1. © 2013 Cengage Learning. All rights reserved. 1-1

2. 1-2 18: Personal Selling and Sales Promotion Part 7: Promotion Decisions © 2013 Cengage Learning. All rights reserved.

3. 1-3  Understand the major purposes of personal selling  Describe the basic steps in the personal selling process  Identify the types of sales force personnel  Recognize new types of personal selling  Understand sales management decisions and activities  Explain what sales promotion activities are and how they are used  Explore specific consumer sales promotion methods  Explore trade sales promotion methods

4. 1-4  Paid personal communication that attempts to inform customers and persuade them to purchase products in an exchange situation  Millions of people earn their living through personal selling Flexible hours Potential for high earnings High degree of job satisfaction New technologies make personal selling faster, more efficient, and easier © 2013 Cengage Learning. All rights reserved.

5. 1-5  Advantages  Provides marketers the greatest freedom to adjust a message to satisfy customers  The most precise of all promotional methods; enables marketers to focus on the most promising sales prospects  Disadvantages  It is the most expensive element in the promotion mix © 2013 Cengage Learning. All rights reserved.

6. 1-6

7. 1-7  Developing a database of potential customers  Prospects can be gained from a variety of sources, internal and external to the firm  Company sales records  Trade shows  Databases  Trade association directories  Traditional and online advertisements can generate leads on interested prospects  Referrals from current customers are a key source © 2013 Cengage Learning. All rights reserved.

8. 1-8  How does technology assist salespeople in  Prospecting?  Maintaining customer relationships?  Informing customers and potential customers about products?  Keeping track of orders?

9. 1-9  Before contacting them, the salesperson analyzes information about the prospect’s needs  Identify key decision makers  Review account histories and problems  Contact other clients for information  Assess credit histories and problems  Prepare sales presentations  Identify product needs  Obtain relevant literature © 2013 Cengage Learning. All rights reserved.

10. 1-10  The manner in which a salesperson contacts a potential customer  Is a crucial step because the first impression of the salesperson may be long-lasting  The salesperson must create a relationship with the prospect, not just sell products  Typical approaches  Referrals Referrals  Cold canvassing  Repeat contact © 2013 Cengage Learning. All rights reserved.

11. 1-11  The salesperson must attract and hold the prospect’s attention, stimulate interest, and spark a desire for the product  Must adapt the presentation to the needs of the prospect  Use influencing tactics that are matched to the prospects © 2013 Cengage Learning. All rights reserved.

12. 1-12  Take time to stay in the moment  Repeat what you hear  Stay relaxed  If you communicate a lot by e-mail, keep your messages succinct  Pay attention to non-verbal behavior  Always take time to follow up with reflection and clarification © 2013 Cengage Learning. All rights reserved.

13. 1-13  Effective salespeople anticipate and counter objections before the prospect raises them  Be careful with this technique–salespeople do not want to raise objections the prospect does not have  A safe approach is to be prepared and handle objections as they arise © 2013 Cengage Learning. All rights reserved.

14. 1-14  The stage in the personal selling process when the salesperson asks the prospect to buy the product  The salesperson may attempt a trial close by asking questions that assume the prospect will buy  Attempt to close at several points during the presentation in case the prospect is ready to buy © 2013 Cengage Learning. All rights reserved.

15. 1-15  The salesperson must follow up on the sale after a successful close  The salesperson determines whether the order was delivered on time and installed properly  This stage is used to determine a customer’s future product needs  Aids in creating a solid relationship with the customer © 2013 Cengage Learning. All rights reserved.

16. 1-16  Order getters: Sell to new customers and increase sales to current customers, also called creative selling  Order takers: Primarily seek repeat sales; generate the bulk of a firm’s total sales  Inside order takers work in sales offices  Field order takers travel to customers © 2013 Cengage Learning. All rights reserved.

17. 1-17  Support personnel: Staff members who facilitate selling but are not involved solely with making sales  Missionary salespeople assist producer’s customers in selling to their own customers  Trade salespeople take orders in addition to being support personnel  Technical salespeople give technical assistance to current customers © 2013 Cengage Learning. All rights reserved.

