Chapter 14 Integrated Marketing Communications: Personal Selling and Direct Marketing

Road Map: Previewing the Concepts Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. Identify and explain the six major sales force management steps. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. Define direct marketing and discuss its benefits to customers and companies. Identify and discuss the major forms of direct marketing.

The Nature of Personal Selling Most salespeople are well-educated, well-trained professionals who work to build and maintain long-term relationships with customers. The term salesperson covers a wide spectrum of positions from: Order taker (department store salesperson) Order getter (someone engaged in creative selling i.e Lear Corporation)

Discussion Question What did Robert Louis Stevenson mean when he said “everyone lives by selling something?” Each student will probably have his or her own opinion about this question. The answers make an interesting in-class discussion. The intent of the question is to get the student to examine the selling function in a different way than the traditional viewpoint (i.e., selling a product or service). As an example, each person in an organization (no matter their role) sells the organization to the public. Each time a receptionist answers the phone or greets a person from the outside, he or she is representing (and therefore selling) the organization. Each time a service person works on a product or serves a customer they are representing (and therefore selling) the organization. It has been said that the most “important” salespeople that an organization has are “the silent majority” of employees that act as support staff.

The Role of the Sales Force Involves two-way, personal communication between salespeople and individual customers. Personal selling is effective because salespeople can: probe customers to learn more about their problems, adjust the marketing offer to fit the special needs of each customer, negotiate terms of sale, and build long-term personal relationships with key decision makers.

The Role of the Sales Force Represent the Company to Customers to Produce Company Profit Sales Force Serves as a Critical Link Between a Company and its Customers Since They: Represent Customers to the Company to Produce Customer Satisfaction

Major Steps in Sales Force Management (Fig. 14-1)

Designing Sales Force Strategy and Structure Territorial Exclusive Territory to Sell the Company’s Full Product Line Designing Sales Force Strategy and Structure Product Sales Force Sells Only a Portion of The Company’s Products or Lines Complex Forms Are a Combination of Any Types of Sales Force Structures Customer Sales Force Sells Only to Certain Customers or Industries

Other Sales Force Strategy and Structure Issues Outside Sales Force Inside Sales Force Conduct Business From Their Offices Via Phone/Buyer Visits Travel to Call on Customers Sells to Major Accounts Finds Major New Prospects Technical Support People Sales Assistants Tele- Marketer & Internet

Team Selling Use team selling to service large, complex accounts. Team finds problems, solutions, and sales opportunities. Problems: can overwhelm customers, difficulties working with teams, evaluation of sales performance.

Some Traits of Good Salespeople Enthusiasm Persistence Job Commitment Self-Confidence Initiative

Recommendations for Recruiting Salespeople Current Salespeople Employment Agencies Classified Ads Search the Web College Students Salespeople from Other Companies

Training Salespeople Help Salespeople Know & Identify With the Company Learn About the Products The Average Sales Training Program lasts for Four Months and Has the Following Goals: Learn About Competitors’ and Customers’ Characteristics Learn How to Make Effective Presentations Understand Field Procedures and Responsibilities

Compensating Salespeople To Attract Salespeople, a Company Must Have an Attractive Plan Made Up of Several Elements Fixed Amount: Usually a Salary Variable Amount: Usually Commissions Or Bonuses Expense Allowance: For Job- Related Expenses Fringe Benefits Provide Job Security and Satisfaction

Supervising Salespeople Directing Salespeople Identify Customer Targets & Call Norms Time Spent Prospecting for New Accounts Use Sales Time Efficiently Annual Call Plan Time-and-Duty Analysis Sales Force Automation Motivating Salespeople Organizational Climate Sales Quotas Positive Incentives Sales Meetings Sales Contests Honors and Trips Merchandise/Cash

How Salespeople Spend Their Time (Fig. 14-2)

Major Steps in Effective Selling (Fig. 14-3)

Steps in the Selling Process Prospecting Salesperson Identifies Qualified Potential Customers. Qualifying Process of Identifying Good Prospects and Screening Out Poor Ones. Preapproach Salesperson Learns About a Prospective Customer Before Making a Sales Call. Approach Salesperson Meets the Buyer and Gets the Relationship Off to a Good Start.

Steps in the Selling Process Presentation Salesperson Tells the Product “Story” to the Buyer Showing How the Product Solves Problems. Handling Objections Salesperson Seeks Out, Clarifies, and Overcomes Customer Objections to Buying. Closing Salesperson Asks the Customer for an Order. Follow-Up Occurs After the Sale and Ensures Customer Satisfaction and Repeat Business.

What is Relationship Marketing? Relationship Marketing Emphasizes Maintaining Profitable Long-Term Relationships with Customers by Creating Superior Customer Value and Satisfaction.

Interactive Student Assignments Form students into groups of three to five. Each group should answer the following questions: Explain the meaning of relationship marketing. Describe how relationship marketing might be used in selling a new car. Relationship marketing emphasizes maintaining profitable long-term relationships with customers by creating superior customer value and satisfaction. Companies are realizing that when operating in maturing markets and facing stiffer competition, it costs more to get new customers from competition than to keep current customers. Relationship marketing is based on the premise that important accounts need focused and continuous attention. As it refers to selling a new car--few consumers buy a new car with only one visit. Instead, trust of the salesperson is essential (the consumer can always buy the same basic model from another dealership).

Mass Marketing and Direct Marketing Most Mass Marketing Involves One-Way Communications Aimed At Consumers. Direct Marketing Involves Two-Way Interactions With Customers.

The New Direct Marketing Model Some firms use direct marketing as a supplemental medium. For many companies, direct marketing – especially Internet and e-commerce companies – constitutes a new and complete model for doing business. Some firms use the new direct model as their only approach. New marketing model of the next millennium.

Benefits and Growth of Direct Marketing Benefits to Buyers Convenient Easy to use Private Product access and selection Abundance of information Immediate Interactive Benefits to Sellers Consumer relationship building Reduces costs Increases speed and efficiency Provides flexibility Global medium

Customer Databases and Marketing Customer Databases are an Organized Collection of Comprehensive Data About Individual Customers or Prospects. Allows companies to offer fine-tuned marketing offers and communications to customers.

Forms of Direct Marketing (Fig. 14-4)

Forms of Direct Marketing Telephone Marketing Represents 36% of direct marketing sales. Outbound telephone marketing sells directly to customers. Inbound numbers provide a toll-free number to receive orders. Direct-Mail Marketing Represents 31% of direct marketing sales. High target-market selectivity. Personalized & flexible. Allows easy measurement of results. Fax mail, e-mail, voice mail are now popular

Forms of Direct Marketing Catalog Marketing Sales expected to exceed $94 billion by 2002. Printed, selling multiple products, offering direct ordering mechanism. Printed catalogs remain the primary medium, but many are now electronic. Direct-Response TV Marketing Direct-response advertising – marketers air TV spots or infomercials. Home shopping channels – entire programs or channels dedicated to selling goods and services. Kiosk Marketing Placing information and ordering machines at various locations.

George Foreman’s Lean Mean Fat-Reducing Grilling Machine Current infomercial champ – George Foreman! Selling for 3 easy payments of $19.95 (plus shipping & handling). Totaled almost $400 million in sales last year.

An Integrated Direct-Marketing Campaign (Fig. 14-5)

Public Policy and Ethical Issues in Direct Marketing Unfairness, Deception, or Fraud Irritation to Consumers Invasion of Privacy

Rest Stop: Reviewing the Concepts Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. Identify and explain the six major sales force management steps. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing. Define direct marketing and discuss its benefits to customers and companies. Identify and discuss the major forms of direct marketing.