Sales promotion in business to business marketing

business-to-business markets sales promotions are also used as a means of moving customers to action. However, the promotional choices available to the B-to-B marketer are not as extensive as those found in the consumer or trade markets. For example, most B-to-B marketers do not use coupons as a vehicle for sales promotion with the exception of companies that sell to both consumer and business customers (e.g., products sold through office supply retailers). Rather, the techniques more likely to be utilized include:

price-reductions

free product

trade-in

promotional products

trade shows

Of the promotions listed, trade shows are by far the mostly widely used sales promotion for B-to-B marketers.

Sales promotion has been in constantly growth since the 1960’s and have today become one of the key factors in the promotional mix. The methods used have become more sophisticated and an increasing number of companies are realizing the importance of a well structured promotion strategy. It was also found that the focus is not always on using sales promotion tools to generate sales, but to improve relationships. As for the tools used, it was found that there are commonly used sales promotional tools in B2B settings. More specifically, gift giving can be deemed inappropriate in certain contexts and should be used carefully.

Trade fairs are classified as a form of sales promotion – a sub-category of marketing promotion. They enable companies to undertake market(ing) research and to promote themselves. Some trade fairs even allow companies to sell their products, thereby helping to generate sales. They permit you to advertise your products and to generate positive publicity for both your company and its offerings. It is also a forum where you can make contact with potential customers and to sell to them on a face-to-face basis (linking personal selling to direct marketing).  A trade fair is like a shopping mall; a one-stop-shop where you can buy everything that you need at home. It enables you to do all of your marketing compressed into a short time-frame and single venue.

The most common business-to-business markets are manufacturers, resellers, the government and non-profit institutions. Most businesses that fall into these categories do make some money off of a consumer base; however, the majority of their capital is made off of other businesses.

One great example of this is a non-profit institution. While private donations from individuals like you and me is important to a non-profit’s operations, most charitable organizations make the great majority of their money from corporations or through government funding. Because of this, non-profits must make themselves and their products and services attractive not just to individuals, but also to other businesses.

To do this, non-profits and other organizations marketing themselves to other businesses must identify a competitive advantage. In other words, they must demonstrate why a company should buy goods and services from them rather than from their competitors, which is where business-to-business marketing comes in.

The biggest differences between business-to-business and business-to-consumer marketing are the types of goods and services being marketed and the types of entities the goods and services are being marketed to.

Business-to-business marketers promote goods and services that will help other companies run. Some of the things businesses produce for other businesses include equipment, components, raw materials, processing services and supplies.

In addition, because business-to-business marketers target only other companies, they have a significantly more targeted market than business-to-consumer marketers. Even when marketing very specific products for a fairly small subset of individuals, the latter type of marketer has a far larger audience than the former.

Business-to-business marketing, in many instances, is driven largely by consumer demand. In other words, if there are no consumers to purchase a product, there is no reason for a business to exist in order to make it. If that business doesn’t exist, it will obviously not need the products and services offered by another business.

Also, the goals of businesses and consumers are often the same. When choosing a company for goods and services, most consumers and businesses will make a decision based upon price, quality, delivery time and their history with the business. Other considerations might be the availability of the product or service and the quality of customer service if something goes wrong.

Business-to-business marketing is currently one of the fastest-growing areas of marketing. As technology brings more businesses together, companies are beginning to court each other far more aggressively. And as technology makes the world a smaller place, it becomes more important for marketing and sales professionals to understand and implement the principles of business-to-business marketing.

In most households, even the most complex of decisions is confined to the small family unit while items such as clothes, food and cigarettes usually involve just one person.  The decision making unit (DMU) in business-to-business markets is highly complex or at least it has the potential to be so. 

Ordering products of low value and low risk (such as the ubiquitous paper clip) may well be the responsibility of the office junior.  However, the purchase of a new plant that is vital to a business may involve a large team who makes their decision over a protracted period.  The DMU at any one time is often ephemeral – specialists enter and leave to make their different contributions and, of course, over time people leave the company or change jobs far more frequently than they change family unit.

This complexity and dynamism has implications for business-to-business markets.  The target audiences for B2B communications are amorphous, made up of groups of constantly changing individuals with different interests and motivations.  Buyers seek a good financial deal.  Production managers want high throughput.  Health and safety executives want low risk.  And those are just their simple, functional needs.  Each person who is party to the DMU will also bring their psychological and cultural baggage to the decision and this can create interesting variations to the selection of products and suppliers.

Business-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G).

The volume of B2B transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving subcomponent or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

B2B is also used in the context of communication and collaboration. Many businesses are now using social media to connect with their consumers (B2C); however, they are now using similar tools within the business so employees can connect with one another. When communication is taking place amongst employees, this can be referred to as “B2B” communication.

Integrated marketing communication (IMC) has had a significant impact on both industry and the academy (Gould, Grein, & Lerman, 1999; Kitchen & Schultz, 2003). Defined as a “collective term for all the various types of planned messages used to build a brand”, marketing communication integrates advertising, public relations, sales promotion, direct marketing, personal selling, packaging, events and sponsorships, and customer service” (Duncan, 2005, p. 7).

