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Sales Promotion and Personal Selling Key Concepts 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 Advertising Reason to buy Sales Promotion Incentive to buy Sales Promotion Consumer Sales Promotion Goal Trade Sales Promotion Consumer market Drive immediate purchase Influence behavior Marketing channel The Objectives of Sales Promotion Objectives of Sales Promotion Type of Buyer Desired Results Sales Promotion Examples Loyal Customers •Reinforce behavior •Loyalty marketing •Increase consumption •Bonus packs •Change purchase timing Competitor’s Customers •Break loyalty •Persuade to switch •Sampling •Sweepstakes, contests, premiums Brand Switchers •Persuade to buy your brand more often •Price-lowering promotion •Trade deals •Appeal with low prices •Supply added value •Coupons, price-off packages, refunds •Trade deals LO1 Price Buyers Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion Tools for Consumer Sales Promotion Coupon A certificate that entitles consumers to an immediate price reduction. Rebate A cash refund given for the purchase of a product during a specific period. Premium An extra item offered to the consumer, usually in exchange for some proof of purchase. Tools for Consumer Sales Promotion Loyalty Marketing Program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. Frequent Buyer Program A loyalty program in which loyal consumers are rewarded for making multiple purchases. Tools for Consumer Sales Promotion Contests Sweepstakes Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation. Tools for Consumer Sales Promotion Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. Methods of Sampling Direct mail Door-to-door delivery Packaging with another product Retail store demonstration Point-of-Purchase Promotion Build traffic Advertise the product Induce impulse buying Online Sales Promotion Effective Types of Online Sales Promotion Free merchandise Sweepstakes Free shipping with purchases Coupons B2B -- Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows Trade Allowance Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. Push Money 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. E.g. Nike gives bonus to sales staff of retailers for meeting quotas Benefits of Trade Promotions Help manufacturers gain new distribution Obtain wholesaler and retailer support for consumer sales promotions Build or reduce dealer inventories Improve trade relations Forms of Trade Sales Promotion 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. Customers are concentrated. Product is simple to understand. Customers are geographically dispersed. Why Personal Selling is Effective Detailed explanation or demonstration Variable sales message Personal Selling Advantages Directed to qualified prospects Controllable adjustable selling costs More effective than other promotion in obtaining sale and gaining customer satisfaction Relationship Selling Relationship (Consultative) Selling A sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships. Traditional Selling and Relationship Selling Traditional Personal Selling 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 LO5 Short-term sales follow-up Profit impact and strategic benefit focus Long-term sales follow-up Relationship Selling vs. Traditional Selling Sales Increases Result From Creating Value Initial Sales Repeat Sales Traditional Sales Relationship Sales Successive Sales Steps in the Selling Process Generate Leads Qualify Leads Probe Customer Needs Develop Solutions Handle Objections Close the Sale Follow Up Generating Leads Advertising Publicity Direct Mail/ Telemarketing Cold Calling Internet Web Site Referrals Networking Trade Shows/ Conventions Company Records Cold Calling Cold Calling A form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects’ needs or financial status. Qualifying Leads Recognized need Buying power Receptivity and accessibility Needs Assessment Needs Assessment A determination of the customer’s specific needs and wants and the range of options a customer has for satisfying them. The Consultative Salesperson Product or service Salesperson must know everything about... Customers Competition Industry Developing and Proposing Solutions Sales Proposal Sales Presentation Powerful Presentations Be well prepared Use eye contact Ask open-ended questions Be poised Use hand gestures and voice inflection Focus on the customer needs Incorporate visual elements Know how to operate the A/V equipment Make sure the equipment works PRACTICE, PRACTICE, PRACTICE! 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 The Impact of Technology on Personal Selling Cell phones Laptops Pagers E-Mail Electronic organizers Internet Steps in the Selling Process
