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Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
1
Designed by Eric Brengle B-books, Ltd.
CHAPTER
16
Sales Promotion and Personal Selling
Prepared byDeborah Baker
Texas Christian University
Introduction to MarketingMcDaniel, Lamb, Hair
9
2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
Learning OutcomesDefine and state the objectives of sales promotion
Discuss the most common forms of consumer sales promotion
List the most common forms of trade sales promotion
Describe personal selling
LOI
LO2
LO3
LO4
3Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
Learning Outcomes
Discuss the key differences between relationship selling and traditional selling
List the steps in the selling process
Describe the functions of sales management
LO5
LO6
LO7
4Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Define and state the objectives of sales promotion
Sales PromotionLOI
5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Sales Promotion
SalesPromotion
LOI
Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.
6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LOI
Advertising
Sales Promotion
Reason to buy
Sales Promotion Incentive to buy
7Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LOI Sales Promotion
ConsumerSales
Promotion
Trade Sales
Promotion
Consumer market
Marketing channel
Drive immediate purchaseInfluence behavior Goal
8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LOI
Type of BuyerType of Buyer
Loyal Customers
Competitor’sCustomers
Brand Switchers
Price Buyers
Desired ResultsDesired Results
•Reinforce behavior• Increase consumption•Change purchase timing
•Break loyalty•Persuade to switch
•Persuade to buy your brand more often
•Appeal with low prices
•Supply added value
Sales PromotionSales PromotionExamples Examples
•Loyalty marketing•Bonus packs
•Sampling•Sweepstakes, contests, premiums
•Price-lowering promotion
•Trade deals
•Coupons, price-offpackages, refunds
•Trade deals
Objectives of Sales Promotion
9Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
REVIEW LEARNING OUTCOMEThe Objectives of Sales PromotionLOI
10Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Discuss the most common forms of consumer
sales promotion
Tools for Consumer Sales PromotionLO2
11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16LO2
Coupons and Rebates
Premiums
Loyalty Marketing Programs
Contests & Sweepstakes
Sampling
Point-of-Purchase Promotion
Tools for Consumer Sales Promotion
12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16LO2
Tools for Consumer Sales Promotion
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.
13Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO2
LoyaltyMarketingProgram
A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers.
FrequentBuyer
Program
A loyalty program in which loyal consumers are rewarded for making multiple purchases.
Tools for Consumer Sales Promotion
14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO2
Contests Promotions that require skill or ability to compete for prizes.
SweepstakesPromotions that depend on chance or luck, with free participation.
Tools for Consumer Sales Promotion
Online
http://www.sweepstakesonline.com
15Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16 LO2
Tools for Consumer Sales Promotion
SamplingA promotional program that allows the consumer the opportunity to try a product or service for free.
16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LO2
Direct mail
Door-to-door delivery
Packaging with another product
Retail store demonstration
Methods of Sampling
17Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16 LO2
Build traffic
Advertise the product
Induce impulse buying
Point-of-Purchase Promotion
18Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Online Sales PromotionLO2
Free merchandise
Sweepstakes
Free shipping with purchases
Coupons
Effective Types of Online Sales Promotion
19Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
REVIEW LEARNING OUTCOMEConsumer Sales PromotionLO2
Coupons and rebates
Premiums
Loyalty marketing programs
Contests
Sampling
P-O-P
Online
20Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
List the most common forms of trade sales promotion
Tools for Trade Sales PromotionLO3
21Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Trade Sales PromotionLO3
Trade Allowances
Push Money
Training
Free Merchandise
Store Demonstration
Conventions & Trade Shows
22Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO3
TradeAllowance
A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.
Trade Allowance
23Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO3
Push MoneyMoney offered to channel intermediaries to encourage them to “push” products--that is, to encourage other members of the channel to sell the products.
Push Money
24Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16 LO3
Benefits of Trade Promotions
Help manufacturers gain new distribution
Obtain wholesaler and retailer support forconsumer sales promotions
Build or reduce dealer inventories
Improve trade relations
25Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
REVIEW LEARNING OUTCOMEForms of Trade Sales PromotionLO3
26Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Describe personal selling
Personal SellingLO4
27Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LO4 Personal SellingPersonal Selling
is more important if...
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.
Advertising & Sales Promotion are more important if...
28Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
REVIEW LEARNING OUTCOMEPersonal SellingLO4
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
PersonalSelling
Advantages
29Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Discuss the key differences between relationship selling
and traditional selling
Relationship SellingLO5
30Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO5
Relationship(Consultative)
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.
31Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Traditional Selling and Relationship SellingLO5
Sell advice, assistance, counsel Sell products
TraditionalTraditionalPersonal SellingPersonal Selling
Focus on closing sales
Limited sales planning
Discuss productAssess “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 environmentConduct discovery in scope of operationsTeam approachProfit impact and strategic benefit focusLong-term sales follow-up
Relationship SellingRelationship Selling
32Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
REVIEW LEARNING OUTCOME Relationship Selling vs. Traditional SellingLO5
InitialSales
RepeatSales
SuccessiveSales
Traditional Sales
Relationship Sales
SalesIncreasesResultFromCreatingValue
33Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
List the steps in the selling process
Steps in the Selling ProcessLO6
34Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16 LO6
Generate Leads
Qualify Leads
Probe Customer Needs
Develop Solutions
Handle Objections
Close the Sale
Follow Up
Steps in the Selling Process
35Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LO6
Key Selling StepsTraditional
SellingRelationship
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
Time Spent in Key Steps of Selling Process
36Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LO6
Advertising Publicity Direct Mail/Telemarketing
Cold Calling Internet Web Site Referrals
Trade Shows/ConventionsNetworking Company
Records
Generating Leads
Online
http://www.linkedin.comhttp://www.ryze.com
37Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Cold Calling
LO6 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.
38Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Recognized need
Buying power
Receptivity andaccessibility
LO6 Qualifying Leads
39Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
NeedsAssessment
LO6 Needs Assessment
A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them.
40Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LO6
Product or service
Customers
Competition
Industry
Salesperson must knoweverything
about...
The Consultative Salesperson
Online
http://www.hoovers.comhttp://www.dnb.com
41Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16 LO6
Developing and Proposing Solutions
Sales Proposal
Sales Presentation
42Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO6
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!
Powerful Presentations
43Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16LO6
View objections as requests for information Anticipate specific objections Investigate the objection with the customer Be aware of competitors’ products Stay calm Use the objection to close the sale
Handling Objections
44Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO6 Closing the Sale
Negotiate
Keep an open mind
Look for customer signals
Tailor to each market
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
Biz Flix
Fam
ily M
an
45
LO6
46Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
REVIEW LEARNING OUTCOMESteps in the Selling ProcessLO6
47Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Describe the functions of sales management
Sales ManagementLO7
48Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO7
Evaluate sales force
Compensate and motivate sales force
Recruit and train sales force
Determine sales force structure
Define sales goals and sales process
Sales Management Responsibilities
49Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LO7
Clear
Precise
Measurable
Time Specific
Defining Sales Goals
Sales VolumeMarket ShareProfit Level
50Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Quota
LO7
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.
Quota
51Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Sales Force StructureLO7
Individual client or account
Market or industry
Marketing function
Product line
Geographic region
52Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Traits of Top Sales PerformersLO7
Strong, healthy self esteem Can bounce back from rejection Sense of urgency and competitiveness Persuasive Assertive Sociable Willing to take risks Understand complex concepts Creative in developing solutions Possess empathy
53Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
LO7
Training includes...
Nonselling duties
Industry and customer characteristics
Product knowledge
Selling techniques
Company policies and practice
Training the Sales Force
54Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO7 Compensating the Sales Force
Commission
Salary
CombinationPlans
55Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
LO7
StraightCommission
The salesperson is paid some percentage when a sale is made.
StraightSalary
The salesperson receives a salary regardless of sales productivity.
Compensating the Sales Force
56Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Motivating the Sales ForceLO7
Ceremonies Plaques Vacations Merchandise Pay raises Cash bonuses Stock options Tuition assistance Product discounts
Rewards and incentives include:
57Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Key Personality Traits of Sales LeadersLO7
Effective Sales Leaders are…
Are assertive
Possess ego drive
Possess ego strength
Take risks
Are innovative
Have a sense of urgency
Are empathetic
58Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Evaluating the Sales ForceLO7
Contribution to profit
Calls per order
Sales or profits per call
Call percentage achieving goals
Sales volume
59Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 16
Women in Car SalesLO7
SOURCE: Jennifer Saranow, “Car Dealers Recruit Saleswomen at the Mall,”
Wall Street Journal, April 12, 2006, B1.
For its Florida and Texas dealerships, Asbury Automotive Group is actively recruiting saleswomen– at shopping malls.
11% of the automotive sales force is female. In contrast, 50% of retail-industry employees are women.
Women influence 81% of new auto purchases, and women may even be better at selling cars than men.
Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16 60
LO7
The Impact of Technology on Personal Selling
Cell phones
Laptops
Pagers
Electronic organizers
Internet
61Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 16
REVIEW LEARNING OUTCOME Functions of Sales ManagementLO7