2. 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
3. LO 5 Discuss the key differences between relationship selling and traditional selling LO 6 List the steps in the selling process Learning Outcomes
5. 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.
9. Tools for Consumer Sales Promotion Discuss the most common forms of consumer sales promotion LO 2
10. Tools for Consumer Sales Promotion LO 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion
11. 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.
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13. 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.
14. 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.
15. 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.
16. Methods of Sampling LO 2 Direct mail Door-to-door delivery Packaging with another product Retail store demonstration
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20. Tools for Trade Sales Promotion List the most common forms of trade sales promotion LO 3
21. Trade Sales Promotion LO 3 Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows
22. Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. LO 3
23. 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
27. 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.
30. 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.
31. 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
32. 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
33. Steps in the Selling Process List the steps in the selling process LO 6
34. Steps in the Selling Process LO 6 Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up
35. 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
36. Generating Leads LO 6 Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Networking Company Records
37. 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.
38. Qualifying Leads LO 6 Receptivity and accessibility Buying power Recognized need
39. 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.
40. The Consultative Salesperson LO 6 Product or service Customers Competition Industry Salesperson must know everything about...
41. Developing and Proposing Solutions Sales Proposal Sales Presentation LO 6
42. 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!
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44. Closing the Sale LO 6 Negotiate Keep an open mind Look for customer signals Tailor to each market
45. The Impact of Technology on Personal Selling LO 6 Cell phones Laptops Pagers E-Mail Electronic organizers Internet
46. 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
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Editor's Notes
Chapter 18 Sales Promotion and Personal Selling Marketing cannot be accomplished in isolation. Even though the marketing function resides with marketers, the concept of marketing must permeate the entire organization.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling Notes: In addition to advertising, public relations, and personal selling, sales promotion is utilized to increase the effectiveness of other promotional efforts. Sales promotion provides an incentive for consumers to purchase a good or service immediately, either by lowering the price or by adding value.
Chapter 18 Sales Promotion and Personal Selling Notes: 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. For example, a national TV ad often costs a total of over $5 million, and it is difficult to determine how many people purchase a product as a result of seeing the ad. With sales promotion, it is easy to measure the number of coupons redeemed or the number of contest entries.
Chapter 18 Sales Promotion and Personal Selling Notes: The objectives of a promotion depend on the behavior of target consumers, as shown in Exhibit 16.1.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling 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 18 Sales Promotion and Personal Selling Notes: Coupons encourage product trial and repurchase, and are likely to increase the amount of a product purchased. Coupon distribution has been growing, with almost 350 billion coupons distributed to U.S. households annually. This does not include Internet and in-store coupons. Increased competition and the introduction of 1200 new products each year have contributed to this trend. Coupons promoting new-product use are likely to stimulate purchases. Even though redemption rates are low for coupons, 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. In-store coupons are more likely to influence buying decisions and are redeemed 15 times more frequently than newspaper coupons. 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. 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, computer manufacturers, cell phones, etc.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling Notes: Loyalty marketing programs reward consumers for making multiple purchases. These programs enable companies to invest sales promotion dollars in activities designed to capture greater profits from customers already loyal to the product/company. The objective of loyalty marketing is to build long-term, mutually-beneficial relationships. Studies show that frequent shopper programs require something more than just discounts to build loyalty. Furthermore, customers are “loyal” to more than one store, and participate in multiple programs. Discussion/Team Activity: Identify several companies that offer these programs. Discuss the benefits offered by some of the more popular loyalty marketing and frequent buyer programs.
Chapter 18 Sales Promotion and Personal Selling Online Sweepstakes Online How do online sweepstakes sites compare to the kind of sweepstakes entries you receive in the mail? Visit the popular sweepstakes site www.online-sweepstakes.com/. Do any of the contests interest you? Do you think the pitches online are ethical? Why or why not? Notes: Contests and sweepstakes are designed to create interest in a good or service, often to encourage brand switching. They are not effective tools for generating long-term sales. Furthermore, the award must appeal to the target market. Offering several smaller prizes instead of one huge prize will increase the effectiveness of a promotion.
Chapter 18 Sales Promotion and Personal Selling Notes: Sampling allows the risk-free trial of a product. Sampling can increase retail sales by as much as 40 percent. As a result, sampling has increased by more than 20 percent annually in recent years. Sampling at special events is popular, effective, and a high profile method that permits marketers to piggyback onto fun-based consumer activities.
Chapter 18 Sales Promotion and Personal Selling 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? What methods are most effective in reaching college students?
Chapter 18 Sales Promotion and Personal Selling Notes: Point-of-purchase promotions (P-O-Ps) 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. P-O-Ps offer manufacturers a captive audience in retail stores, and can boost sales by as much as 65 percent because between 70 and 80 percent of all retail purchase decisions are made in-store.
