1. Personal Selling and Sales Promotion
Chapter 17
Personal Selling and Sales Promotion

2. Chapter Objectives
Outline the marketplace conditions that make personal selling a primary component of a firm’s promotional mix.
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.
Explain the role of ethical behavior in personal selling.
Describe the role of sales promotion in the promotional mix.
Identify the different types of consumer-oriented and trade-oriented sales promotions.

3. The Evolution of Personal Selling
Personal selling: interpersonal influence process involving a seller’s promotional presentation conducted on a person-to-person basis with the buyer
“A salesman is someone who sells goods that won’t come back to customers who will.” (Anonymous)

4. Has been a standard business activity for thousands of years
Early peddlers sold goods they manufactured or imported viewed selling as a secondary activity
In 18th century America, peddlers sold directly to farmers and settlers in the West
In the 19th century, drummers sold to both consumers and intermediaries sometimes using questionable practices and built negative stereotypes which persist today

5. Today’s salesperson is usually a highly-trained professional
Sales professionals take a customer-oriented approach employing truthful, nonmanipulative tactics in order to satisfy the long-term needs of both the customer and the selling firm
Today’s professional salespeople are problem solvers who seek to develop long-term relationships with customers

6. Factor affecting the importance of personal selling in the promotional mix
Variable
Conditions That Favor Personal Selling
Conditions That Favor Advertising
Consumer
Product
Geographically concentrated
Relatively low numbers
Expensive
Technically complex
Custom made
Special handling requirements Transactions frequently involve trade-ins
Geographically dispersed
Relatively high numbers
Inexpensive
Simple to understand
Standardized No special handling requirements Transactions seldom involve trade-ins
Price
Relatively high
Relatively low
Channels
Relatively short
Relatively long

7. NetJets Executive Jet
A Product Requiring Personal Selling

8. The Four Sales Channels
Personal selling occurs through several types of communication channels including these four:
Over-the-Counter
Field Selling
Telemarketing
Inside Selling

9. Over-the-Counter: personal selling conducted in retail and some wholesale locations in which customers come to the seller’ place of business
True Value Salespeople Engage in Over-the-Counter Selling

10. Field selling: sales presentations made at prospective customers’ homes or businesses on a face-to-face basis
Better Homes and Gardens Real Estate Service: A Type of Field Sales

11. Cost of a Sales Call by Industry

12. 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
The Telemarketing Company
Telemarketing: A Popular Selling Technique

13. Inside Selling: performing the functions of field selling but avoiding travel-related expenses by relying on phone, mail, and electronic commerce to provide sales and product service for customers on a continuing basis

14. Trends in Personal Selling
Relationship selling: regular contacts over an extended period to establish a sustained seller-buyer relationship
Consultative selling: meeting customer needs by listing to them, understanding -- and caring about -- their problems, paying attention to details, and following through after the sale
Cross-selling: offer multiple goods and services to the same customer

15. Buyers prefer to do business with salespeople who:
Orchestrate events and bring to bear whatever resources are necessary to satisfy the customer
Provide counseling to the customer based on in-depth knowledge of the product, the market, and the customer’s needs
Solve problems extremely proficiently to ensure satisfactory customer service over extended time periods
Demonstrate high ethical standards and communicate honestly at all times
Willingly advocate the customer’s cause within the selling organization
Create imaginative arrangements to meet buyers’ needs
Arrive well-prepared for sales calls

16. Team Selling: combination of salespeople with specialists from other functional areas to promote a product
Virtual sales team
Team Selling at CDW Computer Centers

17. Sales Force Automation (SFA): applications of computer and other technologies to make the sales function more efficient and competitive
Benefits include improved effectiveness due to improved access to information, lower costs, improved product launches, and attentive customer service

18. Sales Tasks Three basic sales tasks can be identified:
Order Processing
Creative Selling
Missionary sales

19. 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 involving 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 sales: indirect type of selling in which specialized salespeople promote the firm’s goodwill among indirect customers, often by assisting customers in product use

20. The Sales Process
The AIDA Concept and the Personal Selling Process

21. Prospecting: personal-selling function of identifying potential customers
Qualifying: determining that a prospect has the needs, income, and purchase authority necessary for being a potential customer
Oreck
Using advertising to identify prospective customers

22. Approach: salesperson’s initial contact with a prospective customer
Pre-call Planning: use of information collected during the prospecting and qualifying stages of the sales process and during previous contacts with the prospect to tailor the approach and presentation to match the customer’s needs

23. Presentation: describing a product’s major features and relating them to a customer’s problems or needs
ExpoStar Displays & Graphics
Support Tools Increase the Effectiveness of Presentations

24. Demonstration allows the customer to experience a good or service
Even ads as well done as this Oldsmobile ad, can not substitute for an effective demonstration ride in a new automobile

25. Handling Objections: expressions of sales resistance by the prospect
Example: A customer’s “I don't like the color” is probably their way of asking what other colors are available
Objections are reasonable and professional salespeople are prepared to handle them appropriately

