Chapter 17 Chapter 17
Personal Selling Personal Selling and and
Sales PromotionSales Promotion
17-2
Chapter ObjectivesChapter Objectives
1. Outline the marketplace conditions that make personal selling a primary component of a firm’s promotional mix.
2. Describe the four sales channels.
3. Describe the major trends in personal selling.
4. Identify and briefly describe the three basic sales tasks.
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.
9. Identify the different types of consumer-oriented and trade-oriented sales promotions.
17-3
Personal sellingPersonal selling: interpersonal influence process involving a seller’s promotional presentation conducted on a person-to-person basis with the buyer
“A salesman is someone who sells goods that won’t come back to customers who will.” (Anonymous)
The Evolution of Personal SellingThe Evolution of Personal Selling
17-4
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
17-5
Today’s 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
Today’s professional salespeople are problem solvers who seek to develop long-term relationships with customers
17-6
Factor affecting the importance of personal selling in the promotional mix
Variable Conditions That Favor Personal Selling
Conditions That Favor Advertising
Consumer
Product
Geographically concentrated
Relatively low numbers
Expensive
Technically complex
Custom made
Special handling requirementsTransactions frequently involve trade-ins
Geographically dispersed
Relatively high numbers
Inexpensive
Simple to understand
StandardizedNo special handling requirementsTransactions seldom involve trade-ins
Price Relatively high Relatively low
Channels Relatively short Relatively long
17-7
NetJets NetJets Executive Executive JetJetA Product
Requiring Personal Selling
17-8
The Four Sales ChannelsThe Four Sales Channels
Personal selling occurs through several types of communication channels including these four: Over-the-CounterField SellingTelemarketingInside Selling
17-9
Over-the-CounterOver-the-Counter: personal selling conducted in retail and some wholesale locations in which customers come to the seller’ place of businessTrue Value
Salespeople Engage in Over-the-Counter Selling
17-10
Field sellingField selling: sales presentations made at prospective customers’ homes or businesses on a face-to-face basisBetter Homes
and Gardens Real Estate Service: A Type of Field Sales
17-11
Cost of a Sales Call by Industry
17-12
TelemarketingTelemarketing: 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 ordersThe Telemarketing
CompanyTelemarketing: A
Popular Selling Technique
17-13
Inside SellingInside 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
17-14
Trends in Personal SellingTrends in Personal Selling
Relationship sellingRelationship selling: regular contacts over an extended period to establish a sustained seller-buyer relationship
Consultative sellingConsultative 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
17-15
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 customer’s 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 customer’s cause within the selling organization
Create imaginative arrangements to meet buyers’ needs
Arrive well-prepared for sales calls
17-16
Team SellingTeam Selling: combination of salespeople with specialists from other functional areas to promote a productVirtual sales teamTeam Selling at
CDW Computer Centers
17-17
Sales Force Sales Force AutomationAutomation (SFA): applications of computer and other technologies to make the sales function more efficient and competitiveBenefits include
improved effectiveness due to improved access to information, lower costs, improved product launches, and attentive customer service
17-18
Sales TasksSales Tasks
Three basic sales tasks can be identified:Order ProcessingCreative SellingMissionary sales
17-19
Order ProcessingOrder Processing: selling, mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders
Creative SellingCreative Selling: personal selling involving situations in which a considerable degree of analytical decision making on the buyer’s part results in the need for skillful proposals of solutions for the customer’s needs
Missionary salesMissionary sales: indirect type of selling in which specialized salespeople promote the firm’s goodwill among indirect customers, often by assisting customers in product use
17-20
The Sales ProcessThe Sales Process
The AIDA Concept and the Personal Selling Process
17-21
ProspectingProspecting: personal-selling function of identifying potential customers
QualifyingQualifying: determining that a prospect has the needs, income, and purchase authority necessary for being a potential customer
OreckUsing advertising to
identify prospective customers
17-22
ApproachApproach: salesperson’s 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 customer’s needs
