1 Chapter 18: Sales Promotion and Personal Selling Prepared by Amit Shah, Frostburg State University Designed by Eric Brengle, B-books, Ltd. Copyright 2010 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 LO 1 LO 2 LO 3 LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

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 LO 5 LO 6 LO 7 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Promotion 4 Define and state the objectives of sales promotion. LO 1 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Promotion 5 Marketing activities, other than advertising, personal selling, and public relations, that stimulate consumer buying and dealer effectiveness. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Promotion 6 AdvertisingReason to buy Sales PromotionIncentive to buy Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Promotion 7 Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase, Influence behavior Goal Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Objectives of Sales Promotion 8 Type of Buyer Loyal Customers Competitor’s Customers Brand Switchers Price Buyers Desired 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 Promotion Examples Loyalty marketing Bonus packs Sampling Sweepstakes, contests, premiums Price-lowering promotion Trade deals Coupons, price-off packages, refunds Trade deals Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome The Objectives of Sales Promotion 9 LO 1 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Tools for Consumer Sales Promotion 10 Discuss the most common forms of consumer sales promotion. LO 2 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Tools for Consumer Sales Promotion 11 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Coupons, Rebates, and Premiums 12 Coupon Rebate Premium 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Loyalty Marketing 13 Loyalty Marketing Program - A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. Frequent Buyer Program - A loyalty program in which loyal customers are rewarded for making multiple purchasers. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Contests and Sweepstakes 14 Online Contests - Promotions that require skill or ability to compete for prizes. Sweepstakes - Promotions that depend on chance or luck, with free participation. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sampling 15 A promotional program that allows the consumer the opportunity to try a product or service for free. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Methods of Sampling 16 Direct mail Door-to-door delivery Packaging with another product Retail store demonstration Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Point-of-Purchase Promotion Build traffic Advertise the product Induce impulse buying 17 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Online Sales Promotion Free merchandise Sweepstakes Free shipping with purchases Coupons 18 Effective Types of Online Sales Promotion Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Consumer Sales Promotion 19 Coupons and rebates Premiums Loyalty marketing programs Contests and Sweepstakes Sampling P-O-P Online LO 2 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Tools for Trade Sales Promotion 20 List the most common forms of trade sales promotion. LO 3 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Trade Sales Promotion 21 Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Trade Allowance 22 A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Push Money 23 Money offered to channel intermediaries to encourage them to “push” products– that is, to encourage other members of the channel to sell the products. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Benefits of Trade Promotions 24  Help manufacturers gain new distribution  Obtain wholesaler and retailer support for consumer sales promotions  Build or reduce dealer inventories  Improve trade relations Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Forms of Trade Sales Promotion 25 LO 3 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Personal Selling 26 Describe personal selling. LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Personal Selling 27 Personal Selling is more important if... Customers are concentrated. Customers are concentrated. Product is technically complex. There are few customers. Product is custom made. Product has a high value. Customers are geographically dispersed. Customers are geographically dispersed. Product is simple to understand. There are many customers. Product is standardized. Product has a low value. Advertising & Sales Promotion are more important if... Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Personal Selling 28 LO 4  Detailed explanation or demonstration  Variable sales message  Directed to qualified prospects  Controllable adjustable selling costs  Effective at obtaining sale and gaining customer satisfaction Personal Selling Advantages Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Relationship Selling 29 Discuss the key differences between relationship selling and traditional selling. LO 5 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Relationship Selling 30 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 partnership. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Traditional Selling and Relationship Selling 31 Sell advice, assistance, counsel Sell products Traditional Personal 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 customers’ operations Team approach Profit impact and strategic benefit focus Long-term sales follow-up Relationship Selling Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Relationship Selling vs. Traditional Selling 32 LO 5 Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Sales Increases Result From Creating Value Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Steps in the Selling Process 33 List the steps in the selling process. LO 6 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Steps in the Selling Process 34 Generate Leads Qualify Leads Probe Customer Needs Develop/Propose Solutions Handle Objections Close the Sale Follow Up Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Time Spent in Key Steps of Selling Process Key Selling Steps Traditional Selling Relationship Selling Generate LeadsHighLow Qualify LeadsLowHigh Probe NeedsLowHigh Develop SolutionsLowHigh Handle ObjectionsHighLow Close the saleHighLow Follow-upLowHigh 35 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Generating Leads 36 Advertising Publicity Direct Mail/ Telemarketing Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Trade Shows/ Conventions Networking Company Records Online Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Referral and Networking 37 Referral – A recommendation to a customer or business associate. Networking – A process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in organizations. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Qualifying Leads 38 Recognized need Buying power Receptivity and accessibility Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Preapproach Process 39 Product or service Customers Competition Industry Salesperson must know everything about... Salesperson must know everything about... Online Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Needs Assessment 40 A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Developing and Proposing Solutions 41 Sales Proposal Sales Presentation Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Powerful Presentations 42 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! Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Handling Objections 43  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 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Closing the Sale 44 Negotiate Keep an open mind Look for customer signals Tailor to each market Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Steps in the Selling Process 45 LO 6 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Management 46 Describe the functions of sales management. LO 7 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Management Responsibilities 47 Evaluate sales force Compensate and motivate sales force Recruit and train sales force Determine sales force structure Define sales goals and sales process Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Defining Sales Goals 48 Clear Precise Measurable Time Specific Sales Volume Market Share Profit Level Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Quota 49 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Force Structure 50 Individual client or account Market or industry Marketing function Product line Geographic region Copyright 2010 by Cengage Learning Inc. All Rights Reserved

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 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Training the Sales Force 52 Training includes... Nonselling duties Industry and customer characteristics Industry and customer characteristics Product knowledge Selling techniques Company policies and practice Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Compensating the Sales Force 53 Commission Salary Combination Plans Combination Plans Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Motivating the Sales Force 54  Ceremonies  Plaques  Vacations  Merchandise  Pay raises  Cash bonuses  Stock options  Tuition assistance  Product discounts Rewards and incentives include: Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Evaluating the Sales Force 55 Contribution to profit Calls per order Sales or profits per call Call percentage achieving goals Sales volume Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Functions of Sales Management 56 LO 7 Copyright 2010 by Cengage Learning Inc. All Rights Reserved