©2003 South-Western Chapter 14 Version 3e1 chapter Sales Promotion and Personal Selling 14 Prepared by Deborah Baker Texas Christian University

©2003 South-Western Chapter 14 Version 3e2 chapter Learning Objectives 14 1.Define and state the objectives of sales promotion. 2. Discuss the most common forms of consumer sales promotion. 3. List the most common forms of trade sales promotion.

©2003 South-Western Chapter 14 Version 3e3 chapter Learning Objectives (continued) Describe personal selling. 5. Discuss the key differences between relationship selling and traditional selling. 6. List the steps in the selling process. 7.Describe the functions of sales management.

©2003 South-Western Chapter 14 Version 3e4 Learning Objective 1 1 Define and state the objectives of sales promotion.

©2003 South-Western Chapter 14 Version 3e5 Sales Promotion 1 1 Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.

©2003 South-Western Chapter 14 Version 3e6 Sales Promotion Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion Targets Targets 1 1

©2003 South-Western Chapter 14 Version 3e7 Uses of Sales Promotion Immediate Purchases Increase Trial Boost consumer inventory Encourage repurchase Increase ad effectiveness Encourage brand switching UsesofSalesPromotionUsesofSalesPromotion Encourage brand loyalty 1 1

©2003 South-Western Chapter 14 Version 3e8 Objectives of Sales Promotion 1 1 Type of Buyer Loyal Customers Competitors Customers Competitors Customers Brand Switchers Price Buyers Desired Results Reinforce behavior Increase consumption Change timing Reinforce behavior Increase consumption Change timing Break loyalty Persuade to switch Break loyalty Persuade to switch Persuade to buy your brand more often Appeal with low prices Supply added value Appeal with low prices Supply added value Sales Promotion Examples Loyalty marketing Bonus packs Loyalty marketing Bonus packs Sampling Sweepstakes, contests, premiums Sampling Sweepstakes, contests, premiums Price-lowering promotion Trade deals Price-lowering promotion Trade deals Coupons, price-off packages, refunds Trade deals Coupons, price-off packages, refunds Trade deals

©2003 South-Western Chapter 14 Version 3e9 Learning Objective 2 2 Discuss the most common forms of consumer sales promotion.

©2003 South-Western Chapter 14 Version 3e10 Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Popular Tools for Consumer Sales Promotion Popular Tools for Consumer Sales Promotion 2 2

©2003 South-Western Chapter 14 Version 3e11 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 product. A cash refund given for the purchase of a product during a specific product. An extra item offered to the consumer, usually in exchange for some proof of purchase. Tools for Consumer Sales Promotion 2 2

©2003 South-Western Chapter 14 Version 3e12 Loyalty Marketing Program Loyalty Marketing Program Frequent Buyer Program Frequent Buyer 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. 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. Tools for Consumer Sales Promotion 2 2

©2003 South-Western Chapter 14 Version 3e13 Contest Sweepstakes Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation. Tools for Consumer Sales Promotion 2 2

©2003 South-Western Chapter 14 Version 3e14 Sampling A promotional program that allow the consumer the opportunity to try a product or service for free. Tools for Consumer Sales Promotion 2 2

©2003 South-Western Chapter 14 Version 3e15 Sampling Methods of Sampling Methods of Sampling Direct mail Door-to-door delivery Packaging with another product Retail store demonstration 2 2

©2003 South-Western Chapter 14 Version 3e16 Tools for Consumer Sales Promotion Goals of Goals of Point-of-Purchase Point-of-Purchase Displays Displays Goals of Goals of Point-of-Purchase Point-of-Purchase Displays Displays Build traffic Advertise the product Induce impulse buying 2 2

©2003 South-Western Chapter 14 Version 3e17 Tools for Consumer Sales Promotion Free merchandise Sweepstakes Free shipping Coupons Effective Types of On-Line Sales Promotion Effective Types of On-Line Sales Promotion 2 2

©2003 South-Western Chapter 14 Version 3e18 Learning Objective List the most common forms of trade sales promotion. 3 3

©2003 South-Western Chapter 14 Version 3e19 Tools for Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows Unique Tools for Trade Sales Promotion Unique Tools for Trade Sales Promotion 3 3

©2003 South-Western Chapter 14 Version 3e20 Trade Allowance 3 3 A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

©2003 South-Western Chapter 14 Version 3e21 Push Money 3 3 Money offered to channel intermediaries to encourage them to push products-- that is, to encourage other members of the channel to sell the products.

©2003 South-Western Chapter 14 Version 3e22 The Role of Trade Sales Promotion 3 3 Improve trade relations Gain new distributors Build or reduce dealer inventories Obtain support for consumer sales promotions

©2003 South-Western Chapter 14 Version 3e23 Learning Objective Describe personal selling. 4 4

©2003 South-Western Chapter 14 Version 3e24 Advantages of Personal Selling Provides a detailed explanation or demonstration of product Message can be varied to fit the needs of each prospective customer Can be directed to specific qualified prospects Costs can be controlled by adjusting sales force size Most effective in obtaining sales and gaining satisfied customers 4 4

©2003 South-Western Chapter 14 Version 3e25 Personal Selling Customers are concentrated Customers are concentrated There are few customers Product is technically complex Product is custom made Product has a high value Personal Selling is more important if... Customers are geographically dispersed Customers are geographically dispersed There are many customers Product is simple to understand Product is standardized Product has a low value Advertising & Sales Promotion are more important if

©2003 South-Western Chapter 14 Version 3e26 Learning Objective Discuss the key differences between relationship selling and traditional selling. 5 5

