1 Copyright ©2009 by Cengage Learning Inc. All rights reserved Designed by Eric Brengle B-books, Ltd. CHAPTER 18 Sales Promotion and Personal Selling Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10

Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 2 LO I Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 3 LO I AdvertisingReason to buy Sales PromotionIncentive to buy

Copyright ©2009 by Cengage Learning Inc. All rights reserved Objectives of Sales Promotion 4 LO I 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 ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 5 LO 2 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 ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 6 LO 2 Loyalty Marketing Program Loyalty Marketing Program 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. Frequent Buyer Program Frequent Buyer 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.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 7 LO 2 Contests Promotions that require skill or ability to compete for prizes. Sweepstakes Promotions that depend on chance or luck, with free participation. Online

Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 8 LO 2 Sampling A promotional program that allows the consumer the opportunity to try a product or service for free.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Point-of-Purchase Promotion Build traffic Advertise the product Induce impulse buying 9 LO 2

Copyright ©2009 by Cengage Learning Inc. All rights reserved Online Sales Promotion Free merchandise Sweepstakes Free shipping with purchases Coupons 10 LO 2 Effective Types of Online Sales Promotion

Copyright ©2009 by Cengage Learning Inc. All rights reserved Benefits of Trade Promotions 11 LO 3  Help manufacturers gain new distribution  Obtain wholesaler and retailer support for consumer sales promotions  Build or reduce dealer inventories  Improve trade relations

Copyright ©2009 by Cengage Learning Inc. All rights reserved Trade Allowance 12 LO 3 Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Push Money 13 LO 3 Push Money 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 ©2009 by Cengage Learning Inc. All rights reserved Personal Selling 14 LO 4 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 ©2009 by Cengage Learning Inc. All rights reserved Relationship Selling 15 LO 5 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.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Traditional Selling and Relationship Selling 16 LO 5 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 operations Team approach Profit impact and strategic benefit focus Long-term sales follow-up Relationship Selling

Copyright ©2009 by Cengage Learning Inc. All rights reserved Steps in the Selling Process 17 LO 6 Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up

Copyright ©2009 by Cengage Learning Inc. All rights reserved Generating Leads 18 LO 6 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 ©2009 by Cengage Learning Inc. All rights reserved Qualifying Leads 19 Recognized need Buying power Receptivity and accessibility LO 6

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Preapproach Process 20 LO 6 Product or service Customers Competition Industry Salesperson must know everything about... Salesperson must know everything about... Online

Copyright ©2009 by Cengage Learning Inc. All rights reserved Handling Objections 21 LO 6  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 ©2009 by Cengage Learning Inc. All rights reserved Closing the Sale 22 LO 6 Negotiate Keep an open mind Look for customer signals Tailor to each market

Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Management Responsibilities 23 LO 7 Evaluate sales force Compensate and motivate sales force Recruit and train sales force Determine sales force structure Define sales goals and sales process

Copyright ©2009 by Cengage Learning Inc. All rights reserved Defining Sales Goals 24 LO 7 Clear Precise Measurable Time Specific Sales Volume Market Share Profit Level Quota

Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Force Structure 25 LO 7 Individual client or account Market or industry Marketing function Product line Geographic region

Copyright ©2009 by Cengage Learning Inc. All rights reserved Training the Sales Force 26 LO 7 Training includes... Nonselling duties Industry and customer characteristics Industry and customer characteristics Product knowledge Selling techniques Company policies and practice

Copyright ©2009 by Cengage Learning Inc. All rights reserved Compensating the Sales Force 27 LO 7 Commission Salary Combination Plans Combination Plans

Copyright ©2009 by Cengage Learning Inc. All rights reserved Motivating the Sales Force 28 LO 7  Ceremonies  Plaques  Vacations  Merchandise  Pay raises  Cash bonuses  Stock options  Tuition assistance  Product discounts Rewards and incentives include:

Copyright ©2009 by Cengage Learning Inc. All rights reserved Evaluating the Sales Force 29 LO 7 Contribution to profit Calls per order Sales or profits per call Call percentage achieving goals Sales volume