Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel CHAPTER 18 Sales Promotion and Personal Selling © iStockphoto.com/Terry J Alcorn

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 2 LO 1 Define and state the objectives of sales promotion LO 2 Discuss the most common forms of consumer sales promotion LO 3 List the most common forms of trade sales promotion Learning Outcomes

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 3 LO 4 Describe personal selling LO 5 Discuss the key differences between relationship selling and traditional selling LO 6 List the steps in the selling process Learning Outcomes

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 4 Define and state the objectives of sales promotion Sales Promotion LO 1

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 5 Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. Sales Promotion LO 1

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 6 Sales Promotion AdvertisingReason to buy Sales PromotionIncentive to buy LO 1

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 7 Sales Promotion sales promotion activities targeting the ultimate consumer. Consumer Sales Promotion is… sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer. Trade Sales Promotion is…

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 8 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 LO 1

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 9 Discuss the most common forms of consumer sales promotion Tools for Consumer Sales Promotion LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 10 Tools for Consumer Sales Promotion LO 2 Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Online Sales Promotion

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 11 Coupons and Rebates Coupon Rebate Premium A certificate that entitles consumers to an immediate price reduction when they buy the product. A certificate that entitles consumers to an immediate price reduction when they buy the product. 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 of the promoted product. LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 12 Loyalty Marketing Programs 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 of a particular good or service. A loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good or service. LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 13 Coupons and Sweepstakes Contests Promotions in which participants use some skill or ability to compete for prizes. Promotions in which participants use some skill or ability to compete for prizes. Sweepstakes Promotions that depend on chance, with free participation. LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 14 Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 15 Methods of Sampling Direct mail Door-to-door delivery Packaging with another product Retail store demonstration LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 16 Point-of-Purchase Promotion  Offers captive audience in retail stores  Can increase sales by as much as 65 percent LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 17 Online Sales Promotion Effective Types of Online Sales Promotion  Free merchandise  Sweepstakes  Free shipping with purchases  Coupons LO 2

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 18 List the most common forms of trade sales promotion Tools for Trade Sales Promotion LO 3

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 19 Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows LO 3

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 20 Trade Allowance LO 3 a price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. Trade Allowance is…

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 21 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. LO 3

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 22 Benefits of Trade Promotions  Help manufacturers gain new distributors  Obtain wholesaler and retailer support for consumer sales promotions  Build or reduce dealer inventories  Improve trade relations LO 3

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 23 Describe personal selling Personal Selling LO 4

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 24 Advantages of Personal Selling  Provides detailed explanation/demonstration of product  Message can be varied according to motivations of each customer  Can be directed only to qualified prospects  Most effective promotion form in obtaining sale and satisfying customer

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 25 LO 4 Exhibit 18.2 Comparison of Personal Selling and Advertising/Sales Promotion

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 26 Discuss the key differences between relationship selling and traditional selling Relationship Selling LO 5

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 27 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. Relationship (Consultative) Selling LO 5

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 28 LO 5 Exhibit 18.3 Key Differences between Traditional Selling and Relationship Selling SOURCE: Robert M. Peterson, Patrick L. Schul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,” National Conference on Sales Management, Proceedings, March 1996.

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 29 List the steps in the selling process Steps in the Selling Process LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 30 Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 31 Generating Leads Advertising Publicity Direct Mail/ Telemarketing Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Trade Shows/ Conventions Trade Shows/ Conventions Networking Company Records LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 32 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. Cold Calling LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 33 Qualifying Leads Receptivity and accessibility Buying power Recognized need LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 34 Approaching the Customer and Probing Needs A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. Needs Assessment LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 35 The Consultative Salesperson Product or service Customers Competition Industry Salesperson must know everything about... Salesperson must know everything about... LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 36 Developing and Proposing Solutions LO 6 a formal written document or professional presentation that outlines how the salesperson’s product or service will meet or exceed the prospect’s needs. Sales Proposal is… a formal meeting in which the salesperson presents a sales proposal to a prospective buyer. Sales Presentation is…

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 37 Handling Objections  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 LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 38 Closing the Sale Negotiate Keep an open mind Look for customer signals Tailor to each market LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 39 Following Up In the final step of the selling process— follow up—the salesperson must ensure: delivery schedules are met goods or services perform as promise buyers’ employees are properly trained to use the products

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 40 Exhibit 18.3 Relative Amount of Time Spent in the Key Steps of the Selling Process Source : Robert Peterson, Patrick Schul, and George H. Lucas Jr., “Consultative Selling: Walking the Walk in the New Selling Enviroment,” National Conference on Sales Management Proceedings, March 1996.

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 41 The Impact of Technology on Personal Selling Cell phones Laptops Pagers Electronic organizers Internet LO 6

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 42 Making the Sale Now that you know the steps in the selling process, break down this video and Grover’s use of (or failure to use) the steps –Grover Sells Hair-CareGrover Sells Hair-Care What about this man? What are his sales tactics? –Vegetable Peeler SalesmanVegetable Peeler Salesman LO 6 Beyond the Book

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 43 Beyond the Book Chapter 18 Videos Vans – Sales Promotion and Personal Selling How does Vans use giveaways and contests to market its products? Why do these strategies work so well for Vans? k_content/ _lamb/company_c lips/ch18.html

Chapter 18 Copyright ©2012 by Cengage Learning Inc. All rights reserved 44 Beyond the Book Part 5 Videos Promotion and Communication Strategies k_content/ _lamb/part_videos /part05.html