17-23
PresentationPresentation: describing a product’s major features and relating them to a customer’s problems or needsExpoStar
Displays & Graphics
Support Tools Increase the Effectiveness of Presentations
17-24
DemonstrationDemonstration allows the customer to experience a good or serviceEven ads as well
done as this Oldsmobile ad, can not substitute for an effective demonstration ride in a new automobile
17-25
Handling ObjectionsHandling Objections: expressions of sales resistance by the prospectExample: A customer’s “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
17-26
ClosingClosing: stages of personal selling where the salesperson asks the customer to make a purchase decision
Follow-upFollow-up: post-sales activities that often determine whether an individual who has made a recent purchase will become a repeat customerHelps build mutually beneficial long-term
relationships
17-27
Managing the Sales EffortManaging the Sales Effort
Sales managementSales management: Activities of planning, organizing, staffing, motivating compensating, and evaluating and controlling a sales force to ensure its effectiveness
17-28
How salespeople and sales managers spend their time
17-29
Recruitment and SelectionRecruitment and SelectionOne of the sales manager’s greatest
challengesCareful selection is important for two
reasons:Substantial costs involvedMistakes are costly and detrimental to
customer relations and sales-force performance
17-30
TrainingTrainingPrincipal 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
17-31
OrganizationOrganizationGeneral 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 firm’s largest accounts
17-32
Basic approaches to organizing the sales force
17-33
SupervisionSupervisionSpan 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
17-34
MotivationMotivationEfforts 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
17-35
CompensationCompensationCommission: incentive compensation
directly related to the sales or profits achieved by a salesperson
Salary: fixed compensation payments made periodically to an employee
17-36
Figure 17.11Figure 17.11Average Annual Pay for Sales Representatives
17-37
Evaluation and ControlEvaluation and ControlSales 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 salesperson’s strong points:Task, or technical abilityProcess, or sequence of work flowGoal, or end results (output) of sales
performance
17-38
Ethical Issues in SalesEthical 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
themOpen communication exists between
employees and managersManagement leads by exampleEmployees are proud of and loyal to their
organization
17-39
Sales PromotionSales 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 effortsConsumer-Oriented PromotionsConsumer-Oriented PromotionsTrade-Oriented PromotionsTrade-Oriented Promotions
17-40
Figure 17.12Figure 17.12Current Spending by
Companies for Different Sales Promotion
17-41
Table 17.3Table 17.3Seven Most Frequently Used Consumer
Promotion Techniques
17-42
Consumer-Oriented Promotions Consumer-Oriented Promotions Coupons and RefundsCoupons and Refunds
Coupons offer discounts on the purchase price. Nearly $5 billion redeemed annuallyFree-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
17-43
Taco BellAdvertisement
Uses Coupons in Free Standing Insert to Promote New Food Line
17-44
Samples, Bonus Packs, and PremiumsSamples, Bonus Packs, and PremiumsSampling 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
17-45
Contests and Contests and SweepstakesSweepstakesContests 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
17-46
Specialty Advertising Specialty Advertising [“Trinkets and Trash”][“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
17-47
Trade-Oriented PromotionsTrade-Oriented PromotionsSales promotion that appeals to marketing intermediaries rather than to consumersTrade allowancesTrade allowances: deals offered to
wholesalers and retailers for purchasing or promoting specific products
Point-of-purchase (POP) Point-of-purchase (POP) advertisingadvertising: a display or other promotion located near the site of the actual buying decision
17-48
Trade showsTrade shows: vendors’ displays and the demonstrations at sites often organized by industry trade associations, perhaps as part of these association’s annual meetings or conventions.
Dealer incentives, contest, and training Dealer incentives, contest, and training programsprograms 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
17-49
Measuring Sales Promotion EffectivenessMeasuring Sales Promotion EffectivenessSince 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
17-50
Ethics in Sales PromotionEthics in Sales PromotionSales 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
17-51
End of Chapter SeventeenEnd of Chapter Seventeen