1. CHAPTER 18 Sales Promotion and Personal Selling
Lamb, Hair, McDaniel
Chapter 18 Sales Promotion and Personal Selling
CHAPTER 18
Sales Promotion
and Personal Selling
Advertising offers the consumer a reason to buy; sales promotion offers an incentive to buy.
© iStockphoto.com/Terry J Alcorn

2. Chapter 18 Sales Promotion and Personal Selling
Learning Outcomes
LO 1 Define and state the objectives of sales promotion
LO 2 Discuss the most common forms of consumer sales promotion
LO 3 List the most common forms of trade sales promotion

3. Learning Outcomes LO 4 Describe personal selling
Chapter 18 Sales Promotion and Personal Selling
Learning Outcomes
LO 4 Describe personal selling
LO 5 Discuss the key differences between relationship selling and traditional selling
LO 6 List the steps in the selling process

4. the objectives of sales promotion
Chapter 18 Sales Promotion and Personal Selling
Sales Promotion
Define and state
the objectives of sales promotion
LO1

5. Sales Promotion LO1 Sales Promotion
Chapter 18 Sales Promotion and Personal Selling
Sales Promotion
Sales Promotion
Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.
Notes:
In addition to advertising, public relations, and personal selling, sales promotion is utilized to increase the effectiveness of other promotional efforts.
Sales promotion provides an incentive for consumers to purchase a good or service immediately, either by lowering the price or by adding value.
LO1

6. Sales Promotion LO1 Advertising Reason to buy Sales Promotion
Chapter 18 Sales Promotion and Personal Selling
Sales Promotion
Advertising
Reason to buy
Sales Promotion
Incentive to buy
Notes:
While advertising offers a reason to buy, sales promotion offers an incentive to buy. Both are important, but sales promotion is usually cheaper and easier to measure.
LO1

7. Sales Promotion Consumer Sales Promotion is… Trade Sales Promotion is…
Chapter 18 Sales Promotion and Personal Selling
Sales Promotion
Consumer Sales Promotion is…
sales promotion activities targeting the ultimate consumer.
Trade Sales Promotion is…
sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer.

8. Objectives of Sales Promotion
LO1
Chapter 18 Sales Promotion and Personal Selling
Objectives of Sales Promotion
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
Notes:
The objectives of a promotion depend on the behavior of target consumers, as shown in Exhibit 18.1.

9. Tools for Consumer Sales Promotion
Chapter 18 Sales Promotion and Personal Selling
Tools for Consumer Sales Promotion
Discuss the most common forms of consumer sales promotion
LO2

10. Tools for Consumer Sales Promotion
Chapter 18 Sales Promotion and Personal Selling
Tools for Consumer Sales Promotion
Coupons and Rebates
Premiums
Loyalty Marketing Programs
Contests & Sweepstakes
Sampling
Point-of-Purchase Promotion
Online Sales Promotion
Notes:
The tools selected for sales promotion must suit the objectives to ensure success of the overall promotion plan.
Popular tools are shown here, and described on the following slides.
LO2

11. Coupons and Rebates LO2 Coupon Rebate Premium
Chapter 18 Sales Promotion and Personal Selling
Coupons and Rebates
Coupon
Rebate
Premium
A certificate that entitles consumers
to an immediate price reduction when
they buy the product.
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 of the promoted product.
Notes:
Coupons encourage product trial and repurchase, and are likely to increase the amount of a product purchased.
Almost 300 billion coupons are distributed to U.S. households annually. This does not include Internet and in-store coupons. Increased competition and the introduction of 1200 new products each year have contributed to this trend.
Coupons promoting new-product use are likely to stimulate purchases.
In-store coupons are more likely to influence buying decisions.
Rebates must be mailed in along with a proof of purchase. Rebates offer price cuts to consumers directly and are more easily controlled. Further, customer databases can be built due to the information forms required for rebates.
Premiums reinforce the purchase decision, increase consumption, and persuade nonusers to switch brands.
Discussion/Team Activity:
Identify companies who have utilized these popular sales promotion tools.
Examples: fast food services, cosmetic companies, banks, rental cars, magazines, computer manufacturers, cell phones, etc.

