Marketing

Principles of Marketing Seventeenth Edition

Chapter 16

Personal Selling and Sales Promotion

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Learning Objectives 16-1 Discuss the role of a company’s salespeople in creating value for customers

and building customer relationships. 16-2 Identify and explain the six major sales force management steps. 16-3 Discuss the personal selling process, distinguishing between transaction-

oriented marketing and relationship marketing. 16-4 Explain how sales promotion campaigns are developed and implemented.

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Learning Objective 1

Discuss the role of a company’s salespeople in creating value for customers and building customer relationships.

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Personal Selling Personal selling is the interpersonal part of the promotion mix and can include: • Face-to-face communication • Telephone communication • Video or Web conferencing

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Personal Selling

The Nature of Personal Selling Salespeople are an effective link between the company and its customers to produce customer value and company profit by • Representing the company to customers • Representing customers to the company • Working closely with marketing

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Learning Objective 2

Identify and explain the six major sales force management steps.

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Managing the Sales Force Sales force management is the analysis, planning, implementation, and control of sales force activities.

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Managing the Sales Force

Designing Sales Force Strategy and Structure

Territorial sales force structure

Product sales force structure

Customer sales force structure

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Managing the Sales Force

Designing Sales Force Strategy and Structure

Territorial sales force structure: each salesperson is assigned an exclusive geographic area and sells the company’s full line of products and services to all customers in that territory. • Defines salesperson’s job • Fixes accountability • Lowers sales expenses • Improves relationship building and selling effectiveness

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Managing the Sales Force

Designing Sales Force Strategy and Structure

Product sales force structure: each salesperson sells along product lines. • Improves product knowledge • Can lead to territorial conflicts

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Managing the Sales Force

Designing Sales Force Strategy and Structure

Customer sales force structure: each salesperson sells along customer or industry lines. • Improves customer relationships

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Managing the Sales Force

Designing Sales Force Strategy and Structure

Sales Force Size • Salespeople are one of the company’s most productive and expensive

assets. • Workload approach to sales force size refers to grouping accounts into

different classes to determine the number of salespeople needed.

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Managing the Sales Force

Designing Sales Force Strategy and Structure • Outside sales force (field sales force) are salespeople who travel to call

on customers in the field. • Inside sales force are salespeople who conduct business from their offices

via telephone, online and social media interactions, or visits from prospective buyers.

• Team selling involves Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts.

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Managing the Sales Force

Recruiting and Selecting Salespeople • Careful selection and training increases sales performance. • Poor selection increases recruiting and training costs, leads to lost sales,

and disrupts customer relationships.

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Managing the Sales Force Training Salespeople

• Goals of training • Customer knowledge • Selling process • Knowledge of products, company, competitors

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Managing the Sales Force

Compensating Salespeople

Fixed amounts

Variable amounts

Expenses Fringe benefits

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Managing the Sales Force

Supervising and Motivating Salespeople • The goal of supervision is to help salespeople work smart by doing the right

things in the right ways. • The goal of motivation is to encourage salespeople to work hard and

energetically toward sales force goals.

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Managing the Sales Force Supervising and Motivating Salespeople

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Managing the Sales Force

Supervising and Motivating Salespeople • Sales morale and performance can be increased through § Organizational climate § Sales quotas § Positive incentives

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Managing the Sales Force

Evaluating Salespeople and Sales Force Performance

Sales reports Call reports Expense reports

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Learning Objective 3

Discuss the personal selling process, distinguishing between transaction- oriented marketing and relationship marketing.

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The Personal Selling Process

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The Personal Selling Process Steps in the Personal Selling Process Prospecting identifies qualified potential customers through referrals from: • Customers • Suppliers • Dealers • Internet

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The Personal Selling Process Steps in the Personal Selling Process

Qualifying involves identifying good customers and screening out poor ones by looking at • Financial ability • Volume of business • Needs • Location • Growth potential

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The Personal Selling Process Steps in the Personal Selling Process Preapproach is the process of learning as much as possible about a prospect, including needs, who is involved in the buying, and the characteristics and styles of the buyers.

Objectives

• Qualify the prospect • Gather information • Make an immediate

sale

Approaches

• Personal visit • Phone call • Letter/e-mail

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The Personal Selling Process

Steps in the Personal Selling Process Approach is the process where the salesperson meets and greets the buyer and gets the relationship off to a good start and involves the salesperson’s: • Appearance • Opening lines • Follow-up remarks

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The Personal Selling Process

Steps in the Personal Selling Process Presentation is when the salesperson tells the product story to the buyer, presenting customer benefits and showing how the product solves the customer’s problems.

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The Personal Selling Process

Steps in the Personal Selling Process Handling objections is the process where salespeople resolve problems that are logical, psychological, or unspoken.

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The Personal Selling Process

Steps in the Personal Selling Process Closing is the process where salespeople should recognize signals from the buyer—including physical actions, comments, and questions—to ask for a order and finalize the sale.

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The Personal Selling Process

Steps in the Personal Selling Process Follow-up is the last step in which the salesperson follows up after the sale to ensure customer satisfaction and repeat business.

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The Personal Selling Process Steps in the Personal Selling Process Personal selling is transaction-oriented to close a specific sale with a specific customer. The long-term goal of personal selling is to develop a mutually profitable relationship.

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Learning Objective 4

Explain how sales promotion campaigns are developed and implemented.

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Sales Promotion Sales promotion refers to the short-term incentives to encourage purchases or sales of a product or service now.

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Sales Promotion

Rapid Growth of Sales Promotion • Product managers are under pressure to increase current sales. • Companies face more competition. • Competing brands offer less differentiation. • Advertising efficiency has declined due to rising costs, clutter, and legal

constraints. • Consumers have become more deal-oriented.

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Sales Promotion

Sales Promotion Objectives Setting sales promotion objectives includes using: • Consumer promotions • Trade promotions • Business promotions • Sales force promotions

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Sales Promotion

Major Sales Promotion Tools Samples offer a trial amount of a product. Coupons are certificates that give buyers a saving when they purchase specified products. Rebates are similar to coupons except that the price reduction occurs after the purchase. Price packs offer consumers savings off the regular price of a product.

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Sales Promotion

Major Sales Promotion Tools Premiums are goods offered either for free or at a low price. Advertising specialties are useful articles imprinted with the advertiser’s name, logo, or message that are given as gifts to consumers. Point-of-purchase promotions include displays and demonstrations that take place at the point of sale.

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Sales Promotion

Major Sales Promotion Tools Contests, sweepstakes, and games give consumers the chance to win something—such as cash, trips, or goods—by luck or through extra effort. • Contests require an entry by a consumer. • Sweepstakes require consumers to submit their names for a drawing. • Games present consumers with something that may or may not help them

win a prize. Event marketing or event sponsorship is creating a brand-marketing event or serving as a sole or participating sponsor of events created by others.

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Sales Promotion

Major Tools for Trade Promotions

Discount Allowance

Free goods Specialty advertising

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Sales Promotion

Major Sales Promotion Tools for Business Customers

Conventions and trade shows are effective to reach many customers not reached with the regular sales force. Sales contests are effective in motivating salespeople or dealers to increase performance over a given period.

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Sales Promotion

Developing the Sales Promotion Program • Size of the incentive • Conditions for participation • Promotion and distribution of the program • Length of the program • Evaluation of the program