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Chapter 18: Sales Promotion and Personal Selling
Prepared by Amit Shah, Frostburg State University
Designed by Eric Brengle, B-books, Ltd.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Learning Outcomes
2
Define and state the objectives of sales promotion
Discuss the most common forms of consumer sales promotion
List the most common forms of trade sales promotion
Describe personal selling
LO1
LO2
LO3
LO4
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Learning Outcomes
3
Discuss the key differences between relationship selling and traditional selling
List the steps in the selling process
Describe the functions of sales management
LO5
LO6
LO7
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sales Promotion
4
Define and state the objectives of sales promotion.
LO1
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sales Promotion
5
Marketing activities, other than advertising, personal selling,
and public relations, that stimulate consumer buying
and dealer effectiveness.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sales Promotion
6
Advertising Reason to buy
Sales Promotion Incentive to buy
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sales Promotion
7
ConsumerSales
Promotion
ConsumerSales
Promotion
Trade Sales
Promotion
Trade Sales
Promotion
Consumer market
Marketing channel
Drive immediate purchase,Influence behavior
Goal
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Objectives of Sales Promotion
8
Type of BuyerType of Buyer
Loyal Customers
Competitor’sCustomers
Brand Switchers
Price Buyers
Desired ResultsDesired Results
•Reinforce behavior• Increase consumption•Change purchase timing
•Break loyalty•Persuade to switch
•Persuade to buy your brand more often
•Appeal with low prices
•Supply added value
Sales PromotionSales PromotionExamples Examples
•Loyalty marketing•Bonus packs
•Sampling•Sweepstakes, contests, premiums
•Price-lowering promotion
•Trade deals
•Coupons, price-offpackages, refunds
•Trade deals
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomeThe Objectives of Sales Promotion
9
LO1
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Tools for Consumer Sales Promotion
10
Discuss the most common forms
of consumer sales promotion.
LO2
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Tools for Consumer Sales Promotion
11
Coupons and RebatesCoupons and Rebates
PremiumsPremiums
Loyalty Marketing ProgramsLoyalty Marketing Programs
Contests & SweepstakesContests & Sweepstakes
SamplingSampling
Point-of-Purchase PromotionPoint-of-Purchase Promotion
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Coupons, Rebates, and Premiums
12
CouponCoupon
RebateRebate
PremiumPremium
A certificate that entitles consumers to an immediate
price reduction.
A certificate that entitles consumers to an immediate
price reduction.
A cash refund given for the purchase of a product during
a specific period.
A cash refund given for the purchase of a product during
a specific period.
An extra item offered to the consumer, usually in exchange
for some proof of purchase.
An extra item offered to the consumer, usually in exchange
for some proof of purchase.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Loyalty Marketing
13
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 customers are rewarded for making multiple purchasers.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Contests and Sweepstakes
14
Online
http://www.online-sweepstakes.com/
Contests - Promotions that require skill or ability to
compete for prizes.
Sweepstakes - Promotions that depend on chance or luck,
with free participation.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sampling
15
A promotional program that
allows the consumer the
opportunity to try a product or
service for free.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Methods of Sampling
16
Direct mailDirect mail
Door-to-door deliveryDoor-to-door delivery
Packaging with another productPackaging with another product
Retail store demonstrationRetail store demonstration
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Point-of-Purchase Promotion
• Build traffic
• Advertise the product
• Induce impulse buying
17Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Online Sales Promotion
• Free merchandise
• Sweepstakes
• Free shipping with purchases
• Coupons
18
Effective Types of Online Sales PromotionEffective Types of Online Sales Promotion
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomeConsumer Sales Promotion
19
Coupons and rebates
Premiums
Loyalty marketing programs
Contests and Sweepstakes
Sampling
P-O-P
Online
LO2
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Tools for Trade Sales Promotion
20
List the most common forms of trade sales promotion.
LO3
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Trade Sales Promotion
21
Trade AllowancesTrade Allowances
Push MoneyPush Money
TrainingTraining
Free MerchandiseFree Merchandise
Store DemonstrationStore Demonstration
Conventions & Trade ShowsConventions & Trade Shows
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Trade Allowance
22
A price reduction offered by manufacturers
to intermediaries, such as wholesalers and retailers.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Push Money
23
Money offered tochannel intermediaries to encourage
them to “push” products– that is,to encourage other members of the
channel to sell the products.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Benefits of Trade Promotions
24
Help manufacturers gain new distribution
Obtain wholesaler and retailer support forconsumer sales promotions
Build or reduce dealer inventories
Improve trade relations
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomeForms of Trade Sales Promotion
25
LO3
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Personal Selling
26
Describe personal selling.
LO4
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Personal Selling
27
Personal Selling is more important if...
Customers are concentrated.
Customers are concentrated.
Product is technically complex.
Product is technically complex.
There are few customers.There are few customers.
Product is custom made.Product is custom made.
Product has a high value.Product has a high value.
Customers are geographically dispersed.
Customers are geographically dispersed.
Product is simple to understand.
Product is simple to understand.
There are many customers.There are many customers.
Product is standardized.Product is standardized.
Product has a low value.Product has a low value.
Advertising & Sales Promotion are more important if...
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomePersonal Selling
28
LO4
Detailed explanation or demonstration
Variable sales message
Directed to qualified prospects
Controllable adjustable selling costs
Effective at obtaining sale and gaining customer satisfaction
PersonalSelling
Advantages
PersonalSelling
Advantages
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Relationship Selling
29
Discuss the key differences between relationship selling
and traditional selling.