12. Loyalty Marketing Programs
Chapter 18 Sales Promotion and Personal Selling
Loyalty Marketing Programs
Loyalty
Marketing
Program
A promotional program designed
to build long-term, mutually beneficial relationships between
a company and key customers.
Frequent
Buyer
A loyalty program in which loyal consumers are rewarded for
making multiple purchases of a
particular good or service.
Notes:
Loyalty marketing programs reward consumers for making multiple purchases.
The objective of loyalty marketing programs is to build long-term, mutually-beneficial relationships between a company and key customers.
Studies show that consumer loyalty is on the decline. 54 percent of primary grocery shoppers belong to two or more supermarket loyalty cards.
Discussion/Team Activity:
Identify several companies that offer these programs. Discuss the benefits offered by some of the more popular loyalty marketing and frequent buyer programs.
LO2

13. Coupons and Sweepstakes
Chapter 18 Sales Promotion and Personal Selling
Coupons and Sweepstakes
Contests
Promotions in which participants use
some skill or ability to compete for
prizes.
Sweepstakes
Promotions that depend on chance, with free participation.
Notes:
Contests and sweepstakes are designed to create interest in a good or service, often to encourage brand switching.
They are not effective tools for generating long-term sales. Furthermore, the award must appeal to the target market. Offering several smaller prizes instead of one huge prize will increase the effectiveness of a promotion.
LO2

14. Chapter 18 Sales Promotion and Personal Selling
Sampling
Sampling
A promotional program that allows the consumer the opportunity to try a product or service for free.
Notes:
Sampling allows the risk-free trial of a product.
Sampling can increase retail sales by as much as 88 percent.
Sampling at special events is popular, effective, and a high-profile method that permits marketers to piggyback onto fun-based consumer activities.
LO2

15. Methods of Sampling LO2 Direct mail Door-to-door delivery
Chapter 18 Sales Promotion and Personal Selling
Methods of Sampling
Direct mail
Door-to-door delivery
Packaging with another product
Retail store demonstration
Discussion/Team Activity:
Discuss some of the occasions that you have had the opportunity to participate in product sampling. How did this influence your decision to purchase the sampled product?
What methods are most effective in reaching college students?
LO2

16. Point-of-Purchase Promotion
Chapter 18 Sales Promotion and Personal Selling
Point-of-Purchase Promotion
Offers captive audience in retail stores
Can increase sales by as much as 65 percent
Notes:
Point-of-purchase promotions (P-O-Ps) include shelf “talkers”, shelf extenders, ads on carts and bags, end-aisle and floor-stand displays, TV monitors and in-store audio messages, and audiovisual displays.
P-O-Ps offer manufacturers a captive audience in retail stores, and can boost sales by as much as 65 percent because between 70 and 80 percent of all retail purchase decisions are made in-store.
LO2

17. Online Sales Promotion
Chapter 18 Sales Promotion and Personal Selling
Online Sales Promotion
Effective Types of Online Sales Promotion
Free merchandise
Sweepstakes
Free shipping with purchases
Coupons
Notes:
Online sales promotions have grown due to the popularity of the Internet, generating three to fives times higher response rates than those of off-line promotions. The most effective types are shown here.
Internet retailers are eager to boost traffic and give away free services or equipment to lure consumers not only to the Web site but to the Internet in general.
Online versions of loyalty programs are gaining popularity, and the most successful are those run by hotel and airline companies.
LO2

18. Tools for Trade Sales Promotion
Chapter 18 Sales Promotion and Personal Selling
Tools for Trade Sales Promotion
List the most common forms of trade sales promotion
LO3

19. Conventions & Trade Shows
Trade Sales Promotion
Chapter 18 Sales Promotion and Personal Selling
Trade Allowances
Push Money
Training
Free Merchandise
Store Demonstration
Conventions & Trade Shows
Notes:
While consumer promotions pull a product through the channel by creating demand, trade promotions push a product through the distribution channel .
Consumer promotion tools are used when selling to members of the distribution channel, as well as tools that are unique to manufacturers and intermediaries, shown on this slide.
LO3

20. Trade Allowance Trade Allowance is… LO3
Chapter 18 Sales Promotion and Personal Selling
Trade Allowance is…
a price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.
LO3

21. Push Money LO3 Push Money
Chapter 18 Sales Promotion and Personal Selling
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.
LO3

22. Benefits of Trade Promotions
Chapter 18 Sales Promotion and Personal Selling
Help manufacturers gain new distributors
Obtain wholesaler and retailer support for consumer sales promotions
Build or reduce dealer inventories
Improve trade relations
Notes:
Trade promotions are popular among manufacturers for many reasons, as shown on this slide.
LO3

