states that all of the elements of the promotions mix should work together and reinforce each other to promote the desired brand identity.

• Though advertising can reach large audiences, its impact is often substantially limited due to the crowded media and product marketplace.

• Personal selling is most effective when salespeople are able to refine their message to prospective buyers based on the feedback they receive during the sales call.

• Sales promotions can be very effective in generating short-term sales and push- ing the product through distribution channels to retail product markets.

• Public relations has the potential to provide particularly credible exposure for companies since the information reaches the audience from an independent and trusted news source.

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CHAPTER 11Critical Thinking Questions

• The overall goal of promotional strategy includes three communication objec- tives that must be met over the life cycle of the product: creating brand aware- ness, promoting brand preference, and reinforcing past purchasers.

• The two alternative models of how advertising works are the hierarchy-of-effects models and the Elaboration Likelihood Model.

• Hierarchy-of-effects models assume that persuasion requires audiences to learn and recall specific information from an advertisement. The Elaboration Likeli- hood Model does not.

• The Elaboration Likelihood Model proposes two alternative paths to persuasion: the central route and peripheral route. The choice of paths is mediated by the audience’s level of involvement with the message.

• Five issues need to be addressed when developing an advertising campaign: selection of the target audience, establishment of the budget, designing the mes- sage, planning media, and measuring the results.

• There are four classifications of sales functions: new business development, cur- rent account maintenance, sales support, and customer service.

• The selling process is a six-step model describing the steps involved in making a sale. These steps are prospecting, qualifying the prospect, initiating contact, mak- ing the sales presentation, closing the sale, and working to maintain the relation- ship with the buyer after the sale has closed.

• Sales organizations can be organized according to product type, customer type, or geographic territory.

• Sales training within the organization is essential to make sure that all salespeo- ple are equipped with the product knowledge and sales skills required to effec- tively represent the company.

• Sales representatives who work in new business development and current account maintenance are compensated by one of three types of plans: straight salary, straight commission, or a combination of salary plus commission.

Critical Thinking Questions

1. What role does the promotions mix play in executing the positioning strategy for the brand? How does this differ from B2B markets to B2C markets?

2. What does it mean to “integrate marketing communications”? Why is this impor- tant to achieving the promotional objectives for the brand?

3. What is the relationship between the product differentiation and the promotions mix? Now for the tougher question: How does the promotions mix relate to the market segmentation decisions made for a brand?

4. Imagine that a national television news report has identified your company as one that exploits child labor in underdeveloped nations. It isn’t true, and you’re committed to setting the record straight. Explain the nature of the relationship between publicity and public relations in this situation.

5. Due to the ill-advised use of cents-off coupons in the Sunday newspaper every other week for nine months, you’ve essentially trained customers not to buy your brand unless they have a coupon for it. How can you reverse this situation and undo the damage?

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6. Coke and Pepsi spend billions of dollars annually advertising their brands. Why? Is it because it’s possible that there’s still someone out there who hasn’t heard of Coca-Cola?

7. Assume your best friend sees what you’re reading and challenges you with the following statement: “You know, I have never been influenced by an advertising message.” Explain how the hierarchy-of-effects models might support that asser- tion. Explain why the Elaboration Likelihood Model provides reasons to doubt that claim.

8. Setting advertising budgets is difficult. The percentage of sales, objective and task, and competitive parity methods can all begin from the same starting point and lead you to very different conclusions. Explain what factors might cause you to get big differences in the results you obtain from applying all three methods in the same situation.

9. In discussing how to measure the results from an advertising campaign, two alternative types of tests were introduced: communication tests and sales tests. The clients served by advertising agencies are always eager to see the sales test results. But many people on the agency side of the relationship are more likely to use advertising recall measures to assess the success of a campaign. Under what circumstances would it be more useful to see how many people remembered your ad than to look at the change in your sales over the period in which the advertisement was airing?

10. Many popular sales coaches over the past 30 years have taught that good sales- people need to learn to love the word “no.” What do you suppose they mean by that?

11. Consider the four types of sales functions described in the chapter: new business development, current account maintenance, sales support, and customer service. Based on your assessment of the personality types best suited to performing these roles, which is the most attractive to you? The least? Why?

12. Consider the three types of compensation plans discussed in the chapter: straight salary, straight commission, and a combination of the two. Under which of these schemes do you think you would be most productive? Happiest? How does your answer to this question relate to your response to the question above? Is there a conflict? Why?

