Designed by Eric Brengle B-books, Ltd.

1Copyright ©2009 by Cengage Learning Inc. All rights reserved

Designed by Eric Brengle B-books, Ltd.

CHAPTER

18

Sales Promotion and Personal Selling

Prepared byAmit Shah

Frostburg State University

MarketingLamb, Hair, McDaniel

10

Copyright ©2009 by Cengage Learning Inc. All rights reserved

Learning Outcomes

2

Define and state the objectives of sales promotion

Discuss the most common forms of consumer sales promotion

List the most common forms of trade sales promotion

Describe personal selling

LOI

LO2

LO3

LO4


Learning Outcomes

3

Discuss the key differences between relationship selling and traditional selling

List the steps in the selling process

Describe the functions of sales management

LO5

LO6

LO7


Sales Promotion

4

Define and state the objectives of sales promotion

LOI


Sales Promotion

5

SalesPromotion

SalesPromotion

LOI

Marketing communication

activities, other than

advertising, personal selling,

and public relations, in

which a short-term incentive

motivates a purchase.


Sales Promotion

6

LOI

Advertising Reason to buy

Sales Promotion Incentive to buy


Sales Promotion

7

LOI

ConsumerSales

Promotion

ConsumerSales

Promotion

Trade Sales

Promotion

Trade Sales

Promotion

Consumer market

Marketing channel

Drive immediate purchaseInfluence behavior

Goal


Objectives of Sales Promotion

8

LOI

Type of BuyerType of Buyer

Loyal Customers

Competitor’sCustomers

Brand Switchers

Price Buyers

Desired ResultsDesired Results

•Reinforce behavior• Increase consumption•Change purchase timing

•Break loyalty•Persuade to switch

•Persuade to buy your brand more often

•Appeal with low prices

•Supply added value

Sales PromotionSales PromotionExamples Examples

•Loyalty marketing•Bonus packs

•Sampling•Sweepstakes, contests, premiums

•Price-lowering promotion

•Trade deals

•Coupons, price-offpackages, refunds

•Trade deals


REVIEW LEARNING OUTCOMEThe Objectives of Sales Promotion

9

LOI


Tools for Consumer Sales Promotion

10

Discuss the most common forms of consumer

sales promotion

LO2



11LO2

Coupons and RebatesCoupons and Rebates

PremiumsPremiums

Loyalty Marketing ProgramsLoyalty Marketing Programs

Contests & SweepstakesContests & Sweepstakes

SamplingSampling

Point-of-Purchase PromotionPoint-of-Purchase Promotion



12LO2

CouponCoupon

RebateRebate

PremiumPremium

A certificate that entitles consumers to an immediate

price reduction.

A certificate that entitles consumers to an immediate

price reduction.

A cash refund given for the purchase of a product during

a specific period.

A cash refund given for the purchase of a product during

a specific period.

An extra item offered to the consumer, usually in exchange

for some proof of purchase.

An extra item offered to the consumer, usually in exchange

for some proof of purchase.



13

LO2

LoyaltyMarketingProgram

LoyaltyMarketingProgram

A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers.

A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers.

FrequentBuyer

Program

FrequentBuyer

Program

A loyalty program in which loyal consumers are rewarded for making multiple purchases.

A loyalty program in which loyal consumers are rewarded for making multiple purchases.



14

LO2

ContestsContests Promotions that require skill or ability to compete for prizes.

Promotions that require skill or ability to compete for prizes.

SweepstakesSweepstakesPromotions that depend on chance or luck, with free participation.

Promotions that depend on chance or luck, with free participation.

Online

http://www.online-sweepstakes.com/



15

LO2

SamplingSamplingA promotional program that allows the consumer the opportunity to try a product or service for free.

A promotional program that allows the consumer the opportunity to try a product or service for free.