While much of IMC relates to the consumer, a number of authors suggest the need for communication to target non-customer stakeholders as well, such as investors, employers, regulators and others (Belch & Belch, 2002; Kitchen & Schultz, 2003; Proctor & Kitchen, 2002). In fact, Proctor and Kitchen (2002) believe the nexus between IMC and corporate communication has significant implications for stakeholder judgements of organisational effectiveness.

As has been pointed out recently (see Schultz & Kitchen, 2000; Kitchen & Schultz 2001), the marketing communications industry has entered and is now passing through critical times as a result of rapid changes in the marketing and media landscapes. In advertising, Sweeney’s claim that classic image advertising has changed little in 30 years has been counterpoised by new integrated marketing approaches.

For example, athletic sponsorship juxtaposes elements of corporate communications and hospitality, brand advertising, sales promotion, public relations and corporate relations (Broadhent 1998).

Ehrenberg (1994) views advertising as an ambient reminder in mature markets. Consumers draw on advertising as background information providing familiar emotional warmth in their environment.

Ambler (1998), exploring the neuro-science approach, claims that different parts of the brain respond differently to different forms of advertising appeal and that there are relative different lasting effects between ads that influence feelings over those that appeal to rationality.

Authors such as Stanton, Etzel and Walker (1991) and Kotler & Armstrong (1997) agree that the traditional marketing mix has been defined as a set of controllable instruments to manage the uncontrollable and dynamic marketing environment and consists of 4 major elements, such as Price, product, promotion and place (distribution).

Integrated Marketing Communications challenges business to confront a fundamental dilemma in today’s marketing–the fact that mass media advertising, by itself, no longer works. This landmark book reveals that strategies long used to deliver selling messages to a mass culture through a single medium are now obsolete–and shows marketers how to get back on track.

The answer lies in customer-focused marketing, a key planning tool that can–in today’s diverse, fragmented marketplace–explain the lifestyles, attitudes, and motivations of distinct buyer groups and predict their likely buying behaviors in the future. Schultz, Tannenbaum, and Lauterborn (1993) explain how, by beginning with detailed consumer information, marketers can build a synchronized, multi-channel communications strategy that reaches every market segment with a single, unified message. (Ref: Schultz, Tannenbaum. “Integrated Marketing Communications”, 1st edition, Mc-graw, 1993)

According to Roger Brooks bank (1991), “Effective marketing is considered widely to be of critical, if not overwhelming importance to the achievement of competitive success. Organized around six key stages of the marketing process, a summarized review is therefore presented of the empirical research into successful marketing practice.

Specifically, the aim is to provide the marketing practitioner with a “checklist” of all those marketing practices which have been found to be commonly associated with high-performing companies, regardless of their type of business, size, or other strategic”

Kotler (1992) coins the idea of a “new paradigm” in marketing, he emphasis that organizations need to practice “wrap-around marketing”, which encompasses getting and retaining customers. Organizations should therefore build strong relationship with their customers.

Gronroos (1994), strengthened kotler’s views by arguing that trends in business and modern research into industrial marketing, service marketing and customer relationship economics demand a relationship oriented approach to marketing. These views could be relevant to marketing communications of DHL.

According to Rayport and Sviokla 1996 & Smith et al. 1998, say that it is proposed that organizations are increasingly organizing into ‘virtual value chains’ for the duration of individual projects, providing both flexibility and high levels coordination within trade networks.

According to John Fellows, Chief Executive Officer, DHL Americas, states that ” “At DHL, we built the world’s premier global delivery network by trailblazing express shipping in one country after another and assembling a comprehensive portfolio of shipping solutions formed around the needs of our customers,”

According to Ian Rumsby, general manager and senior vice president of Weber Shandwick’s Sydney office states that “”The DHL executive team recognizes the value of communications and is clearly 100 per cent behind the public relations efforts”

According to DHL website for Bahrain states that “In 1976, Bahrain first opened its doors as a DHL office with currently having over 550 employees in Bahrain to service customers. DHL has its Middle East Hub based at Muharraq International Airport. Bahrain is also the home of our Middle East aviation network. With this in mind it is clear to see why DHL Bahrain is the clear market leader in express logistic services.”

According to Rossiter (2005), For most marketing managers, marketing mostly means planning and executing marketing communications (marcoms). Marcoms are difficult to plan effectively because the customers of today have more choices and are not likely to settle for less than what (they think and feel) is the best brand-item for them. Marcoms managers now more than ever require clear theoretical frameworks and useful executional procedures, and Rossiter and Bellman provide them as state-of-the-art in this book.

