1. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2007-2008 Sales Promotion and Personal Selling 16 CHAPTER

2. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 LO 1 Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. Sales Promotion

3. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 LO 1 Sales Promotion AdvertisingReason to buy Sales PromotionIncentive to buy

4. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 LO 1 Sales Promotion Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Consumer market Marketing channel Drive immediate purchase Influence behavior Goal

5. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5 LO 1 Objectives of Sales Promotion Type of Buyer Loyal Customers Competitor’s Customers Brand Switchers Price Buyers Desired 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 Promotion Examples Loyalty marketing Bonus packs Sampling Sweepstakes, contests, premiums Price-lowering promotion Trade deals Coupons, price-off packages, refunds Trade deals

6. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 REVIEW LEARNING OUTCOME LO 1 The Objectives of Sales Promotion

7. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 Tools for Consumer Sales Promotion LO 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion

8. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 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. 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.

9. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 Tools for Consumer Sales Promotion LO 2 Loyalty Marketing Program Loyalty Marketing Program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. Frequent Buyer Program Frequent Buyer Program A loyalty program in which loyal consumers are rewarded for making multiple purchases. A loyalty program in which loyal consumers are rewarded for making multiple purchases.

10. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 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. Online http://www.sweepstakesonline.com

11. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 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.

12. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 Methods of Sampling LO 2 Direct mail Door-to-door delivery Packaging with another product Retail store demonstration

13. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 Point-of-Purchase Promotion LO 2  Build traffic  Advertise the product  Induce impulse buying

14. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 Online Sales Promotion LO 2 Effective Types of Online Sales Promotion  Free merchandise  Sweepstakes  Free shipping with purchases  Coupons

15. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 REVIEW LEARNING OUTCOME LO 2 Consumer Sales Promotion Coupons and rebates Premiums Loyalty marketing programs Contests Sampling P-O-P Online

16. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 Trade Sales Promotion LO 3 Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows

17. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Trade Allowance LO 3 Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

18. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Push Money LO 3 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.

19. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Benefits of Trade Promotions LO 3  Help manufacturers gain new distribution  Obtain wholesaler and retailer support for consumer sales promotions  Build or reduce dealer inventories  Improve trade relations

20. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 REVIEW LEARNING OUTCOME LO 3 Forms of Trade Sales Promotion

21. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 LO 4 Personal Selling Personal Selling is more important if... Customers are concentrated. Customers are concentrated. Product is technically complex. There are few customers. Product is custom made. Product has a high value. Customers are geographically dispersed. 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...

22. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22 REVIEW LEARNING OUTCOME LO 4 Personal Selling  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 Personal Selling Advantages

23. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23 Relationship 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. Relationship (Consultative) Selling

24. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24 Traditional Selling and Relationship SellingTraditional 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 Relationship Selling

25. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 25 REVIEW LEARNING OUTCOME LO 5 Relationship Selling vs. Traditional Selling Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Sales Increases Result From Creating Value

26. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 26 Steps in the Selling Process LO 6 Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up

27. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 27 Time Spent in Key Steps of Selling Process LO 6 Key Selling Steps Traditional Selling Relationship Selling Generate LeadsHighLow Qualify LeadsLowHigh Probe NeedsLowHigh Develop SolutionsLowHigh Handle ObjectionsHighLow Close the saleHighLow Follow-upLowHigh

28. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 28 Generating Leads LO 6 Advertising Publicity Direct Mail/ Telemarketing Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Trade Shows/ Conventions Networking Company Records Online http://www.linkedin.com http://www.ryze.com

29. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 29 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. Cold Calling

30. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 30 Qualifying Leads LO 6 Receptivity and accessibility Buying power Recognized need

31. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 31 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. Needs Assessment

32. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 32 The Consultative Salesperson LO 6 Product or service Customers Competition Industry Salesperson must know everything about... Salesperson must know everything about... Online http://www.hoovers.com http://www.dnb.com

33. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 33 Developing and Proposing Solutions LO 6 Sales Proposal Sales Presentation

34. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 34 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!

35. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 35 Handling Objections LO 6  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

36. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 36 Closing the Sale LO 6 Negotiate Keep an open mind Look for customer signals Tailor to each market

37. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 37 Biz Flix LO 6 Family Man

38. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 38 LO 6 The Impact of Technology on Personal Selling Cell phones Laptops Pagers E-Mail Electronic organizers Internet

39. Chapter 16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 39 REVIEW LEARNING OUTCOME LO 6 Steps in the Selling Process