1. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 Learning Outcomes Chapter 16: Sales Promotion and Personal Selling 1. Define and state the objectives of sales promotion 2. Discuss the most common form of consumer sales promotion 3. List the most common forms of trade sales promotion 4. Describe personal selling 5. Discuss the key differences between relationship selling and traditional selling 6. List the steps in the selling process

2. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 LO 1 Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. Sales Promotion AdvertisingReason to buy Sales Promotion Incentive to buy

3. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 LO 1 Sales Promotion I. Consumer Sales Promotion II. Trade Sales Promotion II. Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase Influence behavior Goal

4. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 LO 1 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 Trade deals

5. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5 Common Forms or Tools for Consumer Sales Promotion [Type I] LO 2 1. Coupons and Rebates 2. Premiums 3. Loyalty Marketing Programs 4. Contests & Sweepstakes 5. Sampling 6. Point-of-Purchase Promotion

6. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 Forms or Tools for Consumer Sales Promotion LO 2 1. Coupon 1. Rebate 2. 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.

7. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 Forms or Tools for Consumer Sales Promotion LO 2 3. Loyalty Marketing Program 3. 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. 3. Frequent Buyer Program 3. 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.

8. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 Forms or Tools for Consumer Sales Promotion LO 2 4. Contests Promotions that require skill or ability to compete for prizes. 4. Sweepstakes Promotions that depend on chance or luck, with free participation. Online http://www.sweepstakesonline.com

9. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 Forms or Tools for Consumer Sales Promotion LO 2 5. Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. Direct mail Door-to-door delivery Packaging with another product Retail store demonstration Methods of Sampling

10. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 6. Point-of-Purchase Promotion LO 2  Build traffic  Advertise the product  Induce impulse buying

11. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 Online Sales Promotion LO 2 Effective Types of Online Sales Promotion  Free merchandise  Sweepstakes  Free shipping with purchases  Coupons

12. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 Trade Sales Promotion [Type II] LO 3 1. Trade Allowances 2. Push Money 3. Training 4. Free Merchandise 5. Store Demonstration. Conventions & Trade Shows

13. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 Benefits of Trade Promotions LO 3  Help manufacturers gain new distribution  Obtain wholesaler and retailer support for consumer sales promotions  Build or reduce dealer inventories  Improve trade relations

14. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 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...

15. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 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

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

17. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Traditional Selling and Relationship SellingTraditional Personal Selling LO 5 Sell advice, assistance, counsel Sell products 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

18. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Steps in the Selling Process LO 6 1. Generate Leads 2. Qualify Leads 3. Probe Customer Needs 4. Develop Solutions 5. Handle Objections 6. Close the Sale 7. Follow Up

19. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Time Spent in Key Steps of Selling Process LO 6 Key Selling Steps Traditional Selling Relationship Selling Generate LeadsHighLow Qualify LeadsLowHigh Probe NeedsLowHigh Develop SolutionsLowHigh Handle ObjectionsHighLow Close the saleHighLow Follow-upLowHigh

20. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Step 1. Generating Leads 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 Online http://www.linkedin.com http://www.ryze.com

21. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 Cold Calling LO 6 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

22. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22 Step 2 & 3. Understand Needs & Qualifying Leads LO 6 Receptivity and accessibility Buying power Recognized need

23. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23 The Consultative Salesperson LO 6 Product or service Customers Competition Industry Salesperson must know everything about... Salesperson must know everything about... Online http://www.hoovers.com http://www.dnb.com

24. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24 Step 4. Developing and Proposing Solutions LO 6 Sales Proposal Sales Presentation

25. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 25 Powerful Presentations 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!

26. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 26 Step 5. Handling Objections 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

27. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 27 Step 6. Closing the Sale LO 6 Negotiate Keep an open mind Look for customer signals Tailor to each market

28. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 28 LO 6 The Impact of Technology on Personal Selling Cell phones Laptops Pagers E-Mail Electronic organizers Internet

29. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 29 Learning Outcomes Chapter 16: Sales Promotion and Personal Selling – We Are Familiar with: 1. T he objectives of sales promotion 2. Common forms of consumer sales promotion 3. Most common forms of trade sales promotion 4. Personal selling definition 5. Key differences between relationship selling and traditional selling 6. The steps in the selling process

30. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 30 Now  Go the www.maktg4me.comwww.maktg4me.com  Review flash card for chapter 16  Explore other aspects of this site for chapter 16 as time permits  Take chapter 16 practice quiz on this site  Go to WebCt and take chapter 16 quiz in the allocated time.  You might also take the extra credit quiz on this chapter ecquiz ch 16 article 36.  Good luck.