Chapter 18 Sales Promotion and Personal Selling Notes: Online 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. Internet retailers are eager to boost traffic and give away free services or equipment to lure consumers not only to the Web site but to the Internet in general. Online versions of loyalty programs are gaining popularity, and the most successful are those run by hotel and airline companies.
Chapter 18 Sales Promotion and Personal Selling Microsoft designed this Halo 3 media campaign to “make casual fans interested and core fans rabid” Phase 1 – Dec 2006, 7.9 million households see “Starry Night” ad on Monday night football where the main character of the game, Master Chief, jumps into the war to “Finish the Fight” – an impressively visual ad (3 million viewers on YouTube, so far.) Phase 2 – May 2007, over 300,000 people entered an online contest to win a multi-player beta version of game; 12 million hours of online play while the beta version was available online Phase 3 – Viral marketing included a fake ad in Best Buy circulars for a scavenger hunt to get the “back story” on Halo 3. Phase 4 – Promotional Partnership with Pontiac, with a $5-million media commitment, Mountain Dew with a Halo 3 “Game Fuel” flavor, and Burger King, Game Stop, 7-Eleven, Samsung, and Comcast, as well as sponsoring Linkin Park’s concert tour. Phase 5 – “Believe” campaign, where Microsoft began re-running the Starry Night ad and launched a media frenzy leading up to a midnight madness event where 10,000 stores opened at midnight to give fans a chance to be the first to purchase the game.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling Notes: While consumer promotions pull a product through the channel by creating demand , trade promotions push a product through the distribution channel in an attempt to influence supply . Consumer promotion tools are used when selling to members of the distribution channel, as well as tools that are unique to manufacturers and intermediaries, shown on this slide.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling Notes: Trade promotions are popular among manufacturers for many reasons, as shown on this slide.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling 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. Many business or marketing majors, as well as non-business majors, will start their professional careers in sales.
Chapter 18 Sales Promotion and Personal Selling Notes: Exhibit 16.2 compares the effectiveness of personal selling and advertising/sales promotion based on certain customer and product characteristics. Personal selling is more important as the number of potential customers decrease, as the complexity of the product increases, and as the value of the product grows.
Chapter 18 Sales Promotion and Personal Selling Notes: Personal selling offers several advantages over other forms of promotion, as shown on this slide.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling 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 consumer/buyers. It’s not about a one-time sale and then moving to the next prospect. Salespeople become consultants, partners, and problem solvers as they strive to develop trust and long-term relationships.
Chapter 18 Sales Promotion and Personal Selling Notes: The end result of relationship selling tends to be loyal customers who purchase from the company time after time. Relationship selling promotes a win-win situation for both buyer and seller. Exhibit 16.3 lists the key differences between traditional personal selling and relationship selling.
Chapter 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling Notes: Completing a sale requires several steps. The sales process, or sales cycle, is the set of steps a salesperson goes through to sell a product or service.
Chapter 18 Sales Promotion and Personal Selling 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 discussed in Chapter 14.
Chapter 18 Sales Promotion and Personal Selling Notes: Although traditional selling and relationship selling follow the same basic steps, the difference between the two selling methods is the relative importance placed on key steps, as shown in Exhibit 16.4. 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 18 Sales Promotion and Personal Selling Online Linkedin Ryze Online networking groups are growing in popularity. Check out the sites for Linkedin and Ryze to read more about how these groups work. Do they sound like something you would join? How could they benefit your career? Notes: Lead generation, or prospecting, is the identification of those most likely to buy the seller’s offerings. Sales leads can be secured in several different ways, such as those sources shown on this slide.
Chapter 18 Sales Promotion and Personal Selling Stephan Schiffman, author of the book, Cold Calling Techniques: (That Really Work!), offers cold-calling professionals these six tips for success: Use a mirror Use a timer Practice! Keep a record of your calls Tape-record your calls Stand up! Stephan believes that sixty-five percent of success in sales is in finding people and telling them what you do. He uses this formula as a reminder: A = P = S A ppointments = P rospects = S ales Source: Stephan Schiffman, Cold Calling Techniques , Adams Media Corporation; 20 Anniversary edition (August 7, 2007)
Chapter 18 Sales Promotion and Personal Selling 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 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling Online Hoover’s Online Dun & Bradstreet Pick a company and try to find out as much information as you can about it using Hoover’s Online and Dun & Bradstreet. Which database gave you the best and most information about your “lead”?
Chapter 18 Sales Promotion and Personal Selling 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 typically presented as a sales proposal during a formal sales presentation. 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 18 Sales Promotion and Personal Selling
Chapter 18 Sales Promotion and Personal Selling 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 18 Sales Promotion and Personal Selling 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. In foreign markets, the sales efforts should be tailored to the appropriate way of doing business for that culture. 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 18 Sales Promotion and Personal Selling 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 provides salespeople with vast resources of information on clients, competition, and the industry. The Internet cost-effectively processes orders and services requests, and is freeing sales representatives from tedious chores to allow more time to focus on client needs.