1. Copyright © 2003 by South-Western. All Rights Reserved. CHAPTER SIXTEEN PROMOTING GOODS AND SERVICES USING IMC Text by Profs. Gene Boone & David Kurtz Multimedia Presentation by Prof. Milton Pressley The University of New Orleans milton.pressley@uno.edu

2. Copyright © 2003 by South-Western. All Rights Reserved. Relate the concept of integrated marketing communications to the development of a firm’s promotional strategy Relate the concept of integrated marketing communications to the development of a firm’s promotional strategy Explain the concept of a promotional mix and list the objectives of promotion Explain the concept of a promotional mix and list the objectives of promotion Summarize the different types of advertising and advertising media Summarize the different types of advertising and advertising media Describe the role of sales promotion in promotional strategy Describe the role of sales promotion in promotional strategy LEARNING GOALS

3. Copyright © 2003 by South-Western. All Rights Reserved. Identify the various personal selling tasks and the steps in the sales process Identify the various personal selling tasks and the steps in the sales process Explain how public relations supports other elements of the promotional mix Explain how public relations supports other elements of the promotional mix Identify the factors that influence the selection of a promotional mix Identify the factors that influence the selection of a promotional mix Contrast pushing and pulling promotional strategies Contrast pushing and pulling promotional strategies Discuss major ethical issues involved in promotion Discuss major ethical issues involved in promotion LEARNING GOALS

4. Copyright © 2003 by South-Western. All Rights Reserved. © PhotoDisc CHAPTER OVERVIEW Promotion: function of informing, persuading, and influencing a purchase decision Promotion: function of informing, persuading, and influencing a purchase decision

5. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.1 Promotional Campaign to Stimulate Primary Demand

6. Copyright © 2003 by South-Western. All Rights Reserved. © PhotoDisc CHAPTER OVERVIEW Integrated marketing communications (IMC): coordination of all promotional activities -- media advertising, direct mail, personal selling, sales promotion, and public relations -- to produce a unified customer-focused message Integrated marketing communications (IMC): coordination of all promotional activities -- media advertising, direct mail, personal selling, sales promotion, and public relations -- to produce a unified customer-focused message Avoids confusing the consumer Avoids confusing the consumer Focuses positive attention on the promotional message Focuses positive attention on the promotional message

7. Copyright © 2003 by South-Western. All Rights Reserved. © PhotoDisc CHAPTER OVERVIEW Explains the role of IMC Explains the role of IMC Discusses the objectives of promotion and the importance of promotional planning Discusses the objectives of promotion and the importance of promotional planning Examines the components of the promotional mix -- advertising, sales promotion, personal selling, and public relations -- and demonstrates how marketers incorporate them into an IMC plan Examines the components of the promotional mix -- advertising, sales promotion, personal selling, and public relations -- and demonstrates how marketers incorporate them into an IMC plan

8. Copyright © 2003 by South-Western. All Rights Reserved. © PhotoDisc CHAPTER OVERVIEW Examines promotional strategies and techniques for selecting a promotional mix and measuring its effectiveness Examines promotional strategies and techniques for selecting a promotional mix and measuring its effectiveness Concludes with a brief discussion of ethical issues related to promotion Concludes with a brief discussion of ethical issues related to promotion

9. Copyright © 2003 by South-Western. All Rights Reserved. INTEGRATED MARKETING COMMUNICATIONS Focuses on customer needs to create a unified promotional message Focuses on customer needs to create a unified promotional message Firms need a broad view of promotion to implement IMC Firms need a broad view of promotion to implement IMC Cannot rely on traditional broadcast and print media and direct mail Cannot rely on traditional broadcast and print media and direct mail Must include all forms of customer contact -- packaging, store displays, sales promotions, sales presentations, and online and interactive media Must include all forms of customer contact -- packaging, store displays, sales promotions, sales presentations, and online and interactive media © PhotoDisc

10. Copyright © 2003 by South-Western. All Rights Reserved. INTEGRATED MARKETING COMMUNICATIONS Must present an integrated approach... with a consistent message from all sources Must present an integrated approach... with a consistent message from all sources Alternatively consumers become confused by receiving conflicting messages Alternatively consumers become confused by receiving conflicting messages Unified personality for the good, brand, or service should be created Unified personality for the good, brand, or service should be created © PhotoDisc

11. Copyright © 2003 by South-Western. All Rights Reserved. Designing Effective IMC Programs First, goals and objectives for the firm’s promotional strategy are set First, goals and objectives for the firm’s promotional strategy are set Then, various elements of the strategy are woven into an integrated communications plan Then, various elements of the strategy are woven into an integrated communications plan Plan becomes a central part of the firm’s total marketing strategy Plan becomes a central part of the firm’s total marketing strategy Feedback completes the process by identifying any deviations from the plan Feedback completes the process by identifying any deviations from the plan © PhotoDisc

