1. Insert Chapter Picture Here Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 1 Designed by Eric Brengle B-books, Ltd. CHAPTER 16 Sales Promotion and Personal Selling Prepared by Deborah Baker Texas Christian University Marketing Lamb, Hair, McDaniel 9

2. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 2 Learning Outcomes Define and state the objectives of sales promotion Discuss the most common forms of consumer sales promotion List the most common forms of trade sales promotion Describe personal selling LO I LO 2 LO 3 LO 4

3. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 3 Learning Outcomes Discuss the key differences between relationship selling and traditional selling List the steps in the selling process Describe the functions of sales management LO 5 LO 6 LO 7

4. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 4 Define and state the objectives of sales promotion Sales Promotion LO I

5. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 5 Sales Promotion LO I Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.

6. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 6 LO I Advertising Sales Promotion Reason to buy Sales PromotionIncentive to buy

7. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 7 LO I Sales Promotion Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase Influence behavior Goal

8. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 8 LO I 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 Trade deals Objectives of Sales Promotion

9. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 9 REVIEW LEARNING OUTCOME The Objectives of Sales Promotion LO I

10. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 10 Discuss the most common forms of consumer sales promotion Tools for Consumer Sales Promotion LO 2

11. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 11 LO 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Tools for Consumer Sales Promotion

12. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 12 LO 2 Tools for Consumer Sales Promotion 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 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.

13. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 13 LO 2 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. A loyalty program in which loyal consumers are rewarded for making multiple purchases. Tools for Consumer Sales Promotion

14. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 14 LO 2 Contests Promotions that require skill or ability to compete for prizes. Sweepstakes Promotions that depend on chance or luck, with free participation. Tools for Consumer Sales Promotion Online http://www.sweepstakesonline.com

15. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 15 LO 2 Tools for Consumer Sales Promotion Sampling A promotional program that allows the consumer the opportunity to try a product or service for free.

16. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 16 LO 2 Direct mail Door-to-door delivery Packaging with another product Retail store demonstration Methods of Sampling

17. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 17 LO 2  Build traffic  Advertise the product  Induce impulse buying Point-of-Purchase Promotion

18. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 18 Online Sales Promotion LO 2  Free merchandise  Sweepstakes  Free shipping with purchases  Coupons Effective Types of Online Sales Promotion

19. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 19 REVIEW LEARNING OUTCOME Consumer Sales Promotion LO 2 Coupons and rebates Premiums Loyalty marketing programs Contests Sampling P-O-P Online

20. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 20 List the most common forms of trade sales promotion Tools for Trade Sales Promotion LO 3

21. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 21 Trade Sales Promotion LO 3 Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows

22. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 22 LO 3 Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. Trade Allowance

23. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 23 LO 3 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. Push Money

24. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 24 LO 3 Benefits of Trade Promotions  Help manufacturers gain new distribution  Obtain wholesaler and retailer support for consumer sales promotions  Build or reduce dealer inventories  Improve trade relations

25. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 25 REVIEW LEARNING OUTCOME Forms of Trade Sales Promotion LO 3

26. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 26 Describe personal selling Personal Selling LO 4

27. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 27 LO 4 Personal Selling Personal Selling is more important if... Customers are concentrated. Customers are concentrated. Product is technically complex. There are few customers. Product is custom made. Product has a high value. 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...

28. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 28 REVIEW LEARNING OUTCOME Personal Selling LO 4  Detailed explanation or demonstration  Variable sales message  Directed to qualified prospects  Controllable adjustable selling costs  More effective than other promotion in obtaining sale and gaining customer satisfaction Personal Selling Advantages

29. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 29 Discuss the key differences between relationship selling and traditional selling Relationship Selling LO 5

30. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 30 LO 5 Relationship (Consultative) Selling 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.

31. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 31 Traditional Selling and Relationship Selling LO 5 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

32. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 32 REVIEW LEARNING OUTCOME Relationship Selling vs. Traditional Selling LO 5 Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Sales Increases Result From Creating Value

33. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 33 List the steps in the selling process Steps in the Selling Process LO 6

34. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 34 LO 6 Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up Steps in the Selling Process

35. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 35 LO 6 Key Selling Steps Traditional Selling Relationship Selling Generate LeadsHighLow Qualify LeadsLowHigh Probe NeedsLowHigh Develop SolutionsLowHigh Handle ObjectionsHighLow Close the saleHighLow Follow-upLowHigh Time Spent in Key Steps of Selling Process

36. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 36 LO 6 Advertising Publicity Direct Mail/ Telemarketing Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Trade Shows/ Conventions Networking Company Records Generating Leads Online http://www.linkedin.com http://www.ryze.com

37. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 37 Cold Calling LO 6 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.

38. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 38 Recognized need Buying power Receptivity and accessibility LO 6 Qualifying Leads

39. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 39 Needs Assessment LO 6 Needs Assessment A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them.

40. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 40 LO 6 Product or service Customers Competition Industry Salesperson must know everything about... Salesperson must know everything about... The Consultative Salesperson Online http://www.hoovers.com http://www.dnb.com

41. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 41 LO 6 Developing and Proposing Solutions Sales Proposal Sales Presentation

42. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 42 LO 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! Powerful Presentations

43. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 43 LO 6  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 Handling Objections

44. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 44 LO 6 Closing the Sale Negotiate Keep an open mind Look for customer signals Tailor to each market

45. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 Biz Flix Family Man 45 LO 6

46. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 46 REVIEW LEARNING OUTCOME Steps in the Selling Process LO 6

47. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 47 Describe the functions of sales management Sales Management LO 7

48. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 48 LO 7 Evaluate sales force Compensate and motivate sales force Recruit and train sales force Determine sales force structure Define sales goals and sales process Sales Management Responsibilities

49. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 49 LO 7 Clear Precise Measurable Time Specific Defining Sales Goals Sales Volume Market Share Profit Level

50. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 50 Quota LO 7 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. Quota

51. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 51 Sales Force Structure LO 7 Individual client or account Market or industry Marketing function Product line Geographic region

52. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 52 Traits of Top Sales Performers LO 7  Strong, healthy self esteem  Can bounce back from rejection  Sense of urgency and competitiveness  Persuasive  Assertive  Sociable  Willing to take risks  Understand complex concepts  Creative in developing solutions  Possess empathy

53. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 53 LO 7 Training includes... Nonselling duties Industry and customer characteristics Industry and customer characteristics Product knowledge Selling techniques Company policies and practice Training the Sales Force

54. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 54 LO 7 Compensating the Sales Force Commission Salary Combination Plans Combination Plans

55. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 55 LO 7 Straight Commission Straight Commission The salesperson is paid some percentage when a sale is made. Straight Salary Straight Salary The salesperson receives a salary regardless of sales productivity. Compensating the Sales Force

56. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 56 Motivating the Sales Force LO 7  Ceremonies  Plaques  Vacations  Merchandise  Pay raises  Cash bonuses  Stock options  Tuition assistance  Product discounts Rewards and incentives include:

57. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 57 Key Personality Traits of Sales Leaders LO 7 Effective Sales Leaders are… Are assertive Possess ego drive Possess ego strength Take risks Are innovative Have a sense of urgency Are empathetic

58. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 58 Evaluating the Sales Force LO 7 Contribution to profit Calls per order Sales or profits per call Call percentage achieving goals Sales volume

59. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 59 Women in Car Sales LO 7 SOURCE: Jennifer Saranow, “Car Dealers Recruit Saleswomen at the Mall,” Wall Street Journal, April 12, 2006, B1.  For its Florida and Texas dealerships, Asbury Automotive Group is actively recruiting saleswomen– at shopping malls.  11% of the automotive sales force is female. In contrast, 50% of retail-industry employees are women.  Women influence 81% of new auto purchases, and women may even be better at selling cars than men.

60. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 60 LO 7 The Impact of Technology on Personal Selling Cell phones Laptops Pagers E-Mail Electronic organizers Internet

61. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 61 REVIEW LEARNING OUTCOME Functions of Sales Management LO 7