personal selling and direct marketing


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personal selling and direct marketing

  1. 1. Personal Selling and Direct and Online Marketing: Building Direct Customer Relationships 16 &17
  2. 2. <ul><li>After studying this chapter, you should be able to: </li></ul><ul><li>Discuss the role of a company’s salespeople in creating value for customers and building customer relationships </li></ul><ul><li>Identify and explain the six major force management steps </li></ul><ul><li>Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing </li></ul>16-2
  3. 3. <ul><li>Personal Selling </li></ul><ul><li>The Personal Selling Process </li></ul>16-3
  4. 4. <ul><li>The Nature of Personal Selling </li></ul><ul><li>Examples of people who do the selling include: </li></ul><ul><li>Salespeople </li></ul><ul><li>Sales representatives </li></ul><ul><li>District managers </li></ul><ul><li>Account executives </li></ul><ul><li>Sales engineers </li></ul><ul><li>Agents </li></ul><ul><li>Account development reps </li></ul>16-4
  5. 5. <ul><li>The Nature of Personal Selling </li></ul><ul><li>Salespeople can include an order taker such as someone standing behind the counter or an order getter whose position demands more creative selling and relationship building </li></ul><ul><li>Personal selling is the interpersonal part of the promotion mix and can include: </li></ul><ul><li>Face-to-face communication </li></ul><ul><li>Telephone communication </li></ul><ul><li>Video or Web conferencing </li></ul>16-5
  6. 6. <ul><li>The Role of the Sales Force </li></ul><ul><li>Salespeople can be more effective than advertising </li></ul><ul><li>Learn about customer problems and adjust the marketing offer and presentation accordingly to meet the special needs of each customer </li></ul><ul><li>Representing the company to customers </li></ul><ul><li>Representing customers to the company </li></ul>16-7
  7. 7. <ul><li>Managing the Sales Force </li></ul><ul><li>Sales force management is the analysis, planning, implementation, and control of sales force activities and includes: </li></ul><ul><li>Designing the sales force strategy and structure </li></ul><ul><li>Recruiting </li></ul><ul><li>Selecting </li></ul><ul><li>Training </li></ul><ul><li>Compensating </li></ul><ul><li>Supervising </li></ul><ul><li>Evaluating </li></ul>16-9
  8. 8. <ul><li>Managing the Sales Force </li></ul><ul><li>Sales Force Structure </li></ul><ul><li>Territorial sales force structure </li></ul><ul><ul><li>refers to a structure where each salesperson is assigned an exclusive geographic area and sells the company’s full line of products and services to all customers in that territory </li></ul></ul><ul><li>Product sales force structure </li></ul><ul><ul><li>refers to a structure where each salesperson sells along product lines </li></ul></ul><ul><li>Customer sales force structure </li></ul><ul><ul><li>refers to a structure where each salesperson sells along customer or industry lines </li></ul></ul><ul><li>Complex sales force structure </li></ul><ul><ul><li>refers to a structure where a wide variety of products is sold to many types of customers over a broad geographic area and combines several types of sales force structures </li></ul></ul>16-10
  9. 9. <ul><li>Managing the Sales Force </li></ul><ul><li>Sales Force Size </li></ul><ul><li>Salespeople are one of the company’s most productive and expensive assets </li></ul><ul><li>Increases in sales force size can increase sales and costs </li></ul>16-15
  10. 10. <ul><li>Managing the Sales Force </li></ul><ul><li>Other Sales Force Strategy and Structure Issues </li></ul><ul><li>Outside salespeople call on customers in the field </li></ul><ul><li>Inside salespeople conduct business from their offices </li></ul><ul><li>Technical sales support people </li></ul><ul><li>Sales assistants </li></ul>16-18
  11. 11. <ul><li>Managing the Sales Force </li></ul><ul><li>Other Sales Force Strategy and Structure Issues </li></ul><ul><li>Team selling is used to service large complex accounts and can include experts from: </li></ul><ul><li>Sales, Marketing, Technical , R&D, Engineering, Operations and Finance </li></ul><ul><li>Some challenges of team selling </li></ul><ul><li>Customers used to working with one salesperson may become confused or overwhelmed </li></ul><ul><li>Salespeople used to working alone can have difficulties working with and trusting teams </li></ul><ul><li>Evaluating individual contributions can lead to compensation issues </li></ul>16-20