13. The term “prospecting” is used to describe the process of identifying potential customers for your goods and services. Many people think of gold miners and oil well drillers when they hear the term. Why would these be good or poor analo- gies to describe what sales prospecting is all about?

14. It’s been said that personal selling is more faithful to the true meaning of the mar- keting concept than all other forms of promotion. Do you agree? Why?

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CHAPTER 11Key Terms

Key Terms

advertising Any paid form of nonper- sonal communication between a seller and potential buyers.

all available funds Allocates all financial resources not specifically allocated to other purposes to the advertising budget.

communication tests Pre- versus post- campaign comparisons on non-sales- related measures.

comparative advertising Advertising messages that make explicit contrasts between brands of the same product.

competitive parity Sets advertising spending at an amount proportionate to that of one’s closest competitors.

cost-per-thousand (CPM) Cost associated with of reaching 1,000 viewers, readers, or listeners.

cost-per-thousand prospects (CPM-P) Cost associated with of reaching 1,000 prospects for the brand being advertised.

current account maintenance The process of keeping current buyers satisfied.

customer service A wide array of func- tions related to sales support and service to buyers after the initial sale.

Elaboration Likelihood Model (ELM) A representation of how advertising works via two alternative paths mediated by audience involvement with the message. The central route requires the thoughtful evaluation of the message contents to be persuasive. The peripheral route is poten- tially effective when the audience is not motivated to process the informational content of the ad.

emotional advertising appeals Message content that emphasizes words and images to evoke an emotional response.

frequency (F) The average number of times that an average prospect will be exposed to a given advertisement over a specified interval.

gross rating points (GRP) Reach times frequency (RxF).

hierarchy-of-effects models Represen- tations of how advertising messages move an audience through a progressive sequence of psychological stages such as awareness, interest, desire, conviction, and action.

informational advertising Appeals mes- sage content which emphasizes facts and arguments.

Integrated Marketing Communications (IMC) Coordination of the promotions mix to achieve the communications objec- tives of the product or service being sold.

missionary selling Providing product- related information and advice to prospec- tive buyers without any expectation of making a sale.

new business development The process of converting prospective buyers into cur- rent customers.

objective and task A media budget setting method that works by matching advertis- ing expenditures to the corresponding marketing objectives for the campaign.

pantry management Providing incentives to consumers to encourage them to stock up on several purchase cycles’ worth of a product for the purpose of preventing competitors’ brands from selling.

percentages of sales A budget setting method that allocates fixed percentages of either past or anticipated sales advertising media.

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Web Resources

The online home for Advertising Age, the leading trade publication for professionals in all phases of advertising. This site provides comprehensive coverage of the industry via both paid and free services. It also provides access to the Advertising Age Datacenter. This fea- ture provides limited free access to a range of advertising-related databases and resources. http://www.adage.com

A website sponsored by the Advertising Educational Foundation. This site includes free access to examples of award-winning advertisements, excerpts from advertising books published in the business press, case histories, and information about careers. http://www.aef.com

A website maintained by the trade publication Sales and Marketing Management magazine. The site includes reprints of articles from the print version of the magazine, webcasts, e-newsletters, case studies, white papers, and other resources of direct relevance to profes- sional selling. http://www.salesandmarketing.com

A special section of the Entrepreneur.com website devoted exclusively to strategies for creating and delivering effective sales presentations. http://www.entrepreneur.com/article/222405

Web Resources

personal selling Personal interactions between company representatives and prospective customers for the purpose of facilitating current and future sales.

persuasion Changing a person’s attitudes by means of promotional messages.

promotions mix The communication techniques available to marketers. These include advertising, personal selling, sales promotion, public relations, and publicity.

prospecting The of activities required to identify potential buyers and generate sales leads.

public relations Nonpaid, impersonal communications sent out by news media or other vehicles outside the control of the seller.

qualifying The process of determining if a sales lead has the potential to be a viable sales prospect.

reach (R) The number of unique prospects that is exposed to a given advertisement over a specified interval.

reminder advertising Ads intended to keep familiar products readily available in the minds of consumers.

sales support Sales-related activities intended to facilitate the activities of other salespeople.

sales tests Pre- versus postcampaign comparisons of brand sales.

trade selling Sales activities focused on maintaining the support of distribution channel intermediaries.

trial close A technique used by salespeo- ple to help determine the buyer’s readi- ness to purchase.

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