Chapter 16 Notes: Sales promotion is utilized to increase the effectiveness of other promotional efforts. While advertising offers a reason to buy, sales promotion offers an incentive to buy. Both are important, but sales promotion is usually cheaper and easier to measure.
Chapter 16 Notes: Sales promotion is targeted toward either of two different markets: to consumers or to members of the marketing channel, such as wholesalers and retailers. Sales promotion expenditures have increased over the last several years as a result of increased competition, an expanding array of media choices, the demand for more deals from manufacturers, and the reliance on accountable and measurable marketing strategies. Promotion marketing in the U.S. exceeds $288 billion a year. Even power companies and restaurants have discovered the power of sales promotion.
Chapter 16 Notes: Sales promotion has more effect on behaviour than attitudes. Immediate purchase is the goal of sales promotion. Immediate purchase is the goal of sales promotion.
Chapter 16 Notes: The tools selected for sales promotion must suit the objectives to ensure success of the overall promotion plan. Popular tools are shown here, and described on the following slides.
Chapter 16 Notes: Coupons encourage product trial and repurchase, and are likely to increase the amount of a product purchased. Coupon usage is steadily declining, with only 1.4 percent actually redeemed. Many coupons are often wasted on consumers who have no interest in the product. Consequently, marketers are reevaluating the use of coupons, such as shortening the expiration time, using everyday low pricing instead, or distributing single, all-purpose coupons for redemption on several brands. Rebates must be mailed in along with a proof of purchase. Rebates offer price cuts to consumers directly and are more easily controlled. Further, customer databases can be built due to the information forms required for rebates. As few as 2 percent of consumers eligible for rebates apply for them. Premiums reinforce the purchase decision, increase consumption, and persuade nonusers to switch brands. Discussion/Team Activity: Identify companies who have utilized these popular sales promotion tools. Examples: fast food services, cosmetic companies, banks, rental cars, magazines
Chapter 16 Notes: Loyalty marketing programs reward consumers for making multiple purchases. The objective of loyalty marketing is to build long-term, beneficial relationships. Studies show that consumer loyalty is on the decline. Discussion/Team Activity: Identify several companies who offer these programs. Discuss the benefits offered by some of the more popular loyalty marketing and frequent buyer programs.
Chapter 16 Video Pepsi Contests and sweepstakes are a popular type of sales promotion. Watch the Pepsi ad for an irreverent take on this marketing tool.
Chapter 16 Video: Levitra This ad from Levitra offers free samples through a physician. Is sampling appropriate for all products? Decide after watching the ad. Notes: Sampling can increase retail sales by as much as 40 percent. As a result, sampling has increased by more than 8 percent annually in recent years and has reached $1.5 billion per year.
Discussion/Team Activity: Discuss some of the occasions that you have had the opportunity to participate in product sampling. How did this influence your decision to purchase the sampled product?
Chapter 16 Notes: Point-of-purchase promotions include shelf “talkers”, shelf extenders, ads on carts and bags, end-aisle and floor-stand displays,TV monitors and in-store messages, and audiovisual displays. It offers manufacturers a captive audience in retail stores, and can boost sales anywhere from 2 to 65 percent, since between 70 and 80 percent of all retail purchase decisions are made in-store.
Chapter 16 Online Upromote.com How can Upromote.com help with your sales promotions efforts? What kind of marketing budget would you need to take advantage of its services? What kind of company would be best served by Upromote.com? Notes: On-line sales promotions have grown due to the popularity of the Internet, generating three to fives times higher response rates than those of off-line counterparts. The most effective types are shown here.
Chapter 16 Notes: Trade promotions push a product through the distribution channel. The tools that are unique to manufacturers and intermediaries are shown here.
Chapter 16 Notes: Personal selling is direct communication between a sales representative and prospective buyers in an attempt to influence each other in a purchase situation. In a sense, all businesspeople are salespeople, and to reach the top in most organizations, individuals need to sell ideas to peers, superiors, and subordinates. Personal selling offers several advantages over other forms of promotion, such as those listed here.
