1Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion and Personal Selling Prepared by Deborah Baker Texas Christian University Chapter 16

2Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives 1.Define and state the objectives of sales promotion. 2. Discuss the most common forms of consumer sales promotion. 3. List the most common forms of trade sales promotion.

3Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 4. Describe personal selling. 5. Discuss the key differences between relationship selling and traditional selling. 6. List the steps in the selling process. 7.Describe the functions of sales management.

4Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Define and state the objectives of sales promotion. 1 1 On Line On Line

5Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. 1 1 On Line On Line

6Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Promotion Targets Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion 1 1

7Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Uses of Sales Promotion Immediate purchases Increase trial Boost consumer inventory Encourage repurchase Increase ad effectiveness Encourage brand switching Encourage brand loyalty 1 1

8Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Objectives of Sales Promotion Type of Buyer Loyal Customers Competitor’s Customers Competitor’s Customers Brand Switchers Price Buyers Desired Results Reinforce behavior Increase consumption Change timing Reinforce behavior Increase consumption Change timing Break loyalty Persuade to switch Break loyalty Persuade to switch Persuade to buy your brand more often Appeal with low prices Supply added value Appeal with low prices Supply added value Sales Promotion Examples Loyalty marketing Bonus packs Loyalty marketing Bonus packs Sampling Sweepstakes, contests, premiums Sampling Sweepstakes, contests, premiums Price-lowering promotion Trade deals Price-lowering promotion Trade deals Coupons, price-off packages, refunds Trade deals Coupons, price-off packages, refunds Trade deals 1 1

9Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the most common forms of consumer sales promotion. 2 2

10Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion 2 2

11Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 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 product. A cash refund given for the purchase of a product during a specific product. An extra item offered to the consumer, usually in exchange for some proof of purchase. Tools for Consumer Sales Promotion 2 2

12Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Loyalty Marketing Program Loyalty Marketing Program Frequent Buyer Program Frequent Buyer 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. 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. Tools for Consumer Sales Promotion 2 2

13Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Contest Sweepstakes Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation. Tools for Consumer Sales Promotion 2 2 On Line On Line

14Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. Tools for Consumer Sales Promotion 2 2

15Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sampling Methods of Sampling Methods of Sampling Direct mail Door-to-door delivery Packaging with another product Retail store demonstration 2 2

16Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Tools for Consumer Sales Promotion Goals of Goals of Point-of-Purchase Point-of-Purchase Displays Displays Goals of Goals of Point-of-Purchase Point-of-Purchase Displays Displays Build traffic Advertise the product Induce impulse buying 2 2

17Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning On Line On Line Tools for Consumer Sales Promotion Free merchandise Sweepstakes Free shipping Coupons Effective Types of On-Line Sales Promotion Effective Types of On-Line Sales Promotion 2 2

18Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective List the most common forms of trade sales promotion. 3 3

19Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Tools for Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows 3 3

20Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. 3 3

21Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 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. 3 3

22Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Role of Trade Sales Promotion Improve trade relations Gain new distributors Build or reduce dealer inventories Obtain support for consumer sales promotions 3 3

23Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe personal selling. 4 4

24Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advantages of Personal Selling  Provides a detailed explanation or demonstration of product  Message can be varied to fit the needs of each prospective customer  Can be directed to specific qualified prospects  Costs can be controlled by adjusting sales force size  Most effective method to obtain sales and gain satisfied customers 4 4

25Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Personal Selling Customers are concentrated Customers are concentrated There are few customers Product is technically complex Product is custom made Product has a high value Personal Selling is more important if... Customers are geographically dispersed Customers are geographically dispersed There are many customers Product is simple to understand Product is standardized Product has a low value Advertising & Sales Promotion are more important if

26Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the key differences between relationship selling and traditional selling. 5 5

27Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Relationship Selling A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long- term satisfaction through mutually beneficial partnerships. 5 5

28Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Relationship Selling vs. Traditional Selling Sell advice, assistance, counsel Sell products Traditional Personal Selling Focus on closing sales Limited sales planning Discuss product Assess “Product-specific” needs 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 Conduct discovery in scope of operations Team approach Profit impact and strategic benefit focus Profit impact and strategic benefit focus Long-term sales follow-up Relationship Selling 5 5

29Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective List the steps in the selling process. 6 6

30Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Process The set of steps a salesperson goes through in a particular organization to sell a particular product or service. 6 6

31Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up 6 6

32Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Time Spent in Key Steps of Selling Process Key Selling StepsTraditional Selling Relationship Selling Generate LeadsHighLow Qualify LeadsLowHigh Probe NeedsLowHigh Develop SolutionsLowHigh Handle ObjectionsHighLow Close the saleHighLow Follow-upLowHigh 6 6

33Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning On Line On Line Generating Leads Cold Calling Advertising Publicity Direct Mail/ Telemarketing Direct Mail/ Telemarketing Trade Shows/ Conventions Trade Shows/ Conventions Internet Web Site Referrals Networking Company Records Sources of Sales Leads 6 6

34Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Cold Calling A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects’ needs or financial status. 6 6

35Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Qualifying Leads Recognized Need Buying Power Receptivity & Accessibility Receptivity & Accessibility Characteristics of Qualified Leads Characteristics of Qualified Leads 6 6 On Line On Line

36Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Needs Assessment A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. 6 6

37Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Probing Needs Product or service Customers and their needs Competition Industry Salesperson must know everything about... Salesperson must know everything about

38Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Developing and Proposing Solutions Sales Proposal Sales Presentation 6 6

39Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Handling Objections Handling Objections Objections Handling Use the objection to close the sale Anticipate specific objections View objections as requests for information View objections as requests for information 6 6

40Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Closing the Sale Closing the Sale Closing the Sale Negotiate Keep an open mind Look for customer signals 6 6

41Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Following Up Responsibilities Responsibilitiesin Following Up Following Up Responsibilities Responsibilitiesin Following Up Following Up Employees are trained Goods or service perform as promised Goods or service perform as promised Ensure delivery schedules are met 6 6

42Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe the functions of sales management. 7 7

43Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Management Responsibilities Evaluate sales force Compensate and motivate sales force Compensate and motivate sales force Recruit and train sales force Recruit and train sales force Determine sales force structure Determine sales force structure Define sales goals and sales process Define sales goals and sales process Tasks of Sales Management Sales Management Tasks of Sales Management Sales Management 7 7

44Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Defining Sales Goals Clear Precise Measurable Time Specific Sales Goals Should Be... Sales Goals Should Be

45Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Quota A statement of the individual salesperson’s sales objectives, usually based on sales volume alone but sometimes including key accounts. 7 7

46Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sales Force Structure CommonSalesOrganizationStructuresCommonSalesOrganizationStructures Individual client or account Market or Industry Marketing Function Product Line Geographic Region 7 7

47Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Training the Sales Force Training includes... Training includes... Nonselling duties Industry and customer characteristics Industry and customer characteristics Product knowledge Selling techniques Company policies and practice 7 7

48Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Compensation Plans: Basic Methods Commission Salary Combination Plans Combination Plans 7 7 On Line On Line

49Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Compensation Plans Straight Commission Straight Commission Straight Salary Straight Salary The salesperson is paid some percentage when a sale is made. The salesperson receives a salary regardless of sales productivity. 7 7

50Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Effective Sales Leaders Effective Sales Leaders... Are assertive Possess ego drive Possess ego strength Take risks Are innovative Have a sense of urgency Are empathetic 7 7

51Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Evaluating the Sales Force: Performance Measures Contribution to Profit Calls per Order Sales or Profits per Call Call Percentage Achieving Goals Sales Volume 7 7

52Chap. 16 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Impact of Technology on Personal Selling Laptop computer link Cell phones Pagers Personal data assistants Internet Sales Force Automation Automation 7 7