Chapter 17 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,...

Chapter 17

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

PERSONAL SELLING AND SALES PROMOTION

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Chapter 17 Personal Selling and Sales Promotion

Objectives

1. Describe the role of today’s salesperson.2. Describe the four sales channels.3. Describe the major trends in personal

selling.4. Identify and briefly describe the three

basic sales tasks.

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Objectives

5. Outline the seven steps in the sales process.

6. Identify the seven basic functions of a sales manager.

7. Explain the role of ethical behavior in personal selling.

8. Describe the role of sales promotion in the promotional mix, and identify the different types of sales promotions.

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Introduction

▮ Personal selling - Interpersonal influence process involving a seller’s promotional presentation conducted on a person-to-person basis with the buyer

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Chapter 17 Personal Selling and Sales PromotionTable 17.1 - Factors Affecting the Importance of Personal Selling in the Promotional Mix

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The Evolution of Personal Selling

▮ Selling has been a standard business activity for thousands of years

▮ Salespeople are problem solvers▮ Personal selling is a vital, vibrant, dynamic

process

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The Evolution of Personal Selling

▮ Salespeople must be able to:• Focus on a customer’s situation and needs and

create solutions that meet those needs

• Follow through and stay in touch before, during, and after a sale

• Know the industry and have a firm grasp of their firm’s and their competitors’ abilities

• Work hard to exceed their customers’ expectations

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Over-the-Counter Selling

▮ Personal selling in which customers come to the seller’s place of business

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Field Selling

▮ Sales presentations made at prospective customers’ locations on a face-to-face basis

▮ Expensive form of selling, particularly because of travel expenses

▮ In routine cases, the salesperson processes regular customers’ orders

▮ In more complex cases, the salesperson prepares for weeks, makes presentations, and follows up

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Field Selling

▮ Network marketing - Personal selling that relies on lists of family members and friends of the salesperson, who organizes a gathering of potential customers for a demonstration of products

▮ Examples: Avon, Pampered Chef, Tupperware

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http://www.avon.com/

http://www.pamperedchef.com/

http://order.tupperware.com/coe/app/home



Telemarketing

▮ Selling process conducted by phone▮ Serves two purposes• Sales• Service

▮ Serves two markets• B2B• B2C

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Telemarketing

▮ Outbound telemarketing - Sales method in which sales personnel place phone calls to prospects and try to conclude the sale over the phone

▮ Technologies used• Predictive dialers• Autodialing• Random-digit dialing

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Telemarketing

▮ Drawback• Most consumers dislike the practice and have

signed up for the national Do Not Call Registry

▮ Some firms still use telemarketing because:• The average call cost is low• Firms point to a significant rate of success

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Telemarketing

▮ Inbound telemarketing - Sales method in which prospects call a seller to obtain information, make reservations, and purchase goods and services

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Inside Selling

▮ Selling by phone, mail, and electronic commerce

▮ Turns opportunities into actual sales▮ Support technicians and purchasers with

current solutions

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Figure 17.1 - Alternative Sales Channels for Serving Customers

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Relationship Selling

▮ Regular contacts between sales representatives and customers over an extended period to establish a sustained buyer-seller relationship

▮ Important to both, B2B and B2C sales

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Table 17.2 - What Buyers Expect from Salespeople

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Consultative Selling

▮ Meeting customer needs by listening to them, understanding their problems, paying attention to details, and following through after the sale

▮ Cross-selling - Offering multiple goods or services to the same customer

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Team Selling

▮ Several sales associates are employed to help the lead sales representative reach all those who influence the purchase decision

▮ Customers often feel better served by a team approach

▮ Relationships form between companies rather than between individuals

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Team Selling

▮ Virtual sales teams - A network of strategic partners, suppliers, and others who are qualified and willing to recommend a firm’s goods or services

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Order Processing

▮ Selling that involves identifying customer needs, pointing them out to customers, and completing orders• Identify customer needs• Point out the need to the customer• Complete (write up) the order

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Creative Selling

▮ Salespeople use well-planned strategies to seek new customers by proposing innovative solutions to customers’ needs

▮ Used to develop new business with either new customers or new products

▮ Generates “buzz” for a product

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Missionary Selling

▮ Promoting goodwill for the firm by educating customers and providing technical or operational assistance

▮ Sales incentives - Programs that reward salespeople for superior performance• Trips, gas cards, or free product upgrades

▮ May involve both field selling and telemarketing

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Figure 17.2 - The AIDA Concept and the Personal Selling Process

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Prospecting and Qualifying

▮ Prospecting - Personal selling function of identifying potential customers

▮ Qualifying - Determining a prospect’s needs, income, and purchase authority as a potential customer

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Approach

▮ Initial contact with prospective customer▮ Precall planning

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Presentation

▮ Describing a product’s major features and relating them to a customer’s problems or needs

▮ Technology must be used efficiently to be effective

▮ Cold calling - Contacting a prospect without a prior appointment

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Demonstration

▮ Customer has the opportunity to try out how a good works before purchase

▮ Multimedia interactive demonstrations are now common

▮ Example: Demonstration videos Black & Decker posts on its website

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http://www.blackanddecker.com/Product-Videos.aspx