  12. 12. <ul><li>Recruiting and Selecting Salespeople </li></ul><ul><li>Issues in recruiting and selecting include: </li></ul><ul><li>Careful selection </li></ul><ul><li>Increases sales performance </li></ul><ul><li>Poor selection </li></ul><ul><li>Increases recruiting and training costs </li></ul><ul><ul><li>Lost sales </li></ul></ul><ul><ul><li>Disrupts customer relationships </li></ul></ul>16-22
  13. 13. <ul><li>Compensating Salespeople </li></ul><ul><li>Compensation is made up of: </li></ul><ul><li>Fixed amounts - a salary, give the salesperson some stable income </li></ul><ul><li>Variable amounts - commission or bonus based on sales performance; rewards the salesperson for greater effort and success </li></ul><ul><li>Expenses </li></ul><ul><li>Fringe benefits </li></ul>16-23
  14. 14. <ul><li>Supervising and Motivating Salespeople </li></ul><ul><li>The goal of supervision is to help salespeople work smart by doing the right things in the right ways </li></ul><ul><li>The goal of motivation is to encourage salespeople to work hard and energetically toward sales force goals </li></ul><ul><li>Sales morale and performance can be increased through: </li></ul><ul><li>Organizational climate - feelings </li></ul><ul><li>Sales quotas </li></ul><ul><li>Positive incentives – sales contest, sales meeting </li></ul>16-26
  15. 15. <ul><li>Evaluating Salespeople and Sales Force Performance </li></ul><ul><li>Sales reports </li></ul><ul><li>Call reports </li></ul><ul><li>Expense reports </li></ul>16-32
  16. 16. <ul><li>The goal of the personal selling process is to get new customers and obtain orders from them </li></ul>16-33
  17. 17. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Prospecting and qualifying </li></ul><ul><li>Pre-approach </li></ul><ul><li>Approach </li></ul><ul><li>Presentation and demonstration </li></ul><ul><li>Handling objections </li></ul><ul><li>Closing </li></ul><ul><li>Follow-up </li></ul>16-34
  18. 18. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 1 </li></ul><ul><li>Prospecting identifies qualified potential customers through referrals from: </li></ul><ul><li>Customers </li></ul><ul><li>Suppliers </li></ul><ul><li>Dealers </li></ul><ul><li>Internet </li></ul>16-35
  19. 19. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 1 </li></ul><ul><li>Qualifying is identifying good customers and screening out poor ones by looking at: </li></ul><ul><li>Financial ability </li></ul><ul><li>Volume of business </li></ul><ul><li>Needs </li></ul><ul><li>Location </li></ul><ul><li>Growth potential </li></ul>16-36
  20. 20. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 2 </li></ul><ul><li>Pre-approach is the process of learning as much as possible about a prospect, including needs, who is involved in the buying, and the characteristics and styles of the buyers </li></ul>16-37
  21. 21. <ul><li>Objectives </li></ul><ul><li>Qualify the prospect </li></ul><ul><li>Gather information </li></ul><ul><li>Make an immediate sale </li></ul><ul><li>Approaches </li></ul><ul><li>Personal visit </li></ul><ul><li>Phone call </li></ul><ul><li>Letter </li></ul>16-38 Steps in the Personal Selling Process Step 2 In the pre-approach stage, the salesperson sets call objectives and the best approach
  22. 22. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 3 </li></ul><ul><li>Approach is the process where the salesperson meets and greets the buyer and gets the relationship off to a good start, and involves the salesperson’s : </li></ul><ul><li>Appearance </li></ul><ul><li>Opening lines </li></ul><ul><li>Follow-up remarks </li></ul><ul><li>Salesperson must listen to customers </li></ul><ul><li>Presentation, need satisfaction approach </li></ul>16-39
  23. 23. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 4 </li></ul><ul><li>Handling objections is the process where salespeople resolve problems that are logical, psychological, or unspoken </li></ul><ul><li>When handling objections from buyers, salespeople should: </li></ul><ul><li>Be positive </li></ul><ul><li>Seek out hidden objections </li></ul><ul><li>Ask the buyers to clarify any objections </li></ul><ul><li>Take objections as opportunities to provide more information </li></ul><ul><li>Turn objections into reasons for buying </li></ul>16-44
