Companies must consider several factors in developing their communications mix: type of product market, consumer readiness to make a purchase, and stage in the product life cycle. Also important is the company’s market rank.
TYPE OF PRODUCT MARKET Communications mix allocations vary between consumer and business markets. Consumer marketers tend to spend comparatively more on sales promotion and advertising; business marketers tend to spend comparatively more on personal selling. In general, personal selling is used more with complex, expensive, and risky goods and in markets with fewer and larger sellers (hence, business markets).
Although advertising is used less than sales calls in business markets, it still plays a significant role:
1. Advertising can provide an introduction to the company and its products.
2. If the product has new features, advertising can explain them.
3. Reminder advertising is more economical than sales calls.
4. Advertisements offering brochures and carrying the company’s phone number are an effective way to generate leads for sales representatives.
5. Sales representatives can use tear sheets of the company’s ads to legitimize their company and products.
6. Advertising can remind customers of how to use the product and reassure them about their purchase.
A number of studies have underscored advertising’s role in business markets. Advertising combined with personal selling can increase sales over what would have resulted if there had been no advertising. Corporate advertising can improve a company’s reputation and improve the sales force’s chances of getting a favorable first hearing and early adoption of the product.
Personal selling can also make a strong contribution in consumer-goods marketing. Some consumer marketers use the sales force mainly to collect weekly orders from dealers and to see that sufficient stock is on the shelf. Yet an effectively trained company sales force can make four important contributions:
1. Increased stock position - Sales reps can persuade dealers to take more stock and devote more shelf space to the company’s brand.
2. Enthusiasm building - Sales reps can build dealer enthusiasm by dramatizing planned advertising and sales promotion backup.
3. Missionary selling- Sales reps can sign up more dealers.
4. Key account management - Sales reps can take responsibility for growing business with the most important accounts.
BUYER-READINES STAGE Communication tools vary in cost-effectiveness at different stages of buyer readiness. Advertising and publicity play the most important roles in the awareness-building stage. Customer comprehension is primarily affected by advertising and personal selling. Customer conviction is influenced mostly by personal selling. Closing the sale is influenced mostly by personal selling and sales promotion. Reordering is also affected mostly by personal selling and sales promotion, and somewhat by reminder advertising.
PRODUCT LIFE CYCLE STAGE Communication tools also vary in cost-effectiveness at different stages of the product life cycle. In the introduction stage, advertising, events and experiences, and publicity have the highest cost effectiveness, followed by personal selling to gain distribution coverage and sales promotion and direct marketing to induce trial. In the growth stage, demand has its own momentum through word of mouth. In the maturity stage, advertising, events and experiences, and personal selling all grow more important. In the decline stage, sales promotion continues strong, other communication tools are reduced, and salespeople give the product only minimal attention.
Before a customer makes a purchase, he or she first goes through 6 of stages called “buyer readiness.” According to Marc Mancini, these stages are:
1. Awareness. Before you can sell, you must make contact with those who want to purchase. Your agency should create advertising and promotional programs that’ll make your name conspicuous and will attract serious buyers.
2. Knowledge. Once prospective clients know your name, they begin the process of acquiring knowledge about what you can offer. Therefore, your advertising efforts should establish you as an expert — perhaps even a specialist in one or more niche areas.
3. Liking. We all tend to buy from people or companies we feel positive about. Entertaining ads, for example, will convey warmth and the “humanity” of your agency. Direct your creative efforts toward making your agency seem joyful, inviting and approachable.
4. Preference. Benefits statements are the key to making prospective clients prefer your agency over another. Provide target customers with reasons to do business with you.
5. Conviction. Your advertising should build the customers’ certainty that you’re the agency to call first. Client testimonials, for example, provide just the right reinforcement for the preference you’ve created.
6. Purchase. Once prospective clients have decided to seek you out, expert sales skills are critical to helping them make the right purchase.