12. Copyright © 2003 by South-Western. All Rights Reserved. THE PROMOTIONAL MIX Promotional mix: combination of personal and nonpersonal selling techniques designed to achieve promotional objectives Promotional mix: combination of personal and nonpersonal selling techniques designed to achieve promotional objectives Marketers combine these techniques to: Marketers combine these techniques to: Meet the needs of their firm’s target customers Meet the needs of their firm’s target customers Effectively and efficiently communicate the firm’s message to them Effectively and efficiently communicate the firm’s message to them © PhotoDisc

13. Copyright © 2003 by South-Western. All Rights Reserved.

14. THE PROMOTIONAL MIX Personal selling: a direct person-to- person promotional presentation to a potential buyer Personal selling: a direct person-to- person promotional presentation to a potential buyer The communication can occur during a face-to-face meeting or via telephone, videoconference, or interactive computer link. The communication can occur during a face-to-face meeting or via telephone, videoconference, or interactive computer link. © PhotoDisc

15. Copyright © 2003 by South-Western. All Rights Reserved. THE PROMOTIONAL MIX Nonersonal selling: consists of advertising, sales promotion, direct marketing, and public relations Nonersonal selling: consists of advertising, sales promotion, direct marketing, and public relations Although advertising is the best-known form of nonpersonal selling, sales promotion accounts for about two-thirds of marketing expenditures in this category Although advertising is the best-known form of nonpersonal selling, sales promotion accounts for about two-thirds of marketing expenditures in this category © Milton M. Pressley

16. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.2 Five Major Promotional Objectives Objectives of Promotional Strategy

17. Copyright © 2003 by South-Western. All Rights Reserved. Providing Information Major portion of U.S. advertising is information-oriented Major portion of U.S. advertising is information-oriented Example: Large sections in Wednesday and Thursday editions of daily newspapers consist of ads and inserts that tell shoppers about featured specials at grocery stores and other local retail outlets Example: Large sections in Wednesday and Thursday editions of daily newspapers consist of ads and inserts that tell shoppers about featured specials at grocery stores and other local retail outlets Objectives of Promotional Strategy

18. Copyright © 2003 by South-Western. All Rights Reserved. Providing Information Differentiating a Product Promotion also used to differentiate a firm’s goods and services from the competitions’ Promotion also used to differentiate a firm’s goods and services from the competitions’ Positioning: establishing a place in the minds of customers by communicating meaningful distinctions about the attributes, price, quality, or use of a good or service Positioning: establishing a place in the minds of customers by communicating meaningful distinctions about the attributes, price, quality, or use of a good or service Objectives of Promotional Strategy

19. Copyright © 2003 by South-Western. All Rights Reserved. Providing Information Differentiating a Product Increasing Sales Most common objective of a promotional strategy Most common objective of a promotional strategy Example: Naturalizer became the third-largest seller of women’s dress shoes by appealing to Baby Boomers Example: Naturalizer became the third-largest seller of women’s dress shoes by appealing to Baby Boomers Objectives of Promotional Strategy

20. Copyright © 2003 by South-Western. All Rights Reserved. Providing Information Differentiating a Product Increasing Sales Stabilizing Sales Sales contests often used during slack periods Sales contests often used during slack periods Motivates salespeople by offering prizes such as vacation trips, TV sets, cell phones, and cash Motivates salespeople by offering prizes such as vacation trips, TV sets, cell phones, and cash Sales promotion materials often distributed to customers to stimulate sales during off-seasons. Sales promotion materials often distributed to customers to stimulate sales during off-seasons. Objectives of Promotional Strategy

21. Copyright © 2003 by South-Western. All Rights Reserved. Providing Information Differentiating a Product Increasing Sales Stabilizing Sales Accentuating the Product’s Value Promotional strategies can enhance product values by explaining often unrecognized ownership benefits Promotional strategies can enhance product values by explaining often unrecognized ownership benefits Examples: Examples: Car makers offer long-term warranty programs and promote the excellence of their repair services Car makers offer long-term warranty programs and promote the excellence of their repair services Promotional efforts can focus on low-price aspects of value Promotional efforts can focus on low-price aspects of value Objectives of Promotional Strategy

22. Copyright © 2003 by South-Western. All Rights Reserved. Promotional Planning Increasing complexity and sophistication of marketing communications requires careful planning to coordinate IMC strategies Increasing complexity and sophistication of marketing communications requires careful planning to coordinate IMC strategies © PhotoDisc

23. Copyright © 2003 by South-Western. All Rights Reserved. ADVERTISINGADVERTISING Advertising: paid, nonpersonal communication delivered through various media and designed to inform or persuade members of a particular audience Advertising: paid, nonpersonal communication delivered through various media and designed to inform or persuade members of a particular audience Of the world’s top ten advertisers, half are headquartered outside the U.S Of the world’s top ten advertisers, half are headquartered outside the U.S

24. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.3 Top Ten Worldwide Advertisers

25. Copyright © 2003 by South-Western. All Rights Reserved. Types Of Advertising Product Advertising: consists of messages designed to sell a particular good or service Product Advertising: consists of messages designed to sell a particular good or service

26. Copyright © 2003 by South-Western. All Rights Reserved. Types Of Advertising Institutional Advertising: involves messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities Institutional Advertising: involves messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities Advocacy Advertising (Cause Advertising): promotes a specific viewpoint on a public issue as a way to influence public opinion and the legislative process Advocacy Advertising (Cause Advertising): promotes a specific viewpoint on a public issue as a way to influence public opinion and the legislative process © PhotoDisc

27. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.4 Advocacy Advertising

28. Copyright © 2003 by South-Western. All Rights Reserved. Advertising and the Product Life Cycle Product and Institutional Advertising fall into one of three categories, based on whether the ads intend to inform, persuade, or remind Product and Institutional Advertising fall into one of three categories, based on whether the ads intend to inform, persuade, or remind Informative Advertising: used to build initial demand for a product in the introductory phase of the product life cycle Informative Advertising: used to build initial demand for a product in the introductory phase of the product life cycle

29. Copyright © 2003 by South-Western. All Rights Reserved. Advertising and the Product Life Cycle Persuasive Advertising: attempts to improve the competitive status of a product, institution, or concept, usually in the growth and maturity stages of the product life cycle Persuasive Advertising: attempts to improve the competitive status of a product, institution, or concept, usually in the growth and maturity stages of the product life cycle

30. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.5 Use of Persuasive Advertising by the U.S. Army Figure 16.5 Use of Persuasive Advertising by the U.S. Army

31. Copyright © 2003 by South-Western. All Rights Reserved. Advertising and the Product Life Cycle Comparative Advertising: form of persuasive product advertising that compares products directly with their competitors Comparative Advertising: form of persuasive product advertising that compares products directly with their competitors Reminder-oriented advertising: often appears in the late maturity or decline stages of the product life cycle to maintain awareness of the importance and usefulness of a product, concept, or institution Reminder-oriented advertising: often appears in the late maturity or decline stages of the product life cycle to maintain awareness of the importance and usefulness of a product, concept, or institution

32. Copyright © 2003 by South-Western. All Rights Reserved. Advertising Media Must choose how to allocate advertising budget Must choose how to allocate advertising budget All media offer advantages and disadvantages All media offer advantages and disadvantages Must consider cost and which media is best suited for communication Must consider cost and which media is best suited for communication © PhotoDisc

33. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.6 Carving Up the Advertising Media Pie

34. Copyright © 2003 by South-Western. All Rights Reserved. NewspapersNewspapers Continue to dominate local advertising Continue to dominate local advertising Ads easily tailored for local tastes and preferences Ads easily tailored for local tastes and preferences Can coordinate newspaper messages with other promotional efforts Can coordinate newspaper messages with other promotional efforts Disadvantage: relatively short life span Disadvantage: relatively short life span

35. Copyright © 2003 by South-Western. All Rights Reserved. TelevisionTelevision America’s leading national advertising medium America’s leading national advertising medium Combines sound with dynamic visuals of products... and their associated images Combines sound with dynamic visuals of products... and their associated images An expensive advertising medium An expensive advertising medium Price for a 30-second ad during weeknight prime time on network television generally ranges from $100,000 to more than $500,000 Price for a 30-second ad during weeknight prime time on network television generally ranges from $100,000 to more than $500,000

36. Copyright © 2003 by South-Western. All Rights Reserved. RadioRadio Average U.S. household owns five radios Average U.S. household owns five radios Captive audience of listeners as they commute to and from work Captive audience of listeners as they commute to and from work In major markets, many stations serve different demographic groups with targeted programming In major markets, many stations serve different demographic groups with targeted programming © PhotoDisc

37. Copyright © 2003 by South-Western. All Rights Reserved. MagazinesMagazines Includes consumer publications and trade journals Includes consumer publications and trade journals Can often customize their publications and target advertising messages to different regions of the country Can often customize their publications and target advertising messages to different regions of the country A natural choice for targeted advertising A natural choice for targeted advertising

38. Copyright © 2003 by South-Western. All Rights Reserved. Direct Mail Average American household receives about 550 pieces of direct mail each year, including 100 catalogs Average American household receives about 550 pieces of direct mail each year, including 100 catalogs Direct-mail advertising a $44 billion business due to: Direct-mail advertising a $44 billion business due to: Huge growth in the variety of direct-mail offerings Huge growth in the variety of direct-mail offerings Convenience offered to today’s busy shoppers Convenience offered to today’s busy shoppers © Milton M. Pressley

