Sales Promotion and Personal Selling chapter 16 Prepared

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Sales Promotion and Personal Selling chapter 16 Prepared by Deborah Baker Texas Christian University

Sales Promotion and Personal Selling chapter 16 Prepared by Deborah Baker Texas Christian University © 2002 South-Western 1

Learning Objectives 1. Define and state the objectives of sales promotion. chapter 16 2.

Learning Objectives 1. Define and state the objectives of sales promotion. chapter 16 2. Discuss the most common forms of consumer sales promotion. 3. List the most common forms of trade sales promotion. Chapter 16 Version 6 e © 2002 South-Western 2

Learning Objectives (continued) 4. Describe personal selling. chapter 16 5. Discuss the key differences

Learning Objectives (continued) 4. Describe personal selling. chapter 16 5. Discuss the key differences between relationship selling and traditional selling. 6. List the steps in the selling process. 7. Describe the functions of sales management. Chapter 16 Version 6 e © 2002 South-Western 3

Learning Objective 1 Define and state the objectives of sales promotion. Chapter 16 Version

Learning Objective 1 Define and state the objectives of sales promotion. Chapter 16 Version 6 e © 2002 South-Western 4

Sales Promotion 1 Marketing communication activities, other than advertising, personal selling, and public relations,

Sales Promotion 1 Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. Chapter 16 Version 6 e © 2002 South-Western 5

Sales Promotion 1 Sales Promotion Targets Consumer Sales Promotion Chapter 16 Version 6 e

Sales Promotion 1 Sales Promotion Targets Consumer Sales Promotion Chapter 16 Version 6 e Trade Sales Promotion © 2002 South-Western 6

Uses of Sales Promotion 1 Immediate Purchases Increase Trial Boost consumer inventory Encourage repurchase

Uses of Sales Promotion 1 Immediate Purchases Increase Trial Boost consumer inventory Encourage repurchase Uses of Sales Promotion Chapter 16 Version 6 e Increase ad effectiveness Encourage brand switching Encourage brand loyalty © 2002 South-Western 7

Objectives of Sales Promotion Type of Buyer Desired Results 1 Sales Promotion Examples Loyal

Objectives of Sales Promotion Type of Buyer Desired Results 1 Sales Promotion Examples Loyal Customers • Reinforce behavior • Loyalty marketing • Increase consumption • Bonus packs • Change 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 Price Buyers • Appeal with low prices • Supply added value © 2002 South-Western • Coupons, price-off packages, refunds • Trade deals 8 Chapter 16 Version 6 e

2 Learning Objective Discuss the most common forms of consumer sales promotion. Chapter 16

2 Learning Objective Discuss the most common forms of consumer sales promotion. Chapter 16 Version 6 e © 2002 South-Western 9

Tools for Consumer Sales Promotion 2 Coupons and Rebates Premiums Loyalty Marketing Programs Popular

Tools for Consumer Sales Promotion 2 Coupons and Rebates Premiums Loyalty Marketing Programs Popular Tools for Consumer Sales Promotion Chapter 16 Version 6 e Contests & Sweepstakes Sampling Point-of-Purchase Promotion © 2002 South-Western 10

Tools for Consumer Sales Promotion Coupon A certificate that entitles consumers to an immediate

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 product. Premium An extra item offered to the consumer, usually in exchange for some proof of purchase. Chapter 16 Version 6 e © 2002 South-Western 2 11

Tools for Consumer Sales Promotion 2 Loyalty Marketing Program A promotional program designed to

Tools for Consumer Sales Promotion 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. Chapter 16 Version 6 e © 2002 South-Western 12

Tools for Consumer Sales Promotion 2 Contest Promotions that require skill or ability to

Tools for Consumer Sales Promotion 2 Contest Promotions that require skill or ability to compete for prizes. Sweepstakes Promotions that depend on chance or luck, with free participation. Chapter 16 Version 6 e © 2002 South-Western 13

Tools for Consumer Sales Promotion Sampling Chapter 16 Version 6 e 2 A promotional

Tools for Consumer Sales Promotion Sampling Chapter 16 Version 6 e 2 A promotional program that allow the consumer the opportunity to try a product or service for free. © 2002 South-Western 14

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

2 Sampling Direct mail Methods of Sampling Door-to-door delivery Packaging with another product Retail store demonstration Chapter 16 Version 6 e © 2002 South-Western 15

Tools for Consumer Sales Promotion 2 Build traffic Advertise the product Goals of Point-of-Purchase

Tools for Consumer Sales Promotion 2 Build traffic Advertise the product Goals of Point-of-Purchase Displays Chapter 16 Version 6 e Induce impulse buying © 2002 South-Western 16

