1 lamb, hair, mcdaniel chapter 18 sales promotion and personal selling 2010-2011
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1
Lamb, Hair, McDaniel
CHAPTER 18
Sales Promotion and Personal Selling
2010-2011
2
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
3
LO 5 Discuss the key differences between relationship selling and traditional selling
LO 6 List the steps in the selling process
Learning OutcomesLearning Outcomes
4
Define and state the objectives of sales promotion
Sales PromotionSales Promotion
LO1
5
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
6
Sales Promotion
Advertising Reason to buy
Sales Promotion Incentive to buy
LO1
7
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
8
REVIEW LEARNING OUTCOMEThe Objectives of Sales Promotion
LO1
9
Discuss the most common forms of consumer sales
promotion
Tools for Consumer Tools for Consumer Sales PromotionSales Promotion
LO2
10
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
11
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
12
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
13
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
14
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
15
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
16
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
17
Point-of-Purchase Promotion
Build traffic
Advertise the product
Induce impulse buying
LO2
18
Online Sales Promotion
Effective Types of Online Sales PromotionEffective Types of Online Sales Promotion
Free merchandise
Sweepstakes
Free shipping with purchases
Coupons
LO2
19
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
20
List the most common forms of trade sales
promotion
Tools for Trade Sales PromotionTools for Trade Sales Promotion
LO3
21
Trade Sales Promotion
Trade AllowancesTrade Allowances
Push MoneyPush Money
TrainingTraining
Free MerchandiseFree Merchandise
Store DemonstrationStore Demonstration
Conventions & Trade ShowsConventions & Trade Shows
LO3
22
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
29
Discuss the key differences between relationship selling
and traditional selling
Relationship SellingRelationship Selling
LO5
30
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
31
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
32
REVIEW LEARNING OUTCOMERelationship Selling vs. Traditional Selling
InitialSales
RepeatSales
SuccessiveSales
Traditional Sales
Relationship Sales
SalesIncreasesResultFromCreatingValue
LO5
33
List the steps in the selling process
Steps in the Selling ProcessSteps in the Selling Process
LO6
34
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
35
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
36
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
37
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
38
Qualifying Leads
Receptivity andaccessibility
Receptivity andaccessibility
Buying powerBuying power
Recognized needRecognized need
LO6
39
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
40
The Consultative Salesperson
Product or serviceProduct or service
CustomersCustomers
CompetitionCompetition
IndustryIndustry
Salesperson must knoweverything
about...
Salesperson must knoweverything
about...
LO6
41
Developing and Proposing Solutions
Sales ProposalSales Proposal
Sales PresentationSales Presentation
LO6
42
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
43
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
44
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
45
The Impact of Technology on Personal Selling
Cell phonesCell phones
LaptopsLaptops
PagersPagers
E-MailE-Mail
Electronic organizersElectronic organizers
InternetInternet
LO6
46
Steps in the Selling Process
Qualifying Leads
Approaching Customer
Developing and proposing solutions
Handling objections
Closing the sale
Generating Leads
A Continuing ProcessLO6
47
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