39. Copyright © 2003 by South-Western. All Rights Reserved. Direct Mail Every dollar spent on direct- mail advertising generates $10 in sales Every dollar spent on direct- mail advertising generates $10 in sales Over twice as effective as television advertising Over twice as effective as television advertising Carefully targeted direct-mail effort, with an interesting message, can work well for small budget advertisers Carefully targeted direct-mail effort, with an interesting message, can work well for small budget advertisers © Milton M. Pressley

40. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.7 Using Telephone and Internet Access to Support the Lands’ End Catalog

41. Copyright © 2003 by South-Western. All Rights Reserved. Outdoor Advertising Accounts for just over 1 percent of total advertising expenditures Accounts for just over 1 percent of total advertising expenditures Share is growing Share is growing Majority of spending on outdoor advertising is for billboards Majority of spending on outdoor advertising is for billboards Other types of outdoor advertising (signs in transit stations, stores, airports, and sports stadiums) is growing Other types of outdoor advertising (signs in transit stations, stores, airports, and sports stadiums) is growing

42. Copyright © 2003 by South-Western. All Rights Reserved. Outdoor Advertising Advertisers exploring new forms of outdoor media -- many of which involve technology Advertisers exploring new forms of outdoor media -- many of which involve technology Disadvantages include the facts that: Disadvantages include the facts that: Brief messages are required Brief messages are required Mounting concern for aesthetic and environmental issues Mounting concern for aesthetic and environmental issues

43. Copyright © 2003 by South-Western. All Rights Reserved. Interactive Media Range from Web sites and CDs to information kiosks Range from Web sites and CDs to information kiosks Currently commands only a tiny portion of media spending, but is the fastest-growing media segment Currently commands only a tiny portion of media spending, but is the fastest-growing media segment

44. Copyright © 2003 by South-Western. All Rights Reserved. SponsorshipsSponsorships Sponsorship: involves providing funds for a sporting or cultural event in exchange for a direct association with the event Sponsorship: involves providing funds for a sporting or cultural event in exchange for a direct association with the event Logictier: An Official Sponsor for the Salt Lake Olympics Games

45. Copyright © 2003 by South-Western. All Rights Reserved. SponsorshipsSponsorships Sports sponsorships attract two- thirds of total sponsorship dollars Sports sponsorships attract two- thirds of total sponsorship dollars Primary benefits: exposure to the event’s audience and association with the image of the activity Primary benefits: exposure to the event’s audience and association with the image of the activity

46. Copyright © 2003 by South-Western. All Rights Reserved. Other Media Options Infomercials: 30-minute programs that resemble regular TV programs, but are devoted to selling goods or services Infomercials: 30-minute programs that resemble regular TV programs, but are devoted to selling goods or services Other Media options include: Other Media options include: Ads in movie theaters Ads in movie theaters Ads on airline movie screens Ads on airline movie screens Printed programs Printed programs Subway tickets Subway tickets Turnpike toll receipts Turnpike toll receipts Automated teller machines Automated teller machines © PhotoDisc

47. Copyright © 2003 by South-Western. All Rights Reserved. SALES PROMOTION Sales promotion: nonpersonal marketing activities other than advertising and public relations that stimulate consumer purchasing and dealer effectiveness; includes displays, trade shows, demonstrations, and various nonrecurrent selling efforts Sales promotion: nonpersonal marketing activities other than advertising and public relations that stimulate consumer purchasing and dealer effectiveness; includes displays, trade shows, demonstrations, and various nonrecurrent selling efforts

48. Copyright © 2003 by South-Western. All Rights Reserved. Potential advantages: Potential advantages: Short-term increased sales Short-term increased sales Increased brand equity Increased brand equity Enhanced customer relationships Enhanced customer relationships SALES PROMOTION

49. Copyright © 2003 by South-Western. All Rights Reserved. Consumer-Oriented Promotions Goals of a consumer-oriented sales promotion include: Goals of a consumer-oriented sales promotion include: Getting new and existing customers to try or buy products Getting new and existing customers to try or buy products Encouraging repeat purchases by rewarding current users Encouraging repeat purchases by rewarding current users Increasing sales of complementary products Increasing sales of complementary products Boosting impulse purchases Boosting impulse purchases © PhotoDisc

50. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.8 Spending on Consumer- Oriented Promotions

51. Copyright © 2003 by South-Western. All Rights Reserved. Coupons, Rebates, Samples, and Premiums The most widely used sales promotion techniques are coupons, advertising clippings, and cards included in packages The most widely used sales promotion techniques are coupons, advertising clippings, and cards included in packages Coupons offer small price discounts Coupons offer small price discounts May persuade a customer to try a new or different product May persuade a customer to try a new or different product © Milton M. Pressley

