Chapter 13 Promotion Strategies: Personal Selling, Publicity, and Sales Promotion

Chapter Outline Promotion and Communication Promotion Mix

Chapter Outline Personal Selling -Personal Selling vs. Advertising -Varying Quality and Style of Personal Selling -Intercultural Negotiation -Motivation -Telemarketing -Expatriate Personnel

Chapter Outline Publicity -The Nature of Publicity -The Management of Publicity -Negative Publicity Sales Promotion -The Nature of Sales Promotion -Restrictions Overseas Product Exhibitions

Purposes of Promotion The purpose of promotion is both to communicate with buyers and to influence them. Effective promotion requires an understanding of the process of persuasion and how this process is affected by environmental factors. The potential buyer must not only receive the desired information but should also be able to comprehend that information. Information must be sufficiently powerfull to motivate this buyer to react positively.

Purposes of Promotion communicate (inform) persuade (influence)

Process of Communication Source Encoding Message (Information) Decoding Destination

Process of Communication

Promotion Mix Advertising Personal Selling Publicity Sales Promotion

Promotion Mix The four promotional components are not mutually exclusive, and it can be difficult at times to determine which one of the four activities a particular promotional tool may be. Consider the common trade fair. Promotion for a trade fair may be viewed as advertising because a fair sponsor, as well as participating companies, generally uses direct mail and newspapers to advertise the event.

Personal Selling Personal Selling vs. Advertising Varying Quality and Style of Personal Selling Intercultural Negotiation Motivation Telemarketing

Personal Selling “oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales.” Personal selling, also commonly known as salesmanship, is used at every distribution level. The cost of personal selling is high. One extreme case is German software maker SAP, the world’s leader in applications packages for client-server networks. In the USA, SAP America has removed the $140,000 annual limit on sales commissions, making it possible for a salesperson to earn as much as $2 million a year – more than what the company’s top German executives make

Personal selling vs Advertisement Personal selling is similar to advertising in the sense that both aim to create sales and that both must be understandable, interesting, believable, and persuasive. However, advertising differs from personal selling in several aspects. Advertising relies on a non-personal means of contact and sales presentation. When compared to advertising, personal selling commands a much larger share of aggregate promotional dollars and accounts for several times more in terms of the number of personnel.

Telemarketing Personal selling does not always require a face- to face conversation. For instance, personal selling may be done over the telephone. Although telephone selling has been in existence for a considerable period of time, the growth of the direct marketing field has pushed this method of selling to the forefront. This marketing practice, now known as telemarketing, has become very popular among sellers – but not necessarily with consumers, who feel they are being inundated with such calls.

Publicity Publicity is the non-personal stimulation of demand that is not paid for by a sponsor which has released news to the media. Advertising and publicity are quite similar in the sense that both require media for a non- personal presentation of the promotional message.

Publicity adv. Publicity offers several advantages. In addition to the low cost, the material presented is not recognized as paid advertising per se because it occurs in an editorial setting that makes it appear to have been generated by approval of the editorial staff. The material thus has more credibility, and consumers tend to accept it as news information rather than as advertising. This perception is particularly useful in countries where it is difficult to buy commercial time or advertising space.

Negative publicity Some publicity received can be far from favorable. To begin with, it is not wise to criticize the media for reporting unfavorable news. The criticism serves to alienate the media by inflaming the issue and prolonging the attention being given to it. It is also not wise to ignore adverse publicity. This behavior may give the impression of arrogance, and it wastes crucial time that could be used to solve the problem if it is serious. A company should also avoid the “no comment” response because it conveys the impression of uncooperativeness and implies guilt.

SALES PROMOTION Sales promotion consists of those promotional activities other than advertising, personal selling, and publicity. As such, any promotional activities that do not fall under the other three activities of the promotion mix are considered to be sales promotion. Businesspeople may use the term “promotion” when they actually mean “sales promotion.” The common ones used are coupons, sweepstakes, games, contests, price- offs, demonstrations, premiums, samples, money refund offers, and gifts. A combination of these may be used and is sometimes used in the same campaign.