  24. 24. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 5 </li></ul><ul><li>Closing is the process where salespeople should recognize signals from the buyer, including physical actions, comments, and questions to close the sale </li></ul>16-45
  25. 25. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 5 </li></ul><ul><li>Closing techniques can include: </li></ul><ul><li>Asking for the order </li></ul><ul><li>Reviewing points of agreement </li></ul><ul><li>Offering to help write up the order </li></ul><ul><li>Asking if the buyer wants this model or another one </li></ul><ul><li>Making note that the buyer will lose out if the order is not placed now </li></ul><ul><li>Offering incentives to buy, including lower price or additional quantity </li></ul>16-46
  26. 26. <ul><li>Steps in the Personal Selling Process </li></ul><ul><li>Step 6 </li></ul><ul><li>Follow up is necessary if the salesperson wants to ensure customer satisfaction and repeat business </li></ul>
  27. 27. <ul><li>Personal Selling and Customer Relationship Management </li></ul><ul><li>Personal selling is a transaction-oriented approach to close a specific sale with a specific customer, with the long-term goal to develop a mutually profitable relationship </li></ul>16-47
  28. 28. <ul><li>After studying this chapter, you should be able to: </li></ul><ul><li>Define direct marketing and discuss its benefits to customers and companies </li></ul><ul><li>Identify and discuss the major forms of direct marketing </li></ul><ul><li>Explain how companies have responded to the Internet and other powerful new technologies with online marketing strategies </li></ul><ul><li>Discuss how companies go about conducting online marketing to profitably deliver more value to customers </li></ul><ul><li>Overview the public policy and ethical issues presented by direct marketing </li></ul>17-2
  29. 29. <ul><li>The New Direct-Marketing Model </li></ul><ul><li>Growth and Benefits of Direct Marketing </li></ul><ul><li>Customer Databases and Direct Marketing </li></ul><ul><li>Forms of Direct Marketing </li></ul><ul><li>Online Marketing </li></ul><ul><li>Integrated Direct Marketing </li></ul><ul><li>Public Policy Issues in Direct Marketing </li></ul>17-3
  30. 30. <ul><li>Direct marketing consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships </li></ul><ul><li>No intermediaries </li></ul><ul><li>An element of the promotion mix </li></ul><ul><li>Fastest-growing form of marketing </li></ul>17-4
  31. 31. <ul><li>Benefits to Buyers </li></ul><ul><li>Convenience </li></ul><ul><li>Ready access to many products </li></ul><ul><li>Access to comparative information about companies, products, and competitors </li></ul><ul><li>Interactive and immediate </li></ul>17-5
  32. 32. <ul><li>Benefits to Sellers </li></ul><ul><li>Tool to build customer relationships </li></ul><ul><li>Low-cost, efficient, fast alternative to reach markets </li></ul><ul><li>Flexible </li></ul><ul><li>Access to buyers not reachable through other channels </li></ul>17-6
  33. 33. <ul><li>Customer Database </li></ul><ul><li>Customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data </li></ul><ul><li>Uses: </li></ul><ul><li>Locate good and potential customers </li></ul><ul><li>Generate sales leads </li></ul><ul><li>Learn about customers </li></ul><ul><li>Develop strong long-term relationships </li></ul>17-7
  34. 34. <ul><li>Personal selling direct marketing </li></ul><ul><li>Direct-mail direct marketing </li></ul><ul><li>Catalog direct marketing </li></ul><ul><li>Telephone marketing </li></ul><ul><li>Direct-response television marketing </li></ul><ul><li>Kiosk marketing </li></ul><ul><li>Digital direct marketing </li></ul><ul><li>Online marketing </li></ul>17-9
  35. 35. <ul><li>Direct-mail marketing involves an offer, announcement, reminder, or other item to a person at a particular address </li></ul><ul><li>Personalized </li></ul><ul><li>Easy-to-measure results </li></ul><ul><li>Costs more than mass media </li></ul><ul><li>Provides better results than mass media </li></ul>17-10
  36. 36. <ul><li>Benefits of Web-based catalogs </li></ul><ul><li>Lower cost than printed catalogs </li></ul><ul><li>Unlimited amount of merchandise </li></ul><ul><li>Real-time merchandising </li></ul><ul><li>Interactive content </li></ul><ul><li>Promotional features </li></ul><ul><li>Challenges of Web-based catalogs </li></ul><ul><li>Require marketing </li></ul><ul><li>Difficulties in attracting new customers </li></ul>17-11 Catalog direct marketing involves printed and Web-based catalogs
