Introduction
Cloud Creative Solutions (CCS) Ltd is a successful and well established full service agency firm, offering an array of marketing communication tools. CCS has an assorted mix of clients, from travel operators, retailers to sports centers, and the company’s favorable reputation of reliability, efficiency and friendliness has meant that CCS could rely on word-of-mouth as a communication tool that would boost business. However, the global recession saw most of CCS’s clients reduce their marketing budgets and look for alternative methods of advertising and promoting their businesses.
CCS has a rigid pricing mechanism, and typically charges a percentage commission rate of between 10 to 15 per cent of a client’s overall marketing budget. Reduced spending by CCS’ clients has led to the decline in revenues and as such, CCS plans on using other marketing communication tools to bolster its revenues, especially in light of the gloom business environment. Additionally, Peter and Sarah, the two CCS owners, have identified the risk of overreliance on a few clients as evidenced by the demise of Robson Brown, a Newcastle based agency, towards the end of 2010. The priority for the two owners is therefore to work towards customer retention and win over new clients so as to secure business. CCS has identified two solutions for this problem; making use of other marketing tools other than personal selling, and employing a sales team (vom Brocke and Rosemann 2010, 10).
Integrated Marketing Communications (IMC) is the appropriate mix or integration, of the various marketing tools in a way that ensures that they are all used effectively and in harmony. Other than personal selling, CCS could employ a variety of other marketing communication tools, including advertising, public relations and publicity, direct marketing, sales promotion and the internet (Mohan 2005, 45). Before integrating the selected marketing communication tools, the company should consider its appropriateness, rate at which the communication mix will increase awareness, and how the level of sales is likely to respond to the communication mix. The major components of the marketing communications mix in a business-to-business environment include personal selling, advertising, sales promotions and public relations.
Marketing communication tools
Kotler et al (2008, 12) describes marketing communication as an approach used by businesses to create relationships within their markets. Various techniques exist for this purpose, which could either be personal or impersonal in a business-to-business setting (Guiltinan et al 1996, 63). The marketing communication process involves constant communication between the seller and the buyer, whereby the seller transfers the intended message to the buyer, who later provides feedback to the seller on understanding the message (Chekitan and Schultz 2005, 67).
Public relations
Publicity, or public relations, is a communication tool through the media in which a company hopes that the subject matter will create additional or secondary exposure of the company. Publicity can also be viewed as a non-paid for form of advertising, and could be done via independent groups such as the company’s clients, the government, media, or even through competition. Employees of the firm also offer a form of publicity whenever they talk about their company in out of office hours (Center and Jackson 1995, 14; Worthington and Britton 2009, 23).
Public relations involves several components, all meant to boost the firm’s brand name in the public domain. Before any publicity strategy may be adopted, the firm has to conduct research that will aim to determine the behavior and attitudes of the public in response to the company’s products and services. The findings from the research may be used to understand the various dynamics in the environment, and point out factors that may influence publics to react in a favorable manner (Bernays 1945, 56).
Employee relations seek to determine employee, or member, concerns and problems, and management of the company can implement policies that will bolster employee motivation and work place satisfaction. Done effectively, employee relations will not only raise productivity, but it will also lead to good publicity when employees are beyond the company’s premises. Community relations, such as activities carried out with input from the community, are projects that will improve the livelihoods of the society, and will be beneficial to both the community and the organization. The company can expect to generate positive media coverage, and benefit from word-of-mouth from the community (Crifasi 2000, 15).
A public affairs department would help CCS in the development of public relations policies, and also help the company in adapting to changes in the environment. Such policies could involve strategies that would gear the company towards meeting its public expectations, and respond to media queries and interests in the company. Through working together with the media, CCS can identify opportunities that will generate positive publicity for the company. Industry relations will help the CCS relate well with peer companies in the marketing and advertising industry.
Advertising
Advertising is a recognizable paid -or promotional tool that is placed in a determined media, with a specific target audience in mind, which is used to guarantee exposure for the company. The main advantage of advertising is the repeated messages which not only create awareness, but also remind the target audience about the mentioned brand. CS can use advertising to build on its competitive advantages and differentiate itself from competitors. Advertising could be used to communicate the fundamental benefits of CCS, including the company’s reliability, efficiency and friendliness (Kotler and Keller 2009, 14; Österle, Fleisch and Alt 2001, 69).