Chapter 16 Video H&R Block What aspects of personal selling are communicated through H&R Block’s advertisement? Notes: Until recently, personal selling focused almost entirely on a planned presentation for the purpose of making a sale. In contrast, modern views of personal selling emphasize the relationship that develops between a salesperson and a buyer. The objective with relationship selling is to build long-term branded relationships with consumers/buyers. Salespeople become consultants, partners, and problem solvers as they strive to develop trust and long-term relationships.
Chapter 16 Notes: The end result of relationship selling tends to be loyal customers who purchase from the company time after time.
Chapter 16 Notes: Completing a sale requires several steps. It can be unique for each product or service, depending on the features of the product, characteristics of customer segments, and internal processes within the firm, such as how sales leads are generated. There are seven basic steps in the personal selling process. These steps of selling follow the AIDA concept.
Chapter 16 Notes: Although traditional selling and relationship selling follow the same basic steps, the differences between the two selling methods is the relative importance placed on key steps. Relationship selling emphasizes an up-front investment in uncovering each customer’s needs and wants and matching them to the benefits of the product or service. This leads to a relatively straightforward close.
Chapter 16 Notes: When a prospect shows interest in having more information about a product, the salesperson has the opportunity to qualify the lead. Lead qualification consists of determining whether the prospect has three things: * A recognized need * The authority to make the purchase decision and access to funds to pay for it * Receptivity and accessibility to the salesperson
Chapter 16 Notes: After compiling information about the client’s needs and wants, the salesperson develops a solution in which the salesperson’s product or service solves the client’s problem or need. These solutions are presented as a sales proposal during a formal sales presentation. Salespeople must be able to present the proposal and handle customer objections confidently and professionally.
Chapter 16 Notes: Usually, there is only one opportunity to present solutions, and salespeople must be able to present the proposal and handle any customer objections confidently and professionally.
Chapter 16 Notes: The salesperson should not take objections personally as confrontations or insults. Instead, objections should be handled as requests for information, and could be used in a positive way to close the sale.
Chapter 16 Notes: Negotiation plays a key role in closing the sale. Negotiation is the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement. A salesperson should emphasize value to the customer, rendering price a nonissue.
Chapter 16 Notes: The goal of relationship selling is to motivate customers to purchase again by developing long-term relationships. Most businesses depend on repeat sales, and repeat sales depend on follow-up by the salesperson. Finding a new customer is far more expensive than retaining an existing customer. Furthermore, today’s customers are less loyal to brands and vendors. Therefore follow-up is critical in relationship building.
Chapter 16 Notes: Sales provide the fuel that keeps the corporate engines running. Nothing happens until a sale is made. As a result, sales management is one of marketing’s most critical specialties. Effective sales management stems from a success-oriented sales force that accomplishes its mission economically and efficiently. Poor sales management can lead to unmet profit objectives or even to the downfall of the corporation.
Chapter 16 Notes: The final task of sales managers is evaluating the effectiveness and performance of the sales force. Typical performance measures are listed above.
Chapter 16 Notes: Technology will not eliminate the need for salespeople; instead, technology can help improve the customer relationship. Technology, such as laptop computers, cell phones, and pagers allow salespeople to be more accessible to the customer. The Internet cost-effectively processes orders and services requests, and is freeing sales reps from tedious chores to allow more time to focus on client needs. The Internet provides salespeople with vast resources of information on clients, competitors, and the industry.
Sales Promotion and Personal Selling Canadian Adaptation prepared by Don Hill, Langara College 15
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
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
Learning Objective Define and state the objectives of sales promotion Online www.theaircanadacentre.com www.bluejays.mlb.com 1 1
Sales Promotion Online www.save.ca www.coupons.com Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. 1
Uses of Sales Promotion 1 Immediate purchases Increase trial Increase product usage Encourage repurchase Try a different brand Encourage brand loyalty
Learning Objective Discuss the most common forms of consumer sales promotion 2 2
Tools for Consumer Sales Promotion 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion
Tools for Consumer Sales Promotion 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 product. An extra item offered to the consumer, usually in exchange for some proof of purchase.