52. Copyright © 2003 by South-Western. All Rights Reserved. Coupons, Rebates, Samples, and Premiums Rebates offer cash back to consumers Rebates offer cash back to consumers Help manufacturers: Help manufacturers: Increase purchase rates Increase purchase rates Promote multiple purchases Promote multiple purchases Reward product users Reward product users

53. Copyright © 2003 by South-Western. All Rights Reserved. Coupons, Rebates, Samples, and Premiums Sample: a gift of a product distributed by mail, door-to-door, in a demonstration, or inside packages of another product Sample: a gift of a product distributed by mail, door-to-door, in a demonstration, or inside packages of another product Expensive, but Expensive, but Generates a higher response rate than most other sales promotion techniques Generates a higher response rate than most other sales promotion techniques

54. Copyright © 2003 by South-Western. All Rights Reserved. Coupons, Rebates, Samples, and Premiums Premium: item given free or at a reduced price with the purchase of another product Premium: item given free or at a reduced price with the purchase of another product Should choose a premium that is likely to get consumers thinking and caring about the brand and the product Should choose a premium that is likely to get consumers thinking and caring about the brand and the product

55. Copyright © 2003 by South-Western. All Rights Reserved. Contests and Sweepstakes Offering cash, merchandise or travel as prizes to participating winners Offering cash, merchandise or travel as prizes to participating winners Often used to introduce new goods and services and to attract additional customers Often used to introduce new goods and services and to attract additional customers Court rulings and legal restrictions have limited the use of contests Court rulings and legal restrictions have limited the use of contests Companies must proceed carefully in advertising their contests and prizes Companies must proceed carefully in advertising their contests and prizes

56. Copyright © 2003 by South-Western. All Rights Reserved. Specialty Advertising Because these specialty advertising products are useful, people tend to keep and use them Because these specialty advertising products are useful, people tend to keep and use them Gives advertisers repeated exposure Gives advertisers repeated exposure Originally designed to identify and create goodwill for advertisers Originally designed to identify and create goodwill for advertisers Now generates sales leads and develops traffic for stores and trade show exhibitors. Now generates sales leads and develops traffic for stores and trade show exhibitors. © Milton M. Pressley

57. Copyright © 2003 by South-Western. All Rights Reserved. Trade-Oriented Promotions Trade promotion: sales promotion geared to marketing intermediaries Trade promotion: sales promotion geared to marketing intermediaries Used to encourage retailers to: Used to encourage retailers to: Stock new products Stock new products Continue carrying existing ones Continue carrying existing ones Promote products effectively to consumers. Promote products effectively to consumers. © PhotoDisc

58. Copyright © 2003 by South-Western. All Rights Reserved. Trade-Oriented Promotions Successful trade promotions: Successful trade promotions: Offer financial incentives Offer financial incentives Require careful timing, attention to costs, and easy implementation for intermediaries Require careful timing, attention to costs, and easy implementation for intermediaries Should bring quick results and improve retail sales Should bring quick results and improve retail sales © PhotoDisc

59. Copyright © 2003 by South-Western. All Rights Reserved. Trade-Oriented Promotions Point-of-purchase (POP) advertising: displays or demonstrations that promote products when and where consumers buy them Point-of-purchase (POP) advertising: displays or demonstrations that promote products when and where consumers buy them Takes advantage of many shoppers’ tendencies to make purchase decisions in the store Takes advantage of many shoppers’ tendencies to make purchase decisions in the store

60. Copyright © 2003 by South-Western. All Rights Reserved. Trade shows: promote goods or services to intermediaries Trade shows: promote goods or services to intermediaries Often organized by industry trade associations Often organized by industry trade associations Typically held during annual meetings or conventions Typically held during annual meetings or conventions Particularly important in fast-changing industries Particularly important in fast-changing industries Especially effective for introducing new products and generating sales leads Especially effective for introducing new products and generating sales leads Trade-Oriented Promotions © PhotoDisc

61. Copyright © 2003 by South-Western. All Rights Reserved. © PhotoDisc PERSONAL SELLING Personal selling: interpersonal promotional process involving a seller’s face-to-face presentation to a prospective buyer Personal selling: interpersonal promotional process involving a seller’s face-to-face presentation to a prospective buyer Considered by many companies as the key to marketing effectiveness Considered by many companies as the key to marketing effectiveness

62. Copyright © 2003 by South-Western. All Rights Reserved. PERSONAL SELLING Likely to emphasize personal selling rather than advertising or sales promotion when: Likely to emphasize personal selling rather than advertising or sales promotion when: Customers are relatively few in number and geographically concentrated Customers are relatively few in number and geographically concentrated Product is technically complex, involves trade-ins, and requires special handling Product is technically complex, involves trade-ins, and requires special handling Product is high in price Product is high in price Product moves through direct-distribution channels Product moves through direct-distribution channels © PhotoDisc

63. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.9 Listening: At the Core of Personal Selling

64. Copyright © 2003 by South-Western. All Rights Reserved. Order Processing Order Processing: selling, mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders Order Processing: selling, mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders Efficient and accurate order processing is critical to satisfying customers’ needs Efficient and accurate order processing is critical to satisfying customers’ needs Sales Tasks © PhotoDisc

65. Copyright © 2003 by South-Western. All Rights Reserved. Order Processing Creative Selling: personal selling involving situations in which a considerable degree of analytical decision making on the buyer’s part results in the need for skillful proposals of solutions for the customer’s needs Creative Selling: personal selling involving situations in which a considerable degree of analytical decision making on the buyer’s part results in the need for skillful proposals of solutions for the customer’s needs Sales Tasks Creative Selling © PhotoDisc

66. Copyright © 2003 by South-Western. All Rights Reserved. Order Processing Missionary Selling: indirect form of selling in which specialized salespeople promote goodwill among indirect customers, often by assisting customers in product use Missionary Selling: indirect form of selling in which specialized salespeople promote goodwill among indirect customers, often by assisting customers in product use Missionary salespeople sometimes to help their clients with questions not directly related to their employers’ products Missionary salespeople sometimes to help their clients with questions not directly related to their employers’ products Sales Tasks Creative Selling Missionary Selling © PhotoDisc

67. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.10 Seven Steps in the Sales Process The Sales Process

68. Copyright © 2003 by South-Western. All Rights Reserved. Prospecting and Qualifying The Sales Process Prospecting involves identifying potential customers Prospecting involves identifying potential customers Qualifying involves identifying potential customers who have the financial ability and authority to buy. Qualifying involves identifying potential customers who have the financial ability and authority to buy.

69. Copyright © 2003 by South-Western. All Rights Reserved. Prospecting and Qualifying Approach The Sales Process Before making the initial contact: Before making the initial contact: Careful preparations are made Careful preparations are made Available data about a prospective customer and other pertinent information is analyzed Available data about a prospective customer and other pertinent information is analyzed First impression is important in influencing a customer’s attitudes First impression is important in influencing a customer’s attitudes Successful salespeople learn to “read” customers and to determine their needs Successful salespeople learn to “read” customers and to determine their needs

70. Copyright © 2003 by South-Western. All Rights Reserved. Prospecting and Qualifying Approach Presentation The Sales Process Involves communicating promotional messages Involves communicating promotional messages Major features of the product, highlights of the advantages, and examples of satisfied consumers are typically presented Major features of the product, highlights of the advantages, and examples of satisfied consumers are typically presented

71. Copyright © 2003 by South-Western. All Rights Reserved. Prospecting and Qualifying Approach Presentation Demonstration The Sales Process Involves the prospect in the sales presentation Involves the prospect in the sales presentation Reinforces the message that the salesperson has been communicating Reinforces the message that the salesperson has been communicating Often a critical step in the sales process Often a critical step in the sales process

72. Copyright © 2003 by South-Western. All Rights Reserved. Handling Objections Prospecting and Qualifying Approach Presentation Demonstration The Sales Process Allows sales personnel to remove obstacles and complete the sale Allows sales personnel to remove obstacles and complete the sale Can become a positive part of the sales process Can become a positive part of the sales process Allows the salesperson to present additional information Allows the salesperson to present additional information

73. Copyright © 2003 by South-Western. All Rights Reserved. Handling Objections Closing Prospecting and Qualifying Approach Presentation Demonstration The Sales Process Critical point in a selling relationship -- the time at which the salesperson actually asks the prospect to buy Critical point in a selling relationship -- the time at which the salesperson actually asks the prospect to buy If the presentation effectively matches product features to customer needs, the closing should be a natural conclusion. If the presentation effectively matches product features to customer needs, the closing should be a natural conclusion.

74. Copyright © 2003 by South-Western. All Rights Reserved. Handling Objections Closing Prospecting and Qualifying Approach Presentation Demonstration The Sales Process Follow-up Salesperson’s actions after the sale Salesperson’s actions after the sale May well determine whether the customer will make another purchase May well determine whether the customer will make another purchase Seller should: Seller should: Process the order quickly and efficiently Process the order quickly and efficiently Reassure the customer about the purchase decision Reassure the customer about the purchase decision

75. Copyright © 2003 by South-Western. All Rights Reserved. Handling Objections Closing Prospecting and Qualifying Approach Presentation Demonstration The Sales Process Follow-up Vital activity for building a long- term relationship with customers Vital activity for building a long- term relationship with customers By calling soon after a purchase, the salesperson provides psychological reinforcement for the customer’s decision to buy By calling soon after a purchase, the salesperson provides psychological reinforcement for the customer’s decision to buy Also gives the seller a chance to correct any problems Also gives the seller a chance to correct any problems

