1. Copyright © Houghton Mifflin Company. All rights reserved. 18–1 What Is Personal Selling? 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

2. Copyright © Houghton Mifflin Company. All rights reserved. 18–2 General Steps in the Personal Selling Process FIGURE 18.1

3. Copyright © Houghton Mifflin Company. All rights reserved. 18–3 Prospecting for Customers 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

4. Copyright © Houghton Mifflin Company. All rights reserved. 18–4 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

5. Copyright © Houghton Mifflin Company. All rights reserved. 18–5 Approaching the Customer 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

6. Copyright © Houghton Mifflin Company. All rights reserved. 18–6 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.

7. Copyright © Houghton Mifflin Company. All rights reserved. 18–7 Overcoming Objections Anticipate objections and counter them during the presentation Generally, best to handle objections as they arise

8. Copyright © Houghton Mifflin Company. All rights reserved. 18–8 Closing the Sale Closing –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

9. Copyright © Houghton Mifflin Company. All rights reserved. 18–9 Following Up Determining if the delivery and setup of order was completed to the customer’s satisfaction Ascertaining the customer’s future product needs

10. Copyright © Houghton Mifflin Company. All rights reserved. 18–10 Important Terms Personal Selling –Paid personal communication that informs customers and persuades them to buy products Prospecting –Developing a list of potential customers Approach –The manner in which a salesperson contacts a potential customer Closing –The stage in the selling process when the salesperson asks the prospect to buy the product

11. Copyright © Houghton Mifflin Company. All rights reserved. 18–11 What Is Sales Promotion? 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

12. Copyright © Houghton Mifflin Company. All rights reserved. 18–12 Sales Promotions Like This Provide Incentives to Customers Reprinted with permission of LORD’S & LADY’S Hair Salon, Inc.

13. Copyright © Houghton Mifflin Company. All rights reserved. 18–13 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

14. Copyright © Houghton Mifflin Company. All rights reserved. 18–14 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

15. Copyright © Houghton Mifflin Company. All rights reserved. 18–15 Who Uses Coupons? Source: Promotion Marketing Association, press release, August 30 2004, www.couponmonth.com/pages/news.htm.

16. Copyright © Houghton Mifflin Company. All rights reserved. 18–16 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

17. Copyright © Houghton Mifflin Company. All rights reserved. 18–17 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

18. Copyright © Houghton Mifflin Company. All rights reserved. 18–18 Consumer Sales Promotions Methods: Frequent User Incentives Reprinted with permission of the Sperry & Hutchinson Company, Inc.

19. Copyright © Houghton Mifflin Company. All rights reserved. 18–19 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.

20. Copyright © Houghton Mifflin Company. All rights reserved. 18–20 Consumer Sales Promotion Methods (cont’d) Consumer Contests and Games –Individuals compete for prizes based on analytical or creative skills –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

21. Copyright © Houghton Mifflin Company. All rights reserved. 18–21 Important Terms 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 Consumer Sales Promotion Methods –Ways of encouraging consumers to patronize specific stores or to try a particular product Coupons –Written price reductions used to encourage consumers to buy a specific product

22. Copyright © Houghton Mifflin Company. All rights reserved. 18–22 Important Terms Cents-Off Offers –Promotions that let buyers pay less than the regular price to encourage purchase 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

23. Copyright © Houghton Mifflin Company. All rights reserved. 18–23 Important Terms Point-of-Purchase (P-O-P) Displays –Signs, window displays, display racks, and similar means used to attract customers and to encourage immediate purchases Demonstrations –Manufacturers use them temporarily to encourage trial use and purchase of a product or to show how a product works. Free Samples –Samples of a product given out to encourage trial and purchase

24. Copyright © Houghton Mifflin Company. All rights reserved. 18–24 Important Terms Premiums –Items offered free or at a minimal cost as a bonus for purchasing a product Consumer Contests and Games –Individuals compete for prizes based on analytical or creative skills. Consumer Sweepstakes –A sales promotion in which entrants submit their names for inclusion in a drawing for prizes

25. Copyright © Houghton Mifflin Company. All rights reserved. 18–25 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

26. Copyright © Houghton Mifflin Company. All rights reserved. 18–26 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

27. Copyright © Houghton Mifflin Company. All rights reserved. 18–27 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

28. Copyright © Houghton Mifflin Company. All rights reserved. 18–28 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

29. Copyright © Houghton Mifflin Company. All rights reserved. 18–29 Important Terms Trade Sales Promotion Methods –Ways of persuading wholesalers and retailers to carry a producer’s products and 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 Scan-Back Allowance –A manufacturer’s reward to retailers based on the number of pieces scanned

30. Copyright © Houghton Mifflin Company. All rights reserved. 18–30 Important Terms 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 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

31. Copyright © Houghton Mifflin Company. All rights reserved. 18–31 Important Terms Free Merchandise –A manufacturer’s reward given to resellers for purchasing a stated quantity of goods Dealer Loader –A gift, often part of a display, offered to a retailer who purchases a specified quantity of merchandise 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