1. 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved Designed by Eric Brengle B-books, Ltd. CHAPTER 18 Sales Promotion and Personal Selling Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10

2. Copyright ©2009 by Cengage Learning Inc. All rights reserved Learning Outcomes 2 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 ©2009 by Cengage Learning Inc. All rights reserved Learning Outcomes 3 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 ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 4 Define and state the objectives of sales promotion LO I

5. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 5 LO I Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.

6. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 6 LO I AdvertisingReason to buy Sales PromotionIncentive to buy

7. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 7 LO I Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase Influence behavior Goal

8. Copyright ©2009 by Cengage Learning Inc. All rights reserved Objectives of Sales Promotion 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

9. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME The Objectives of Sales Promotion 9 LO I

10. Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 10 Discuss the most common forms of consumer sales promotion LO 2

11. Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 11 LO 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion

12. Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 12 LO 2 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 ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 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.

14. Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 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. Online http://www.online-sweepstakes.com/

15. Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Consumer Sales Promotion 15 LO 2 Sampling A promotional program that allows the consumer the opportunity to try a product or service for free.

16. Copyright ©2009 by Cengage Learning Inc. All rights reserved Methods of Sampling 16 LO 2 Direct mail Door-to-door delivery Packaging with another product Retail store demonstration

17. Copyright ©2009 by Cengage Learning Inc. All rights reserved Point-of-Purchase Promotion Build traffic Advertise the product Induce impulse buying 17 LO 2

18. Copyright ©2009 by Cengage Learning Inc. All rights reserved Online Sales Promotion Free merchandise Sweepstakes Free shipping with purchases Coupons 18 LO 2 Effective Types of Online Sales Promotion

19. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Consumer Sales Promotion 19 LO 2 Coupons and rebates Premiums Loyalty marketing programs Contests Sampling P-O-P Online

20. Copyright ©2009 by Cengage Learning Inc. All rights reserved Tools for Trade Sales Promotion 20 List the most common forms of trade sales promotion LO 3

21. Copyright ©2009 by Cengage Learning Inc. All rights reserved Trade Sales Promotion 21 LO 3 Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows

22. Copyright ©2009 by Cengage Learning Inc. All rights reserved Trade Allowance 22 LO 3 Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

23. Copyright ©2009 by Cengage Learning Inc. All rights reserved Push Money 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.

24. Copyright ©2009 by Cengage Learning Inc. All rights reserved Benefits of Trade Promotions 24 LO 3  Help manufacturers gain new distribution  Obtain wholesaler and retailer support for consumer sales promotions  Build or reduce dealer inventories  Improve trade relations

25. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Forms of Trade Sales Promotion 25 LO 3

26. Copyright ©2009 by Cengage Learning Inc. All rights reserved Personal Selling 26 Describe personal selling LO 4

27. Copyright ©2009 by Cengage Learning Inc. All rights reserved Personal Selling 27 LO 4 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 ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Personal Selling 28 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 ©2009 by Cengage Learning Inc. All rights reserved Relationship Selling 29 Discuss the key differences between relationship selling and traditional selling LO 5

30. Copyright ©2009 by Cengage Learning Inc. All rights reserved Relationship Selling 30 LO 5 Relationship (Consultative) 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 ©2009 by Cengage Learning Inc. All rights reserved Traditional Selling and Relationship Selling 31 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 ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Relationship Selling vs. Traditional Selling 32 LO 5 Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Sales Increases Result From Creating Value

33. Copyright ©2009 by Cengage Learning Inc. All rights reserved Steps in the Selling Process 33 List the steps in the selling process LO 6

34. Copyright ©2009 by Cengage Learning Inc. All rights reserved Steps in the Selling Process 34 LO 6 Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up

35. Copyright ©2009 by Cengage Learning Inc. All rights reserved Time Spent in Key Steps of Selling Process Key Selling Steps Traditional Selling Relationship Selling Generate LeadsHighLow Qualify LeadsLowHigh Probe NeedsLowHigh Develop SolutionsLowHigh Handle ObjectionsHighLow Close the saleHighLow Follow-upLowHigh 35 LO 6

36. Copyright ©2009 by Cengage Learning Inc. All rights reserved Generating Leads 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 Online http://www.linkedin.com http://www.ryze.com

37. Copyright ©2009 by Cengage Learning Inc. All rights reserved Networking 37 Referral LO 6 A recommendation to a salesperson from a customer or business associate. Networking A process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations.

38. Copyright ©2009 by Cengage Learning Inc. All rights reserved Qualifying Leads 38 Recognized need Buying power Receptivity and accessibility LO 6

39. Copyright ©2009 by Cengage Learning Inc. All rights reserved Needs Assessment 39 Needs Assessment LO 6 A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them.

40. Copyright ©2009 by Cengage Learning Inc. All rights reserved The Preapproach Process 40 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

41. Copyright ©2009 by Cengage Learning Inc. All rights reserved Developing and Proposing Solutions 41 LO 6 Sales Proposal Sales Presentation

42. Copyright ©2009 by Cengage Learning Inc. All rights reserved Powerful Presentations 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!

43. Copyright ©2009 by Cengage Learning Inc. All rights reserved Handling Objections 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

44. Copyright ©2009 by Cengage Learning Inc. All rights reserved Closing the Sale 44 LO 6 Negotiate Keep an open mind Look for customer signals Tailor to each market

45. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Steps in the Selling Process 45 LO 6

46. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Management 46 Describe the functions of sales management LO 7

47. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Management Responsibilities 47 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

48. Copyright ©2009 by Cengage Learning Inc. All rights reserved Defining Sales Goals 48 LO 7 Clear Precise Measurable Time Specific Sales Volume Market Share Profit Level

49. Copyright ©2009 by Cengage Learning Inc. All rights reserved Quota 49 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.

50. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Force Structure 50 LO 7 Individual client or account Market or industry Marketing function Product line Geographic region

51. Copyright ©2009 by Cengage Learning Inc. All rights reserved Traits of Top Sales Performers  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 51 LO 7

52. Copyright ©2009 by Cengage Learning Inc. All rights reserved Training the Sales Force 52 LO 7 Training includes... Nonselling duties Industry and customer characteristics Industry and customer characteristics Product knowledge Selling techniques Company policies and practice

53. Copyright ©2009 by Cengage Learning Inc. All rights reserved Compensating the Sales Force 53 LO 7 Commission Salary Combination Plans Combination Plans

54. Copyright ©2009 by Cengage Learning Inc. All rights reserved Motivating the Sales Force 54 LO 7  Ceremonies  Plaques  Vacations  Merchandise  Pay raises  Cash bonuses  Stock options  Tuition assistance  Product discounts Rewards and incentives include:

55. Copyright ©2009 by Cengage Learning Inc. All rights reserved Evaluating the Sales Force 55 LO 7 Contribution to profit Calls per order Sales or profits per call Call percentage achieving goals Sales volume

56. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Functions of Sales Management 56 LO 7