Download Chapter 18 Personal Selling and Sales Management

Chapter 18 Personal Selling and Sales Management
 Personal selling is the personal communication of information to persuade someone
to buy something.
 Personal selling is likely to be a part of promotional effort when:
o The market is concentrated geographically in a few industries or in several
large customers.
o The value of the product is not readily apparent to the prospect.
o The product has a high cost, is quite technical in nature, or requires a
demonstration.
o The product must be fitted into an individual customer’s needs (ex. Insurance)
o The organization does not have enough money to sustain an adequate
advertising campaign.
 Types of Personal Selling
o Inside selling is where the customers come to the sales people (ex: retail)
o Outside selling is when sales people go to the customer:
 Producers whose representatives sell directly to household customers
(ex. Insurance companies)
 Representatives of retail organizations go to consumers’ homes to
demonstrate a product, give advice, or provide an estimate (ex.
Heating and cooling companies)
 Representatives of non-profit organizations (ex. Charity and religious)
o A typical sales job includes 3 activities: order taking, customer support, and
order getting. Range of sale jobs in 6 categories:
 Delivery-sales person – sales person delivers product
 Inside order taker – sale person takers orders and assists customer at
the sellers place of business (ex. Retail clerk for JCPenney)
 Outside order taker – sales person goes to the customer in the field and
requests an order (ex. John Deere calls farm equipment dealer)
 Missionary sales person – sales person that’s expected to provide
information and other services for existing or potential customers,
perform promotional activities, and build goodwill (ex. Detail sales
person for pharmaceutical company – Merck)
 Sales engineer – emphasis on ability to explain the product to
prospective customer and also adapt the product to customer’s needs
 Consultative sales person – involves creative selling of good and
services. Requires the sales person to establish a relationship of trust
with customer.
o Specific sales jobs are tailored to the needs of the market and the sales
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organization.
Uniqueness of sales jobs:
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Largely responsible for coordinating a firm’s trade promotion with its
market strategies.
Most visible representative of their company.
Limited direct supervision.
Have more rejections than acceptances.
Considerable traveling and time away from home.
Generate the revenues.
Changing Patterns is Personal Selling
o
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Selling center is a group of people representing a sales department as well as
other functional areas in the firm brought together to meet the needs of a
particular customer (sales team)
Systems selling means selling a total package of related goods and services
to solve a customer’s problem (ex. Xerox)
Global sales teams is where a team of sales people is responsible for all of its
company’s sales to an account anywhere in the world (ex. IBM)
o Relationship selling is developing a mutually beneficial relationship with
selected customers over time. Typically sales relationships require the parties to:
 Share information such as forecasts, product development and
termination plans, and cost information that has historically been
treated as confidential.
 Avoid opportunism, on using shared information for individual gain.
 Have similar organizational cultures when it comes to objectives such
as short term profits versus long-term growth (P&G)
o Telemarketing is the innovative use of telecommunications equipment and
systems as part of the “going to the customer” category of personal selling
(examples of selling activities that work nicely):
 Processing orders for standardized products
 Dealing with small-order customers, especially where seller would lose
money if field calls were made.
 Improving relations with middlemen.
o Internet selling, only business-to-business auction, qualifies as personal selling
because of its interactive nature. Uses traditional auction or reverse auction.
o Sales-force automation is the capability of using electronic tools to combine
company and client information in real time to enhance the sales function.
Personal selling process is a logical sequence of 4 steps that a sales person takes in
dealer with prospective buyers.
o Prospecting – 2 parts
 Identifying prospective customers
 Qualifying prospects – determine whether they have necessary
willingness, purchasing power, and authority to buy.
o Preapproach to individual prospects – learning all they can about the person
or companies to whom they hope to sell to.
o Presenting the sales message – Use AIDA approach
 AIDA is an acronym form by word Attention, Interest, Desire, and
Action:
 Attention – first task is to attract the prospect’s attention and
curiosity.
 Interest – the challenge is to hold prospect’s attention and
stimulate…
 Desire - for the product with a sales presentation.
 Action – try to close the sale; action on the customer’s part.
o Post sale service – try to reduce the customer’s postpurchase cognitive
dissonance(anxiety that occurs after a significant buying decision) by:
 Summarizing the product’s benefits after the purchase
 Repeating why the product is better than alternatives not chosen
 Describing how satisfied other buyers have been with the product
 Emphasizing how satisfied the customer will be with the product
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Staffing and Operating a Sales Force
o Recruitment and Selection – 3 tasks
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Determining the type of people needed by preparing a written job
description.
 Recruiting an adequate number of applicants.
 Selecting the most qualified persons from among the applicants.
Assimilating new sales people – after being hired, management should
integrate them into the company.
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Training the sales force
Motivating the sale force – determine what motivates the sales reps (Money,
status, control, etc.)
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Compensating the sales force – 3 types: straight salary, straight commission, or
a combination plan.
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Supervising the sales force – ensure company policies are being carried out.
Evaluating a Sales Person’s Performance
o Quantitative bases have the advantage of being specific and objective.
o Qualitative bases often reflect broader dimensions of behavior but are
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limited by the subjective judgment of evaluators.
Chapter 19 Advertising, Sales Promotion, and Public Relations
 Advertising, sales promotion, and public relations are the mass-communication tools
available to marketers.
 Nature and scope of Advertising
o All ads have 4 features:
 A verbal and/or visual message.