23. Describe personal selling
Chapter 18 Sales Promotion and Personal Selling
Personal Selling
Describe personal selling
Notes:
As mentioned in Chapter 16, personal selling is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other.
In a sense, all businesspeople are salespeople.
LO4

24. Advantages of Personal Selling
Chapter 18 Sales Promotion and Personal Selling
Advantages of Personal Selling
Provides detailed explanation/demonstration of product
Message can be varied according to motivations of each customer
Can be directed only to qualified prospects
Most effective promotion form in obtaining sale and satisfying customer

25. Chapter 18 Sales Promotion and Personal Selling
Exhibit 18.2 Comparison of Personal Selling and Advertising/Sales Promotion
Notes:
Exhibit 18.2 compares the effectiveness of personal selling and advertising/sales promotion based on certain customer and product characteristics.
Personal selling is more important as the number of potential customers decrease, as the complexity of the product increases, and as the value of the product grows.
LO4

26. Relationship Selling LO5
Chapter 18 Sales Promotion and Personal Selling
Relationship Selling
Discuss the key differences between relationship selling and traditional selling
LO5

27. Relationship (Consultative) Selling
Relationship Selling
Chapter 18 Sales Promotion and Personal Selling
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.
Notes:
Until recently, personal selling focused almost entirely on a planned presentation for the purpose of making a sale. In contrast, modern views of personal selling emphasize the relationship that develops between a salesperson and a buyer.
The objective with relationship selling is to build long-term branded relationships with consumer/buyers. The focus is on building mutual trust between the buyer and seller.
Salespeople become consultants, partners, and problem solvers as they strive to develop trust and long-term relationships.
LO5

28. Chapter 18 Sales Promotion and Personal Selling
Exhibit 18.3 Key Differences between Traditional Selling and Relationship Selling
Notes:
The end result of relationship selling tends to be loyal customers who purchase from the company time after time. A relationship selling strategy focused on retaining customers costs a company less than prospecting and selling to new customers.
Exhibit 18.3 lists the key differences between traditional personal selling and relationship selling.
LO5
SOURCE: Robert M. Peterson, Patrick L. Schul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,” National Conference on Sales Management, Proceedings, March 1996.

29. Steps in the Selling Process
Chapter 18 Sales Promotion and Personal Selling
Steps in the Selling Process
List the steps in the selling process
Notes:
The sales process, or sales cycle, is the set of steps a salesperson goes through to sell a product or service.
LO6

30. Steps in the Selling Process
Chapter 18 Sales Promotion and Personal Selling
Steps in the Selling Process
Generate Leads
Qualify Leads
Probe Customer Needs
Develop Solutions
Handle Objections
Close the Sale
Follow Up
Notes:
Completing a sale requires several steps. It can be unique for each product or service, depending on the features of the product, characteristics of customer segments, and internal processes within the firm, such as how sales leads are generated.
There are seven basic steps in the personal selling process. These steps of selling follow the AIDA concept discussed in Chapter 16.
LO6

31. Generating Leads LO6 Advertising Publicity Direct Mail/ Telemarketing
Chapter 18 Sales Promotion and Personal Selling
Generating Leads
Advertising
Publicity
Direct Mail/
Telemarketing
Cold Calling
Internet Web Site
Referrals
Trade Shows/
Conventions
Networking
Company Records
Notes:
Lead generation, or prospecting, is the identification of those firms and people most likely to buy the seller’s offerings.
Sales leads can be obtained in several different ways, such as those sources shown on this slide.
LO6

32. Cold Calling LO6 Cold Calling
Chapter 18 Sales Promotion and Personal Selling
Cold Calling
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.
Notes:
Before the advent of more sophisticated methods of lead generation, most prospecting was done through cold calling.
LO6

33. Receptivity and accessibility
Chapter 18 Sales Promotion and Personal Selling
Qualifying Leads
Receptivity and accessibility
Buying power
Recognized need
Notes:
When a prospect shows interest in learning more about a product, the salesperson has the opportunity to qualify the lead.
Lead qualification involves determining whether the prospect has three things: * A recognized need * The authority to make the purchase decision and access to funds to pay for it * Receptivity and accessibility to the salesperson
LO6