  37. 37. <ul><li>Telephone direct marketing involves using the telephone to sell directly to consumers and business customers </li></ul><ul><li>Outbound telephone marketing sells directly to consumers and businesses </li></ul><ul><li>Inbound telephone marketing uses toll-free numbers to receive orders from television and print ads, direct mail, and catalogs </li></ul>17-12
  38. 38. <ul><li>Benefits of telephone direct marketing </li></ul><ul><li>Purchasing convenience </li></ul><ul><li>Increased product service and information </li></ul><ul><li>Challenges of Web-based catalogs </li></ul><ul><li>Unsolicited outbound telephone marketing </li></ul><ul><li>Do-Not-Call Registry </li></ul>17-13
  39. 39. <ul><li>Direct-response television (DRTV) marketing involves 60- to 120-second advertisements that describe products or give customers a toll-free number or Web site to purchase and 30-minute infomercials such as home shopping channels </li></ul><ul><li>Less expensive than other forms of promotion </li></ul><ul><li>Easier to track results </li></ul>17-14
  40. 40. <ul><li>Kiosk marketing involves placing information and ordering machines in stores, airports, trade shows, and other locations </li></ul>17-15
  41. 41. <ul><li>Digital direct marketing technologies </li></ul><ul><li>Mobile phone marketing </li></ul><ul><li>Podcasts </li></ul><ul><li>Vodcasts </li></ul><ul><li>Interactive TV </li></ul>17-16
  42. 42. <ul><li>Mobile phone marketing includes: </li></ul><ul><li>Ring-tone giveaways </li></ul><ul><li>Mobile games </li></ul><ul><li>Ad-supported content </li></ul><ul><li>Contests and sweepstakes </li></ul>17-17
  43. 43. <ul><li>Podcasts and Vodcasts involve the downloading of audio and video files via the Internet to a handheld device such as a PDA or iPod and listening to them at the consumer’s convenience </li></ul>17-18
  44. 44. <ul><li>Interactive TV (ITV) lets viewers interact with television programming and advertising using their remote controls and provides marketers with an interactive and involving means to reach targeted audiences </li></ul>17-19
  45. 45. <ul><li>Marketing and the Internet </li></ul><ul><li>Internet is a vast public web of computer networks that connects users of all types around the world to each other and to a large information repository </li></ul>17-20
  46. 46. <ul><li>Online Marketing Domains </li></ul><ul><li>Business to consumer (B2C) </li></ul><ul><ul><li>involves selling goods and services online to final consumers </li></ul></ul><ul><li>Business to business (B2B) </li></ul><ul><ul><li>involves selling goods and services, providing information online to businesses, and building customer relationships </li></ul></ul><ul><li>Consumer to consumer (C2C) </li></ul><ul><ul><li>occurs on the Web between interested parties over a wide range of products and subjects, blogs </li></ul></ul><ul><li>Consumer to business (C2B) </li></ul><ul><ul><li>involves consumers communicating with companies to send suggestions and questions via company Web sites </li></ul></ul>17-21
  47. 47. <ul><li>Types of Online Marketers </li></ul><ul><li>Click-only marketers </li></ul><ul><ul><li>Operate only online without any brick and mortar presence </li></ul></ul><ul><ul><li>E-tailers (Amazon), search engines and portals, shopping or price comparison sites, Internet service providers (ISP) </li></ul></ul><ul><li>Click-and-mortar marketers </li></ul><ul><ul><li>Companies are brick-and-mortar companies with an online presence </li></ul></ul><ul><ul><li>Advantages of click and mortar companies include known and trusted brand names, strong financial resources, large customer bases, industry knowledge, reputation etc </li></ul></ul>17-25
  48. 48. <ul><li>Setting Up an Online Presence </li></ul><ul><li>Creating a Web site requires designing an attractive site and developing ways to get consumers to visit the site, remain on the site, and return to the site </li></ul>17-31
  49. 49. <ul><li>Setting Up an Online Presence </li></ul><ul><li>Types of sites </li></ul><ul><li>Corporate Web site </li></ul><ul><li>Marketing Web site </li></ul>17-32
  50. 50. <ul><li>Setting up an Online Presence </li></ul><ul><li>Corporate Web site is designed to build customer goodwill and to supplement other channels, rather than to sell the company’s products directly to: </li></ul><ul><li>Provide information </li></ul><ul><li>Create excitement </li></ul><ul><li>Build relationships </li></ul>17-33
