1. Chapter 17 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. PERSONAL SELLING AND SALES PROMOTION 1

2. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Objectives 1. Describe the role of today’s salesperson. 2. Describe the four sales channels. 3. Describe the major trends in personal selling. 4. Identify and briefly describe the three basic sales tasks. 2

3. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Objectives 5. Outline the seven steps in the sales process. 6. Identify the seven basic functions of a sales manager. 7. Explain the role of ethical behavior in personal selling. 8. Describe the role of sales promotion in the promotional mix, and identify the different types of sales promotions. 3

4. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Introduction ▮ Personal selling - Interpersonal influence process involving a seller’s promotional presentation conducted on a person-to- person basis with the buyer 4

5. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Table 17.1 - Factors Affecting the Importance of Personal Selling in the Promotional Mix 5

6. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion The Evolution of Personal Selling ▮ Selling has been a standard business activity for thousands of years ▮ Salespeople are problem solvers ▮ Personal selling is a vital, vibrant, dynamic process 6

7. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion The Evolution of Personal Selling ▮ Salespeople must be able to: Focus on a customer’s situation and needs and create solutions that meet those needs Follow through and stay in touch before, during, and after a sale Know the industry and have a firm grasp of their firm’s and their competitors’ abilities Work hard to exceed their customers’ expectations 7

8. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Over-the-Counter Selling ▮ Personal selling in which customers come to the seller’s place of business 8

9. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Field Selling ▮ Sales presentations made at prospective customers’ locations on a face-to-face basis ▮ Expensive form of selling, particularly because of travel expenses ▮ In routine cases, the salesperson processes regular customers’ orders ▮ In more complex cases, the salesperson prepares for weeks, makes presentations, and follows up 9

10. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Field Selling ▮ Network marketing - Personal selling that relies on lists of family members and friends of the salesperson, who organizes a gathering of potential customers for a demonstration of products ▮ Examples: Avon, Pampered Chef, TupperwareAvonPampered Chef Tupperware 10

11. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Telemarketing ▮ Selling process conducted by phone ▮ Serves two purposes Sales Service ▮ Serves two markets B2B B2C 11

12. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Telemarketing ▮ Outbound telemarketing - Sales method in which sales personnel place phone calls to prospects and try to conclude the sale over the phone ▮ Technologies used Predictive dialers Autodialing Random-digit dialing 12

13. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Telemarketing ▮ Drawback Most consumers dislike the practice and have signed up for the national Do Not Call Registry ▮ Some firms still use telemarketing because: The average call cost is low Firms point to a significant rate of success 13

14. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Telemarketing ▮ Inbound telemarketing - Sales method in which prospects call a seller to obtain information, make reservations, and purchase goods and services 14

15. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Inside Selling ▮ Selling by phone, mail, and electronic commerce ▮ Turns opportunities into actual sales ▮ Support technicians and purchasers with current solutions 15

16. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Figure 17.1 - Alternative Sales Channels for Serving Customers 16

17. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Relationship Selling ▮ Regular contacts between sales representatives and customers over an extended period to establish a sustained buyer-seller relationship ▮ Important to both, B2B and B2C sales 17

18. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Table 17.2 - What Buyers Expect from Salespeople 18

19. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Consultative Selling ▮ Meeting customer needs by listening to them, understanding their problems, paying attention to details, and following through after the sale ▮ Cross-selling - Offering multiple goods or services to the same customer 19

20. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Team Selling ▮ Several sales associates are employed to help the lead sales representative reach all those who influence the purchase decision ▮ Customers often feel better served by a team approach ▮ Relationships form between companies rather than between individuals 20

21. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Team Selling ▮ Virtual sales teams - A network of strategic partners, suppliers, and others who are qualified and willing to recommend a firm’s goods or services 21

22. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Order Processing ▮ Selling that involves identifying customer needs, pointing them out to customers, and completing orders Identify customer needs Point out the need to the customer Complete (write up) the order 22

23. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Creative Selling ▮ Salespeople use well-planned strategies to seek new customers by proposing innovative solutions to customers’ needs ▮ Used to develop new business with either new customers or new products ▮ Generates “buzz” for a product 23

24. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Missionary Selling ▮ Promoting goodwill for the firm by educating customers and providing technical or operational assistance ▮ Sales incentives - Programs that reward salespeople for superior performance Trips, gas cards, or free product upgrades ▮ May involve both field selling and telemarketing 24

25. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Figure 17.2 - The AIDA Concept and the Personal Selling Process 25

26. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Prospecting and Qualifying ▮ Prospecting - Personal selling function of identifying potential customers ▮ Qualifying - Determining a prospect’s needs, income, and purchase authority as a potential customer 26

27. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Approach ▮ Initial contact with prospective customer ▮ Precall planning 27

28. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Presentation ▮ Describing a product’s major features and relating them to a customer’s problems or needs ▮ Technology must be used efficiently to be effective ▮ Cold calling - Contacting a prospect without a prior appointment 28

29. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Demonstration ▮ Customer has the opportunity to try out how a good works before purchase ▮ Multimedia interactive demonstrations are now common ▮ Example: Demonstration videos Black & Decker posts on its websiteDemonstration videos 29

30. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Handling Objections ▮ Objections - Expressions of resistance by the prospect ▮ May take the form of stalling or indecisiveness ▮ Use objections as an opportunity to reassure the buyers 30

31. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Closing ▮ the salesperson asks the customer to make a purchase decision ▮ Possible strategies Addressing the prospect’s major concern about a purchase and then offering a convincing argument Posing choices for the prospect in which either alternative represents a sale 31

32. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Closing Advising the buyer that a product is about to be discontinued or will go up in price soon Remaining silent so the buyer can make a decision on his or her own Offering an extra inducement designed to motivate a favorable buyer response 32

33. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Follow-Up ▮ Postsale activities that often determine whether an: Individual who has made a recent purchase will become a repeat customer 33

34. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Managing the Sales Effort ▮ Sales managers handle the overall direction and control of the personal selling effort ▮ Requires an appropriate mix of sales and management skills 34

35. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Recruitment and Selection ▮ Successful sales careers offer: Opportunity for advancement Potential for high earnings Personal satisfaction Job security Independence and variety 35

36. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Training ▮ Primary methods are on-the-job training, individual instruction, how-to classes, and external seminars ▮ Use videos, simulations, and executive development programs ▮ Ongoing training is important for experienced salespeople 36

37. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Organization ▮ May be based on geography, products, types of customers, or some combination of these factors ▮ National accounts organization - A dedicated sales team is assigned to a firm’s major customers to provide sales and service needs 37

38. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Figure 17.3 - Basic Approaches to Organizing the Sales Force 38

39. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Supervision ▮ Span of control - Number of sales representatives who report to first-level sales managers ▮ Optimal span of control is affected by: Complexity of work activities Ability of the individual sales manager Degree of interdependence among individual salespeople Extent of training each salesperson receives 39

40. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Motivation ▮ Motivational tools include information sharing, recognition, bonuses, incentives, and benefits ▮ Expectancy theory – Motivation depends on an individual’s expectations of: His or her ability to perform a job and how that performance relates to attaining a desired reward 40

41. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Compensation ▮ Commission - Incentive compensation directly related to the sales or profits achieved by a salesperson ▮ Salary - Fixed payment made periodically to an employee ▮ Compensation packages vary according to industry 41

42. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Figure 17.4 - Median Pay for Account Managers by Years of Experience 42

43. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Evaluation and Control ▮ Managers must set standards and choose the best methods for measuring sales performance ▮ Sales quotas - Level of expected sales for a territory, product, customer, or salesperson against which actual results are compared 43

44. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Evaluation and Control ▮ Other measures include: Customer satisfaction Profit contribution Share of product-category sales Customer retention 44

45. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Ethical Issues in Sales ▮ Honesty and ethical behavior is encouraged when: Employees understand what is expected of them Open communication is encouraged Managers lead by example 45

46. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Sales Promotion ▮ Marketing activities other than personal selling, advertising, and publicity that enhance consumer purchasing and dealer effectiveness ▮ Integrated into overall marketing plan ▮ Promotions are likely to stress price advantages, giveaways, or special offers 46

47. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Sales Promotion ▮ Goal is speeding the sales process and increasing sales volume ▮ Cannot overcome poor brand images, product deficiencies, or poor training for salespeople 47

48. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Consumer-Oriented Sales Promotions ▮ Encourage repurchases by rewarding current users ▮ Boost sales of complementary products ▮ Increase impulse purchases 48

49. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Coupons and Refunds ▮ Coupons - Offers a discount on the purchase price of goods or services ▮ Refunds or rebates - Cash given back to consumers who send in proof of purchase for one or more products 49

50. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Samples, Bonus Packs, and Premiums ▮ Sampling - Free distribution of a product to obtain future sales Higher response rate than other forms of promotion Good for promoting new or unusual products Relatively expensive form of promotion 50

51. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Samples, Bonus Packs, and Premiums ▮ Bonus pack - Specially packaged item that gives the purchaser a larger quantity at the regular price ▮ Premiums - Items given free or at reduced cost with purchases of other products 51

52. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Contests and Sweepstakes ▮ Contest - Sales promotion technique that requires entrants to complete a task for the chance to win a prize ▮ Sweepstakes - Sales promotion technique in which prize winners are selected by chance 52

53. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Specialty Advertising ▮ Places the advertiser’s name, address, and advertising message on useful articles that are then distributed to target consumers 53

54. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Trade-Oriented Promotions ▮ Trade promotion - Sales promotion that appeals to marketing intermediaries rather than to consumers ▮ Trade allowances - Special financial incentives offered to wholesalers and retailers that purchase or promote specific products May give a discount on goods or include off- invoice allowances 54

55. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Trade-Oriented Promotions ▮ Point-of-purchase (POP) advertising - Display or other promotion located near the site of the actual buying decision ▮ Trade shows - Product exhibition organized by industry trade associations to showcase goods and services 55

56. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Trade-Oriented Promotions ▮ Dealer incentives and contests reward retailers who increase sales ▮ Push money - Cash reward paid to retail salespeople for every unit of a product they sell 56

57. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Personal Selling and Sales Promotion Hubway Video 57 http://www.cengage.com/marketing/book_content/boone_9781133628460/ videos/ch17.html Scripps Networks Interactive & Food Network Video http://www.cengage.com/marketing/book_content/boone_9781133628460/ videos/part6.html