18. 1-18  Team selling: Using a team of experts from all functional areas of a firm, led by a salesperson, to conduct the personal selling process  Relationship selling: Building mutually beneficial long-term associations with a customer through regular communications over prolonged periods of time © 2013 Cengage Learning. All rights reserved.

19. 1-19  The sales force is directly responsible for generating sales revenue  They are important to a firm’s success  Ethics is important  A firm’s reputation is determined by the behavior of its sales force © 2013 Cengage Learning. All rights reserved.

20. 1-20

21. 1-21  Sales objectives tell salespeople what they are expected to accomplish during a specific time period  They serve as standards for evaluation  Objectives should be stated in precise, measurable terms and be specific about time periods and geography  Objectives usually are established for  The entire sales force—in terms of sales volume, market share, profit  Individuals—in terms of dollars or unit sales volume © 2013 Cengage Learning. All rights reserved.

22. 1-22  The size of the sales force determines the firm’s ability to generate sales and profits  Several methods determine the best size  Divide the number of annual sales calls by the average number of individual annual sales calls  Marginal analysis: Salespeople are added to the sales force until the cost of an additional salesperson equals the amount of additional sales generated by that person © 2013 Cengage Learning. All rights reserved.

23. 1-23  Recruiting: A process by which the sales manager develops a list of qualified applicants for sales positions  Managers recruit from several sources  Departments within the firm  Other firms  Employment agencies  Universities  Recruitment should be continuous and systematic © 2013 Cengage Learning. All rights reserved.

24. 1-24 Prepare Job Description Analyze Successful Sales people Develop Requirements

25. 1-25  Training can be formal or informal and on- the-job  Can concentrate on The company Its products Its selling methods  Training can be  Aimed at salespeople at all seniority and experience levels  Conducted in-house or by outside specialists © 2013 Cengage Learning. All rights reserved.

26. 1-26  Straight salary compensation plan: Salespeople are paid a specified amount, regardless of effort  Straight commission compensation plan: Compensation determined solely by sales for a given period  Combination compensation plan: Salespeople are paid a fixed salary plus commission based on sales volume  Compensation should be flexible, equitable, easy to administer, and easy to understand  Compensation levels should reflect a salesperson’s value to the company © 2013 Cengage Learning. All rights reserved.

27. 1-27

28. © 2013 Cengage Learning. All rights reserved. 1-28

29. 1-29  Salaries of other types of personnel in the firm  Competitors’ compensation plans  Cost of sales force turnover  Non-salary selling expenses © 2013 Cengage Learning. All rights reserved.

30. 1-30  Additional efforts beyond compensation are necessary for motivation  Managers must identify their employee’s needs and goals and strive to create a positive organizational climate  Incentives programs can pay for themselves by making workers happier and more committed © 2013 Cengage Learning. All rights reserved.

31. 1-31  Creating sales territories  Create territories with measurable sales potential  Try to balance sales/earning potential and workload traveling throughout the territory  Routing and scheduling salespeople  Geographic size and share of sales territory are most important when routing and scheduling sales calls  Number and distribution of customers is also important  Some firms have salespeople make their own routes/schedules  Major goal is to minimize non-selling time and travel expenses © 2013 Cengage Learning. All rights reserved.

32. 1-32  Managers need information  Salespersons’ call reports  Customer feedback  Contracts and invoices  Dimensions used to measure performance and determined by sales objectives  Calls per day and cost per call  Average sales per customer and gross profit per customer  Actual sales vs. sales potential  Number of new customer orders © 2013 Cengage Learning. All rights reserved.

33. 1-33  An activity and/or material that acts as an inducement to resellers, salespeople, or consumers  Can increase sales through extra purchasing incentives  Marketers must consider multiple factors when determining the best consumer sales promotion methods Product characteristics Target market characteristics  Consumer sales promotion methods encourage consumers to patronize specific stores or try particular products © 2013 Cengage Learning. All rights reserved.

34. 1-34  Sales promotion is more popular than ever, at the expense of advertising  Heightened customer concerns about value  Retailers have considerable power in the supply chain and are demanding greater promotional efforts  Declines in brand loyalty mean sales promotions are more effective  A stronger emphasis placed on improving short-term results calls for greater use of sales promotion methods © 2013 Cengage Learning. All rights reserved.

