Chapter 16 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1

MKTG

Designed byAmy McGuire, B-books, Ltd.

Prepared byDeborah Baker, Texas Christian University

Lamb, Hair, McDaniel 2007-2008

Sales Promotion and Personal Selling

16

CHAPTER

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Learning Outcomes

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

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Learning Outcomes

Discuss the key differences between relationship selling and traditional selling

List the steps in the selling processLO6

LO5

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Define and state the objectives of sales promotion

Sales PromotionSales PromotionLO1

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LO1

Sales Promotion

Marketing

communication

activities, other than

advertising, personal

selling, and public

relations, in which a

short-term incentive

motivates a purchase.

SalesPromotion

SalesPromotion

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LO1

Sales Promotion

Advertising Reason to buy

Sales Promotion Incentive to buy

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LO1

Sales Promotion

ConsumerSales

Promotion

ConsumerSales

Promotion

Trade Sales

Promotion

Trade Sales

Promotion

Consumer market

Marketing channel

Drive immediate purchaseInfluence behavior

Goal

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LO1

Objectives of Sales Promotion

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

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REVIEW LEARNING OUTCOMELO1

The Objectives of Sales Promotion

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Discuss the most common forms of consumer sales

promotion

Tools for Consumer Tools for Consumer Sales PromotionSales Promotion

LO2

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Tools for Consumer Sales Promotion

LO2

Coupons and RebatesCoupons and Rebates

PremiumsPremiums

Loyalty Marketing ProgramsLoyalty Marketing Programs

Contests & SweepstakesContests & Sweepstakes

SamplingSampling

Point-of-Purchase PromotionPoint-of-Purchase Promotion

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Tools for Consumer Sales Promotion

LO2

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.

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14-13

PremiumsPremiums provide consumers with a reason to choose one brand over another.

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Tools for Consumer Sales Promotion

LO2

LoyaltyMarketingProgram

LoyaltyMarketingProgram

A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers.

A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers.

FrequentBuyer

Program

FrequentBuyer

Program

A loyalty program in which loyal consumers are rewarded for making multiple purchases.

A loyalty program in which loyal consumers are rewarded for making multiple purchases.

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Tools for Consumer Sales Promotion

LO2

ContestsContests Promotions that require skill or ability to compete for prizes.

Promotions that require skill or ability to compete for prizes.

SweepstakesSweepstakes Promotions that depend on chance or luck, with free participation.

Promotions that depend on chance or luck, with free participation.

Online

http://www.sweepstakesonline.com

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14-16

Contests like this one encourage consumers to purchase more

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Sweepstakes rely on chance

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Tools for Consumer Sales Promotion

LO2

SamplingSamplingA promotional program that allows the consumer the opportunity to try a product or service for free.

A promotional program that allows the consumer the opportunity to try a product or service for free.

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14-19

Samples

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Methods of Sampling

LO2

Direct mailDirect mail

Door-to-door deliveryDoor-to-door delivery

Packaging with another productPackaging with another product

Retail store demonstrationRetail store demonstration

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Point-of-Purchase Promotion

LO2

Build traffic

Advertise the product

Induce impulse buying

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Point of Purchase

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Online Sales Promotion

LO2

Effective Types of Online Sales PromotionEffective Types of Online Sales Promotion

Free merchandise

Sweepstakes

Free shipping with purchases

Coupons

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REVIEW LEARNING OUTCOMELO2

Consumer Sales Promotion

Coupons and rebates

Premiums

Loyalty marketing programs

Contests

Sampling

P-O-P

Online

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List the most common forms of trade sales

promotion

Tools for Trade Sales PromotionTools for Trade Sales PromotionLO3

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Trade Sales PromotionLO3

Trade AllowancesTrade Allowances

Push MoneyPush Money

TrainingTraining

Free MerchandiseFree Merchandise

Store DemonstrationStore Demonstration

Conventions & Trade ShowsConventions & Trade Shows

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Trade AllowanceLO3

TradeAllowance

TradeAllowance

A price reduction offered

by manufacturers to

intermediaries, such as

wholesalers and retailers.

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Push MoneyLO3

Push MoneyPush MoneyMoney offered to channel

intermediaries to encourage

them to “push” products--

that is, to encourage other

members of the channel to

sell the products.

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Benefits of Trade PromotionsLO3

Help manufacturers gain new distribution

Obtain wholesaler and retailer support forconsumer sales promotions

Build or reduce dealer inventories

Improve trade relations

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REVIEW LEARNING OUTCOMELO3

Forms of Trade Sales Promotion

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Describe personal selling

Personal SellingPersonal SellingLO4

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LO4

Personal Selling

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...

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REVIEW LEARNING OUTCOMELO4

Personal Selling

Detailed explanation or demonstration

Variable sales message

Directed to qualified prospects

Controllable adjustable selling costs

More effective than other promotion in obtaining sale and gaining customer satisfaction

PersonalSelling

Advantages

PersonalSelling

Advantages