14-1 Visit UMT online at © UMT 2004 MKT100Version: Visit UMT online at PRINCIPLES OF MARKETING University of Management and Technology 1901 N. Fort Myer Drive Arlington, VA USA Phone: (703) Fax: (703) Website:

14-2 Visit UMT online at © UMT 2004 MKT100Version: Visit UMT online at CHAPTER 14: Integrated Marketing Communications: Personal Selling and Direct Marketing Armstrong, G. & Kotler, P. Marketing: An Introduction (6th ed.) Prentice Hall © 2003.

14-3 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Road Map: Previewing the Concepts Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. Identify and explain the six major sales force management steps. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. Define direct marketing and discuss its benefits to customers and companies. Identify and discuss the major forms of direct marketing.

14-4 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at The Nature of Personal Selling Most salespeople are well-educated, well-trained professionals who work to build and maintain long-term relationships with customers. The term salesperson covers a wide spectrum of positions from: Order taker (department store salesperson) Order getter (someone engaged in creative selling i.e Lear Corporation)

14-5 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at The Role of the Sales Force Involves two-way, personal communication between salespeople and individual customers. Personal selling is effective because salespeople can: probe customers to learn more about their problems, adjust the marketing offer to fit the special needs of each customer, negotiate terms of sale, and build long-term personal relationships with key decision makers.

14-6 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at The Role of the Sales Force Sales Force Serves as a Critical Link Between a Company and its Customers Since They: Represent Customers to the Company to Produce Customer Satisfaction Represent the Company to Customers to Produce Company Profit

14-7 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Major Steps in Sales Force Management (Fig. 14-1)

14-8 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Territorial Exclusive Territory to Sell the Company’s Full Product Line Customer Sales Force Sells Only to Certain Customers or Industries Product Sales Force Sells Only a Portion of The Company’s Products or Lines Designing Sales Force Strategy and Structure Complex Forms Are a Combination of Any Types of Sales Force Structures

14-9 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Other Sales Force Strategy and Structure Issues Inside Sales Force Inside Sales Force Outside Sales Force Outside Sales Force Travel to Call on Customers Travel to Call on Customers Sells to Major Accounts Sells to Major Accounts Finds Major New Prospects Finds Major New Prospects Conduct Business From Their Offices Via Phone/Buyer Visits Conduct Business From Their Offices Via Phone/Buyer Visits Technical Support People Technical Support People Tele- Marketer & Internet Tele- Marketer & Internet Sales Assistants Sales Assistants

14-10 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Team Selling Use team selling to service large, complex accounts. Team finds problems, solutions, and sales opportunities. Problems: can overwhelm customers, difficulties working with teams, evaluation of sales performance.

14-11 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Some Traits of Good Salespeople

14-12 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Salespeople from Other Companies College Students Search the Web Classified Ads Employment Agencies Current Salespeople Recommendations for Recruiting Salespeople

14-13 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Help Salespeople Know & Identify With the Company Learn About the Products Learn About Competitors’ and Customers’ Characteristics Learn How to Make Effective Presentations The Average Sales Training Program lasts for Four Months and Has the Following Goals: Training Salespeople Understand Field Procedures and Responsibilities

14-14 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Fixed Amount: Usually a Salary Fixed Amount: Usually a Salary Variable Amount: Usually Commissions Or Bonuses Variable Amount: Usually Commissions Or Bonuses To Attract Salespeople, a Company Must Have an Attractive Plan Made Up of Several Elements To Attract Salespeople, a Company Must Have an Attractive Plan Made Up of Several Elements Expense Allowance: For Job- Related Expenses Expense Allowance: For Job- Related Expenses Compensating Salespeople

14-15 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Supervising Salespeople Directing Salespeople Identify Customer Targets & Call Norms Time Spent Prospecting for New Accounts Use Sales Time Efficiently Annual Call Plan Time-and-Duty Analysis Sales Force Automation Motivating Salespeople Organizational Climate Sales Quotas Positive Incentives Sales Meetings Sales Contests Honors and Trips Merchandise/Cash

14-16 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at How Salespeople Spend Their Time (Fig. 14-2)

14-17 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Major Steps in Effective Selling (Fig )

14-18 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Prospecting Salesperson Identifies Qualified Potential Customers. Preapproach Salesperson Learns About a Prospective Customer Before Making a Sales Call. Qualifying Process of Identifying Good Prospects and Screening Out Poor Ones. Steps in the Selling Process Approach Salesperson Meets the Buyer and Gets the Relationship Off to a Good Start.

14-19 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Presentation Salesperson Tells the Product “Story” to the Buyer Showing How the Product Solves Problems. Closing Salesperson Asks the Customer for an Order. Handling Objections Handling Objections Salesperson Seeks Out, Clarifies, and Overcomes Customer Objections to Buying. Steps in the Selling Process Follow-Up Occurs After the Sale and Ensures Customer Satisfaction and Repeat Business.

14-20 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at What is Relationship Marketing? Relationship Marketing Emphasizes Maintaining Profitable Long-Term Relationships with Customers by Creating Superior Customer Value and Satisfaction.

14-21 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Most Mass Marketing Involves One-Way Communications Aimed At Consumers. Mass Marketing and Direct Marketing Direct Marketing Involves Two-Way Interactions With Customers.

14-22 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at The New Direct Marketing Model Some firms use direct marketing as a supplemental medium. For many companies, direct marketing – especially Internet and e-commerce companies – constitutes a new and complete model for doing business. Some firms use the new direct model as their only approach. New marketing model of the next millennium.

14-23 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Benefits and Growth of Direct Marketing Benefits to Buyers Convenient Easy to use Private Product access and selection Abundance of information Immediate Interactive Benefits to Sellers Consumer relationship building Reduces costs Increases speed and efficiency Provides flexibility Global medium

14-24 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Customer Databases and Marketing Customer Databases are an Organized Collection of Comprehensive Data About Individual Customers or Prospects. Allows companies to offer fine- tuned marketing offers and communications to customers.

14-25 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Forms of Direct Marketing (Fig. 14-4)

14-26 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Forms of Direct Marketing Telephone Marketing Represents 36% of direct marketing sales. Outbound telephone marketing sells directly to customers. Inbound numbers provide a toll-free number to receive orders. Direct-Mail Marketing Represents 31% of direct marketing sales. High target-market selectivity. Personalized & flexible. Allows easy measurement of results. Fax mail, , voice mail are now popular

14-27 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Forms of Direct Marketing Catalog Marketing Sales expected to exceed $94 billion by Printed, selling multiple products, offering direct ordering mechanism. Printed catalogs remain the primary medium, but many are now electronic. Direct-Response TV Marketing Direct-response advertising – marketers air TV spots or infomercials. Home shopping channels – entire programs or channels dedicated to selling goods and services. Kiosk Marketing Placing information and ordering machines at various locations.

14-28 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at George Foreman’s Lean Mean Fat- Reducing Grilling Machine Current infomercial champ – George Foreman! Selling for 3 easy payments of $19.95 (plus shipping & handling). Totaled almost $400 million in sales last year.

14-29 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at An Integrated Direct-Marketing Campaign (Fig. 14-5)

14-30 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Irritation to Consumers Unfairness, Deception, or Fraud Invasion of Privacy Public Policy and Ethical Issues in Direct Marketing

14-31 Visit UMT online at © UMT 2004 MKT100 Visit UMT online at Version: Visit UMT online at Rest Stop: Reviewing the Concepts Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. Identify and explain the six major sales force management steps. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. Define direct marketing and discuss its benefits to customers and companies. Identify and discuss the major forms of direct marketing.