76. Copyright © 2003 by South-Western. All Rights Reserved. Recent Trends in Personal Selling Especially in business-to- business situations involving technical products, customers expect sales reps to: Especially in business-to- business situations involving technical products, customers expect sales reps to: Answer technical questions Answer technical questions Understand technical jargon Understand technical jargon Communicate using sophisticated technological tools -- or bring along someone who can Communicate using sophisticated technological tools -- or bring along someone who can © PhotoDisc

77. Copyright © 2003 by South-Western. All Rights Reserved. Recent Trends in Personal Selling Patience is required Patience is required Sales cycle, may take months or even years... especially for large, expensive equipment Sales cycle, may take months or even years... especially for large, expensive equipment Companies are turning to: Companies are turning to: Relationship selling Relationship selling Consultative selling Consultative selling Team selling Team selling Sales force automation Sales force automation © PhotoDisc

78. Copyright © 2003 by South-Western. All Rights Reserved. TelemarketingTelemarketing Telemarketing: personal selling conducted entirely by telephone, provides a firm’s marketers with a high return on their expenditures, an immediate response, and an opportunity for personalized, two-way conversation Telemarketing: personal selling conducted entirely by telephone, provides a firm’s marketers with a high return on their expenditures, an immediate response, and an opportunity for personalized, two-way conversation © PhotoDisc

79. Copyright © 2003 by South-Western. All Rights Reserved. TelemarketingTelemarketing Two forms of telemarketing : Two forms of telemarketing : Outbound telemarketing: when a sales representative calls you at your place of business Outbound telemarketing: when a sales representative calls you at your place of business Inbound telemarketing: when the customer calls a toll-free phone number to get information or place an order. Inbound telemarketing: when the customer calls a toll-free phone number to get information or place an order. © PhotoDisc

80. Copyright © 2003 by South-Western. All Rights Reserved. Relationship Selling and Consultative Selling Relationship Selling: when a salesperson builds a mutually beneficial relationship with a customer through regular contacts over an extended period Relationship Selling: when a salesperson builds a mutually beneficial relationship with a customer through regular contacts over an extended period © PhotoDisc

81. Copyright © 2003 by South-Western. All Rights Reserved. Relationship Selling and Consultative Selling Consultative selling: meeting customers’ needs by listening to them, understanding and caring about their problems, paying attention to details, suggesting solutions, and following through after the sale Consultative selling: meeting customers’ needs by listening to them, understanding and caring about their problems, paying attention to details, suggesting solutions, and following through after the sale © PhotoDisc

82. Copyright © 2003 by South-Western. All Rights Reserved. Team Selling Team selling: joins salespeople with specialists from other functional areas of the firm to complete the selling process Team selling: joins salespeople with specialists from other functional areas of the firm to complete the selling process Complements relationship and consultative selling strategies Complements relationship and consultative selling strategies Can be formally assigned teams or assembled for specific, temporary selling situations Can be formally assigned teams or assembled for specific, temporary selling situations © PhotoDisc

83. Copyright © 2003 by South-Western. All Rights Reserved. Sales Force Automation Sales force automation (SFA): incorporates a broad range of tools, from e-mail, telecommunications devices like pagers and cell phones, and laptop computers to increasingly sophisticated software systems that automate the sales process Sales force automation (SFA): incorporates a broad range of tools, from e-mail, telecommunications devices like pagers and cell phones, and laptop computers to increasingly sophisticated software systems that automate the sales process © PhotoDisc

84. Copyright © 2003 by South-Western. All Rights Reserved. Helps sales managers: Helps sales managers: Develop account territories Develop account territories Plan sales campaigns Plan sales campaigns Perform detailed analyses of sales trends Perform detailed analyses of sales trends Forecast future sales Forecast future sales Sales Force Automation © PhotoDisc

85. Copyright © 2003 by South-Western. All Rights Reserved. Sales personnel can use the system to: Sales personnel can use the system to: Analyze customer databases to develop leads Analyze customer databases to develop leads Schedule sales campaigns Schedule sales campaigns Automatically file orders and expense reports Automatically file orders and expense reports Tap into company databases for instant updates on prices, and product availability Tap into company databases for instant updates on prices, and product availability Sales Force Automation © PhotoDisc

86. Copyright © 2003 by South-Western. All Rights Reserved. Public Relations Public Relations: organization’s nonpaid communications and relationships with public audiences Public Relations: organization’s nonpaid communications and relationships with public audiences © PhotoDisc

