Personal Selling and Sales Promotion

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Chapter 17

• Personal Selling and Sales Promotion

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Chapter Objectives

• Outline the marketplace conditions that make
  personal selling a primary component of a firms
  promotional mix.
• Describe the four sales channels.
• Describe the major trends in personal selling.
• Identify and briefly describe the three basic
  sales tasks.
• Outline the seven steps in the sales process.
• Identify the seven basic functions of a sales
  manager.
• Explain the role of ethical behavior in personal
  selling.
• Describe the role of sales promotion in the
  promotional mix.
• Identify the different types of consumer-oriented
  and trade-oriented sales promotions.

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The Evolution of Personal Selling

• Personal selling interpersonal influence
  process involving a sellers promotional
  presentation conducted on a person-to-person
  basis with the buyer
• A salesman is someone who sells goods that wont
  come back to customers who will. (Anonymous)

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• Has been a standard business activity for
  thousands of years
• Early peddlers sold goods they manufactured or
  imported . . . viewed selling as a secondary
  activity
• In 18th century America, peddlers sold directly
  to farmers and settlers in the West
• In the 19th century, drummers sold to both
  consumers and intermediaries sometimes using
  questionable practices and built negative
  stereotypes which persist today

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• Todays salesperson is usually a highly-trained
  professional
• Sales professionals take a customer-oriented
  approach employing truthful, nonmanipulative
  tactics in order to satisfy the long-term needs
  of both the customer and the selling firm
• Todays professional salespeople are problem
  solvers who seek to develop long-term
  relationships with customers

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• Factor affecting the importance of personal
  selling in the promotional mix

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• NetJets Executive Jet
• A Product Requiring Personal Selling

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The Four Sales Channels

• Personal selling occurs through several types of
  communication channels including these four
• Over-the-Counter
• Field Selling
• Telemarketing
• Inside Selling

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• Over-the-Counter personal selling conducted in
  retail and some wholesale locations in which
  customers come to the seller place of business
• True Value Salespeople Engage in Over-the-Counter
  Selling

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• Field selling sales presentations made at
  prospective customers homes or businesses on a
  face-to-face basis
• Better Homes and Gardens Real Estate Service A
  Type of Field Sales

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• Cost of a Sales Call by Industry

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• Telemarketing promotional presentation
  involving the use of the telephone on an outbound
  basis by salespeople or on an inbound basis by
  customers who initiate calls to obtain
  information and place orders
• The Telemarketing Company
• Telemarketing A Popular Selling Technique

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• Inside Selling performing the functions of field
  selling but avoiding travel-related expenses by
  relying on phone, mail, and electronic commerce
  to provide sales and product service for
  customers on a continuing basis

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Trends in Personal Selling

• Relationship selling regular contacts over an
  extended period to establish a sustained
  seller-buyer relationship
• Consultative selling meeting customer needs by
  listing to them, understanding -- and caring
  about -- their problems, paying attention to
  details, and following through after the sale
• Cross-selling offer multiple goods and services
  to the same customer

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• Buyers prefer to do business with salespeople
  who
• Orchestrate events and bring to bear whatever
  resources are necessary to satisfy the customer
• Provide counseling to the customer based on
  in-depth knowledge of the product, the market,
  and the customers needs
• Solve problems extremely proficiently to ensure
  satisfactory customer service over extended time
  periods
• Demonstrate high ethical standards and
  communicate honestly at all times
• Willingly advocate the customers cause within
  the selling organization
• Create imaginative arrangements to meet buyers
  needs
• Arrive well-prepared for sales calls

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• Team Selling combination of salespeople with
  specialists from other functional areas to
  promote a product
• Virtual sales team
• Team Selling at CDW Computer Centers

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• Sales Force Automation (SFA) applications of
  computer and other technologies to make the sales
  function more efficient and competitive
• Benefits include improved effectiveness due to
  improved access to information, lower costs,
  improved product launches, and attentive customer
  service

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Sales Tasks

• Three basic sales tasks can be identified
• Order Processing
• Creative Selling
• Missionary sales

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• Order Processing selling, mostly at the
  wholesale and retail levels, that involves
  identifying customer needs, pointing them out to
  customers, and completing orders
• Creative Selling personal selling involving
  situations in which a considerable degree of
  analytical decision making on the buyers part
  results in the need for skillful proposals of
  solutions for the customers needs
• Missionary sales indirect type of selling in
  which specialized salespeople promote the firms
  goodwill among indirect customers, often by
  assisting customers in product use

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The Sales Process

• The AIDA Concept and the Personal Selling Process

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• Prospecting personal-selling function of
  identifying potential customers
• Qualifying determining that a prospect has the
  needs, income, and purchase authority necessary
  for being a potential customer
• Oreck
• Using advertising to identify prospective
  customers

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• Approach salespersons initial contact with a
  prospective customer
• Pre-call Planning use of information collected
  during the prospecting and qualifying stages of
  the sales process and during previous contacts
  with the prospect to tailor the approach and
  presentation to match the customers needs

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• Presentation describing a products major
  features and relating them to a customers
  problems or needs
• ExpoStarDisplays Graphics
• Support Tools Increase the Effectiveness of
  Presentations

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• Demonstration allows the customer to experience a
  good or service
• Even ads as well done as this Oldsmobile ad, can
  not substitute for an effective demonstration
  ride in a new automobile

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• Handling Objections expressions of sales
  resistance by the prospect
• Example A customers I don't like the color is
  probably their way of asking what other colors
  are available
• Objections are reasonable and professional
  salespeople are prepared to handle them
  appropriately

