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Chapter 18 Sales Promotion and Personal Selling Sales Promotion Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. Sales Promotion Consumer Sales Promotion Goal Trade Sales Promotion Consumer market Drive immediate purchase Influence behavior Marketing channel Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Sales Promotion toward Consumers Product sampling: samples given to consumers to try the product. Coupons: reduction in price given in the form of a certificate. Sales Promotion toward Consumers Rebates: portion of the price is returned to the purchaser. Contests and Sweepstakes: Contests: consumer must perform Sweepstakes: lottery Sales Promotion toward Consumers Premiums: product offered free or at reduced charge if another product is purchased. Multiple Purchase Offers: two-for-one or other multiple purchase tied to lower price or other promotion. Tools for Consumer Sales Promotion Loyalty Marketing Program Frequent Buyer Program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. A loyalty program in which loyal consumers are rewarded for making multiple purchases. Point-of-Purchase Promotion Build traffic Advertise the product Induce impulse buying Sales Promotion toward Consumers Product placements: conveying a noncommercial message by having a product appear in a movie or TV show. Tie-ins: collaborative effort between two or more organizations in a promotional effort. Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows Trade Promotions Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. Trade Promotions Push 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. Trade Promotions Trade show: meeting or convention of members of a particular industry. Contest: offering bonuses or prizes for sales performance in order to motivate a sales force. Trade Promotions Point-of-purchase: Promotional items which attract attention at the places where products are purchased. Cooperative advertising: paid for jointly by supplier and retailer. Personal Selling Personal Selling is more important if... Advertising & Sales Promotion are more important if... Product has a high value. Product has a low value. Product is custom made. Product is standardized. There are few customers. There are many customers. Product is technically complex. Product is simple to understand. Customers are concentrated. Customers are geographically dispersed. Traditional Traditional Selling Personal Selling Relationship Selling and Relationship Selling Sell products Sell advice, assistance, counsel Focus on closing sales Focus on customer’s bottom line Limited sales planning Sales planning is top priority Discuss product Build problem-solving environment Assess “product-specific” needs Conduct discovery in scope of operations “Lone wolf” approach Team approach Pricing/product focus Profit impact and strategic benefit focus Short-term sales follow-up Long-term sales follow-up Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up Sources of Leads Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Networking Trade Shows/ Conventions Company Records Qualifying Leads Recognized need Buying power Receptivity and accessibility Developing and Proposing Solutions Sales Proposal Sales Presentation Handling Objections View objections as requests for information Anticipate specific objections Investigate the objection with the customer Be aware of competitors’ products Stay calm Use the objection to close the sale Closing the Sale Look for customer signals Keep an open mind Negotiate Tailor to each market