LO5
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Relationship Selling
30
Relationship (Consultative)Selling - A sales practice that
involves building, maintaining,and enhancing interactionswith customers in order to
develop long-term satisfactionthrough mutually beneficial
partnership.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Traditional Selling and Relationship Selling
31
Sell advice, assistance, counsel Sell products
TraditionalTraditionalPersonal SellingPersonal Selling
Focus on closing sales
Limited sales planning
Discuss product
Assess “product-specific” needs
“Lone wolf” approach
Pricing/product focus
Short-term sales follow-up
Focus on customer’s bottom line
Sales planning is top priority
Build problem-solving environment
Conduct discovery in scope of customers’ operations
Team approach
Profit impact and strategic benefit focus
Long-term sales follow-up
Relationship SellingRelationship Selling
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning Outcome Relationship Selling vs. Traditional Selling
32
LO5
InitialSales
RepeatSales
SuccessiveSales
Traditional Sales
Relationship Sales
SalesIncreasesResultFromCreatingValue
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Steps in the Selling Process
33
List the steps in the
selling process.
LO6
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Steps in the Selling Process
34
Generate LeadsGenerate Leads
Qualify LeadsQualify Leads
Probe Customer NeedsProbe Customer Needs
Develop/Propose SolutionsDevelop/Propose Solutions
Handle ObjectionsHandle Objections
Close the SaleClose the Sale
Follow UpFollow Up
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Time Spent in Key Steps of Selling Process
Key Selling StepsTraditional
SellingRelationship
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
35Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Generating Leads
36
AdvertisingAdvertising PublicityPublicity Direct Mail/TelemarketingDirect Mail/
Telemarketing
Cold CallingCold Calling Internet Web Site
Internet Web Site ReferralsReferrals
Trade Shows/Conventions
Trade Shows/ConventionsNetworkingNetworking Company
RecordsCompany Records
Online
http://www.linkedin.comhttp://www.ryze.com
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Referral and Networking
37
Referral – A recommendationto a customer
or business associate.
Networking – A process of findingout about potential clients
from friends, business contacts,coworkers, acquaintances,
and fellow members inorganizations.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Qualifying Leads
38
Recognized needRecognized need
Buying powerBuying power
Receptivity andaccessibility
Receptivity andaccessibility
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
The Preapproach Process
39
Product or serviceProduct or service
CustomersCustomers
CompetitionCompetition
IndustryIndustry
Salesperson must knoweverything
about...
Salesperson must knoweverything
about...
Online
http://www.hoovers.comhttp://www.dnb.com
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Needs Assessment
40
A determination of the
customer’s specific needs and
wants and the range of
options a customer has for
satisfying them.
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Developing and Proposing Solutions
41
Sales ProposalSales Proposal
Sales PresentationSales Presentation
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Powerful Presentations
42
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
PRACTICE, PRACTICE, PRACTICE!Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Handling Objections
43
View objections as requests for information
Anticipate specific objections
Investigate the objection with the customer
Be aware of competitors’ products
Stay calm
Use the objection to close the sale
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Closing the Sale
44
NegotiateNegotiate
Keep an open mindKeep an open mind
Look for customer signals
Look for customer signals
Tailor to each marketTailor to each market
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning OutcomeSteps in the Selling Process
45
LO6
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sales Management
46
Describe the functions of sales management.
LO7
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sales Management Responsibilities
47
Evaluate sales forceEvaluate sales force
Compensate and motivate sales forceCompensate and motivate sales force
Recruit and train sales forceRecruit and train sales force
Determine sales force structureDetermine sales force structure
Define sales goals and sales processDefine sales goals and sales process
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Defining Sales Goals
48
ClearClear
PrecisePrecise
MeasurableMeasurable
Time SpecificTime Specific
Sales VolumeMarket ShareProfit Level
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Quota
49
A statement of the individual salesperson’s sales
objectives, usually based on salesvolume alone but sometimes including key accounts, new
accounts, repeat sales, and specificproducts.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Sales Force Structure
50
Individual client or account
Individual client or account
Market or industryMarket or industry
Marketing functionMarketing function
Product lineProduct line
Geographic regionGeographic region
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Traits of Top Sales Performers Strong, healthy self esteem
Can bounce back from rejection
Sense of urgency and competitiveness
Persuasive
Assertive
Sociable
Willing to take risks
Understand complex concepts
Creative in developing solutions
Possess empathy51
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Training the Sales Force
52
Training includes...
Training includes...
Nonselling dutiesNonselling duties
Industry and customer characteristics
Industry and customer characteristics
Product knowledgeProduct knowledge
Selling techniquesSelling techniques
Company policies and practice
Company policies and practice
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Compensating the Sales Force
53
CommissionCommission
SalarySalary
CombinationPlans
CombinationPlans
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Motivating the Sales Force
54
Ceremonies Plaques Vacations Merchandise Pay raises Cash bonuses Stock options Tuition assistance Product discounts
Rewards and incentives include:
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Evaluating the Sales Force
55
Contribution to profitContribution to profit
Calls per orderCalls per order
Sales or profits per callSales or profits per call
Call percentage achieving goalsCall percentage achieving goals
Sales volumeSales volume
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Review Learning Outcome Functions of Sales Management
56
LO7
Copyright 2010 by Cengage Learning Inc. All Rights Reserved