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Global Marketing
Communications
Decisions II:
Sales Promotion,
Personal Selling,
Special Forms of
Marketing
Communication
Global Marketing
Chapter 14
1
Introduction
• In addition to
advertising, publicity
and PR, the promotion
mix includes:
–
–
–
–
–
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Sponsorships
Sales promotion
Direct marketing
Personal selling
Internet
Infomercials
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Sales Promotion
• Sales promotion refers to any paid
consumer or trade communication
program of limited duration that adds
tangible value to a product or brand
– Price vs. non-price promotions
– Consumer vs. trade promotions
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• In a price promotion, tangible value may take the form of a
price reduction, coupon, or mail-in refund.
• Nonprice promotions may take the form of free samples,
premiums, “buy one, get one free” offers, sweepstakes, and
contests.
• Consumer sales promotions may be designed to make
consumers aware of a new product, to stimulate nonusers
to sample an existing product, or to increase overall
consumer demand.
• Trade sales promotions are designed to increase product
availability in distribution channels.
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• At many companies, expenditures for sales promotion
activities have surpassed expenditures for media
advertising. At any level of expenditure, however, sales
promotion is only one of several marketing communication
tools. Sales promotion plans and programs should be
integrated and coordinated with those for advertising,
public relations, and personal selling.
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Sales Promotion
• Provide a tangible incentive to buyers
• Reduce the perceived risk associated
with purchasing a product
• Provide accountability for
communications activity
• Provide method of collecting
additional data for database
Home and Garden shows
attract homeowners
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• Worldwide, the increasing popularity of sales promotion as
a marketing communication tool can be explained in terms
of several strengths and advantages.
• Besides providing a tangible incentive to buyers, sales
promotions also reduce the perceived risk buyers may
associate with purchasing the product.
• From the point of view of the sponsoring company, sales
promotion provides accountability; the manager in charge
of the promotion can immediately track the results of the
promotion. Overall, promotional spending is increasing at
many companies as they shift advertising allocations away
from traditional print and broadcast advertising.
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• In addition, sweepstakes, rebates, and other forms
of promotion require consumers to fill out a form
and return it to the company, which can then build
up information in its database for use when
communicating with customers in the future.
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Sales Promotion: Global or Local
• In countries with low levels of economic
development, low incomes limit the range of
promotional tools available
• Market maturity can also be different from country to
country
• Local perceptions of a particular promotional tool or
program can vary
• Local regulations may rule out use of a particular
promotion in certain countries
• Trade structure in the retailing industry can affect the
use of sales promotions
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• In countries with low levels of economic development, low
incomes limit the range of promotional tools available. In
such countries, free samples and demonstrations are more
likely to be used than coupons or on-pack premiums.
• • Market maturity can also be different from country to
country; consumer sampling and coupons are appropriate
in growing markets, but mature markets might require
trade allowances or loyalty programs.
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• • Local perceptions of a particular promotional tool or
program can vary. Japanese consumers, for example, are
reluctant to use coupons at the checkout counter. A particular
premium can be seen as a waste of money.
• • Local regulations may rule out use of a particular promotion
in certain countries. Table 14-2 lists regulations governing
coupon distribution in several countries.
• • Trade structure in the retailing industry can affect the use of
sales promotions. For example, in the United States and parts
of Europe, the retail industry is highly concentrated, i.e.,
dominated by a few key players such as Wal-Mart. This
situation requires significant promotional activity at both the
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trade and consumer level.
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Sampling
• Sampling
– Provides consumer with
opportunity to try product at no
cost
– May be distributed in stores, in
the mail, through print media, at
events, or door-to-door
• Kikkoman soy sauce launched a
sampling program in supermarkets in
the U.S.; today the U.S. contributes
85% of profit from international
operations
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Wine tasting in
South Africa
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• Cost is one of the major disadvantages associated with sampling;
another problem is that it is sometimes difficult for marketing
managers to assess the contribution a sampling program makes to
return on investment.
•
Today, many companies utilize event marketing and
sponsorships to distribute samples at concerts, sports events, or
special events such as food and beverage festivals attended by
large numbers of people.
• Compared with other forms of marketing communication,
sampling is more likely to result in actual trial of the product.
•
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Couponing
• Couponing
– Printed certificates
entitle the bearer to a
price reduction or some
other special
consideration for
purchasing a particular
product
• Couponing accounts for 70% of consumer
promotion spending in the U.S.
• Free-standing inserts, in-pack, on-pack, cross
coupons
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Couponing
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• According to Joseph Potacki, who teaches a "Basics of
Promotion" seminar for the PMAA, couponing is the aspect of
the promotion mix for which the practices in the United States
differ the most from those in other countries. In the United
States, couponing accounts for 70 percent of consumer
promotion spending. Elsewhere, the percentage is much lower.
According to Potacki, "It is far less—or nonexistent—in most
other countries simply because the cultures don't accept
couponing." Potacki notes that one reason couponing is gaining
importance in countries such as the United Kingdom is because
retailers are learning more about its advantages.
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Couponing
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Sales Promotion:
Issues and Problems
• Fraud
– Pepsi promotion with Apple
• Regulations vary by country
• Cultural dispositions to coupons and other
sales promotions
– Malaysians see coupon usage as embarrassing
– Islam frowns on gambling so sweepstakes may
not work
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• During the 2004 Super Bowl broadcast, PepsiCo launched a
joint promotion with Apple Computer's iTunes Music Store.