Handling Objections

▮ Objections - Expressions of resistance by the prospect

▮ May take the form of stalling or indecisiveness

▮ Use objections as an opportunity to reassure the buyers

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Closing

▮ the salesperson asks the customer to make a purchase decision

▮ Possible strategies• Addressing the prospect’s major concern about

a purchase and then offering a convincing argument

• Posing choices for the prospect in which either alternative represents a sale

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Closing

• Advising the buyer that a product is about to be discontinued or will go up in price soon

• Remaining silent so the buyer can make a decision on his or her own

• Offering an extra inducement designed to motivate a favorable buyer response

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Follow-Up

▮ Postsale activities that often determine whether an: • Individual who has made a recent purchase will

become a repeat customer

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Managing the Sales Effort

▮ Sales managers handle the overall direction and control of the personal selling effort

▮ Requires an appropriate mix of sales and management skills

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Recruitment and Selection

▮ Successful sales careers offer:• Opportunity for advancement• Potential for high earnings• Personal satisfaction• Job security• Independence and variety

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Training

▮ Primary methods are on-the-job training, individual instruction, how-to classes, and external seminars

▮ Use videos, simulations, and executive development programs

▮ Ongoing training is important for experienced salespeople

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Organization

▮ May be based on geography, products, types of customers, or some combination of these factors

▮ National accounts organization - A dedicated sales team is assigned to a firm’s major customers to provide sales and service needs

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Figure 17.3 - Basic Approaches to Organizing the Sales Force

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Supervision

▮ Span of control - Number of sales representatives who report to first-level sales managers

▮ Optimal span of control is affected by:• Complexity of work activities• Ability of the individual sales manager• Degree of interdependence among individual

salespeople• Extent of training each salesperson receives

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Motivation

▮ Motivational tools include information sharing, recognition, bonuses, incentives, and benefits

▮ Expectancy theory – Motivation depends on an individual’s expectations of:• His or her ability to perform a job and how that

performance relates to attaining a desired reward

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Compensation

▮ Commission - Incentive compensation directly related to the sales or profits achieved by a salesperson

▮ Salary - Fixed payment made periodically to an employee

▮ Compensation packages vary according to industry

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Figure 17.4 - Median Pay for Account Managers by Years of Experience

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Evaluation and Control

▮ Managers must set standards and choose the best methods for measuring sales performance

▮ Sales quotas - Level of expected sales for a territory, product, customer, or salesperson against which actual results are compared

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Evaluation and Control

▮ Other measures include: • Customer satisfaction• Profit contribution• Share of product-category sales• Customer retention

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Ethical Issues in Sales

▮ Honesty and ethical behavior is encouraged when:• Employees understand what is expected of

them• Open communication is encouraged• Managers lead by example

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Sales Promotion

▮ Marketing activities other than personal selling, advertising, and publicity that enhance consumer purchasing and dealer effectiveness

▮ Integrated into overall marketing plan▮ Promotions are likely to stress price

advantages, giveaways, or special offers

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Sales Promotion

▮ Goal is speeding the sales process and increasing sales volume

▮ Cannot overcome poor brand images, product deficiencies, or poor training for salespeople

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Consumer-Oriented Sales Promotions▮ Encourage repurchases by rewarding

current users▮ Boost sales of complementary products▮ Increase impulse purchases

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Coupons and Refunds

▮ Coupons - Offers a discount on the purchase price of goods or services

▮ Refunds or rebates - Cash given back to consumers who send in proof of purchase for one or more products

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Samples, Bonus Packs, and Premiums▮ Sampling - Free distribution of a product to

obtain future sales• Higher response rate than other forms of

promotion• Good for promoting new or unusual products• Relatively expensive form of promotion

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Samples, Bonus Packs, and Premiums▮ Bonus pack - Specially packaged item that

gives the purchaser a larger quantity at the regular price

▮ Premiums - Items given free or at reduced cost with purchases of other products

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Contests and Sweepstakes

▮ Contest - Sales promotion technique that requires entrants to complete a task for the chance to win a prize

▮ Sweepstakes - Sales promotion technique in which prize winners are selected by chance

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Specialty Advertising

▮ Places the advertiser’s name, address, and advertising message on useful articles that are then distributed to target consumers

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Trade-Oriented Promotions

▮ Trade promotion - Sales promotion that appeals to marketing intermediaries rather than to consumers

▮ Trade allowances - Special financial incentives offered to wholesalers and retailers that purchase or promote specific products• May give a discount on goods or include off-

invoice allowances

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▮ Point-of-purchase (POP) advertising - Display or other promotion located near the site of the actual buying decision

▮ Trade shows - Product exhibition organized by industry trade associations to showcase goods and services

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▮ Dealer incentives and contests reward retailers who increase sales

▮ Push money - Cash reward paid to retail salespeople for every unit of a product they sell

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Hubway Video

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http://www.cengage.com/marketing/book_content/boone_9781133628460/videos/ch17.html

Scripps Networks Interactive & Food Network Video

http://www.cengage.com/marketing/book_content/boone_9781133628460/videos/part6.html





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