Executive Summary
In many organizations, there is little coordination between the marketing and the sales functions. Leads generated by marketing activities are often ignored by the sales force, and inadequate knowledge of the sales process often results in marketing programs of, at best, variable quality. Such a divide can lead to wasted expense and energy as sales representatives chase after leads (regardless of their quality and potential). In many instances, higher-quality leads end up receiving delayed and potentially less effective selling effort. An integrated marketing communications framework, built on the synergy among different communication channels, has the potential to bridge the gap between marketing and sales, thus leveraging marketing and sales resources more effectively in achieving the organization’s sales and profit objectives.
Integration requires an understanding of how multiple communications influence one another. In this research, the authors address several questions: How do changes in media mix, budgets, and timing influence the sales system? How can these marketing-oriented decisions improve the effectiveness of subsequent selling activities? Does a sales representative’s ability to respond quickly to a customer’s inquiry affect sales conversion? The authors develop a three-stage model to capture the effects of sequential marketing communications on generating leads, securing appointments with customers, and closing sales.
The results suggest strong and often complex relationships among marketing efforts (multiple lead-generating media), delays in subsequent communications (time lag between inquiry and follow-up sales visit), and stresses placed on sales efficiencies (appointment and sales conversion). The findings underscore the impact of multimedia communications spending on subsequent communications timing and effectiveness and address resource deployment in an integrated marketing communications context.
This study is a result of a collaborative effort with a large, national home improvement retailer. A unique product of the study is a user-friendly decision support tool for marketing and sales planning. Managers can simulate the impact of varying communications budgets, timing, and media allocations to understand the overall impact on sales and profits. The authors provide three hypothetical scenarios that illustrate the impact of media changes on the retailer’s operations.
Biography
Timothy M. Smith is Associate Professor of Corporate Environmental Management and AT&T Industrial Ecology Fellow at the University of Minnesota, where he also holds an adjunct faculty position in Marketing and Logistics Management in the Carlson School of Management. He received a BA in Business Administration from the University of Colorado (1993) and a PhD (1998) and an MBA (1996) from Penn State University; he has also held positions in sales and marketing planning in the financial and telecommunications industries. Dr. Smith’s research and consulting interests focus on the effectiveness of marketing communications, particularly involving media and sales force interactions. This work has recently been expanded to explore communication effectiveness around “green” messaging, products designed for the environment, and life-cycle assessment information dissemination throughout the supply chain. Dr. Smith, in conjunction with collaborators in support of these and related research efforts, has been award more than $1,000,000 in grants and contracts. Sponsoring organizations include the U.S. Department of Energy; the U.S. Department of Agriculture; Minnesota Department of Commerce; and various public and private organizations, such as the Institute for the Study of Business Markets, the 3M Corporation, the Andersen Corporation, the Louisiana Pacific Corporation, and the Pentair Corporation. His work has appeared in various academic journals, including International Journal of Research in Marketing, Journal of Marketing Research, and International Journal of Life Cycle Assessment. Dr. Smith also serves as the Director of the Forest Products Management Development Institute, a unique industry/university partnership focused on environmental and managerial aspects of the forest products industries.
Srinath Gopalakrishna is Associate Professor of Marketing in the College of Business at the University of Missouri, Columbia. Previously, he was a member of the marketing faculty at Penn State University for several years. He received his PhD in Marketing from Purdue University in 1988. He has an undergraduate degree in Engineering (1977) and an MBA with a specialization in Marketing (1980) from prestigious universities in India. Before commencing his doctoral education in the United States, he worked for several years as a sales manager. He is interested in the application of quantitative modeling techniques to marketing problems, especially in the area of business-to-business marketing and sales management. His research has examined the effectiveness and appropriate deployment of business-to-business marketing communications, such as advertising, direct mail, and trade shows, in conjunction with personal selling. He is also interested in measuring the economic returns from marketing expenditures and studying the effectiveness of sales incentive programs. His research has been sponsored by the Center for Exhibition Industry Research and the Society for Incentive Travel Executives, among other organizations. His work has appeared in Marketing Science, Journal of Marketing Research, and Journal of Marketing, among other journals.
Rabikar Chatterjee is Professor of Business Administration at the University of Pittsburgh. He previously served on the marketing faculties of Purdue University and the University of Michigan and has been a visiting professor at the Australian Graduate School of Management, Sydney. Dr. Chatterjee received his PhD in Marketing from the Wharton School at the University of Pennsylvania in 1986. He has a bachelor’s degree in Chemical Engineering from the Indian Institute of Technology, Kanpur, and the equivalent of an MBA from the Indian Institute of Management, Ahmedabad. He also has several years of industry experience in engineering, project management, sales management, marketing, and strategic planning positions. Dr. Chatterjee’s teaching, research, and consulting interests are in the area of customer-focused marketing and product/service strategies, particularly in high-tech and/or engineered products and services. His research has focused on models of market response to new products, with applications in forecasting, product design, and pricing, and in methods for measuring and representing customers’ perceptions of and preferences for competing products. Dr. Chatterjee’s articles have appeared in various academic journals, including Journal of Marketing Research and Management Science. He is an associate editor in the Marketing department of Management Science and is a member of the editorial board of Marketing Science, two of the leading journals for quantitative research in marketing.
J Marketing Research, Volume 43, Number 4, November 2006
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