1 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Sales Promotion and 15 Personal Selling Canadian Adaptation prepared by Don Hill, Langara College

2 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

3 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

4 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Learning Objective Define and state the objectives of sales promotion Online

5 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Sales Promotion Online Sales Promotion Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. 1

6 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Sales Promotion Objectives 1 Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Consumer market Marketing channel Goal = Drive immediate purchase = Influence behaviour

7 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Uses of Sales Promotion 1 Immediate purchases Increase trial Increase product usage Encourage repurchase Try a different brand Encourage brand loyalty

8 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Learning Objective Discuss the most common forms of consumer sales promotion 2 2 2

9 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion 2

10 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

11 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

12 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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 Online 2

13 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. Tools for Consumer Sales Promotion 2

14 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Methods of Sampling Direct mail Door-to-door delivery Packaging with another product Retail store demonstration 2

15 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Point-of-Purchase 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

16 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Online Online Sales Promotion Free merchandise Sweepstakes Free shipping Coupons 2

17 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Learning Objective List the most common forms of trade sales promotion 3 3 3

18 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Tools for Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Instore Demonstration Conventions & Trade Shows 3

19 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. 3

20 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

21 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 The Role of Trade Sales Promotion Improve trade relations Gain new distributors Build or reduce dealer inventories Obtain support for consumer sales promotions 3

22 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Learning Objective Describe personal selling 4 4 4

23 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Advantages of Personal Selling 4  Detailed explanation or demonstration  Variable sales message  Directed at qualified prospects  Controllable adjustable selling costs  Effective at obtaining sale and gaining customer satisfaction

24 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Personal Selling Customers are concentrated Customers are concentrated Product is technically complex There are few customers Product is custom made Product has a high value Personal Selling is more important if... 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... 4

25 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Learning Objective Discuss the key differences between relationship selling and traditional selling 5 5 5

26 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

27 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Relationship Selling versus Traditional Selling 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 5

28 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Key Differences between Traditional and Relationship Selling 5

29 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Learning Objective List the steps in the selling process 6 6 6

30 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Sales Process The set of steps a salesperson goes through in a particular organization to sell a particular product or service. 6

31 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Steps in the Selling Process 6

32 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

33 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Online Generating Leads Advertising Publicity Direct Mail/ Telemarketing Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Trade Shows/ Conventions Networking Company Records 6

34 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

35 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Characteristics of Qualified Leads 6 Recognized need Buying power Receptivity and accessibility Online

36 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Needs Assessment A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. 6

37 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Probing Needs Product or service Customers and their needs Competition Industry Salesperson must know everything about... Salesperson must know everything about... 6

38 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Developing and Proposing Solutions Sales Proposal Sales Presentation 6

39 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Powerful Presentations 6 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!

40 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Handling Objections Use the objection to close the sale Anticipate specific objections View objections as requests for information View objections as requests for information 6

41 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Closing the Sale Negotiate Keep an open mind Look for customer signals 6 Online

42 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Following Up Employees are trained Goods or service perform as promised Goods or service perform as promised Ensure delivery schedules are met 6

43 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Learning Objective Describe the functions of sales management 7 7 7

44 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Sales Management Responsibilities Supervise and evaluate sales force Compensate and motivate sales force Recruit and train sales force Determine sales force structure Define sales goals and sales process 7

45 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Defining Sales Goals Clear Precise Measurable Time Specific Sales Goals Should Be... Sales Goals Should Be... 7

46 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15Quota Quota 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. 7

47 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Sales Force Structure Individual client or account Market or industry Marketing function Product line Geographic region 7

48 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

49 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Compensation Plans: Basic Methods Commission Salary Combination Plans Combination Plans Online 7

50 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

51 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 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

52 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Evaluating the Sales Force: Performance Measures Contribution to profit Calls per order Sales or profits per call Call percentage achieving goals Sales volume 7

53 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 The Impact of Technology on Personal Selling Cell phones Laptops Pagers Electronic organizers 7

54 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 15 Benefits of Technology as a Sales Tool 7 Ease administration burden Arm salespeople with valuable information Track sales performance Enable collaboration Make sales management more effective