Lamb, Hair, McDaniel CHAPTER 18 Sales Promotion and Personal Selling 2010-2011
LO 1 Define and state the objectives of sales promotion LO 2 Discuss the most common forms of consumer sales promotion LO 3 List the most common forms of trade sales promotion LO 4 Describe personal selling Learning Outcomes
LO 5 Discuss the key differences between relationship selling and traditional selling LO 6 List the steps in the selling process Learning Outcomes
Sales Promotion Define and state the objectives of sales promotion LO 1
Sales Promotion Sales Promotion LO 1 Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.
Sales Promotion Advertising Reason to buy Sales Promotion Incentive to buy LO 1
Objectives of Sales Promotion LO 1 Type of Buyer Loyal Customers Competitor’s Customers Brand Switchers Price Buyers Desired Results
Change purchase timing
Persuade to switch
Persuade to buy your brand more often
Appeal with low prices
Supply added value
Sales Promotion Examples
Sweepstakes, contests, premiums
Coupons, price-off packages, refunds
REVIEW LEARNING OUTCOME The Objectives of Sales Promotion LO 1
Tools for Consumer Sales Promotion Discuss the most common forms of consumer sales promotion LO 2
Tools for Consumer Sales Promotion LO 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion
Tools for Consumer Sales Promotion 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. An extra item offered to the consumer, usually in exchange for some proof of purchase.
With coupon use, a family can save more than an economic stimulus check (avg. $ 300-$1,200 in May 2008).
Possible grocery savings/household (2 adults + 2 children) using coupons = 25 percent/year, without cutting purchases.
Economic Hard Times = Coupon Use SOURCE: “In Economic Downturn, 67% Plan More Coupon Use,” http://www.i-com.com/aboutus_news_detail.asp?pid=68. That means, if a family spends $800/month on groceries, they can save $ 2,400 annually by using coupons. LO 2
Tools for Consumer Sales Promotion LO 2 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 LO 2 Contests 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 LO 2 Sampling A promotional program that allows the consumer the opportunity to try a product or service for free.
Methods of Sampling LO 2 Direct mail Door-to-door delivery Packaging with another product Retail store demonstration
Advertise the product
Induce impulse buying
Online Sales Promotion
Free shipping with purchases
Effective Types of Online Sales Promotion LO 2
Verizon Wireless launched the largest integrated marketing campaign in the company’s history, receiving $100 million in support for pushing the Droid.
Beginning in late October, Verizon launched ads in magazines and television that position their newest smartphone as the antidote to the iPhone’s shortfalls.
As part of the demonstration of the Droid’s capabilities, Verizon launched the Droid Does Times Square campaign. This allows users to call a toll-free number and use billboards on Times Square to search for anything using voice commands. And the results show up on times square. For those not on Times Square, Verizon’s website streams video of times square.
SOURCE: Chang, Rita. “Verizon Spending $100 Million on its Droid Ad Campaign,” thebusinessinsider.com, November 9, 2009; Wimberly, Taylor. “Drod Does Times Square,” androidandme.com, November 6, 2009. TV, Print, Times Square, Oh My! LO 2
Tools for Trade Sales Promotion List the most common forms of trade sales promotion LO 3
Trade Sales Promotion LO 3 Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows
Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. LO 3
Push Money 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. LO 3
Benefits of Trade Promotions
Help manufacturers gain new distribution
Obtain wholesaler and retailer support for consumer sales promotions
Build or reduce dealer inventories
Improve trade relations
REVIEW LEARNING OUTCOME Forms of Trade Sales Promotion LO 3
Personal Selling Describe personal selling LO 4
Personal Selling Personal Selling is more important if... Advertising & Sales Promotion are more important if... LO 4 Customers are concentrated. Product is technically complex. There are few customers. Product is custom made. Product has a high value. Customers are geographically dispersed. Product is simple to understand. There are many customers. Product is standardized. Product has a low value.
REVIEW LEARNING OUTCOME
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 LO 4
Relationship Selling Discuss the key differences between relationship selling and traditional selling LO 5
Relationship Selling Relationship (Consultative) Selling LO 5 A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.
Traditional Selling and Relationship Selling Relationship Selling LO 5 Traditional Personal Selling LO 5 Sell advice, assistance, counsel Sell products 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
REVIEW LEARNING OUTCOME Relationship Selling vs. Traditional Selling LO 5 Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Sales Increases Result From Creating Value
Steps in the Selling Process List the steps in the selling process LO 6
Steps in the Selling Process LO 6 Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up
Time Spent in Key Steps of Selling Process LO 6 Key Selling Steps Traditional Selling Relationship Selling Generate Leads High Low Qualify Leads Low High Probe Needs Low High Develop Solutions Low High Handle Objections High Low Close the sale High Low Follow-up Low High
Generating Leads LO 6 Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Networking Company Records
Cold Calling Cold Calling LO 6 A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects’ needs or financial status.
Qualifying Leads LO 6 Receptivity and accessibility Buying power Recognized need
Needs Assessment 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.
The Consultative Salesperson LO 6 Product or service Customers Competition Industry Salesperson must know everything about...
Developing and Proposing Solutions Sales Proposal Sales Presentation LO 6
Powerful Presentations 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!
View objections as requests for information
Anticipate specific objections
Investigate the objection with the customer
Be aware of competitors’ products
Use the objection to close the sale
Closing the Sale LO 6 Negotiate Keep an open mind Look for customer signals Tailor to each market
The Impact of Technology on Personal Selling LO 6 Cell phones Laptops Pagers E-Mail Electronic organizers Internet
Steps in the Selling Process Qualifying Leads Approaching Customer Developing and proposing solutions Handling objections Closing the sale Generating Leads A Continuing Process LO 6
Making the Sale
Now that you know the steps in the selling process, break down this video and Grover’s use of (or failure to use) the steps