Tools for Consumer Sales Promotion 2 Loyalty Marketing Program Frequent Buyer Program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. A loyalty program in which loyal consumers are rewarded for making multiple purchases.
Tools for Consumer Sales Promotion Online www.somewhereincanada.com 2 Click Contest Sweepstakes Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation.
Tools for Consumer Sales Promotion 2 Click Sampling A promotional program that allows the consumer the opportunity to try a product or service for free.
Methods of Sampling 2 Direct mail Door-to-door delivery Packaging with another product Retail store demonstration
Point-of-Purchase Promotion 2 Goals of Point-of-Purchase Displays Build traffic Advertise the product Induce impulse buying
Learning Objective List the most common forms of trade sales promotion 3 3
Tools for Trade Sales Promotion 3 Trade Allowances Push Money Training Free Merchandise Instore Demonstration Conventions & Trade Shows
Trade Allowance Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. 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. 3
The Role of Trade Sales Promotion 3 Improve trade relations Gain new distributors Build or reduce dealer inventories Obtain support for consumer sales promotions
Learning Objective Describe personal selling 4 4
Advantages of Personal Selling 4 <ul><li>Detailed explanation or demonstration </li></ul><ul><li>Variable sales message </li></ul><ul><li>Directed at qualified prospects </li></ul><ul><li>Controllable adjustable selling costs </li></ul><ul><li>Effective at obtaining sale and gaining customer satisfaction </li></ul>
Personal Selling 4 Customers are concentrated Product is technically complex There are few customers Product is custom made Product has a high value Personal Selling is more important if... Customers are geographically dispersed Product is simple to understand There are many customers Product is standardized Product has a low value Advertising & Sales Promotion are more important if...
Learning Objective Discuss the key differences between relationship selling and traditional selling 5 5
Relationship Selling Relationship Selling A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships. 5 Click
Relationship Selling versus Traditional Selling 5 Sell advice, assistance, counsel Sell products Traditional Personal Selling 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 Relationship Selling
Key Differences between Traditional and Relationship Selling 5
Learning Objective List the steps in the selling process 6 6
Sales Process Sales Process The set of steps a salesperson goes through in a particular organization to sell a particular product or service. 6
Time Spent in Key Steps of Selling Process 6 Relationship Selling Traditional Selling Key Selling Steps High Low Follow-up Low High Close the sale Low High Handle Objections High Low Develop Solutions High Low Probe Needs High Low Qualify Leads Low High Generate Leads
Generating Leads Online www.infocanada.com 6 Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Networking Company Records
Cold Calling Cold Calling A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects’ needs or financial status. 6
Characteristics of Qualified Leads 6 Online www.citidirectory.com www.dnb.ca Recognized need Buying power Receptivity and accessibility
Needs Assessment Needs Assessment A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. 6
Probing Needs 6 Product or service Customers and their needs Competition Industry Salesperson must know everything about...
Developing and Proposing Solutions 6 Sales Proposal Sales Presentation
Powerful Presentations 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!
Handling Objections 6 Use the objection to close the sale Anticipate specific objections View objections as requests for information
Closing the Sale 6 Online www.cpsa.com Negotiate Keep an open mind Look for customer signals
Following Up 6 Employees are trained Goods or service perform as promised Ensure delivery schedules are met
Learning Objective Describe the functions of sales management 7 7
Sales Management Responsibilities 7 Supervise and evaluate sales force Compensate and motivate sales force Recruit and train sales force Determine sales force structure Define sales goals and sales process
Defining Sales Goals 7 Clear Precise Measurable Time Specific Sales Goals Should Be...
Quota Quota A statement of the individual salesperson’s sales objectives, usually based on sales volume alone but sometimes including key accounts, new accounts, repeat sales and specific products. 7
Sales Force Structure 7 Individual client or account Market or industry Marketing function Product line Geographic region
Training the Sales Force 7 Training includes... Nonselling duties Industry and customer characteristics Product knowledge Selling techniques Company policies and practice