Tools for Consumer Sales Promotion 2 Free merchandise Effective Types of On-Line Sales Promotion

Tools for Consumer Sales Promotion 2 Free merchandise Effective Types of On-Line Sales Promotion Sweepstakes Free shipping Coupons Chapter 16 Version 6 e © 2002 South-Western 17

3 Learning Objective List the most common forms of trade sales promotion. Chapter 16

3 Learning Objective List the most common forms of trade sales promotion. Chapter 16 Version 6 e © 2002 South-Western 18

3 Tools for Trade Sales Promotion Trade Allowances Push Money Training Unique Tools for

3 Tools for Trade Sales Promotion Trade Allowances Push Money Training Unique Tools for Trade Sales Promotion Chapter 16 Version 6 e Free Merchandise Store Demonstration Conventions & Trade Shows © 2002 South-Western 19

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

3 Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. Chapter 16 Version 6 e © 2002 South-Western 20

3 Push Money offered to channel intermediaries to encourage them to “push” products-that is,

3 Push Money offered to channel intermediaries to encourage them to “push” products-that is, to encourage other members of the channel to sell the products. Chapter 16 Version 6 e © 2002 South-Western 21

The Role of Trade Sales Promotion 3 Gain new distributors Obtain support for consumer

The Role of Trade Sales Promotion 3 Gain new distributors Obtain support for consumer sales promotions Build or reduce dealer inventories Improve trade relations Chapter 16 Version 6 e © 2002 South-Western 22

4 Learning Objective Describe personal selling. Chapter 16 Version 6 e © 2002 South-Western

4 Learning Objective Describe personal selling. Chapter 16 Version 6 e © 2002 South-Western 23

4 Advantages of Personal Selling u Provides a detailed explanation or demonstration of product

4 Advantages of Personal Selling u Provides a detailed explanation or demonstration of product u Message can be varied to fit the needs of each prospective customer u Can be directed to specific qualified prospects u Costs can be controlled by adjusting sales force size u Most effective in obtaining sales and gaining satisfied customers Chapter 16 Version 6 e © 2002 South-Western 24

4 Personal Selling is more important if. . . Advertising & Sales Promotion are

4 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 Product is technically complex Product is simple to understand There are few customers There are many customers Customers are concentrated Chapter 16 Version 6 e Customers are geographically dispersed © 2002 South-Western 25

5 Learning Objective Discuss the key differences between relationship selling and traditional selling. Chapter

5 Learning Objective Discuss the key differences between relationship selling and traditional selling. Chapter 16 Version 6 e © 2002 South-Western 26

5 Relationship Selling A sales practice that involves building, maintaining, and enhancing interactions with

5 Relationship Selling A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop longterm satisfaction through mutually beneficial partnerships. Chapter 16 Version 6 e © 2002 South-Western 27

5 Relationship Selling Focus: Building Long-Term Value-Added Benefits to Buyer Mutual Trust Chapter 16

5 Relationship Selling Focus: Building Long-Term Value-Added Benefits to Buyer Mutual Trust Chapter 16 Version 6 e © 2002 South-Western 28

Relationship Selling vs. Traditional Selling Traditional Personal Selling 5 Relationship Selling Sell products Sell

Relationship Selling vs. Traditional Selling Traditional Personal Selling 5 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 Assess “Product-specific” needs “Lone wolf” approach Build problem-solving environment Conduct discovery in scope of operations Team approach Profit impact and strategic Pricing/product focus benefit focus Chapter 16 Version 6 e South-Western sales follow-up 29 Short-term sales follow-up© 2002 Long-term

6 Learning Objective List the steps in the selling process. Chapter 16 Version 6

6 Learning Objective List the steps in the selling process. Chapter 16 Version 6 e © 2002 South-Western 30

6 Sales Process The set of steps a salesperson goes through in a particular

6 Sales Process The set of steps a salesperson goes through in a particular organization to sell a particular product or service. Chapter 16 Version 6 e © 2002 South-Western 31

6 Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop

6 Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Basic Steps in the Personal Selling Process Chapter 16 Version 6 e Handle Objections Close the Sale Follow Up © 2002 South-Western 32

6 Generating Leads Advertising Publicity Direct Mail/ Telemarketing Cold Calling Web Sites/ Internet Referrals

6 Generating Leads Advertising Publicity Direct Mail/ Telemarketing Cold Calling Web Sites/ Internet Referrals Networking Trade Shows/ Conventions Company Records Sources of Sales Leads Chapter 16 Version 6 e © 2002 South-Western 33

6 Cold Calling A form of lead generation in which the salesperson approaches potential

6 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. Chapter 16 Version 6 e © 2002 South-Western 34