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• Closing stages of personal selling where the
  salesperson asks the customer to make a purchase
  decision
• Follow-up post-sales activities that often
  determine whether an individual who has made a
  recent purchase will become a repeat customer
• Helps build mutually beneficial long-term
  relationships

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Managing the Sales Effort

• Sales management Activities of planning,
  organizing, staffing, motivating compensating,
  and evaluating and controlling a sales force to
  ensure its effectiveness

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• How salespeople and sales managers spend their
  time

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• Recruitment and Selection
• One of the sales managers greatest challenges
• Careful selection is important for two reasons
• Substantial costs involved
• Mistakes are costly and detrimental to customer
  relations and sales-force performance

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• Training
• Principal methods used are on-the-job training,
  individual instruction, in-house classes, and
  external seminars
• Popular training techniques include instructional
  videotapes/DVDs, lectures, roll-playing
  exercises, slides, films, and interactive
  computer programs

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• Organization
• General organizational alignment may be based on
  geography, products, types of customers, or some
  combination of these factors
• National accounts organization organizational
  arrangement that assigns sales teams to a firms
  largest accounts

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• Basic approaches to organizing the sales force

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• Supervision
• Span of control the number of sales
  representatives who report to the first level of
  sales management
• Optimal span of control is affected by such
  factors as complexity work activities being
  performed, ability of the individual sales
  manager, degree of interdependence among
  individual salespersons, and the extent of
  training each salesperson receives

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• Motivation
• Efforts to motivate salespeople usually take the
  form of the briefings, information sharing, and
  both psychological and financial encouragement
• Psychological encouragement includes appeals to
  emotional needs, recognition, and peer acceptance
• Financial encouragement includes monetary rewards
  and fringe benefits such as club memberships and
  sales contest awards

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• Compensation
• Commission incentive compensation directly
  related to the sales or profits achieved by a
  salesperson
• Salary fixed compensation payments made
  periodically to an employee

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• Figure 17.11
• Average Annual Pay for Sales Representatives

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• Evaluation and Control
• Sales quotas level of expected sales for
  territory, product, customer, or salesperson
  against which actual results are compared
• Other measures such as customer satisfaction,
  profit contribution, share of product-category
  sales, and customer retention
• Another way to categorize a salespersons strong
  points
• Task, or technical ability
• Process, or sequence of work flow
• Goal, or end results (output) of sales performance

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Ethical Issues in Sales

• Promotional activities, including personal sales,
  raise many ethical questions
• Sales managers can foster a corporate culture for
  an ethical sales environment
• Employees understand what is expected of them
• Open communication exists between employees and
  managers
• Management leads by example
• Employees are proud of and loyal to their
  organization

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Sales Promotion

• Marketing activities other than personal selling,
  advertising, and publicity that stimulate
  consumer purchasing and dealer effectiveness
  includes displays, trade shows and expositions,
  demonstrations and various nonrecurrent selling
  efforts
• Consumer-Oriented Promotions
• Trade-Oriented Promotions

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• Figure 17.12
• Current Spending by Companies for Different Sales
  Promotion

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• Table 17.3
• Seven Most Frequently Used Consumer Promotion
  Techniques

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• Consumer-Oriented Promotions
• Coupons and Refunds
• Coupons offer discounts on the purchase price.
  Nearly 5 billion redeemed annually
• Free-standing inserts (FSIs) in Sunday newspapers
  account for about 75 percent of all coupons
• Refunds offer cash back to consumers with proof
  of purchasing one or more products

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• Taco Bell
• Advertisement Uses Coupons in Free Standing
  Insert to Promote New Food Line

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• Samples, Bonus Packs, and Premiums
• Sampling refers to the free distribution of a
  product in an attempt to obtain future sales.
  Try it, you'll like it.
• A bonus pack is a specially packaged item that
  gives the purchaser a larger quantity at the
  regular price.
• Premiums are items given free or at a reduced
  cost with the purchases of other products

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• Contests and Sweepstakes
• Contests require entrants to solve problems or
  write essays -- they may also require proofs of
  purchase
• Sweepstakes select winners by chance -- no
  product purchase is necessary

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• Specialty Advertising Trinkets and Trash
• Sales promotion technique that places the
  advertiser's name, address, and advertising
  message on useful articles that are then
  distributed to target markets
• More than 8 billion worth of specialty
  advertising items are given out annually

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• Trade-Oriented PromotionsSales promotion that
  appeals to marketing intermediaries rather than
  to consumers
• Trade allowances deals offered to wholesalers
  and retailers for purchasing or promoting
  specific products
• Point-of-purchase (POP) advertising a display
  or other promotion located near the site of the
  actual buying decision

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• Trade shows vendors displays and the
  demonstrations at sites often organized by
  industry trade associations, perhaps as part of
  these associations annual meetings or
  conventions.
• Dealer incentives, contest, and training programs
  are run by the manufacturers to induce retailers
  and their salespeople to increase sales and to
  promote product
• Push money is an incentive that gives retail
  salespeople cash rewards for every unit of a
  product they sell

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• Measuring Sales Promotion Effectiveness
• Since many sales promotions result in direct
  consumer responses, marketers can relatively
  easily track their effectiveness
• As with other methods, marketers must weigh the
  cost against the benefits

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• Ethics in Sales Promotion
• Sales promotions provide opportunities for
  unscrupulous companies to take advantage of
  consumers
• Trade allowances, particularly slotting
  allowances, have been criticized for years as a
  form of bribery

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End of Chapter Seventeen