 An identified sponsor.
 Delivery through one or more media
 Payment by the sponsor to the medium carrying the message.
o Advertising consists of all the activities involved in presenting through the
media a non-personal, sponsor-identified, paid-for message about a product or
organization.
o Advertising is much cheaper than personal selling.
o Advertising can be classified according to 3 classifications:
 The target audience – either consumers or business
 The objective sought – stimulation of primary or selective demand
 Primary-demand advertising is designed to stimulate
demand for a generic category (ex. Coffee) Used in the intro
stage of the product life cycle and throughout product life cycle
 Selective-demand advertising is intended to stimulate
demand for individual brands (ex. Folders coffee) Essentially
competitive advertising.
o Comparison advertising is an ad the refers directly
to one or more competitors (ex. Bud vs. Miller)
 What is being advertised – a product versus an institution
 Product advertising focuses on a particular product or
brand – 2 subdivisions:
o Direct-action seeks a quick response (ex. Specials for
only a few days)
o Indirect-action is designed to stimulate demand over a
longer period of time (ex. Maytag Man)
 Institutional advertising presents information about the
advertiser’s business or tries to create a favorable attitude
towards the organization (ex. McDonalds – “I’m lovin’ It”)
 Firms try to stimulate word-of-mouth endorsements for advertising.
 Advertising campaign consists of all the tasks involved in transforming a theme into
a coordinated advertising program to accomplish a specific goal for a product or
brand. Established when management: identifies the target audience, establishes the
overall promotional goals, sets the total promotional budget, and determines the
overall promotional theme.
 Steps to developing an Ad Campaign:
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Define objectives:
 Support personal selling.
 Improve dealer relations.
 Introduce and position a new product.
 Expand the use of a product.
 Reposition an existing product.
 Counteract substitution.
Establish a budget
 Cooperative advertising is a joint effort by 2 or more firms intended
to benefit each of the participants:
 Vertical involves firms on different levels of distribution.
o Advertising allowance is a cash discount offered by a
manufacturer to a retailer to encourage the retailer to
advertise or prominently display a product.
 Horizontal is joint advertising in which 2 or more firms on same
level of distribution share the costs.
Creating a message
 The message has 2 elements, the appeal and execution.
 Appeal is the benefit that the individual will receive as a result
of accepting the message.
 Execution is combining in a convincing, compatible way the
feature or device that gets attention with the appeal (ex.
Character – Energizer Bunny)
Selecting media
 Factors that influence media choice:
 Objective of the ad
 Audience coverage
 Requirements of the message
 Time and location of the buying decision
 Media cost
 Types of media:
 Television
 Direct mail
 Newspapers
 Radio
 Yellow pages
 Magazines
 Out-of-home advertising
 Interactive media
Evaluating the advertising effort
 Difficulty of evaluation factors:
 Different objectives – some ads may not be aimed at
immediate results
 Effects over time – even ads for immediate impact may
produce results weeks/months later
 Measurement problems – human motivation is too
complicated to be explained by a single factor.
 Measuring effectiveness
 Direct tests compile the responses to an ad or campaign(ex. #
of coupons used from an ad)
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Organizing for advertising
There are 3 ways a firm can manage its advertising:
 Develop an internal advertising department. Many large retailers
have their own ad departments.
 Use an outside advertising agency – an independent company that
provides specialized advertising services. Used by producers.
 Use a combination of an internal department and outside agency.
Sales promotion is demand-stimulating devices designed to supplement advertising
and facilitate personal selling (ex. Coupons, premiums, in-store displays, etc.)
o Two categories of sales promotion: trade promotion, directed to the members
of the distribution channel, and consumer promotions, aimed at consumers.
o Sales promotion popularity factors:
 short-term results
 competitive pressure
 buyers’ expectations – once offered incentives, you begin to expect it
 low quality of retail selling – only effective promotional tools available
at point of purchase.
o Sales objectives:
 Stimulating business user or household demand for a product.
 Improving the marketing performance of middlemen and sales people.
 Supplementing advertising and facilitating personal selling.
o The sales promotion budget should be established as a specific part of the
budget for the total promotional mix.
o Factors that influence choice of promotional devices:
 Nature of target audience – loyal or competitive brand?
 Nature of product – product lend itself to sampling, demonstration, or
multi-item purchase?
 Cost of device – large markets may e expensive
 Current economic conditions – good during recessions or inflation
periods
Public relations is a management tool designed to favorably influence attitudes
towards an organization, its products, and its policies.
o Publicity is any communication about an organization, its products, or
policies through the media not paid for by the organization
o Means for gaining good publicity:
 Prepare and distribute a story (ex. News release)
 Personal communication with a group (ex. Press conference)
 One-on-one personal communication; lobbying
o Publicity can help accomplish any communication objective. It can be used to
announce new products, publicize new policies, recognize employees, describe
research breakthroughs, or report financial performance.
o Other benefits of publicity are: lower cost, increased attention, more
information, and timeliness.
o Publicity has limitations: loss of control over the message, limited exposure, and
publicity is not free.
o
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Indirect tests are measures of something other than actual
behavior. Most used is recall; 3 types of recall tests are:
o Recognition – showing people an ad and asking if
they’ve seen it before.
o Aided recall – asking people if they can recall seeing
any ads for a particular brand.
o Unaided recall – asking people if they can remember
seeing and ads within an identified product category.