©2003 South-Western Chapter 14 Version 3e27 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. 5 5

©2003 South-Western Chapter 14 Version 3e28 Relationship Selling Focus:BuildingMutualTrust Long-TermValue-Added Benefits to Buyer 5 5

©2003 South-Western Chapter 14 Version 3e29 Relationship Selling vs. Traditional Selling Sell advice, assistance, counsel Sell products Traditional Personal Selling Relationship Selling Focus on closing sales Limited sales planning Discuss product Assess Product-specific needs Assess Product-specific needs Lone wolf approach Pricing/product focus Short-term sales follow-up Focus on customers bottom line Sales planning is top priority Build problem-solving environment Conduct discovery in scope of operations Conduct discovery in scope of operations Team approach Profit impact and strategic benefit focus Profit impact and strategic benefit focus Long-term sales follow-up 5 5

©2003 South-Western Chapter 14 Version 3e30 Learning Objective 6 6 List the steps in the selling process.

©2003 South-Western Chapter 14 Version 3e31 Sales Process The set of steps a salesperson goes through in a particular organization to sell a particular product or service. 6 6

©2003 South-Western Chapter 14 Version 3e32 Steps in the Selling Process 6 6 Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up Basic Steps in the Personal Selling Process Basic Steps in the Personal Selling Process

©2003 South-Western Chapter 14 Version 3e33 Generating Leads Cold Calling Advertising Publicity Direct Mail/ Telemarketing Direct Mail/ Telemarketing Trade Shows/ Conventions Trade Shows/ Conventions Web Sites/ Internet Web Sites/ Internet Referrals Networking Company Records Sources of Sales Leads 6 6

©2003 South-Western Chapter 14 Version 3e34 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. 6 6

©2003 South-Western Chapter 14 Version 3e35 Qualifying Leads Recognized Need Buying Power Receptivity & Accessibility Receptivity & Accessibility Characteristics of Qualified Leads Characteristics of Qualified Leads 6 6

©2003 South-Western Chapter 14 Version 3e36 Probing Needs Product or service Salesperson must know everything about... Salesperson must know everything about... Customers and their needs Competition Industry 6 6

©2003 South-Western Chapter 14 Version 3e37 Needs Assessment A determination of the customers specific needs and wants and the range of options a customer has for satisfying them. 6 6

©2003 South-Western Chapter 14 Version 3e38 Developing and Proposing Solutions 6 6 Sales Proposal Sales Presentation

©2003 South-Western Chapter 14 Version 3e39 Handling Objections 6 6 Handling Handling Objections Objections Handling Handling Objections Objections Use the objection to close the sale Anticipate specific objections View objections as requests for information View objections as requests for information

©2003 South-Western Chapter 14 Version 3e40 Closing the Sale 6 6 Closing the Sale Closing the Sale Negotiate Keep an open mind Look for customer signals

©2003 South-Western Chapter 14 Version 3e41 Following Up 6 6 Responsibilities Responsibilitiesin Following Up Following Up Responsibilities Responsibilitiesin Following Up Following Up Employees are trained Goods or service perform as promised Goods or service perform as promised Ensure delivery schedules are met

©2003 South-Western Chapter 14 Version 3e42 Learning Objective Describe the functions of sales management. 7 7

©2003 South-Western Chapter 14 Version 3e43 Sales Management Responsibilities Evaluate sales force Compensate and motivate sales force Compensate and motivate sales force Recruit and train sales force Recruit and train sales force Determine sales force structure Determine sales force structure Define sales goals and sales process Define sales goals and sales process Tasks of Sales Management Sales Management Tasks of Sales Management Sales Management 7 7

©2003 South-Western Chapter 14 Version 3e44 Defining Sales Goals 7 7 Clear Sales Goals Should Be... Sales Goals Should Be... Precise Measurable Time Specific

©2003 South-Western Chapter 14 Version 3e45 Quota A statement of the individual salespersons sales objectives, usually based on sales volume alone but sometimes including key accounts. 7 7

©2003 South-Western Chapter 14 Version 3e46 Sales Force Structure 7 7 CommonSalesOrganizationStructuresCommonSalesOrganizationStructures Individual client or account Market or Industry Marketing Function Product Line Geographic Region

©2003 South-Western Chapter 14 Version 3e47 Training the Sales Force 7 7 Training includes... Training includes... Nonselling duties Industry and customer characteristics Industry and customer characteristics Product knowledge Selling techniques Company policies and practice

©2003 South-Western Chapter 14 Version 3e48 Compensation Plans 7 7 Commission Combination Plans Combination Plans Salary BasicCompensationMethodsBasicCompensationMethods

©2003 South-Western Chapter 14 Version 3e49 Compensation Plans 7 7 Straight Commission Straight Commission Straight Salary Straight Salary The salesperson is paid some percentage when a sale is made. The salesperson receives a salary regardless of sales productivity.

©2003 South-Western Chapter 14 Version 3e50 Effective Sales Leaders 7 7 Effective Sales Leaders... Are assertive Possess ego drive Possess ego strength Take risks Are innovative Have a sense of urgency Are empathetic

©2003 South-Western Chapter 14 Version 3e51 PerformanceMeasuresPerformanceMeasures Evaluating the Sales Force Contribution to Profit Calls per Order Sales or Profits per Call Call Percentage Achieving Goals Sales Volume 7 7

©2003 South-Western Chapter 14 Version 3e52 The Impact of Technology on Personal Selling 7 7 Laptop computer link Mobile telephones Pagers Personal data assistants Internet Sales Force Automation Automation