6 Qualifying Leads Characteristics of Qualified Leads Receptivity & Accessibility Recognized Need Buying Power

6 Qualifying Leads Characteristics of Qualified Leads Receptivity & Accessibility Recognized Need Buying Power Chapter 16 Version 6 e © 2002 South-Western 35

6 Probing Needs Product or service Salesperson must know everything about. . . Customers

6 Probing Needs Product or service Salesperson must know everything about. . . Customers and their needs Competition Industry Chapter 16 Version 6 e © 2002 South-Western 36

6 Needs Assessment A determination of the customer’s specific needs and wants and the

6 Needs Assessment A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. Chapter 16 Version 6 e © 2002 South-Western 37

Developing and Proposing Solutions 6 Sales Proposal Sales Presentation Chapter 16 Version 6 e

Developing and Proposing Solutions 6 Sales Proposal Sales Presentation Chapter 16 Version 6 e © 2002 South-Western 38

6 Handling Objections View objections as requests for information Handling Objections Anticipate specific objections

6 Handling Objections View objections as requests for information Handling Objections Anticipate specific objections Use the objection to close the sale Chapter 16 Version 6 e © 2002 South-Western 39

6 Closing the Sale Look for customer signals Closing the Sale Keep an open

6 Closing the Sale Look for customer signals Closing the Sale Keep an open mind Negotiate Chapter 16 Version 6 e © 2002 South-Western 40

6 Following Up Responsibilities in Following Up Ensure delivery schedules are met Goods or

6 Following Up Responsibilities in Following Up Ensure delivery schedules are met Goods or service perform as promised Employees are trained Chapter 16 Version 6 e © 2002 South-Western 41

7 Learning Objective Describe the functions of sales management. Chapter 16 Version 6 e

7 Learning Objective Describe the functions of sales management. Chapter 16 Version 6 e © 2002 South-Western 42

Sales Management Responsibilities 7 Define sales goals and sales process Determine sales force structure

Sales Management Responsibilities 7 Define sales goals and sales process Determine sales force structure Tasks of Sales Management Recruit and train sales force Compensate and motivate sales force Chapter 16 Version 6 e Evaluate sales force © 2002 South-Western 43

7 Defining Sales Goals Clear Precise Sales Goals Should Be. . . Measurable Time

7 Defining Sales Goals Clear Precise Sales Goals Should Be. . . Measurable Time Specific Chapter 16 Version 6 e © 2002 South-Western 44

7 Quota A statement of the individual salesperson’s sales objectives, usually based on sales

7 Quota A statement of the individual salesperson’s sales objectives, usually based on sales volume alone but sometimes including key accounts. Chapter 16 Version 6 e © 2002 South-Western 45

7 Sales Force Structure Geographic Region Common Sales Organization Structures Product Line Marketing Function

7 Sales Force Structure Geographic Region Common Sales Organization Structures Product Line Marketing Function Market or Industry Individual client or account Chapter 16 Version 6 e © 2002 South-Western 46

7 Training the Sales Force Company policies and practice Selling techniques Training includes. .

7 Training the Sales Force Company policies and practice Selling techniques Training includes. . . Product knowledge Industry and customer characteristics Nonselling duties Chapter 16 Version 6 e © 2002 South-Western 47

7 Compensation Plans Basic Compensation Methods Commission Salary Combination Plans Chapter 16 Version 6

7 Compensation Plans Basic Compensation Methods Commission Salary Combination Plans Chapter 16 Version 6 e © 2002 South-Western 48

7 Compensation Plans Straight Commission The salesperson is paid some percentage when a sale

7 Compensation Plans Straight Commission The salesperson is paid some percentage when a sale is made. Straight Salary The salesperson receives a salary regardless of sales productivity. Chapter 16 Version 6 e © 2002 South-Western 49

7 Effective Sales Leaders. . . Are assertive Possess ego drive Possess ego strength

7 Effective Sales Leaders. . . Are assertive Possess ego drive Possess ego strength Take risks Are innovative Have a sense of urgency Are empathetic Chapter 16 Version 6 e © 2002 South-Western 50

7 Evaluating the Sales Force Sales Volume Contribution to Profit Calls per Order Performance

7 Evaluating the Sales Force Sales Volume Contribution to Profit Calls per Order Performance Measures Chapter 16 Version 6 e Sales or Profits per Call Percentage Achieving Goals © 2002 South-Western 51

The Impact of Technology on Personal Selling 7 Laptop computer link Mobile telephones Pagers

The Impact of Technology on Personal Selling 7 Laptop computer link Mobile telephones Pagers Personal data assistants Sales Force Automation E-Mail Internet Chapter 16 Version 6 e © 2002 South-Western 52