Lamb Hair Mc Daniel CHAPTER 18 Sales Promotion

Lamb, Hair, Mc. Daniel CHAPTER 18 Sales Promotion and Personal Selling 2010 -2011

Learning Outcomes 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 LO 4 Describe personal selling 2

Learning Outcomes LO 5 Discuss the key differences between relationship selling and traditional selling LO 6 List the steps in the selling process 3

Sales Promotion Define and state the objectives of sales promotion LO 1 4

Sales Promotion LO 1 Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. 5

Sales Promotion LO 1 Advertising Reason to buy Sales Promotion Incentive to buy 6

Objectives of Sales Promotion Type of Buyer Desired Results Sales Promotion Examples Loyal Customers • Reinforce behavior • Increase consumption • Change purchase timing • Loyalty marketing • Bonus packs Competitor’s Customers • Break loyalty • Persuade to switch • Sampling • Sweepstakes, contests, premiums Brand Switchers • Persuade to buy your brand more often • Price-lowering promotion • Trade deals Price Buyers • Appeal with low prices • Supply added value • Coupons, price-off packages, refunds • Trade deals LO 1 7

REVIEW LEARNING OUTCOME The Objectives of Sales Promotion LO 1 8

Tools for Consumer Sales Promotion Discuss the most common forms of consumer sales promotion LO 2 9

Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion LO 2 10

Tools for Consumer Sales Promotion Coupon A certificate that entitles consumers to an immediate price reduction. Rebate A cash refund given for the purchase of a product during a specific period. Premium An extra item offered to the consumer, usually in exchange for some proof of purchase. LO 2 11

Economic Hard Times = Coupon Use With coupon use, a family can save more than an economic stimulus check (avg. $300 -$1, 200 in May 2008). Possible grocery savings/household (2 adults + 2 children) using coupons = 25 percent/year, without cutting purchases. That means, if a family spends $800/month on groceries, they can save $2, 400 annually by using coupons. SOURCE: “In Economic Downturn, 67% Plan More Coupon Use, ” http: //www. i-com. com/aboutus_news_detail. asp? pid=68. LO 2 12

Tools for Consumer Sales Promotion LO 2 Loyalty Marketing Program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. Frequent Buyer Program A loyalty program in which loyal consumers are rewarded for making multiple purchases. 13

Tools for Consumer Sales Promotion Contests Sweepstakes LO 2 Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation. 14

Tools for Consumer Sales Promotion Sampling LO 2 A promotional program that allows the consumer the opportunity to try a product or service for free. 15

Methods of Sampling Direct mail Door-to-door delivery Packaging with another product Retail store demonstration LO 2 16

Point-of-Purchase Promotion u. Build traffic u. Advertise the product u. Induce impulse buying LO 2 17

Online Sales Promotion Effective Types of Online Sales Promotion u Free merchandise u Sweepstakes u Free shipping with purchases u Coupons LO 2 18

TV, Print, Times Square, Oh My! Verizon Wireless launched the largest integrated marketing campaign in the company’s history, receiving $100 million in support for pushing the Droid. Beginning in late October, Verizon launched ads in magazines and television that position their newest smartphone as the antidote to the i. Phone’s shortfalls. As part of the demonstration of the Droid’s capabilities, Verizon launched the Droid Does Times Square campaign. This allows users to call a toll-free number and use billboards on Times Square to search for anything using voice commands. And the results show up on times square. For those not on Times Square, Verizon’s website streams video of times square. LO 2 SOURCE: Chang, Rita. “Verizon Spending $100 Million on its Droid Ad Campaign, ” thebusinessinsider. com, November 9, 2009; Wimberly, Taylor. “Drod Does Times Square, ” androidandme. com, November 6, 2009. 19

Tools for Trade Sales Promotion List the most common forms of trade sales promotion LO 3 20

Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows LO 3 21

Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. LO 3 22

Push Money LO 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. 23

Benefits of Trade Promotions u Help manufacturers gain new distribution u Obtain wholesaler and retailer support for consumer sales promotions u Build or reduce dealer inventories u Improve trade relations LO 3 24

REVIEW LEARNING OUTCOME Forms of Trade Sales Promotion LO 3 25

Personal Selling Describe personal selling LO 4 26

Personal Selling is more important if. . . Advertising & Sales Promotion are more important if. . . Product has a high value. Product has a low value. Product is custom made. Product is standardized. There are few customers. There are many customers. Product is technically complex. Product is simple to understand. Customers are concentrated. Customers are geographically dispersed. LO 4 27

REVIEW LEARNING OUTCOME R Detailed explanation or demonstration R Variable sales message Personal R Directed to qualified prospects Selling Advantages R Controllable adjustable selling costs R LO 4 More effective than other promotion in obtaining sale and gaining customer satisfaction 28

Relationship Selling Discuss the key differences between relationship selling and traditional selling LO 5 29

Relationship Selling Relationship (Consultative) Selling LO 5 A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships. 30

Traditional Selling and Relationship Selling Traditional Personal Selling Relationship Selling Sell products Sell advice, assistance, counsel Focus on closing sales Focus on customer’s bottom line Limited sales planning Sales planning is top priority Discuss product Build problem-solving environment Assess “product-specific” needs Conduct discovery in scope of operations “Lone wolf” approach Team approach Pricing/product focus Profit impact and strategic benefit focus LO 5 Short-term sales follow-up LO 5 Long-term sales follow-up 31

REVIEW LEARNING OUTCOME Relationship Selling vs. Traditional Selling Sales Increases Result From Creating Value LO 5 Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales 32

Steps in the Selling Process List the steps in the selling process LO 6 33

Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up LO 6 34

Time Spent in Key Steps of Selling Process Traditional Selling Relationship Selling Generate Leads High Low Qualify Leads Low High Probe Needs Low High Develop Solutions Low High Handle Objections High Low Close the sale High Low Follow-up Low High Key Selling Steps LO 6 35

Generating Leads Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Networking Trade Shows/ Conventions Company Records LO 6 36

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. LO 6 37

Qualifying Leads Recognized need Buying power Receptivity and accessibility LO 6 38

Needs Assessment LO 6 A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. 39

The Consultative Salesperson Product or service Salesperson must know everything about. . . Customers Competition Industry LO 6 40

Developing and Proposing Solutions Sales Presentation Sales Proposal LO 6 41

Powerful Presentations Be well prepared Use eye contact Ask open-ended questions Be poised Use hand gestures and voice inflection Focus on the customer needs Incorporate visual elements Know how to operate the A/V equipment Make sure the equipment works LO 6 PRACTICE, PRACTICE! 42

Handling Objections u View objections as requests for information u Anticipate specific objections u Investigate the objection with the customer u Be aware of competitors’ products u Stay calm u Use the objection to close the sale LO 6 43

Closing the Sale Look for customer signals Keep an open mind Negotiate Tailor to each market LO 6 44

The Impact of Technology on Personal Selling Cell phones Laptops Pagers E-Mail Electronic organizers Internet LO 6 45

Steps in the Selling Process Closing the sale Handling objections Developing and proposing solutions Approaching Customer Qualifying Leads Generating Leads LO 6 A Continuing Process 46

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-Care What about this man? What are his sales tactics? – Vegetable Peeler Salesman LO 6 47