Chapter 12:Selling, Sales Promotion, and

Public Relations

The Sales Function

• the sales function is responsible for selling products and services to customers, through the communication of information during customer interaction

• it is a relatively high-cost form of promotion, often a firm’s largest single operating expense

• there is more to a personal selling job than selling; often the job is to build a relationship; many sales people are now referred to as customer-services reps

• personal selling is the most flexible promotional tool; can be tailored to the specific customer

Sales is Most Effective When…

• the sales function is more likely to be dominant when:– the market is concentrated geographically– product value is not readily apparent– the product has high unit value. is technically, or

requires much explanation– the product must be tailored to a customer– the sale involves a trade-in– the product is at the introductory stage of its life

cycle– the firm has a small budget for advertising

Scope of the Sales Function• there are many types of sales jobs• retailing involves inside selling; these jobs may

involve proactive selling or reactive selling• outside sales persons go to the customer;

there is usually some opportunity for creative selling and addressing customer needs

• electronic selling through telemarketing is a relatively new development which combines with databases to better target customers

Figure 12-1 Scope of the Sales Function

The New Focus of Selling

• “selling” may be a misleading term; often there is no selling involved – sales personnel are providing service and building relationships

• because of their interpersonal contact with the customer, sales people influence the image of the firm

• they provide a valuable service role , and ideally become the customer’s trusted partner

The Nature of Sales Jobs

• many sales reps are now professional sales persons with complete responsibility for relations with their customers

• there is often considerable opportunity for role conflict and role ambiguity

• there is a wide variety of sales jobs from delivery drivers to creative sales engineers

• the sales staff is the front line and represents the firm to its customers

Changing Patterns in Sales

• the nature of the selling job is changing, reflecting changing market situations

• many firms have organized sales teams• others now offer their customers a coordinated

systems and solutions for their problems• there is considerable emphasis today on the

development of relationships with customers• technology has changed the way many firms

sell, relying on telemarketing and the Internet

Relationship Selling

• high levels of trust are important• buyer must demonstrate trust in the

salesperson as well as the selling organization

• trusted salespeople can retain the buyer’s commitment even in the face of policies that may not be considered satisfactory

• sales people have a major role in the management of customer relationships

The Sales Process

• many firms follow a predictable sales pattern• prospecting involves the identification of

prospects from various sources• qualifying the prospect determines the

willingness and capability to buy• presenting the sales message (attract attention,

hold interest, stimulate desire, close the sale)• there is often a need to serve customers after

the sale to ensure their satisfaction

Figure 12-2 The Personal Selling Process

Staffing/Operating a Sales Force

• staffing is a critical sales-force decision: must ensure that staff have necessary qualifications

• the firm needs a system to generate applicants• recruitment often involves extensive screening• extensive sales force training is often needed• the sales force must be supervised and managed• their performance has to be evaluated;

compensation systems must be put in place

Figure 12-3 Staffing and Operating a Sales Force

Evaluating Sales Performance

• a system must exist to evaluate performance• serves as the basis for training programs

and for determining appropriate rewards• quantitative bases for performance review

include sales generated, number of orders, closing rate, number of calls made

• qualitative bases include product knowledge, preparedness for calls, success in establishing relationships, appearance, and attitude

Sales Promotion• sales promotions stimulate short-term sales

through non-advertising means; coupons, contests, samples, displays, premiums, trade shows

• may be directed at end consumers (consumer promotions) or at intermediaries (trade promotions) or a firm’s sales force

• sales promotions are short-term in orientation and tactical in achieving certain objectives

• it may be easier to evaluate the effectiveness of sales promotions than it is for advertising

Public Relations

• public relations is intended to develop and maintain a positive public image for a firm

• objective is to maintain good relations with a number of “publics”; this may be achieved by generating positive publicity

• publicity is usually considered to be a “news item” that appears about a specific company

• positive publicity is achieved through press releases, press conferences, and events

Chapter 13:Retailing

Figure 13-1 Total Retail Trade in Canada, Selected Years

Retailing

• retailing involves the sale of products and services to end consumers for their personal non-business use

• not all sales by retailers are retail sales. why?• similarly, not all retailing is done by retailers• most of the retailers of Canada are very small• there is considerable concentration in retailing,

accounted for by the large chains• many small retailers join contractual vertical

marketing systems to increase their competitiveness

Physical Facilities of Retailers

• most retailers operate from stores, although more now engage in nonstore retailing

• those that operate stores must consider where to locate their stores, how to design them, and what physical layout to use

• much retailing in Canada is concentrated in shopping centres which range in size from small neighbourhood convenience centres to very large regional centres

Forms of Retailing

• most retailers are independents• corporate chains are centrally owned and

managed which means that individual stores have relatively little autonomy

• chains can generally offer their customers lower prices because of a lower cost structure

• they spread their risk and exposure over a larger number of stores; they can experiment and gain economies of scale in advertising

• however, they tend to be quite standardized

Franchising and Other VMS

• retail co-operatives and voluntary chains offer retailers increased buying power and the benefits of management and marketing support

• product and trade name franchising allows a retailer to use the franchisor’s trade name for promotional purposes; focus is on what is sold

• in business format franchising, a firm with a track record sells the right to operate identical businesses; focus is on how the business is run

Major Types of Retailers

• department stores offer a wide variety of mechandise and services and don’t compete on the basis of price; they are facing intense competition and high operating costs

• discount houses are large-scale chain retailers that offer a wide range of products but less depth; they offer low prices and fewer services and have succeeded in keeping costs low through use of technology

Limited-line Retailers

• limited-line retailers offer customers less selection, but great depth within their lines

• specialty stores carry a very narrow product line, usually specializing in a single category

• off-price retailers offer a deep assortment in a narrow line, low prices, and few services; these include factory outlets

• category-killer stores offer a very wide variety and low prices; dominate the category

Other Forms of Retailing

• many of the established retailers are moving toward new forms of distribution, including telephone and Internet shopping

• supermarket retailing has extended with the opening of superstores and combination stores

• convenience stores are open 24 hours• warehouse club chains have made a major

entry into Canada in recent years; they offer a wide breadth of products, but little depth

Nonstore Retailing

• there has been considerable growth in nonstore retailing with advancing technology and changing consumer shopping preferences

• direct selling avoids using intermediaries• telemarketing uses sales people on the

phone to sell products and services• direct marketing uses catalogues, direct

mail, television shopping, and the Internet• many products and services are now sold

through vending machines

Online Retailing

• more and more companies are selling directly to consumers over the Internet

• those that operate only online have struggled to become profitable; those that also have a physical stores are more likely successful

• shopping-cart abandonment is high; challenge to turn browsers into buyers

Retailing Management

• in a competitive market, positioning of retailers is a challenge

• in many retail operations, managing through seasonal and fashion cycles is necessary

• through technology, retailers will have access to considerable volumes of information; improved productivity will be one result

• retailers will place greater emphasis on convenience, customer service, and customer retention

Managing Retail Assortments

• Style and Fashion– Style: a distinctive presentation or

construction of any art, product, or activity.– Fashion: A style that is popularly accepted by

groups of people over a reasonably long period of time.

• Fashion-adoption process– Large or small group influences of buying

decisions.– Diffusion of innovation.

Figure 13-2 Fashion-Adoption Processes

Next Class

• Supply System (Chapter 14).

• Review for the final exam.