Apple planned to give away 100 million songs for free (regular
price: $.99); consumers could obtain a code from the caps of
Pepsi bottles and enter the code online to quality for the
download. The promotion was designed so that anyone
purchasing a bottle of Pepsi had a 1-in-3 chance of being a
winner. However, many people discovered that, by tilting the
bottles to one side, they could tell whether the bottle was a
winner. Moreover, they could read the code without having to
pay for the Pepsi!
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• Sales promotion in Europe is highly
regulated. Sales promotions are popular in
Scandinavia because of restrictions on
broadcast advertising, but are subject to
regulations. If such regulations are relaxed
as the single market develops in Europe and
regulations are harmonized, companies may
be able to roll out pan-European
promotions.
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Personal Selling
• Person-to-person communication
between a company representative and
a prospective buyer
• Focus is to inform and persuade
prospect
• Short-term goal: make a sale
• Long-term goal: build a relationship
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•
Because selling provides a two-way communication channel, it
is especially important in marketing industrial products that may
be expensive and technologically complex. Sales personnel can
often provide headquarters with important customer feedback
that can be utilized in design and engineering decisions.
• Global marketing presents additional challenges because the
buyer and seller may come from different national or cultural
backgrounds. Despite such challenges, it is difficult to overstate
the importance of a face-to-face, personal selling effort for
industrial products in global markets.
•
Personal selling is also a popular marketing communication
tool in countries with various restrictions on advertising.
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Personal Selling Hurdles
• Political Risks – unstable or corrupt governments
change the rules for the sales team
• Regulatory Hurdles – Governments can set up quotas
or tariffs that affect the sales force
• Currency Fluctuations – increase and decrease in
local currencies can make certain products
unaffordable
• Market Unknowns – lack of knowledge of market
conditions, the accepted way of doing business, or
positioning of the product may derail the sales team’s
efforts
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The Strategic/Consultative
Selling Model
Evolved in response to:
•Increased competition
•More complex products
•More emphasis on
customer needs
•Long-term relationships
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The Strategic/Consultative
Selling Model
• Personal Selling Philosophy – commitment to
the marketing concept and a willingness to
adopt the role of problem solver/partner
• Relationship Strategy – game plan for
establishing and maintaining high-quality
relationships with prospects/customers
• Product Strategy – plan that can assist the
sales representative in selecting and
positioning products to satisfy customer
needs
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The Strategic/Consultative
Selling Model
• Customer Strategy – plan that ensures
that the sales professional will be
maximally responsive to customer
needs
• Presentation Strategy – consists of
setting objectives for each sales call and
establishing a presentation plan to meet
those objectives
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The Strategic/Consultative
Selling Model
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The Presentation Plan
•
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•
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•
•
Approach
Presentation
Demonstration
Negotiation
Close
Servicing the sale
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Approach
• Initial contact with the
customer/prospect
• Must completely
understand the
decision-making
process and the roles
of each participant
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Presentation
• Prospect’s needs are
assessed and
matched to the
company’s products
• The style and
message of the
presentation must
be tailored to the
audience
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Demonstration
• Salesperson has the
opportunity to tailor
the communication
effort to the
customer
• Can show how the
product can meet
the customer’s
needs
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Negotiation
• Ensures that both the
customer and the
salesperson come
away from the
presentation winners
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Close
• Ask for the sale
• Must be culturally
sensitive
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Servicing the Sale
• To ensure customer
satisfaction
– Implementation
process must be
outlined
– Customer service
program established
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Special Forms of Marketing
Communications
• Direct Marketing
– Direct mail
– Catalogs
– Infomercials, teleshopping
• Event Sponsorship
– Concerts, sporting events
– Product placement in movies
• Internet Communications
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Direct Marketing
• Any communication with a consumer or
business recipient that is designed to
generate a response in the form of:
– An order
– Request for further information
– A visit to a store or other
place of business
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Direct Marketing—
Going Global
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•
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The world is full of people who are not Americans.
Be sure not to treat them like they are.
Like politics, all marketing is local. Just because
your direct mail campaign worked in Texas, do not
assume it will work in Toronto.
Although there may be a European Union, there is
no such thing as a "European."
Pick your target, focus on one country, and do your
homework.
Customers need to be able to return products
locally or at least believe there are services
available in their country.
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One-to-One Marketing
• One-to-one marketing calls for treating
different customers differently based on
their previous purchase history or past
interactions with the company.
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One-to-One Marketing
• Building from Customer Relationship
Management
– Identify customers and accumulate detailed
information about them
– Differentiate customers and rank them in terms of
their value to the company
– Interact with customers and develop more cost
efficient and effective forms of interaction
– Customize the product/service offered to the
customer
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Catalogs
• A magazine style
publication that
features
photographs and
extensive
information about a
company’s products
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Infomercials and Teleshopping
• An infomercial is a form of paid TV in
which a particular product is
demonstrated, explained, and offered
for sale to viewers who call a toll-free
number on the screen
• Teleshopping on channels like HSN and
QVC is exclusively devoted to
demonstration and selling
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Interactive Television
• ITV allows viewers to interact with the
programming content they are viewing
• In the U.K., more than half of pay-TV
subscribers use ITV
• Remote controls have buttons to push
to order products shown on screen
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Sponsorships
• A company pays a fee to be associated
with an event, team, athletic
association, or sports facility
• Combines elements of PR and sales
promotion
• Draws media attention
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Product Placement
• Arranging to have the company’s
products and brand names appear in TV
shows, movies, and other types of
entertainment
• Marketers also lend or donate products
to celebrities and other public figures
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Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
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