Chapter 1

Chapter 1

Lamb, Hair, McDaniel 2011-2012 CHAPTER 18 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 1 iStockphoto.com/Terry J Alcorn Sales Promotion and Personal Selling Learning Outcomes 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

Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 2 Learning Outcomes LO 4 Describe personal selling LO 5 Discuss the key differences between relationship selling and traditional selling LO 6 List the steps in the selling process Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 3 Sales Promotion Define and state the objectives of sales promotion

LO1 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 4 Sales Promotion Sales Sales Promotion Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. LO1 Chapter 18

Copyright 2012 by Cengage Learning Inc. All rights reserved 5 Sales Promotion Advertising Reason to buy Sales Promotion Incentive to buy LO1 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 6 Sales Promotion Consumer Sales Promotion is sales promotion activities targeting

the ultimate consumer. Trade Sales Promotion is sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer. Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 7 LO1 Objectives of Sales Promotion Type of Buyer Desired Results Sales Promotion Examples Loyal

Customers Reinforce behavior Increase consumption Change purchase timing Loyalty marketing Bonus packs Competitors Customers Break loyalty Persuade to switch Sampling Sweepstakes, contests, premiums Brand Switchers Persuade to buy your brand more often

Price-lowering promotion Trade deals Price Buyers Appeal with low prices Supply added value Coupons, price-off packages, refunds Trade deals Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 8 Tools for Consumer Sales Promotion

Discuss the most common forms of consumer sales promotion LO2 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 9 Tools for Consumer Sales Promotion Coupons Coupons and and Rebates Rebates Premiums Premiums Loyalty Loyalty Marketing Marketing Programs Programs

Contests Contests && Sweepstakes Sweepstakes Sampling Sampling Point-of-Purchase Point-of-Purchase Promotion Promotion LO2 Chapter 18 Online Online Sales Sales Promotion Promotion Copyright 2012 by Cengage Learning Inc. All rights reserved 10 LO2 Coupons and Rebates Coupon

Coupon A A certificate certificate that that entitles entitles consumers consumers to to an an immediate immediate price price reduction reduction when when they they buy buy the the product. product. Rebate Rebate

A A cash cash refund refund given given for for the the purchase purchase of of aa product product during during aa specific specific period. period. Premium Premium An An extra extra item item offered offered to

to the the consumer, consumer, usually usually in in exchange exchange for for some some proof proof of of purchase purchase of of the the promoted promoted product. product. Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 11

Loyalty Marketing Programs Loyalty Loyalty Marketing Marketing Program Program AApromotional promotionalprogram programdesigned designed to tobuild buildlong-term, long-term,mutually mutually beneficial beneficialrelationships relationshipsbetween between aacompany companyand

andkey keycustomers. customers. Frequent Frequent Buyer Buyer Program Program AAloyalty loyaltyprogram programin inwhich which loyal loyalconsumers consumersare arerewarded rewardedfor for making makingmultiple

multiplepurchases purchasesof ofaa particular particulargood goodor orservice. service. LO2 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 12 Coupons and Sweepstakes Contests Contests Sweepstakes Sweepstakes

Promotions Promotionsin inwhich whichparticipants participantsuse use some someskill skillor orability abilityto tocompete competefor for prizes. prizes. Promotions Promotionsthat thatdepend dependon on chance, chance,with

withfree freeparticipation. participation. LO2 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 13 Sampling Sampling Sampling A A promotional promotional program program that that allows allows the the consumer

consumer the the opportunity opportunity to to try try aa product product or or service service for for free. free. LO2 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 14 Methods of Sampling Direct Direct mail mail Door-to-door

Door-to-doordelivery delivery Packaging Packagingwith withanother anotherproduct product Retail Retail store storedemonstration demonstration LO2 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 15 Point-of-Purchase Promotion Offers captive audience in retail stores Can increase sales by as much as 65 percent

LO2 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 16 Online Sales Promotion Effective EffectiveTypes Typesof of Online OnlineSales SalesPromotion Promotion Free merchandise Sweepstakes Free shipping with purchases LO2 Chapter 18 Coupons

Copyright 2012 by Cengage Learning Inc. All rights reserved 17 Tools for Trade Sales Promotion List the most common forms of trade sales promotion LO3 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 18 Trade Sales Promotion Trade Trade Allowances Allowances Push Push Money

Money Training Training Free Free Merchandise Merchandise Store Store Demonstration Demonstration LO3 Chapter 18 Conventions Conventions && Trade Trade Shows Shows Copyright 2012 by Cengage Learning Inc. All rights reserved 19 Trade Allowance Trade Allowance is a price reduction offered by

manufacturers to intermediaries, such as wholesalers and retailers. LO3 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 20 Push Money Push PushMoney 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

Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 21 Benefits of Trade Promotions Help manufacturers gain new distributors Obtain wholesaler and retailer support for consumer sales promotions Build or reduce dealer inventories Improve trade relations LO3 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 22 Personal Selling Describe personal

selling LO4 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 23 Advantages of Personal Selling Provides detailed explanation/demonstration of product Message can be varied according to motivations of each customer Can be directed only to qualified prospects Most effective promotion form in obtaining sale and satisfying customer Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 24

Exhibit 18.2 Comparison of Personal Selling and Advertising/Sales Promotion LO4 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 25 Relationship Selling Discuss the key differences between relationship selling and traditional selling LO5 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved

26 Relationship Selling Relationship Relationship (Consultative) (Consultative) Selling Selling A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships. LO5 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 27

Exhibit 18.3 Key Differences between Traditional Selling and Relationship Selling LO 5 Chapter 18 SOURCE: Robert M. Peterson, Patrick L. Schul, and George H. Lucas, Jr., Consultative Selling: Walking the Walk in the New Selling Environment, National Conference on Sales Management, Proceedings, March 1996. Copyright 2012 by Cengage Learning Inc. All rights reserved 28 Steps in the Selling Process List the steps in the selling process

LO6 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 29 Steps in the Selling Process Generate Generate Leads Leads Qualify Qualify Leads Leads Probe Probe Customer Customer Needs Needs Develop Develop Solutions Solutions Handle Handle Objections Objections

Close Close the the Sale Sale LO6 Chapter 18 Follow Follow Up Up Copyright 2012 by Cengage Learning Inc. All rights reserved 30 Generating Leads Advertising Advertising Publicity Publicity Direct DirectMail/

Mail/ Telemarketing Telemarketing Cold ColdCalling Calling Internet Internet Web WebSite Site Referrals Referrals Networking Networking Trade Trade Shows/ Shows/ Conventions Conventions

Company Company Records Records LO6 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 31 Cold Calling Cold ColdCalling Calling A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects needs or financial status. LO6

Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 32 Qualifying Leads Recognized Recognized need need Buying Buying power power Receptivity Receptivity and and accessibility accessibility LO6 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved

33 Approaching the Customer and Probing Needs Needs Needs Assessment Assessment A determination of the customers specific needs and wants and the range of options a customer has for satisfying them. LO6 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 34 The Consultative Salesperson

Product Productor orservice service Salesperson Salesperson must must know know everything everything about... about... Customers Customers Competition Competition Industry Industry LO6 Chapter 18

Copyright 2012 by Cengage Learning Inc. All rights reserved 35 Developing and Proposing Solutions Sales Proposal is a formal written document or professional presentation that outlines how the salespersons product or service will meet or exceed the prospects needs. Sales Presentation is LO6 Chapter 18 a formal meeting in which the salesperson presents a sales proposal to a prospective buyer. Copyright 2012 by Cengage Learning Inc. All rights reserved 36

Handling Objections View objections as requests for information Anticipate specific objections Investigate the objection with the customer Be aware of competitors products Stay calm LO6 Chapter 18 Use the objection to close the sale Copyright 2012 by Cengage Learning Inc. All rights reserved 37 Closing the Sale Look Look for for customer customer signals signals

Keep Keep an an open open mind mind Negotiate Negotiate Tailor Tailor to to each each market market LO6 Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 38 Following Up In the final step of the selling process follow upthe salesperson must ensure:

delivery schedules are met goods or services perform as promise buyers employees are properly trained to use the products Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 39 Exhibit 18.3 Relative Amount of Time Spent in the Key Steps of the Selling Process Source : Robert Peterson, Patrick Schul, and George H. Lucas Jr., Consultative Selling: Walking the Walk in the New Selling Enviroment, National Conference on Sales Management Proceedings, March 1996. Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 40

The Impact of Technology on Personal Selling Cell Cell phones phones Laptops Laptops Pagers Pagers E-Mail E-Mail Electronic Electronic organizers organizers LO6 Chapter 18 Internet Internet Copyright 2012 by Cengage Learning Inc. All rights reserved 41

Beyond Book the Making the Sale LO6 Chapter 18 Now that you know the steps in the selling process, break down this video and Grovers use of (or failure to use) the steps Grover Sells Hair-Care What about this man? What are his sales tactics? Vegetable Peeler Salesman Copyright 2012 by Cengage Learning Inc. All rights reserved 42

Beyond the Book Chapter 18 Videos Chapter 18 Vans Sales Promotion and Personal Selling How does Vans use giveaways and contests to market its products? Why do these strategies work so well for Vans? http://www.cengage.com/marketing/ book_content/1439039429_lamb/ company_clips/ch18.html Copyright 2012 by Cengage Learning Inc. All rights reserved 43 Beyond the Book Part 5 Videos

Promotion and Communication Strategies http://www.cengage.com/marketing/ book_content/1439039429_lamb/ part_videos/part05.html Chapter 18 Copyright 2012 by Cengage Learning Inc. All rights reserved 44

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