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Lamb, Hair, McDaniel

CHAPTER 18

Sales Promotion and Personal Selling

2010-2011

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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

Learning OutcomesLearning Outcomes

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LO 5 Discuss the key differences between relationship selling and traditional selling

LO 6 List the steps in the selling process

Learning OutcomesLearning Outcomes

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Define and state the objectives of sales promotion

Sales PromotionSales Promotion

LO1

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Sales Promotion

Marketing

communication

activities, other than

advertising, personal

selling, and public

relations, in which a

short-term incentive

motivates a purchase.

SalesPromotion

SalesPromotion

LO1

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Sales Promotion

Advertising Reason to buy

Sales Promotion Incentive to buy

LO1

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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

LO1

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REVIEW LEARNING OUTCOMEThe Objectives of Sales Promotion

LO1

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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

Coupons and RebatesCoupons and Rebates

PremiumsPremiums

Loyalty Marketing ProgramsLoyalty Marketing Programs

Contests & SweepstakesContests & Sweepstakes

SamplingSampling

Point-of-Purchase PromotionPoint-of-Purchase Promotion

LO2

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Tools for Consumer Sales Promotion

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.

LO2

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Economic Hard Times = Coupon Use

SOURCE: “In Economic Downturn, 67% Plan More Coupon Use,” http://www.i-com.com/aboutus_news_detail.asp?pid=68.

With coupon use, a family can save more than an economic stimulus check (avg. $300-$1,200 in May 2008).

Possible grocery savings/household (2 adults + 2 children) using coupons = 25 percent/year, without cutting purchases.

That means, if a family spends $800/month on groceries, they can save $2,400 annually by using coupons.

LO2

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Tools for Consumer Sales Promotion

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.

LO2

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Tools for Consumer Sales Promotion

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.

LO2

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Tools for Consumer Sales Promotion

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.

LO2

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Methods of Sampling

Direct mailDirect mail

Door-to-door deliveryDoor-to-door delivery

Packaging with another productPackaging with another product

Retail store demonstrationRetail store demonstration

LO2

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Point-of-Purchase Promotion

Build traffic

Advertise the product

Induce impulse buying

LO2

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Online Sales Promotion

Effective Types of Online Sales PromotionEffective Types of Online Sales Promotion

Free merchandise

Sweepstakes

Free shipping with purchases

Coupons

LO2

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SOURCE: Chang, Rita. “Verizon Spending $100 Million on its Droid Ad Campaign,” thebusinessinsider.com, November 9, 2009; Wimberly, Taylor. “Drod Does Times Square,” androidandme.com, November 6, 2009.

Verizon Wireless launched the largest integrated marketing campaign in the company’s history, receiving $100 million in support for pushing the Droid.

Beginning in late October, Verizon launched ads in magazines and television that position their newest smartphone as the antidote to the iPhone’s shortfalls.

As part of the demonstration of the Droid’s capabilities, Verizon launched the Droid Does Times Square campaign. This allows users to call a toll-free number and use billboards on Times Square to search for anything using voice commands. And the results show up on times square. For those not on Times Square, Verizon’s website streams video of times square.

TV, Print, Times Square, Oh My!

LO2

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List the most common forms of trade sales

promotion

Tools for Trade Sales PromotionTools for Trade Sales Promotion

LO3

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Trade Sales Promotion

Trade AllowancesTrade Allowances

Push MoneyPush Money

TrainingTraining

Free MerchandiseFree Merchandise

Store DemonstrationStore Demonstration

Conventions & Trade ShowsConventions & Trade Shows

LO3

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Trade Allowance

A price reduction offered by

manufacturers to intermediaries,

such as wholesalers and retailers.

LO3

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Push Money

Push MoneyPush Money

Money offered to channel

intermediaries to encourage

them to “push” products--

that is, to encourage other

members of the channel to

sell the products.

LO3

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Benefits of Trade Promotions

Help manufacturers gain new distribution

Obtain wholesaler and retailer support forconsumer sales promotions

Build or reduce dealer inventories

Improve trade relations

LO3

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REVIEW LEARNING OUTCOME

Forms of Trade Sales Promotion

LO3

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Describe personal selling

Personal SellingPersonal Selling

LO4

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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...

LO4

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REVIEW LEARNING OUTCOME

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

PersonalSelling

Advantages

PersonalSelling

Advantages

LO4

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Discuss the key differences between relationship selling

and traditional selling

Relationship SellingRelationship Selling

LO5

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Relationship Selling

A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.

Relationship(Consultative)

Selling

Relationship(Consultative)

Selling

LO5

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Traditional Selling and Relationship SellingTraditionalTraditional

Personal SellingPersonal Selling

LO5

Sell advice, assistance, counsel Sell products

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 operations

Team approach

Profit impact and strategic benefit focus

Long-term sales follow-up

Relationship SellingRelationship Selling

LO5

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REVIEW LEARNING OUTCOMERelationship Selling vs. Traditional Selling

InitialSales

RepeatSales

SuccessiveSales

Traditional Sales

Relationship Sales

SalesIncreasesResultFromCreatingValue

LO5

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List the steps in the selling process

Steps in the Selling ProcessSteps in the Selling Process

LO6

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Steps in the Selling Process

Generate LeadsGenerate Leads

Qualify LeadsQualify Leads

Probe Customer NeedsProbe Customer Needs

Develop SolutionsDevelop Solutions

Handle ObjectionsHandle Objections

Close the SaleClose the Sale

Follow UpFollow Up

LO6

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Time Spent in Key Steps of Selling Process

Key Selling StepsTraditional

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

LO6

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Generating Leads

AdvertisingAdvertising PublicityPublicity Direct Mail/TelemarketingDirect Mail/

Telemarketing

Cold CallingCold Calling Internet Web SiteInternet Web Site ReferralsReferrals

Trade Shows/Conventions

Trade Shows/ConventionsNetworkingNetworking Company

RecordsCompany Records

LO6

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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.

Cold CallingCold Calling

LO6

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Qualifying Leads

Receptivity andaccessibility

Receptivity andaccessibility

Buying powerBuying power

Recognized needRecognized need

LO6

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Needs Assessment

A determination of the

customer’s specific needs

and wants and the range of

options a customer has for

satisfying them.

NeedsAssessment

NeedsAssessment

LO6

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The Consultative Salesperson

Product or serviceProduct or service

CustomersCustomers

CompetitionCompetition

IndustryIndustry

Salesperson must knoweverything

about...

Salesperson must knoweverything

about...

LO6

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Developing and Proposing Solutions

Sales ProposalSales Proposal

Sales PresentationSales Presentation

LO6

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Powerful PresentationsBe 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!LO6

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Handling Objections

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

LO6

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Closing the Sale

NegotiateNegotiate

Keep an open mindKeep an open mind

Look for customer signals

Look for customer signals

Tailor to each marketTailor to each market

LO6

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The Impact of Technology on Personal Selling

Cell phonesCell phones

LaptopsLaptops

PagersPagers

E-MailE-Mail

Electronic organizersElectronic organizers

InternetInternet

LO6

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Steps in the Selling Process

Qualifying Leads

Approaching Customer

Developing and proposing solutions

Handling objections

Closing the sale

Generating Leads

A Continuing ProcessLO6

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Making the Sale

Now that you know the steps in the selling process, break down this video and Grover’s use of (or failure to use) the steps– Grover Sells Hair-Care

What about this man? What are his sales tactics?– Vegetable Peeler Salesman

LO6