  51. 51. <ul><li>Setting Up an Online Presence </li></ul><ul><li>Marketing Web site is designed to engage consumers in interaction that will move them closer to a direct purchase or other marketing outcome </li></ul>17-34
  52. 52. <ul><li>Designing Effective Web Sites </li></ul><ul><li>To attract visitors, companies must: </li></ul><ul><li>Promote in offline promotion and online links </li></ul><ul><li>Create value and excitement </li></ul><ul><li>Constantly update the site </li></ul><ul><li>Make the site useful </li></ul>17-35
  53. 53. <ul><li>Designing Effective Web Sites </li></ul><ul><li>The seven Cs of effective Web site design </li></ul><ul><li>Context - is the site’s layout </li></ul><ul><li>Content - is the site’s pictures, sound, and video </li></ul><ul><li>Community - is the site’s means to enable user-to-user communication </li></ul><ul><li>Customization - is the site’s ability to tailor itself to different users or to allow users to personalize the site </li></ul><ul><li>Communication - is the way the site enables user-to-user, user-to-site, or two-way communication </li></ul><ul><li>Connection - is the degree that the site is lined to other sites </li></ul><ul><li>Commerce - is the site’s capabilities to enable commercial transactions </li></ul>17-36
  54. 54. <ul><li>Designing Effective Web Sites </li></ul><ul><li>The eighth C </li></ul><ul><li>To keep customers coming back, the site needs to constantly change </li></ul>17-39
  55. 55. <ul><li>Placing Ads and Promotions Online </li></ul><ul><li>Forms of online advertising </li></ul><ul><li>Display ads </li></ul><ul><li>Search-related ads </li></ul><ul><li>Online classifieds </li></ul>17-40
  56. 56. <ul><li>Placing Ads and Promotions Online </li></ul><ul><li>Display ads </li></ul><ul><li>Banners are banner-shaped ads found on a Web site </li></ul><ul><li>Interstitials are ads that appear between screen changes </li></ul><ul><li>Pop-ups are ads that suddenly appear in a new window in front of the window being viewed </li></ul><ul><li>Rich media ads incorporate animation, video, sound, and interactivity </li></ul>17-41
  57. 57. <ul><li>Placing Ads and Promotions Online </li></ul><ul><li>Search-related ads are ads in which text-based ads and links appear alongside search engine results on sites such as Google and Yahoo! and are effective in linking consumers to other forms of online promotion </li></ul>17-42
  58. 58. <ul><li>Placing Ads and Promotions Online </li></ul><ul><li>Other forms of online promotion include </li></ul><ul><li>Content sponsorships provide companies with name exposure through the sponsorship of special content such as news or financial information </li></ul><ul><li>Alliances and affiliate programs are relationships where online companies promote each other </li></ul><ul><li>Viral marketing is the Internet version of word-of-mouth marketing and involves the creation of a Web site, an e-mail message, or another marketing event that customers pass along to friends </li></ul>17-44
  59. 59. <ul><li>The Future of Online Advertising </li></ul><ul><li>Online advertising provides a useful purpose as a supplement to other marketing efforts and is playing an increasingly important role in the marketing mix </li></ul>17-45
  60. 60. <ul><li>Creating or Participating in Web Communities </li></ul><ul><li>Web communities allow members to congregate online and exchange views on issues of common interest </li></ul><ul><li> </li></ul><ul><li> </li></ul>17-46
  61. 61. <ul><li>Using E-mail </li></ul><ul><li>Marketers are developing enriched messages that include animation, interactivity, and personal messages with streaming audio and video to compete with the cluttered e-mail environment </li></ul>17-47
  62. 62. <ul><li>Integrated direct marketing involves the use of carefully coordinated multiple-media, multiple-stage campaigns </li></ul>17-48
  63. 63. <ul><li>Customer irritation, unfairness, deception, and fraud </li></ul><ul><li>Privacy </li></ul><ul><li>Security </li></ul>17-49
  64. 64. <ul><li>Irritation, Unfairness, Deception, and Fraud </li></ul><ul><li>Irritation includes annoying and offending customers </li></ul><ul><li>Unfairness includes taking unfair advantage of impulsive or less-sophisticated buyers </li></ul><ul><li>Deception includes “heat merchants” who design mailers and write copy designed to mislead consumers </li></ul><ul><li>Internet fraud includes identity theft and financial scams </li></ul>17-50