Advertising also helps build relations between the company’s brand and associated benefits. In this case, advertising has a major role in the integrated marketing communications mix, and has the capability of reaching a wider audience base than other traditional marketing communication tools. Although the major objective of advertising is to build brand awareness, its major function is to deliver t5he intended message to the targeted audience (Jordan 2009, 56). Therefore, advertising can help boost the company’s sales by persuading existing or potential clients to undertake CCS’ services.
Since CCS’ clients are mostly businesses, advertising could rely on other outlets other than the traditional media vehicles. Not only television and radio advertisements costly, but most of the audiences reached by the mass media do not constitute industrial customers, and may therefore not form part of CCS’ target audience. Due to this, CCS should seek to advertise in other media such as industrial publications, magazines, general business publications and other print media such as newspapers. The advertising content should concentrate on the service benefits that customers can expect from CCS (Fill 2009, 12).
Organizing a sales force
Organizing a sales force involves several steps, whereby the first process includes the formulation of a sales force policy and structure. The designed strategy will recommend on the size and qualifications of the sales force, as well as how the sales team will be organized. Once the strategy has been designed, CCS will have to recruit personnel based on individual personality traits, sales aptitude, analytical and organizational skills and other characteristics.
Training will help the sales personnel identify well with CCS, and also learn about the company’s key products and services. The sales team could be rewarded an attractive compensation package in form of a fixed salary, commissions or bonuses, and expense allowances for on-job related expenditures, which will all aim to improve and maintain employee morale and satisfaction. Supervision will encourage the sales team to meet its targets, while evaluation of performance will consider profits or sales derived by the sales team (Darmon 2007, 55; Ehan 2007, 56).
Organization of the sales force is important for the specialization of labor, which has its advantages. The structures will also allow for continuity of the CCS’ marketing efforts, and enable the coordination of activities in the CCS in a way that will increase productivity. The various methods of organizing a sales force include line organizations, functional organizations, and specialization. The purpose of organizing the sales team is to maximize on the potential of personal selling.
Line organizations are involved with the allocation of tasks among employees and departments. A simple line organization would have a sales manager supervising several sales personnel, while a two level line organization would include a regional manager between the sales manager and the sales personnel. In line organizations, the sales manager is responsible for formulating and implementing sales activities, and each individual reports to one boss (Kohlbacher 2009, 45).
The line organization method is simple to understand and implement, and allows for greater accountability because each person only has one supervisor. Another advantage of line organizations is that it is relatively inexpensive since only a few executives are needed, which also means that the decision making process is fast because authority lies with a few individuals. However, as the firm grows, then problems become more complex and more specialized skills are needed, adding onto the costs of the organization. Replacement of sales managers becomes difficult due to lack of experience by lower staff. For these reasons, line organizations should be implemented by small companies that have distinctly divided key departments in the organization.
Line and staff organizations have similar characteristics as the line organizations other than staff positions. In line and staff organizations, staff positions are added, although they have no power over line positions. This form of organization is the most common sales force organizational design since the staff positions provide the company with more specialized skills, thereby allowing the sales manager to be more effective without diluting his authority.
Specific duties are allocated different staff, allowing for more specialization whereby people can be trained to fill vacant positions. Training enables work to go on with minimal interruptions when designated people leave their departments. The main disadvantage of the line and staff organization is that conflicts may arise between line and staff executives as each tries to exert its influence and authority over the other personnel. The line and staff organization is more expensive to implement because of the additional departments. This organizational method is therefore more suitable for companies that want to increase specialization in their departments.
Functional organizations are those divided by function, whereby the specialists have line authority and sales personnel respond to multiple bosses. For instance the sales people could respond to the regional sales manager, the tasking director, and the market forecaster. The main advantage of organizing the sales force in this manner is that it ensures that their various functions are carried out, and specialization allows for greater performance and efficiency. The method has several drawbacks, for example the functional organization reduces accountability because the sales people report to many bosses. The organization method also breaks down the chain of command due to the numerous supervisors, and may often arise in conflicting orders (Anony. 2006, 90).
Lastly, a sales force can be organized according to divisions or specialists. These include organization according to the sales function, geographic areas, customer types or markets, or product specialists. Should CCS decide to organize its sales force by sales activities, a simple line structure may be employed but the personnel will have different selling functions. Some employees will be responsible for sourcing for new accounts while others will be responsible for maintaining the accounts of existing clients. Organizing the sales team by selling activities will enable the staff to become experts in their respective responsibilities, allowing the firm to place emphasis on creating new accounts and also selling services to existing clients.