According to George Beluch (2003), says that as the field of advertising and promotion continues to dramatically change since the dominant days of high-powered agencies, marketers must look beyond traditional media in order to achieve success. In order to best communicate with consumers, advertisers must utilize a myriad of tools (advertising, public relations, direct marketing, interactive/Internet marketing, sales promotion, and personal selling); This is the first book to reflect the shift from the conventional methods of advertising to the more widely recognized approach of implementing an integrated marketing communications strategy. That underscores the importance of recognizing that a firm must use all promotional tools available to convey a unified message to the consumer. The integrated marketing communications perspective, catapults the us into the business practices of the 21st century

Methods of Promotion & Advertising in DHL

“More power”, “More speed”, “More reach” – one of the biggest re-launch campaigns ever carried out by a logistics company tells people all over the world what they can expect from the new DHL, the strong brand of Deutsche Post World Net. The new DHL combines the complete express and logistics business of the global player, offering customers a unique range of services in the market.

Since its beginning in the Bahrain market and the Middle East region, DHL had always presented itself as a global leader in its field. Promotional activities and advertisements were always top priorities in DHL and they have spent millions of dollars worldwide.

It’s almost useless to review lists of alternatives for advertising if we haven’t developed well-written ads. Writing ads is a skill. There are important aspects to think about, including the wording, graphics, arrangement of wording and graphics, coloring, how our audience will interpret the ads, their placement, etc. Poorly done ads can hurt worse than not having ads at all. For this DHL had hired top ad agency companies from abroad as well as local.

DHL had not left any stone unturned and have utilized all the marketing tools in order to spread the word. It has advertised on local televisions, radio announcements for promotional activities, colorful brochures, direct mails, magazine & newspaper ads, posters and bulletin boards, web pages and yellow pages. DHL had also done promotional activities through media such as editorials, press releases and sometimes public service announcements. There were also other promotional activities which DHL takes much priority, such as relationship with stakeholders, special events and offers, networking, annual reports, presentation etc.

DHL underwent these activities in full force in order to create a awareness and a solid presence in the market, as it faced stiff competition from local forwarders, who had local advantage, due to language and culture.

In order to evaluate the DHL services in the Bahrain market, we should first analyze each of its marketing communications strategies. DHL uses the following medium to enable its marketing communications strategies in the region:

Analysis of Advertising

DHL spends millions of dollars worldwide on advertisements. Even in the Gulf region, it has left no stone unturned, weather its TV, Websites or radio. Lot of marketing strategies has been used to increase the company awareness in the market. The company vehicles itself has been used as a mode of advertisement round the clock. With advertisements, DHL has build up a long term image of the company.

DHL has made a significant presence on primetime network and cable television across the region. Ads emphasizing competition, innovation and choice also appear in leading business publications and online as well as on billboards in strategic markets across the Gulf region. DHL has also placed the red logo over bright yellow background on all buildings, vehicles, courier uniforms, packaging units and drop boxes across the region. The introduction of the logo follows an initiative by parent company Deutsche Post World Net to align and identify all properties worldwide under the DHL brand.

With millions spent on advertisements, DHL still lacks behind heavy cargo services, which is usually dominated by other cargo companies such as PWC Logistics, Inscape etc. Clients / customers tend to see DHL has only documents package oriented service company and not a full fledged heavy cargo company, due to these reasons most of the sea freight orders are placed with either local companies or with internationally renowned companies.

Most of the DHL advertisements tend to target on its services such as next day delivery, time efficiency and price rates, but it does not focus too much on the large consignments.

Analysis of Sales promotion

DHL sales promotion techniques such as premiums, contests and special events tend to be highly diverse and offer distinctive benefits to the company such as – communication, incentive & invitation. In the Bahrain market itself, DHL has held & sponsored many fairs, social events and trade shows. Sales promotion offers an incentive to buy, since DHL offers services; it has become very competitive in terms of pricing and delivery, which is unbeatable in the current Gulf Market.

Personal selling

With a presence in more then 220 countries, DHL has maintained a highly skilled and professional sales work force, which contributes to its growing sales and market leadership. The sales force and the marketing team work closely, and implement sound marketing strategies. In Bahrain alone, the company has divided the sales team into three major areas such as Express services, air & ocean freight & package services, whereby the team is focused and gets the target results. Under the personal selling , DHL representatives hold presentations, meetings with clients, incentive programs and promote trade shows.

Analysis of Public relations & Publicity

DHL public relations agents or “officials” deliver info to the media or directly to the public to convey messages toward wider audiences, or to specific demographic segments within the public, called “target audiences.” Because similar opinions tend to be shared by a group of people rather than an entire society, research are conducted to determine a range of things such as target audiences, appeal, as well as strategies for coordinated message presentation. PR targets different audiences with different messages to achieve an overall goal. DHL ensure that public relations can effect widespread opinion and behavior change.

DHL sees public relations as a management function of the organization. An effective communication, or public relations, plan for an organization is developed to communicate to an audience (whether internal or external publics) in such a way the message coincides with organizational goals and seeks to benefit mutal interests whenever possible.

DHL public relations include ongoing activities to ensure the organization has a strong public image. Public relations activities include helping the public to understand the organization and its services. Similar to effective advertising and promotions, DHL’s effective public relations often depends on designing and implementing a well-designed public relations plan. Often, public relations are conducted through the media that is, newspapers, television, magazines, etc. and also most of its public relation activities are posted on the website, such as monthly press releases.