1. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel CHAPTER 18 Sales Promotion and Personal Selling © iStockphoto.com/Terry J Alcorn

2. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 2 Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. Sales Promotion LO 1

3. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 3 Sales Promotion AdvertisingReason to buy Sales PromotionIncentive to buy LO 1

4. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 4 Sales Promotion sales promotion activities targeting the ultimate consumer. Consumer Sales Promotion is… sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer. Trade Sales Promotion is…

5. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 5 Objectives of Sales Promotion Type of Buyer Loyal Customers Competitors 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 LO 1

6. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 6 Tools for Consumer Sales Promotion LO 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Online Sales Promotion

7. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 7 Coupons and Rebates Coupon Rebate Premium A certificate that entitles consumers to an immediate price reduction when they buy the product. 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. 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. LO 2

8. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 8 Loyalty Marketing Programs 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 of a particular good or service. A loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good or service. LO 2

9. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 9 Coupons and Sweepstakes Contests Promotions in which participants use some skill or ability to compete for prizes. Promotions in which participants use some skill or ability to compete for prizes. Sweepstakes Promotions that depend on chance, with free participation. LO 2

10. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 10 Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. LO 2

11. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 11 Point-of-Purchase Promotion Offers captive audience in retail stores Can increase sales by as much as 65 percent LO 2

12. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 12 Online Sales Promotion Effective Types of Online Sales Promotion Free merchandise Sweepstakes Free shipping with purchases Coupons LO 2

13. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 13 Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows LO 3

14. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 14 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

15. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 15 LO 4 Exhibit 18.2 Comparison of Personal Selling and Advertising/Sales Promotion

16. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 16 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. Relationship (Consultative) Selling LO 5

17. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 17 LO 5 Exhibit 18.3 Key Differences between Traditional Selling and Relationship Selling 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.

18. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 18 Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up LO 6

19. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 19 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 LO 6

20. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 20 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. Cold Calling LO 6

21. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 21 Qualifying Leads Receptivity and accessibility Buying power Recognized need LO 6

22. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 22 Approaching the Customer and Probing Needs A determination of the customers specific needs and wants and the range of options a customer has for satisfying them. Needs Assessment LO 6

23. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 23 The Consultative Salesperson Product or service Customers Competition Industry Salesperson must know everything about... Salesperson must know everything about... LO 6

24. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 24 Developing and Proposing Solutions LO 6 a formal written document or professional presentation that outlines how the salespersons product or service will meet or exceed the prospects needs. Sales Proposal is… a formal meeting in which the salesperson presents a sales proposal to a prospective buyer. Sales Presentation is…

25. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 25 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 LO 6

26. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 26 Closing the Sale Negotiate Keep an open mind Look for customer signals Tailor to each market LO 6

27. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 27 Following Up In the final step of the selling process follow upthe salesperson must ensure: delivery schedules are met goods or services perform as promise buyers employees are properly trained to use the products

28. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 28 Exhibit 18.3 Relative Amount of Time Spent in the Key Steps of the Selling Process 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.

29. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 29 The Impact of Technology on Personal Selling Cell phones Laptops Pagers E-Mail Electronic organizers Internet LO 6

30. Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 30 Assignment Contests and sweepstakes are very common in the entertainment industry. Radio stations have contests almost weekly (some daily); local television morning shows quiz viewers on trivia; even movies offer sweepstakes in conjunction with film previews and premiere nights. Think of a television program unlikely to have contests or sweepstakes (things like Cops, The View, or Scooby Doo). Once you have chosen your program, design a contest or sweepstakes to promote the show or the channel on which it airs. Describe the rationale behind your promotion.