Methods of Sampling

16

LO2

Direct mailDirect mail

Door-to-door deliveryDoor-to-door delivery

Packaging with another productPackaging with another product

Retail store demonstrationRetail store demonstration


Point-of-Purchase Promotion

• Build traffic

• Advertise the product

• Induce impulse buying

17

LO2


Online Sales Promotion

• Free merchandise

• Sweepstakes

• Free shipping with purchases

• Coupons

18

LO2

Effective Types of Online Sales PromotionEffective Types of Online Sales Promotion


REVIEW LEARNING OUTCOMEConsumer Sales Promotion

19

LO2

Coupons and rebates

Premiums

Loyalty marketing programs

Contests

Sampling

P-O-P

Online


Tools for Trade Sales Promotion

20

List the most common forms of trade sales promotion

LO3


Trade Sales Promotion

21

LO3

Trade AllowancesTrade Allowances

Push MoneyPush Money

TrainingTraining

Free MerchandiseFree Merchandise

Store DemonstrationStore Demonstration

Conventions & Trade ShowsConventions & Trade Shows


Trade Allowance

22

LO3

TradeAllowance

TradeAllowance

A price reduction offered

by manufacturers to

intermediaries, such as

wholesalers and retailers.


Push Money

23

LO3

Push MoneyPush MoneyMoney offered to channel

intermediaries to

encourage them to “push”

products--that is, to

encourage other members

of the channel to sell the

products.


Benefits of Trade Promotions

24

LO3

Help manufacturers gain new distribution

Obtain wholesaler and retailer support forconsumer sales promotions

Build or reduce dealer inventories

Improve trade relations


REVIEW LEARNING OUTCOMEForms of Trade Sales Promotion

25

LO3


Personal Selling

26

Describe personal selling

LO4


Personal Selling

27

LO4

Personal Selling is more important if...

Customers are concentrated.

Customers are concentrated.

Product is technically complex.

Product is technically complex.

There are few customers.There are few customers.

Product is custom made.Product is custom made.

Product has a high value.Product has a high value.

Customers are geographically dispersed.

Customers are geographically dispersed.

Product is simple to understand.

Product is simple to understand.

There are many customers.There are many customers.

Product is standardized.Product is standardized.

Product has a low value.Product has a low value.

Advertising & Sales Promotion are more important if...


REVIEW LEARNING OUTCOMEPersonal Selling

28

LO4

Detailed explanation or demonstration

Variable sales message

Directed to qualified prospects

Controllable adjustable selling costs

More effective than other promotion in obtaining sale and gaining customer satisfaction

PersonalSelling

Advantages

PersonalSelling

Advantages


Relationship Selling

29

Discuss the key differences between relationship selling

and traditional selling

LO5


Relationship Selling

30

LO5

Relationship(Consultative)

Selling

Relationship(Consultative)

Selling

A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.


Traditional Selling and Relationship Selling

31

LO5

Sell advice, assistance, counsel Sell products

TraditionalTraditionalPersonal SellingPersonal Selling

Focus on closing sales

Limited sales planning

Discuss product

Assess “product-specific” needs

“Lone wolf” approach

Pricing/product focus

Short-term sales follow-up

Focus on customer’s bottom line

Sales planning is top priority

Build problem-solving environment

Conduct discovery in scope of operations

Team approach

Profit impact and strategic benefit focus

Long-term sales follow-up

Relationship SellingRelationship Selling


REVIEW LEARNING OUTCOME Relationship Selling vs. Traditional Selling

32

LO5

InitialSales

RepeatSales

SuccessiveSales

Traditional Sales

Relationship Sales

SalesIncreasesResultFromCreatingValue


Steps in the Selling Process

33

List the steps in the selling process

LO6


Steps in the Selling Process

34

LO6

Generate LeadsGenerate Leads

Qualify LeadsQualify Leads

Probe Customer NeedsProbe Customer Needs

Develop SolutionsDevelop Solutions

Handle ObjectionsHandle Objections

Close the SaleClose the Sale

Follow UpFollow Up


Time Spent in Key Steps of Selling Process

Key Selling StepsTraditional

Selling

Relationship

Selling

Generate Leads High Low

Qualify Leads Low High

Probe Needs Low High

Develop Solutions Low High

Handle Objections High Low

Close the sale High Low

Follow-up Low High

35

LO6


Generating Leads

36

LO6

AdvertisingAdvertising PublicityPublicity Direct Mail/TelemarketingDirect Mail/

Telemarketing

Cold CallingCold Calling Internet Web Site

Internet Web Site ReferralsReferrals

Trade Shows/Conventions

Trade Shows/ConventionsNetworkingNetworking Company

RecordsCompany Records

Online

http://www.linkedin.comhttp://www.ryze.com


Networking

37

ReferralReferral

LO6

A recommendation to a salesperson from a customer or business associate.