87. Copyright © 2003 by South-Western. All Rights Reserved. Public Relations Publicity: stimulation of demand for a good, service, place, idea, person, or organization by disseminating news or obtaining favorable media presentations not paid for by the sponsor Publicity: stimulation of demand for a good, service, place, idea, person, or organization by disseminating news or obtaining favorable media presentations not paid for by the sponsor © PhotoDisc

88. Copyright © 2003 by South-Western. All Rights Reserved. PROMOTIONAL STRATEGIES By blending advertising, sales promotion, personal selling, and public relations, marketers create an integrated promotional mix that reflects the market, product type, stage in the product life cycle, price, and promotional budget By blending advertising, sales promotion, personal selling, and public relations, marketers create an integrated promotional mix that reflects the market, product type, stage in the product life cycle, price, and promotional budget They then implement one of two promotional alternatives: pulling or pushing strategies They then implement one of two promotional alternatives: pulling or pushing strategies Finally, the effectiveness of the promotional strategies must be measured Finally, the effectiveness of the promotional strategies must be measured © PhotoDisc

89. Copyright © 2003 by South-Western. All Rights Reserved. Selecting a Promotional Mix Guidelines for allocating promotional efforts and expenditures among personal selling and advertising: Guidelines for allocating promotional efforts and expenditures among personal selling and advertising: What is your target market? What is your target market? What is the value of the product? What is the value of the product? What time frame is involved? What time frame is involved? © PhotoDisc

90. Copyright © 2003 by South-Western. All Rights Reserved. Figure 16.11 Advertising in Nike’s Promotional Mix Figure 16.11 Advertising in Nike’s Promotional Mix

91. Copyright © 2003 by South-Western. All Rights Reserved. Pushing and Pulling Strategies Pushing strategy: promotional effort by a seller to members of the distribution channel intended to stimulate personal selling of the good or service, thereby pushing it through the channel Pushing strategy: promotional effort by a seller to members of the distribution channel intended to stimulate personal selling of the good or service, thereby pushing it through the channel Cooperative advertising: allowances in which firms share the cost of local advertising of their product or line with channel partners Cooperative advertising: allowances in which firms share the cost of local advertising of their product or line with channel partners © PhotoDisc

92. Copyright © 2003 by South-Western. All Rights Reserved. Pulling strategy: promotional effort by a seller to stimulate demand among final users, who will then exert pressure on the distribution channel to carry the good or service, pulling it through the distribution channel Pulling strategy: promotional effort by a seller to stimulate demand among final users, who will then exert pressure on the distribution channel to carry the good or service, pulling it through the distribution channel © PhotoDisc Pushing and Pulling Strategies

93. Copyright © 2003 by South-Western. All Rights Reserved. ETHICS IN PROMOTION Promotion ranks high among things raising the most ethical questions Promotion ranks high among things raising the most ethical questions Many people view advertising negatively, labeling it as propaganda rather than information Many people view advertising negatively, labeling it as propaganda rather than information © PhotoDisc

94. Copyright © 2003 by South-Western. All Rights Reserved. Puffery and Deception Puffery: exaggerated claims of a product’s superiority or use of doubtful, subjective, or vague statements Puffery: exaggerated claims of a product’s superiority or use of doubtful, subjective, or vague statements Usually considered unbelievable and is therefore legal Usually considered unbelievable and is therefore legal Raises ethical questions Raises ethical questions

95. Copyright © 2003 by South-Western. All Rights Reserved. Puffery and Deception Other promotional elements can also involve deception Other promotional elements can also involve deception Sales promotions may tempt unscrupulous companies to deceive consumers by inaccurately stating the odds of winning sweepstakes or contests Sales promotions may tempt unscrupulous companies to deceive consumers by inaccurately stating the odds of winning sweepstakes or contests Salespeople have deceived customers with misleading information Salespeople have deceived customers with misleading information

96. Copyright © 2003 by South-Western. All Rights Reserved. Promotion to Children and Teens Risk of deception is especially great with promotion targeted to children and teens Risk of deception is especially great with promotion targeted to children and teens Children not sophisticated at analyzing promotional messages Children not sophisticated at analyzing promotional messages © PhotoDisc

97. Copyright © 2003 by South-Western. All Rights Reserved. Promotion in Public Schools and on College Campuses Includes promotional book covers, posters, and even curriculum materials provided to today’s schools Includes promotional book covers, posters, and even curriculum materials provided to today’s schools Some schools sign contracts that give certain brands exclusive access to their students Some schools sign contracts that give certain brands exclusive access to their students © PhotoDisc

98. Copyright © 2003 by South-Western. All Rights Reserved. WHAT’S AHEAD As discussion of how information systems, including the Internet, and other forms of technology change the business environment and help businesses succeed As discussion of how information systems, including the Internet, and other forms of technology change the business environment and help businesses succeed © PhotoDisc