1. Personal Selling and Sales Promotion20
Personal Selling and Sales Promotion

2. To understand the major purposes of personal selling
Objectives
To understand the major purposes of personal selling
To describe the basic steps in the personal selling process
To identify the types of sales force personnel
To understand sales management decisions and activities
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3. To explain what sales promotion activities are and how they are used
Objectives (cont’d)
To explain what sales promotion activities are and how they are used
To explore specific consumer and trade sales promotion methods
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4. The Nature of Personal Selling
Chapter Outline
The Nature of Personal Selling
Elements of the Personal Selling Process
Types of Salespeople
Managing the Sales Force
The Nature of Sales Promotion
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5. The Nature of Personal Selling
Paid personal communication that informs customers and persuades them to buy products.
Most adjustable to customer information needs
Most precise (targeted) form of promotion methods
Most expensive element in promotion mix
Personal selling as a career
The potential for high income
A great deal of freedom
A high level of training
A high level of job satisfaction
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6. General Steps in the Personal Selling Process
FIGURE 20.1
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7. Elements of the Personal Selling Process
Prospecting
Developing a list of potential customers
Sales records, trade shows, commercial databases, newspaper announcements, public records, telephone directories, trade association directories
Reponses to advertisements with information request forms
Referrals—recommendations from current customers
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8. Elements of the Personal Selling Process (cont’d)
Preapproach
Finding and analyzing information about the prospect
Specific product needs
Current use of brands
Feelings about available brands
Personal characteristics
Additional research
Identifying key decision makers
Reviewing account histories and problems
Contacting other clients for information
Assessing credit histories and problems
Preparing sales presentations
Identifying product needs
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9. Elements of the Personal Selling Process (cont’d)
Approach
The manner in which a salesperson contacts a potential customer
Purpose is to gather information about the buyer’s needs and objectives
Important to create a favorable first impression and build rapport with prospective customer
Typical approaches
Referral by another customer to a prospective customer
“Cold canvass” call without prior introduction to the customer
Repeat contact based on prior meeting(s) with the potential customer
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10. Elements of the Personal Selling Process (cont’d)
Making the Presentation
During the presentation:
Attract and hold the prospect’s attention.
Stimulate interest in the product.
Spark a desire for the product.
Listen and respond to the prospect questions and comments.
Ways to enhance the presentation’s effects
Have the prospect touch, hold, or use the product.
Use audiovisual technology to heighten the impact of the presentation.
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11. Elements of the Personal Selling Process (cont’d)
Overcoming objections
Anticipate objections and counter them during the presentation
Generally, best to handle objections as they arise
Closing the sale
Closing is the stage in the selling process when the salesperson asks the prospect to buy the product.
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12. Elements of the Personal Selling Process (cont’d)
Closing strategies
“Trial” closing: asking questions (what, how, or why) that assume the customer will buy the product
Asking for a tryout order: low-risk way for customer to try out the product
Following up
Determining if the delivery and setup of order was completed to the customer’s satisfaction
Ascertaining the customer’s future product needs
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13. Types of Salespeople Order Getters Order Takers
The salesperson who sells to new customers and increases sales to current ones
Creative selling
Current-customer sales
New-business sales
Order Takers
The salesperson who primarily seeks repeat sales
Inside order takers
Field order takers
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14. Types of Salespeople (cont’d)
Support Personnel: sales staff members who facilitate selling but usually are not involved solely with making sales
Missionary salespeople
Support salespersons who assist the producer’s customers in selling to their own customers
Trade salespeople
Salespersons involved mainly in helping a producer’s customers promote a product
Technical salespeople
Support salespersons who give technical assistance to a firm’s current customers
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15. Managing the Sales Force
Establishing Sales Force Objectives
Objectives tell salespeople what they are to accomplish during a specified time period.
Objectives for the total sales force
Sales volume: total units or dollars of product sold for a period of time
Market share: unit or dollar percentage share of the total market for a product
Profit: dollars or percentage of return on investment (ROI)
Objective for individual salespersons
Quotas: dollars or units sold, or average order size, average number of calls, or ratio of orders to calls by an individual salesperson
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16. Managing the Sales Force (cont’d)
Determining Sales Force Size
Size of sales force affects
compensation methods for salespersons.
morale of salespersons.
overall sales force management.
Methods for determining optimal sale force size:
Dividing the number of sales calls necessary to serve customers by the number of sales calls a salesperson makes annually
Adding additional salespersons until the cost of adding one more salespersons equals the additional sales that would be generated by that person
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17. Managing the Sales Force (cont’d)
Recruiting and Selecting Salespeople
Recruiting
Developing a list of qualified applicants for sales positions
Establish a set of qualifications that best match the firm’s particular sales tasks
Prepare a job description listing specific tasks
Analyze successful salespeople among current employees
Sources of applicants
Other departments in the company, other firms, employment agencies, educational institutions, job ad respondents, employee referrals
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18. Managing the Sales Force (cont’d)
Training Sales Personnel
What to teach?
The company, its products, or selling methods
Whom to train?
Newly hired or experienced salespeople, or both
When/where to train?
In the field, at educational institutions, in company facilities
Before or after initial field assignment
Frequency, sequencing, and duration of periodic training
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19. Managing the Sales Force (cont’d)
Training Sales Personnel (cont’d)
Who will train?
Sales managers, technical personnel, outside consultants
How to train?
Materials and instructional methods
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20. Managing the Sales Force (cont’d)
Compensating Salespeople
Compensation objectives
Attract, motivate, and retain effective salespeople
Maintain the desired level of control
Provide acceptable levels of income, freedom, and incentive
Encourage proper treatment of customers
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22. Managing the Sales Force (cont’d)
Motivating Salespeople
Motivation should be provided on a continuous basis.
