Chapter Objectives Personal Selling and Sales Promotion CHAPTER 17 1 2 4 7 8 Describe the role of today’s salesperson. Describe the four sales channels. Describe the major trends in personal selling. Identify and briefly describe the three basic sales tasks. Outline the seven steps in the sales process. Identify the seven basic functions of a sales manager. Identify the role of ethical behavior in personal selling. Describe the role of sales promotion in the promotional mix, and identify the different types of sales promotions. 5 3 6
• Personal selling Interpersonal influence process involving a seller ’s promotional presentation conducted on a person-to-person basis with the buyer. • Sixteen million people in the U.S. are employed in sales. • Personal selling is the single largest marketing expense in many firms.
THE EVOLUTION OF PERSONAL SELLING • Salespeople are problem solvers who focus on meeting customers’ needs before, during, and after the sale . • Must be able to do the following: • Focus on customers ’ needs and problems, and offer solutions. • Follow through with phone calls and other communications. • Develop expertise about their industry and product. • Go the extra mile to fulfill customers ’ needs b eyond their expectations. • Bureau of Labor Statistics predicts that jobs in sales will grow by 10 percent over the next decade.
THE FOUR SALES CHANNELS • Channels all include both business-to-business and direct-to-customer selling. • Over-the-counter selling Personal selling conducted in retail and some wholesale locations in which customers come to the seller ’s place of business. • Field selling Sales presentations made at prospective customers’ locations on a face-to-face basis. • Telemarketing Promotional presentation involving the use of the telephone on an outbound basis by salespeople or on an inbound basis by customers who initiate calls to obtain information and place orders. • Inside selling Selling by phone, mail, and electronic commerce. • Firms generally blend sales channels in their sales organization.
TRENDS IN PERSONAL SELLING • Companies rely on three major personal selling approaches to meet customer needs. • Relationship selling Regular contacts between sales representatives and customers over an extended period to establish a sustained buyer-seller relationship. • Consultative selling Meeting customer needs by listening to them, understanding their problems, paying attention to details, and following through after the sale. • Team selling Selling situation in which several sales associates or other members of the organization are recruited to help the lead sales representative reach all those who influence the purchase decision.
SALES TASKS • Ensuring that buyer’s purchases are in his or her best interest aids the development of long-term relationships. • Selling involves three basic tasks: • Order processing Selling, mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders. • Creative selling Personal selling that involves situations in which a considerable degree of analytical decision making on the buyer ’s part results in the need for skillful proposals of solutions for the customer ’s needs. • Missionary selling Indirect type of selling in which specialized salespeople promote the firm ’s goodwill among indirect customers, often by helping customers use products.
CREATIVE SELLING • Creative selling Personal selling that involves situations in which a considerable degree of analytical decision making on the buyer ’s part results in the need for skillful proposals of solutions for the customer ’s needs. • Generally used to develop new business with either new customers of new products for existing customers. MISSIONARY SELLING • Missionary selling Indirect type of selling in which specialized salespeople promote the firm ’s goodwill among indirect customers, often by helping customers use products. • Example: Pharmaceutical companies that use free samples, educational seminars to court doctors. • May involve both field selling and telemarketing.
THE SALES PROCESS • Steps follow the AIDA concept.
PROSPECTING AND QUALIFYING • Prospecting—identifying potential customers. • Qualifying—determining that the prospect really is a potential customer. APPROACH • Initial contact with prospective customer. • Use precall planning research to identify how your products might best meet customer’s needs. PRESENTATION • Conveying marketing message to the customer. • Features-benefits framework focuses on the good or service in terms that are meaningful to the buyer.
DEMONSTRATION • Buyer has a chance to try a product or see how it works. HANDLING OBJECTIONS • Expressions of resistance, such as stalling or indecision, by the prospect are an opportunity to reassure the buyer or offer suitable alternatives. CLOSING • Point at which salesperson asks the prospect for an order. • Let buyer know you are ready to be of service in the future. FOLLOW-UP • Successful sales people turn today’s customers into tomorrow’s by reinforcing the purchase decision. • Ensure that customer service needs are met.
MANAGING THE SALES EFFORT • Sales managers mix sales and management skills to manage the overall direction and control of the personal selling effort. RECRUITMENT AND SELECTION • Important because of company investment in the hiring process and the potential damage to customer relationships and overall performance. TRAINING • Primary methods are on-the-job training, individual instruction, how-to classes, and external seminars; often ongoing for experienced salespeople. ORGANIZATION • National accounts organization—assigning senior sales personnel or sales teams to major accounts in each market.
SUPERVISION • Span of control—number of sales representatives who report to first-level sales managers. MOTIVATION • Tools include information sharing, recognition, bonuses, and benefits. • Expectancy theory—motivation depends on the expectations an individual has of his or her ability to perform the job and on how performance relates to attaining rewards that the individual values. COMPENSATION • Commission—compensation tied directly to the sales or profits the salesperson achieves. • Salary—fixed payment made periodically to an employee. • Many firms combine the features of both commission and salary in their compensation programs.
EVALUATION AND CONTROL • Managers must set standards and choose the best methods for measuring sales performance. • Sales quotas—specified sales or profit targets that the firm expects salespeople to achieve. • Other measures include customer satisfaction, profit contribution, share of product-category sales, and customer retention. • Evaluations should motivate improved performance.
ETHICAL ISSUES IN SALES • Long-term success requires strong code of ethics. • Honesty and ethical behavior is encouraged when: • Employees understand what is expected of them. • Open communication is encouraged. • Managers lead by example.
SALES PROMOTION • Sales promotion Marketing activities other than personal selling, advertising, and publicity that enhance consumer purchasing and dealer effectiveness. • Goal is speeding the sales process and increasing sales volume. • Produce best results when combined with other other marketing activities, such as advertising. • Cannot overcome poor brand images, product deficiencies, or poor training for salespeople. CONSUMER-ORIENTED SALES PROMOTIONS • Goals: Encourage repurchases by rewarding current users, boost sales of complementary products, and increase impulse purchases. • Coupons—most widely used form of sales promotion.
• Refunds or rebates—help packaged-goods companies increase purchase rates, promote multiple purchases, and reward product users. • Samples, bonus packs, and premiums—a “try it, you’ll like it” approach. • Contests—require entrants to complete a task such as solving a puzzle or answering questions in a trivia quiz. • Sweepstakes—choose winners by chance; no product purchase is necessary. • Specialty Advertising—sales promotion technique that places the advertiser ’s name, address, and advertising message on useful articles that are then distributed to target consumers.
TRADE-ORIENTED PROMOTIONS • Sales promotion that appeals to marketing intermediaries rather than to final consumers. • Accounts for half of typical firm’s promotion budget. • Trade allowances—special financial incentives offered to wholesalers and retailers that purchase or promote specific products. • Point-of-purchase advertising—display or other promotion located near the site of the actual buying decision. • Trade shows—vendors who serve the industries display and demonstrate their products for members. • Dealer incentives, contests, and training programs.