1. Personal Selling and Sales Promotion
Part Eight Promotion Decisions
Chapter 18
Personal Selling and Sales Promotion

2. Chapter Learning Objectives
To define personal selling and understand its purpose
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
To explain what sales promotion activities are and how they are used
To recognize specific consumer and trade sales promotion methods

3. Chapter Outline What Is Personal Selling? The Personal Selling Process
Prospecting for Customers
Evaluating Prospects
Approaching the Customer
Making the Presentation
Overcoming Objections
Closing the Sale
Following Up
Types of Salespeople
Order Getters
Order Takers
Support Personnel
Types of Selling

4. Chapter Outline (cont’d)
Managing the Sales Force
Establishing Sales Force Objectives
Determining Sales Force Size
Recruiting and Selecting Salespeople
Training Sales Personnel
Compensating Sales Personnel
Motivating Sales Personnel
Managing Sales Territories
Controlling and Evaluating Sales Force Performance
The Nature of Sales Promotion
Consumer Sales Promotion Methods
Trade Sales Promotion Methods

5. What Is 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

6. Figure 18.1: General Steps in the Personal Selling Process

7. Prospecting for Customers
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

8. Evaluating Prospects Preapproach (before contacting the customer)
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

9. Approaching the Customer
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

10. 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.

11. Overcoming Objections
Anticipate objections and counter them during the presentation
Generally, best to handle objections as they arise

12. Closing the Sale Closing Closing strategies
The stage in the selling process when the salesperson asks the prospect to buy the product
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

13. Following Up
Determining if the delivery and setup of order was completed to the customer’s satisfaction
Ascertaining the customer’s future product needs

14. Types of Salespeople Order Getters Order Takers
Sell to new customers and increases sales to current ones
Employ creative selling
Current-customer sales
New-business sales
Order Takers
Primarily seek repeat sales
Inside order takers
Field order takers

15. Types of Salespeople (cont’d)
Support personnel facilitate selling but usually are not involved solely with making sales
Missionary salespeople
Assist the producer’s customers in selling to their own customers
Trade salespeople
Primarily involved in helping a producer’s customers promote a product
Technical salespeople
Give technical assistance to a firm’s current customers

16. Selected Types of Selling
Team selling
The use of a team of experts from all functional areas of a firm, led by a salesperson, to conduct the personal-selling process
Relationship selling
The building of mutually beneficial long-term associations with a customer through regular communications over prolonged periods of time

17. 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)
Objectives 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

18. 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
Divide the number of sales calls necessary to serve customers by the number of sales calls a salesperson makes annually
Add additional salespersons until the cost of adding one more salespersons equals the additional sales that would be generated by that person

19. Recruiting and Selecting Salespeople
Developing a list of qualified applicants 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
Employment agencies
Job ad respondents
Other firms
Educational institutions
Employee referrals

20. Training Sales Personnel
What to teach?
The company, its products, or selling methods
Who 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
How to train?
Videos, tests, online materials, manuals, and cases
Lectures, demonstrations, simulation exercises, and on-the-job training

21. 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

22. Compensating Salespeople (cont’d)
Compensation Plans
Straight salary
Paying salespeople a specific amount per period of time
Straight commission
Paying salespeople according to the amount of their sales in a given time period
Combination compensation
Paying salespeople a fixed salary plus a commission on sales volume

23. Figure 18.2: Average Salaries for Sales Representatives and Executives
This is a premium slide.
Source: From Christine Galea, “Average Salary for Sales Staffers in 2005,” Sales and Marketing Management, May 2006, p. 30. ©2004 VNU
Business Media, Inc. Reprinted with permission from Sales and Marketing Management

24. Source: Charles Futrell, Sales Management (Fort Worth, TX: Dryden Press), 2001, pp. 307-316.

25. 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)

26. 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)
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

27. Controlling and Evaluating Sales Force Performance
Performance measures largely determined by sales objectives, 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
Salespersons evaluated by comparing performance to
Performance standards
Other employees
Past performance

28. What Is 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
Encourages product trial and purchase by adding value to the product
Facilitates or is facilitated by personal selling and advertising
Use has grown dramatically over the last 20 years at the expense of traditional advertising

29. What Is 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

30. Consumer Sales Promotion Methods
Consumer sales promotion methods encourage consumers to patronize specific stores or to try particular products
Coupons
Written price reductions used to encourage consumers to buy a specific product
Effective coupons are easily recognized and state the offer clearly
Advantages: generate brand awareness and interest and reward brand loyalty
Disadvantages: Fraud and misredemptions; consumer ill-will from stock-outs during promotions

31. Figure 18.3: Sources of Coupons
This is a premium slide.
Source: Enid Burns, “Coupons Converge Online,” ClickZ, Oct. 6, 2005,

32. This is a premium slide.
Source: Betsy Spethmann, “FSI Coupon Worth Reaches $300 Billion in 2006: MARX,” Promo, Jan. 4, 2007, .

33. Consumer Sales Promotion Methods (cont’d)
Cents-Off Offers
Let buyers pay less than the regular price to encourage purchase
Money Refund
Offers consumers money when they mail in a proof of purchase, usually for multiple product purchases
Rebate
Sends consumers a specific amount of money for making a single product purchase

34. Consumer Sales Promotion Methods (cont’d)
Frequent-User Incentives
Loyalty programs reward frequent buyers
Point-of-Purchase Displays
Signs, window displays, display racks, and similar means used to attract customers and to encourage immediate purchases
Demonstrations
Used temporarily to encourage trial use and purchase of a product or to show how a product works.
Highly effective yet costly in practice

35. Consumer Sales Promotion Methods (cont’d)
Free Samples
Free products 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.

36. Consumer Sales Promotion Methods (cont’d)
Consumer Contests, Games, and Sweepstakes
Used to generate retail traffic and to increase exposure to promotional messages
Consumer Contests
Individuals compete for prizes based on analytical or creative skills
Consumer Games
Individuals compete for prizes based primarily on chance, often by collecting game pieces
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

37. Trade Sales Promotion Methods
Trade sales promotion methods refer to ways of persuading wholesalers and retailers to carry a producer’s products and to market them aggressively
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

38. Trade Sales Promotion Methods (cont’d)
Scan-Back Allowance
A manufacturer’s reward to retailers based on the number of pieces scanned
Merchandise Allowance
A manufacturer’s agreement to help resellers pay for special promotional efforts
Cooperative Advertising
Sharing of media costs by manufacturer and retailer for advertising the manufacturer’s products

39. Trade Sales Promotion Methods (cont’d)
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
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

40. Trade Sales Promotion Methods (cont’d)
Premium (Push) Money
Extra compensation to salespersons for pushing a line of products
Sales Contest
A means of motivating distributors, retailers, and salespeople by recognizing outstanding achievements

41. After reviewing this chapter you should:
Be able to define personal selling and understand its importance.
Be able to describe 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.
Be able to explain what sales promotion activities are and how they can be used.
Be familiar with specific consumer and trade sales promotion methods.