NetworkingNetworking

A process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations.


Qualifying Leads

38

Recognized needRecognized need

Buying powerBuying power

Receptivity andaccessibility

Receptivity andaccessibility

LO6


Needs Assessment

39

NeedsAssessment

NeedsAssessment

LO6

A determination of the

customer’s specific needs

and wants and the range of

options a customer has for

satisfying them.


The Preapproach Process

40

LO6

Product or serviceProduct or service

CustomersCustomers

CompetitionCompetition

IndustryIndustry

Salesperson must knoweverything

about...

Salesperson must knoweverything

about...

Online

http://www.hoovers.comhttp://www.dnb.com


Developing and Proposing Solutions

41

LO6

Sales ProposalSales Proposal

Sales PresentationSales Presentation


Powerful Presentations

42LO6

Be well prepared

Use eye contact

Ask open-ended questions

Be poised

Use hand gestures and voice inflection

Focus on the customer needs

Incorporate visual elements

Know how to operate the A/V equipment

Make sure the equipment works

PRACTICE, PRACTICE, PRACTICE!


Handling Objections

43LO6

View objections as requests for information

Anticipate specific objections

Investigate the objection with the customer

Be aware of competitors’ products

Stay calm

Use the objection to close the sale


Closing the Sale

44

LO6

NegotiateNegotiate

Keep an open mindKeep an open mind

Look for customer signals

Look for customer signals

Tailor to each marketTailor to each market


REVIEW LEARNING OUTCOMESteps in the Selling Process

45

LO6


Sales Management

46

Describe the functions of sales management

LO7


Sales Management Responsibilities

47

LO7

Evaluate sales forceEvaluate sales force

Compensate and motivate sales forceCompensate and motivate sales force

Recruit and train sales forceRecruit and train sales force

Determine sales force structureDetermine sales force structure

Define sales goals and sales processDefine sales goals and sales process


Defining Sales Goals

48

LO7

ClearClear

PrecisePrecise

MeasurableMeasurable

Time SpecificTime Specific

Sales VolumeMarket ShareProfit Level


Quota

49

QuotaQuota

LO7

A statement of the individual

salesperson’s sales objectives,

usually based on sales volume

alone but sometimes including

key accounts, new accounts,

repeat sales, and specific

products.


Sales Force Structure

50

LO7

Individual client or account

Individual client or account

Market or industryMarket or industry

Marketing functionMarketing function

Product lineProduct line

Geographic regionGeographic region


Traits of Top Sales Performers Strong, healthy self esteem

Can bounce back from rejection

Sense of urgency and competitiveness

Persuasive

Assertive

Sociable

Willing to take risks

Understand complex concepts

Creative in developing solutions

Possess empathy

51

LO7


Training the Sales Force

52

LO7

Training includes...

Training includes...

Nonselling dutiesNonselling duties

Industry and customer characteristics

Industry and customer characteristics

Product knowledgeProduct knowledge

Selling techniquesSelling techniques

Company policies and practice

Company policies and practice


Compensating the Sales Force

53LO7

CommissionCommission

SalarySalary

CombinationPlans

CombinationPlans


Motivating the Sales Force

54

LO7

Ceremonies Plaques Vacations Merchandise Pay raises Cash bonuses Stock options Tuition assistance Product discounts

Rewards and incentives include:


Evaluating the Sales Force

55

LO7

Contribution to profitContribution to profit

Calls per orderCalls per order

Sales or profits per callSales or profits per call

Call percentage achieving goalsCall percentage achieving goals

Sales volumeSales volume


REVIEW LEARNING OUTCOME Functions of Sales Management

56

LO7

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