35. 1-35  Written price reductions used to encourage consumers to try specific products  Is the most widely-used consumer sales promotion technique  Digital coupons are increasingly popular © 2013 Cengage Learning. All rights reserved.

36. 1-36

37. 1-37  Effective at generating brand awareness  Reward present users and win back former users  Encourage purchases in large quantities  Are traceable to target market  Electronic coupons are low-cost, have greater targeting ability, and have data-gathering capabilities © 2013 Cengage Learning. All rights reserved.

38. 1-38  Fraud and misredemption  Many customers will not buy without a coupon  Brand loyalty is diminished  Some customers will only redeem coupons for products they normally buy  Stores may have insufficient stock of the coupon item © 2013 Cengage Learning. All rights reserved.

39. 1-39

40. 1-40  Cents-off: Buyers pay a certain amount less  Money refunds: Customers are mailed a specific amount of money with a proof-of- purchase  Rebates: Customers are sent a specified amount of money for making a purchase  Frequent user incentives  Point-of-purchase materials: Signs, window displays, counter pieces, etc. designed to attract attention and inform customers © 2013 Cengage Learning. All rights reserved.

41. 1-41  Demonstrations: Sales promotions that show customers how the product works  Free samples: Given out to stimulate trial of the product, increase sales, and improve distribution  Premiums: Items offered as a bonus for purchasing a product  Consumer contests: Individuals compete for prizes based on analytical or creative skills  Consumer games: Individuals compete for prizes based on chance  Sweepstakes: Entrants include their names in a drawing for a prize © 2013 Cengage Learning. All rights reserved.

42. 1-42  Attempt to persuade wholesalers and retailers to carry and aggressively market a product  Counter the effect of lower-priced store brands  Pass along a discount to a price-sensitive market segment  Boost brand exposure among target customers  Provide incentives to move excess inventory © 2013 Cengage Learning. All rights reserved.

43. 1-43  Buying allowance: A temporary price reduction offered to resellers for purchasing set quantities of a product  Buy-back allowance: A sum of money a producer gives to a reseller for each unit the reseller buys after a promotional deal expires  Scan-back allowance: A manufacturer’s reward to retailers based on the number of items scanned  Merchandise allowance: A manufacturer's agreement to pay resellers certain amounts of money for providing special promotional efforts © 2013 Cengage Learning. All rights reserved.

44. 1-44  Cooperative advertising: An arrangement in which a manufacturer agrees to pay a certain amount of a retailer’s media costs for advertising the manufacturer’s products  Dealer listings: Advertisements promoting a product and identifying participating retailers that sell the product © 2013 Cengage Learning. All rights reserved.

45. 1-45  Free merchandise is sometimes offered as an incentive for purchasing a stated quantity of products  Dealer loader: A gift given to a retailer who purchases a specified quantity of merchandise  Often used to obtain special display efforts © 2013 Cengage Learning. All rights reserved.

46. 1-46  Additional compensation to salespeople offered by the manufacturer as an incentive to push a line of products  Is a good method when personal selling is important to the marketing effort © 2013 Cengage Learning. All rights reserved.

47. 1-47  Designed to motivate distributors, retailers, and sales personnel by recognizing outstanding achievements  Must be equitable for everyone involved  Positive effects may be short-lived  Can be expensive © 2013 Cengage Learning. All rights reserved.

48. 1-48 Personal sellingTeam selling ProspectingRelationship selling ApproachRecruiting ClosingStraight salary compensation plan Order gettersStraight commission compensation plan Order takersCombination compensation plan Support personnelSales promotion Missionary salespeopleConsumer sales promotion methods Trade salespeopleCoupons Technical salespeopleCents-off offers

49. © 2013 Cengage Learning. All rights reserved. 1-49 Money refundsBuying allowance RebatesBuy-back allowance Point-of-purchase (P.O.P.) materials Scan-back allowance DemonstrationMerchandise allowance Free samplesCooperative advertising PremiumsDealer listings Consumer contestsFree merchandise Consumer gamesDealer loader Consumer sweepstakesPremium money (Push money) Trade sales promotion methods Sales contest