Lamb Hair Mc Daniel MKTG 2008 2009 16

Lamb, Hair, Mc. Daniel MKTG 2008 -2009 16 CHAPTER Designed by Amy Mc. Guire, B-books, Ltd. Chapter 16 Sales Promotion and Personal Selling Prepared by Deborah Baker, Texas Christian University Copyright © 2009 Cengage Learning Inc. All rights reserved 1

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 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 2

Learning Outcomes LO 5 Discuss the key differences between relationship selling and traditional selling LO 6 List the steps in the selling process Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 3

Sales Promotion LO 1 Chapter 16 Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. Copyright © 2009 Cengage Learning Inc. All rights reserved 4

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

Sales Promotion Consumer Sales Promotion Goal Trade Sales Promotion Consumer market Drive immediate purchase Influence behavior Marketing channel LO 1 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 6

Objectives of Sales Promotion Type of Buyer Desired Results Sales Promotion Examples Loyal Customers • Reinforce behavior • Loyalty marketing • Increase consumption • Bonus packs • Change purchase timing 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 • Appeal with low prices • Supply added value • Coupons, price-off packages, refunds • Trade deals LO 1 Price Buyers Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 7

LO 1 REVIEW LEARNING OUTCOME The Objectives of Sales Promotion Chapter 16 Copyright ©

Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling LO 2 Chapter 16 Point-of-Purchase Promotion Copyright © 2009 Cengage Learning Inc. All rights reserved 9

Tools for Consumer Sales Promotion LO 2 Chapter 16 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. Copyright © 2009 Cengage Learning Inc. All rights reserved 10

Tools for Consumer Sales Promotion 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. LO 2 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 11

Tools for Consumer Sales Promotion Contests Sweepstakes LO 2 Chapter 16 Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation. www. online-sweepstakes. com/ Online Copyright © 2009 Cengage Learning Inc. All rights reserved 12

Tools for Consumer Sales Promotion Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. LO 2 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 13

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

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

Online Sales Promotion Effective Types of Online Sales Promotion u Free merchandise u Sweepstakes u Free shipping with purchases u Coupons LO 2 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 16

LO 2 REVIEW LEARNING OUTCOME Consumer Sales Promotion Coupons and rebates Premiums Loyalty marketing programs Contests Sampling P-O-P Online Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 17

LO 3 Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise 18 Store Demonstration Conventions & Trade Shows Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 18

LO 3 Trade Allowance A price reduction offered by manufacturers to intermediaries, such as

LO 3 Push Money Chapter 16 Money offered to channel intermediaries to encourage them to “push” products--that is, to encourage other members of the channel to 20 sell the products. Copyright © 2009 Cengage Learning Inc. All rights reserved 20

LO 3 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 21 u Improve trade relations Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 21

LO 3 REVIEW LEARNING OUTCOME Forms of Trade Sales Promotion Chapter 16 Copyright ©

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. Customers are concentrated. Product is simple to understand. Customers are geographically dispersed. LO 4 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 23

LO 4 REVIEW LEARNING OUTCOME Personal Selling Advantages Chapter 16 R Detailed explanation or demonstration R Variable sales message R Directed to qualified prospects R Controllable adjustable selling costs R More effective than other promotion in obtaining sale and gaining customer satisfaction Copyright © 2009 Cengage Learning Inc. All rights reserved 24

Relationship Selling Relationship (Consultative) Selling A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships. LO 5 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 25

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 LO 5 Short-term sales follow-up Profit impact and strategic benefit focus Chapter 16 Long-term sales follow-up Copyright © 2009 Cengage Learning Inc. All rights reserved 26

LO 5 REVIEW LEARNING OUTCOME Relationship Selling vs. Traditional Selling Sales Increases Result From Creating Value Initial Sales Repeat Sales Successive Sales Traditional Sales Relationship Sales Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 27

Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale LO 6 Chapter 16 Follow Up Copyright © 2009 Cengage Learning Inc. All rights reserved 28

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 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 29

Generating Leads Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Networking Trade Shows/ Conventions Company Records http: //www. linkedin. com http: //www. ryze. com LO 6 Chapter 16 Online Copyright © 2009 Cengage Learning Inc. All rights reserved 30

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 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 31

Qualifying Leads Recognized need Buying power Receptivity and accessibility LO 6 Chapter 16 Copyright

Needs Assessment A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. LO 6 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 33

The Consultative Salesperson Product or service Salesperson must know everything about. . . Customers Competition Industry LO 6 Chapter 16 http: //www. hoovers. com http: //www. dnb. com Online Copyright © 2009 Cengage Learning Inc. All rights reserved 34

Developing and Proposing Solutions Sales Proposal Sales Presentation LO 6 Chapter 16 Copyright ©

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 Chapter 16 PRACTICE, PRACTICE! Copyright © 2009 Cengage Learning Inc. All rights reserved 36

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 Chapter 16 Copyright © 2009 Cengage Learning Inc. All rights reserved 37