This system is challenging in that some clients may prefer working with the sales person who recruited them, instead of being turned over to a new sales personnel. Another drawback is that it the organization method may de-motivate sales people who may want to cultivate the accounts that they have created. This organizational method is especially useful in organizations that expect high client turnovers, implying that fast growth of new accounts on a continual basis is necessary for the profitability of the company. The method is also useful where different sets of skills are required in various departments (Gomez-Mejia, Balkin and Cardy 2008, 33).
In a geographic organization, the sales team is organized depending on geographic areas, whereby different teams are assigned to sell the firm’s products and services in specified regions. This type of organization enables sales people and their respective regional managers to be familiar with their assigned regions, allowing them to be more responsive to local issues and changes in the environment. Geographic organization may limit a sales person’s knowledge of the company’s products, especially where the company’s offers varying products and services in different regions due to the specific needs of those regions. For this reason, this method is best suited in firms that offer homogeneous products and services, and also where the firm’s clients are widely dispersed (Selden 1997, 154).
Organizing the sales force by products implies that different teams are assigned for each product or service category, and are responsible for marketing such products and services. This method enables for specialization, whereby sales people become familiar with single or related products and services. The firm will be able to achieve higher sales due to specialization. Another advantage is that product organization calls for decentralization of authority and specialization, which enables solutions to be more aligned with the challenges affecting specific products and services.
Disadvantages of product organization include the duplication of efforts, for example multiple sales personnel may call on one customer when trying to market different products. It will be difficult for the firm to maintain consistent brand image under product organization since different marketing strategies may be employed on different product lines. The product organization method is recommended for companies with a wide variety of technically complex products, where sales personnel should portray in-depth knowledge of the product when marketing it. The method can also be used where clients have a wide range of specific requirements and the products and services offered are relatively heterogeneous (Charles et al. 2009, 102; Clow and Baack 2007, 88).
The sales force can lastly be organized on a customer basis, under specialization organization. Here, particular sales people specialize in marketing or servicing specific clients. This is the most customer oriented approach since sales personnel are able to concentrate and specialize on each customer’s needs. The approach therefore has a higher probability of guaranteeing customer satisfaction. The major disadvantage of organizing a sales force on customer type or market basis is the increased selling and administrative costs, especially in a case where the company has numerous customers. Duplication of duties also arises because a duty that could be done by a single individual may be carried out more than one sales person due to multiple customers.
Relationship variables and business networks
Businesses to business relationships are important for both the firm and its clients. Good long term relationships lead to customer loyalty, which secures future earnings for the company. The main aim of establishing relationships is to create an arrangement that will be mutually beneficial for both parties. Business to business relationships can take various forms, including partnerships, joint ventures, trade associations and networks. Competitive advantage is usually gained through the effective management of business relationships (Blankenburg, Eriksson and Johanson 1996, 1047).
Business networks, especially those aimed at creating value, help reduce transaction costs for the involved parties, and also help to provide access to valuable resources. Companies can also take advantage of the networks to transfer financial resources, thereby reducing risks and guaranteeing the survival of the entire network. Two types of networks can be identified; collaborative networks and coordinated networks. Collaborative networks involve a collection of businesses with the needed resources and competences to achieve desired outcomes and thus create value.
Collaborative resources focus on expertise, whereby members of the network aim on innovations which will subsequently support the growth of the market. Coordinate networks, on the other hand, are transaction oriented and focus on increasing the value of transactions (Wright 2004, 79). CCS would benefit from using collaborative networks as this would lead to innovation, increase in value of the company’s services and benefit from market growth. The success of business-to-business relationships can be measured by evaluating each business partner’s satisfaction derived from the relationship in terms of experiences and performance expectations. Another approach is by employing quantitative measures to evaluate the impact that the relationship has had on the business. CCS should use networks that improve the value of its services since it may increase profits, reduce transaction costs and lead to increase market share.
Conclusion
Given the advantages of networking, CCS should source for business networks within its industry as this may create links to lucrative business opportunities, reduce costs, and improve on the value of CCS’ services. Outsourcing the sales team offers CCS the opportunity of lowering administrative expenses, and also provides an opportunity for establishing contacts and creates networks. Outsourcing is risky for CCS as the company will not be in a good position to control the quality of services offered to clients. An internal sales team is therefore recommended, with product organization as this will result in specialization, and ultimately quality services to CCS’ clients.
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