Motivational incentives
Enjoyable working conditions
Power and authority
Job security
Opportunities to excel
Motivational methods
Sales contests
Recognition programs
Awards (travel, merchandise, and cash)
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23. Managing the Sales Force (cont’d)
Managing Sales Territories
Creating sales territories
Based on similar sales potential or requiring about the same amount of work
Setting differential commission rates to compensate for differences in the characteristics of territories (density and distribution of customers)
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24. Managing the Sales Force (cont’d)
Managing Sales Territories (cont’d)
Routing and scheduling considerations
Geographic size and shape of the territory
Number and distribution of customers
Sequence of customer calls
Routes and distances traveled
Minimizing salesperson’s travel and lodging costs
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25. Managing the Sales Force (cont’d)
Controlling and Evaluating Sales Force Performance
Sales objectives, determined by the sales manager, stated in terms of
Sales volume
Average number of calls per day
Average sales per customer
Actual sales relative to sales potential
Number of new customer orders
Average cost per call
Average gross profit per customer
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26. The Nature of Sales Promotion
An activity and/or material that acts as a direct inducement to resellers or salespeople to sell a product or consumers to buy it
It encourages product trial and purchase by adding value to the product.
It is most effective when it facilitates or is facilitated by personal selling and advertising.
Its use has grown dramatically over the last 20 years at the expense of traditional advertising.
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27. The Nature of Sales Promotion (cont’d)
Deciding Which Sales Promotion Method to Use
Product characteristics
Target market characteristics
Distribution channel(s)
Number and types of resellers
Competitive and legal environment
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28. Consumer Sales Promotion Methods
Encourage or stimulate consumers to patronize specific stores or to try particular products
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29. Consumer Sales Promotion Methods (cont’d)
Coupons and Cents-Off Offers
Coupons
Written price reductions used to encourage consumers to buy a specific product
Effective coupons are easily recognized and state the offer clearly.
The nature of the product is the prime consideration in setting up a coupon promotion.
Advantages: generate brand awareness and interest and reward brand loyalty
Disadvantages: Fraud and misredemptions; consumer ill-will from stock-outs during promotions
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30. Consumer Sales Promotion Methods (cont’d)
Coupons and Cents-Off Offers (cont’d)
Cents-off offers
Promotions that let buyers pay less than the regular price to encourage purchase
Refunds and Rebates
Money refunds
Offering consumers money when they mail in a proof of purchase, usually for multiple product purchases
Rebates
Sending consumers a specific amount of money for making a single product purchase
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31. Consumer Sales Promotion Methods (cont’d)
Frequent User Incentives
Frequent-user incentives
Incentive programs that foster consumer loyalty by rewarding customers’ repeat (frequent) purchases
Point-of-Purchase Materials
Point-of-purchase displays
Signs, window displays, display racks, and similar means used to attract customers and to encourage immediate purchases
Demonstrations
Manufacturers use it temporarily to encourage trial use and purchase of a product or to show how a product works.
Highly effective yet costly in practice
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32. Consumer Sales Promotion Methods (cont’d)
Free Samples and Premiums
Free samples
Samples of a product given out to encourage trial and purchase
Used to increase sales volume and obtain desirable distribution for fast turnover products
The most expensive form of sales promotion
Premiums
Items offered free or at a minimal cost as a bonus for purchasing a product
Premium must match both the target market and the brand’s image.
Premiums must be easily recognizable and desirable.
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33. Consumer Sales Promotion Methods (cont’d)
Consumer Games, Contests, and Sweepstakes
Consumer contests and games
Individuals compete for prizes based on analytical or creative skills.
Competitions for prizes are used to generate retail traffic and to increase exposure to promotional messages.
Consumer sweepstakes
A sales promotion in which entrants submit their names for inclusion in a drawing for prizes
Used more than contests and attract more widespread interest
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34. Trade Sales Promotion Methods
Ways of persuading wholesalers and retailers to carry a producer’s products and to market them aggressively
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35. Trade Sales Promotion Methods (cont’d)
Trade Allowances
Buying allowance
A temporary price reduction to resellers for purchasing specified quantities of a product
Buy-back allowance
A sum of money a producer gives a reseller for each additional unit bought after an initial promotion deal is over
Scan-back allowance
A manufacturer’s reward to retailers based on the number of pieces scanned
Merchandise allowances
A manufacturer’s agreement to help resellers pay for special promotional efforts
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36. Trade Sales Promotion Methods (cont’d)
Cooperative Advertising and Dealer Listings
Cooperative advertising
Sharing of media costs by manufacturer and retailer for advertising the manufacturer’s products
Dealer listings
Ads promoting a product and identifying retailers that sell the product; influences retailers to carry the products, builds traffic at the retail level, and encourages consumers to shop at participating dealers
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37. Trade Sales Promotion Methods (cont’d)
Free Merchandise and Gifts
Free merchandise
A manufacturer’s reward given to resellers for purchasing a stated quantity of goods
Usually takes the form of a reduced invoice
Dealer loader
A gift, often part of a display, offered to a retailer who purchases a specified quantity of merchandise
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38. Trade Sales Promotion Methods (cont’d)
Premium (Push) Money
Extra compensation to salespersons for pushing a line of products
Sales Contests
A means of motivating distributors, retailers, and salespeople by recognizing outstanding achievements
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39. After reviewing this chapter you should:
Understand the major purposes of personal selling.
Know the basic steps in the personal selling process.
Be able to identify the types of sales force personnel.
Have insight into sales management decisions and activities.
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40. After reviewing this chapter you should:
Be aware of what sales promotion activities are and how they can be used.
Be familiar with specific consumer and trade sales promotion methods.
Copyright © Houghton Mifflin Company. All rights reserved.