Sales Promotion and Personal Selling

1. Sales Promotion and Personal Selling Chapter 16 Prepared by Deborah Baker Texas Christian University

2. Learning Objectives 1. Define and state the objectives of sales promotion. 2. Discuss the most common forms of consumer sales promotion. 3. List the most common forms of trade sales promotion.

3. Learning Objectives (continued) 4. Describe personal selling. 5. Discuss the key differences between relationship selling and traditional selling. 6. List the steps in the selling process. 7. Describe the functions of sales management.

4. Learning Objective 1 On Line http://www.nba.com/mavericks http://www.mavs.com Define and state the objectives of sales promotion.

5. Sales Promotion 1 On Line http://www.onlineclothingstores.com http://www1.coolsavings.com Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.

6. Sales Promotion Targets 1 ConsumerSales Promotion Trade Sales Promotion

7. Immediate purchases Increase trial Boost consumer inventory Encourage repurchase Increase ad effectiveness Encourage brand switching Encourage brand loyalty Uses of Sales Promotion 1

8. Type of Buyer Desired Results Sales PromotionExamples Loyal Customers • Reinforce behavior • Increase consumption • Change timing • Loyalty marketing • Bonus packs Competitor’s Customers • Break loyalty • Persuade to switch • Sampling • Sweepstakes, contests, premiums Brand Switchers • Persuade to buy your brand more often • Price-lowering promotion • Trade deals Price Buyers • Appeal with low prices • Supply added value • Coupons, price-offpackages, refunds • Trade deals Objectives of Sales Promotion 1

9. Learning Objective 2 Discuss the most common forms of consumer sales promotion.

10. Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Tools for Consumer Sales Promotion 2

11. Coupon A certificate that entitles consumers to an immediate price reduction. Rebate A cash refund given for the purchase of a product during a specific product. Premium An extra item offered to the consumer, usually in exchange for some proof of purchase. Tools for Consumer Sales Promotion 2

12. Loyalty Marketing Program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. Frequent Buyer Program A loyalty program in which loyal consumers are rewarded for making multiple purchases. Tools for Consumer Sales Promotion 2

13. Contest Promotions that require skill or ability to compete for prizes. Sweepstakes Promotions that depend on chance or luck, with free participation. Tools for Consumer Sales Promotion 2 On Line http://www.sweepstakesonline.com

14. Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. Tools for Consumer Sales Promotion 2

15. Direct mail Methods of Sampling Door-to-door delivery Packaging with another product Retail store demonstration Sampling 2

16. Goals of Point-of-Purchase Displays Build traffic Advertise the product Induce impulse buying Tools for Consumer Sales Promotion 2

17. Free merchandise Effective Types of On-Line Sales Promotion Sweepstakes Free shipping Coupons Tools for Consumer Sales Promotion 2 On Line http://www.burgerking.com http://www.philipmorris.com http://www.upromote.com

18. Learning Objective 3 List the most common forms of trade sales promotion.

19. Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows Tools for Trade Sales Promotion 3

20. Trade Allowance 3 A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

21. Push Money 3 Money offered to channel intermediaries to encourage them to “push” products--that is, to encourage other members of the channel to sell the products.

22. Gain new distributors Obtain support for consumer sales promotions Build or reduce dealer inventories Improve trade relations The Role of Trade Sales Promotion 3

23. Learning Objective 4 Describe personal selling.

24. Advantages of Personal Selling 4 • Provides a detailed explanation or demonstration of product • Message can be varied to fit the needs of each prospective customer • Can be directed to specific qualified prospects • Costs can be controlled by adjusting sales force size • Most effective method to obtain sales and gain satisfied customers

25. Advertising & Sales Promotion are more important if... Personal Selling is more important if... Product has a high value Product has a low value Product is custom made Product is standardized Product is technically complex Product is simple to understand There are few customers There are many customers Customers are concentrated Customers are geographically dispersed Personal Selling 4

26. Learning Objective 5 Discuss the key differences between relationship selling and traditional selling.

27. Relationship Selling 5 A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.

28. Traditional Personal Selling Relationship Selling Sell advice, assistance, counsel Sell products Focus on closing sales Focus on customer’s bottom line Limited sales planning Sales planning is top priority Discuss product Build problem-solving environment Assess “Product-specific” needs Conduct discovery in scope of operations “Lone wolf” approach Team approach Pricing/product focus Profit impact and strategic benefit focus Short-term sales follow-up Long-term sales follow-up Relationship Selling vs. Traditional Selling 5

29. Learning Objective 6 List the steps in the selling process.

30. Sales Process 6 The set of steps a salesperson goes through in a particular organization to sell a particular product or service.

31. Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up Steps in the Selling Process 6

32. Time Spent in Key Steps of Selling Process 6

33. Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Networking Trade Shows/ Conventions Company Records Sources ofSales Leads Generating Leads On Line http://www.goleads.com http://www.zapdata.com 6

34. Cold Calling 6 A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects’ needs or financial status.

35. Characteristics of Qualified Leads Recognized Need Receptivity & Accessibility Buying Power Qualifying Leads 6 On Line http://www.hoovers.com http://www.dnb.com

36. Needs Assessment 6 A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them.

37. Product or service Salesperson must know everything about... Customers and their needs Competition Industry Probing Needs 6

38. Sales Proposal Sales Presentation Developing and Proposing Solutions 6

39. View objections as requests for information Handling Objections Anticipate specific objections Use the objection to close the sale Handling Objections 6

40. Look for customer signals Closing the Sale Keep an open mind Negotiate Closing the Sale 6

41. Ensure delivery schedules are met Responsibilities in Following Up Goods or service perform as promised Employees are trained Following Up 6

42. Learning Objective 7 Describe the functions of sales management.

43. Define sales goals and sales process Determine sales force structure Tasks of Sales Management Recruit and train sales force Compensate and motivate sales force Evaluate sales force Sales Management Responsibilities 7

44. Clear Sales Goals Should Be... Precise Measurable Time Specific Defining Sales Goals 7

45. Quota 7 A statement of the individual salesperson’s sales objectives, usually based on sales volume alone but sometimes including key accounts.

46. Geographic Region Product Line Common Sales Organization Structures Marketing Function Market or Industry Individual client or account Sales Force Structure 7

47. Company policies and practice Selling techniques Training includes... Product knowledge Industry and customer characteristics Nonselling duties Training the Sales Force 7

48. Commission Salary Compensation Plans: Basic Methods 7 On Line http://www.marykay.com Combination Plans

49. Straight Commission The salesperson is paid some percentage when a sale is made. Straight Salary The salesperson receives a salary regardless of sales productivity. Compensation Plans 7

50. Effective Sales Leaders... Are assertive Possess ego drive Possess ego strength Take risks Are innovative Have a sense of urgency Are empathetic Effective Sales Leaders 7