26. Closing: stages of personal selling where the salesperson asks the customer to make a purchase decision
Follow-up: post-sales activities that often determine whether an individual who has made a recent purchase will become a repeat customer
Helps build mutually beneficial long-term relationships

27. Managing the Sales Effort
Sales management: Activities of planning, organizing, staffing, motivating compensating, and evaluating and controlling a sales force to ensure its effectiveness

28. How salespeople and sales managers spend their time

29. Recruitment and Selection
One of the sales manager’s greatest challenges
Careful selection is important for two reasons:
Substantial costs involved
Mistakes are costly and detrimental to customer relations and sales-force performance

30. Training
Principal methods used are on-the-job training, individual instruction, in-house classes, and external seminars
Popular training techniques include instructional videotapes/DVDs, lectures, roll-playing exercises, slides, films, and interactive computer programs

31. Organization
General organizational alignment may be based on geography, products, types of customers, or some combination of these factors
National accounts organization: organizational arrangement that assigns sales teams to a firm’s largest accounts

32. Basic approaches to organizing the sales force

33. Supervision
Span of control: the number of sales representatives who report to the first level of sales management
Optimal span of control is affected by such factors as complexity work activities being performed, ability of the individual sales manager, degree of interdependence among individual salespersons, and the extent of training each salesperson receives

34. Motivation
Efforts to motivate salespeople usually take the form of the briefings, information sharing, and both psychological and financial encouragement
Psychological encouragement includes appeals to emotional needs, recognition, and peer acceptance
Financial encouragement includes monetary rewards and fringe benefits such as club memberships and sales contest awards

35. Compensation
Commission: incentive compensation directly related to the sales or profits achieved by a salesperson
Salary: fixed compensation payments made periodically to an employee

36. Figure 17.11
Average Annual Pay for Sales Representatives

37. Evaluation and Control
Sales quotas: level of expected sales for territory, product, customer, or salesperson against which actual results are compared
Other measures such as customer satisfaction, profit contribution, share of product-category sales, and customer retention
Another way to categorize a salesperson’s strong points:
Task, or technical ability
Process, or sequence of work flow
Goal, or end results (output) of sales performance

38. Ethical Issues in Sales
Promotional activities, including personal sales, raise many ethical questions
Sales managers can foster a corporate culture for an ethical sales environment:
Employees understand what is expected of them
Open communication exists between employees and managers
Management leads by example
Employees are proud of and loyal to their organization

39. Sales Promotion
Marketing activities other than personal selling, advertising, and publicity that stimulate consumer purchasing and dealer effectiveness; includes displays, trade shows and expositions, demonstrations and various nonrecurrent selling efforts
Consumer-Oriented Promotions
Trade-Oriented Promotions

40. Figure 17.12
Current Spending by Companies for Different Sales Promotion

41. Table 17.3
Seven Most Frequently Used Consumer Promotion Techniques

42. Consumer-Oriented Promotions
Coupons and Refunds
Coupons offer discounts on the purchase price. Nearly $5 billion redeemed annually
Free-standing inserts (FSIs) in Sunday newspapers account for about 75 percent of all coupons
Refunds offer cash back to consumers with proof of purchasing one or more products

43. Taco Bell
Advertisement Uses Coupons in Free Standing Insert to Promote New Food Line

44. Samples, Bonus Packs, and Premiums
Sampling refers to the free distribution of a product in an attempt to obtain future sales. “Try it, you'll like it.”
A bonus pack is a specially packaged item that gives the purchaser a larger quantity at the regular price.
Premiums are items given free or at a reduced cost with the purchases of other products

45. Contests and Sweepstakes
Contests require entrants to solve problems or write essays -- they may also require proofs of purchase
Sweepstakes select winners by chance -- no product purchase is necessary

46. Specialty Advertising [“Trinkets and Trash”]
Sales promotion technique that places the advertiser's name, address, and advertising message on useful articles that are then distributed to target markets
More than $8 billion worth of specialty advertising items are given out annually

47. Trade-Oriented Promotions Sales promotion that appeals to marketing intermediaries rather than to consumers
Trade allowances: deals offered to wholesalers and retailers for purchasing or promoting specific products
Point-of-purchase (POP) advertising: a display or other promotion located near the site of the actual buying decision

48. Trade shows: vendors’ displays and the demonstrations at sites often organized by industry trade associations, perhaps as part of these association’s annual meetings or conventions.
Dealer incentives, contest, and training programs are run by the manufacturers to induce retailers and their salespeople to increase sales and to promote product
Push money is an incentive that gives retail salespeople cash rewards for every unit of a product they sell

49. Measuring Sales Promotion Effectiveness
Since many sales promotions result in direct consumer responses, marketers can relatively easily track their effectiveness
As with other methods, marketers must weigh the cost against the benefits

50. Ethics in Sales Promotion
Sales promotions provide opportunities for unscrupulous companies to take advantage of consumers
Trade allowances, particularly slotting allowances, have been criticized for years as a form of bribery

51. End of Chapter Seventeen