34. Approaching the Customer and Probing Needs
Chapter 18 Sales Promotion and Personal Selling
Approaching the Customer and Probing Needs
Needs Assessment
A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them.
Notes:
Before approaching customers, the salesperson should learn as much as possible about the prospect’s organization and its buyers.
LO6

35. The Consultative Salesperson
Chapter 18 Sales Promotion and Personal Selling
The Consultative Salesperson
Product or service
Customers
Competition
Industry
Salesperson
must know
everything
about...
Online
Hoover’s Online and Dun & Bradstreet
Pick a company and try to find out as much information as you can about it using Hoover’s Online and Dun & Bradstreet. Which database gave you the best and most information about your “lead”?
LO6

36. Developing and Proposing Solutions
Chapter 18 Sales Promotion and Personal Selling
Developing and Proposing Solutions
Sales Proposal is…
a formal written document or professional presentation that outlines how the salesperson’s product or service will meet or exceed the prospect’s needs.
Sales Presentation is…
Notes:
After compiling information about the client’s needs and wants, the salesperson develops a solution in which the salesperson’s product or service solves the client’s problem or need.
These solutions are typically presented as a sales proposal during a formal sales presentation.
Usually, there is only one opportunity to present solutions, and salespeople must be able to present the proposal and handle any customer objections confidently and professionally.
a formal meeting in which the salesperson presents a sales proposal to a prospective buyer.
LO6

37. Handling Objections LO6 View objections as requests for information
Chapter 18 Sales Promotion and Personal Selling
Handling Objections
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
Notes:
The salesperson should not take objections personally as confrontations or insults. Instead, objections should be handled as requests for information, and could be used in a positive way to close the sale.
LO6

38. Look for customer signals
Chapter 18 Sales Promotion and Personal Selling
Closing the Sale
Negotiate
Keep an open mind
Look for customer signals
Tailor to each market
Notes:
Negotiation plays a key role in closing the sale. Negotiation is the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement.
A salesperson should emphasize value to the customer, rendering price a nonissue.
In foreign markets, the sales efforts should be tailored to the appropriate way of doing business for that culture.
LO6

39. Chapter 18 Sales Promotion and Personal Selling
Following Up
In the final step of the selling process—follow up—the salesperson must ensure:
delivery schedules are met
goods or services perform as promise
buyers’ employees are properly trained to use the products
Notes:
The goal of relationship selling is to motivate customers to purchase again by developing long-term relationships.
Most businesses depend on repeat sales, and repeat sales depend on follow-up by the salesperson. Furthermore, today’s customers are less loyal to brands and vendors. Therefore follow-up is critical in relationship building.

40. Chapter 18 Sales Promotion and Personal Selling
Exhibit 18.3 Relative Amount of Time Spent in the Key Steps of the Selling Process
Notes:
Exhibit 18.4 depicts the time involved in the sales process and how those elements relate to the traditional and relationship selling approaches.
Source : Robert Peterson, Patrick Schul, and George H. Lucas Jr., “Consultative Selling: Walking the Walk in the New Selling Enviroment,” National Conference on Sales Management Proceedings, March 1996.

41. The Impact of Technology on Personal Selling
Chapter 18 Sales Promotion and Personal Selling
The Impact of Technology on Personal Selling
Cell phones
Laptops
Pagers
Electronic organizers
Internet
Notes:
Technology will not eliminate the need for salespeople; instead, technology can help improve the customer relationship. Technology, such as laptop computers, cell phones, and pagers allow salespeople to be more accessible to the customer.
The Internet provides salespeople with vast resources of information on clients, competition, and the industry.
The Internet cost-effectively processes orders and services requests, and is freeing sales representatives from tedious administrative tasks to allow more time to focus on client needs.
LO6

42. Making the Sale Beyond the Book LO6
Chapter 18 Sales Promotion and Personal Selling
Making the Sale
Now that you know the steps in the selling process, break down this video and Grover’s use of (or failure to use) the steps
Grover Sells Hair-Care
What about this man? What are his sales tactics?
Vegetable Peeler Salesman
Beyond the Book
LO6

43. Vans – Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Videos
Vans – Sales Promotion and Personal Selling
How does Vans use giveaways and contests to market its products?
Why do these strategies work so well for Vans?
Beyond the Book

44. Promotion and Communication Strategies
Chapter 18 Sales Promotion and Personal Selling
Part 5 Videos
Promotion and Communication Strategies
Beyond the Book