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Personal Selling and Sales Promotion Chapter 13 Rest Stop: Previewing the Concepts • Discuss the role of a company’s salespeople • • in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing 13 - 2 Rest Stop: Previewing the Concepts • Explain how sales promotion campaigns are developed and implemented 13 - 3 First Stop: P&G • Its sales force has long been an American icon for selling at its very best • It understands that if its customers don’t do well, neither will the company • Its business development involves partnering with customers to jointly identify strategies that create shopper value and satisfaction and drive profitable sales at the store level 13 - 4 Personal selling • Personal presentations by the firm’s sales force for the purpose of making sales and building customer relationships Salesperson • Individual representing a company to customers by performing one or more of the following activities: • • • • • • Prospecting Communicating Selling Servicing Information gathering Relationship building 13 - 6 The Role of the Sales Force • Serve as a critical link between a company and its customers • Coordinate marketing and sales Salespeople link the company with its customers. To many customers, the salesperson is the company. 13 - 7 Sales force management • Analyzing, planning, implementing, and controlling sales force activities Figure 13.1 – Major Steps in Sales Force Management 13 - 9 Types of Sales Force Structure • Territorial: Assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company’s full line • Product: Salespeople specialize in selling only a portion of the company’s products or lines • Customer (or market): Salespeople specialize in selling only to certain customers or industries 13 - 10 Sales Force Structure Whirlpool specializes its sales force by customer and by territory for each key customer group Sales Force Size • May range from only a few to thousands • Many companies use some form of workload approach to set sales force size • Company first groups accounts into different classes according to size, account status, or other factors • Then determines the number of salespeople needed to call on each class of accounts 13 - 12 Other Sales Force Strategy and Structure Issues • Outside sales force (or field sales force): Salespeople who travel to call on customers in the field • Inside sales force: Salespeople who conduct business from their offices via telephone, the Internet, or visits from prospective buyers 13 - 13 Other Sales Force Strategy and Structure Issues For many types of selling situations, phone or Web selling can be as effective as a personal sales call. At Climax Portable Machine Tools, phone reps build surprisingly strong and personal customer relationships. Team selling • Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts Recruiting and Selecting Salespeople The best salespeople possess intrinsic motivation, a disciplined work style, the ability to close a sale, and, perhaps most important, the ability to build relationships with customers 13 - 16 Training Salespeople • Training programs teach salespeople: • About different types of customers and their needs, buying motives, and buying habits • How to sell effectively • Basics of the selling process • How to know and identify themselves with the company, its products, and the strategies of major competitors 13 - 17 Training Salespeople • Companies provide continuing sales training via seminars, sales meetings, and Internet e-learning throughout the salesperson’s career E-Training can make sales training more efficient—and more fun. Bayer HealthCare Pharmaceuticals’ roleplaying video game—Rep Race—helped improve sales rep effectiveness by 20 percent. 13 - 18 Compensating Salespeople • Compensation consists of four elements: • • • • Fixed amount, Variable amount Expenses Fringe benefits 13 - 19 Compensating Salespeople • Different combinations of fixed and variable compensation give rise to four basic types of compensation plans: • • • • Straight salary Straight commission Salary plus bonus Salary plus commission 13 - 20 Supervising Salespeople • Goal • Help salespeople work smart by doing the right things in the right way • Sales force management tools: • Call plan – Shows which customers and prospects to call on and which activities to carry out • Time-and-duty analysis 13 - 21 Sales Force Automation System • Computerized, digitized sales force operations that let salespeople work more effectively anytime, anywhere Technology has reshaped the ways in which salespeople carry out their duties and engage customers Marketing At Work • Online selling tools build customer awareness and consideration, purchase interest, and salespeople, • Extend their reach and effectiveness of salespeople Selling on the Internet • Benefits • Conserves salespeople’s valuable time, saves travel dollars, and gives them a new vehicle for selling and servicing accounts • Gives customers more control over the sales process • Drawbacks • Expensive • Intimidates low-tech salespeople or clients 13 - 24 Motivating Salespeople • Goal • Encourage salespeople to work hard and energetically toward sales force goals • Management boost sales force morale by: • • • • • Organizational climate Sales quotas Positive incentives Sales meetings Sales contests 13 - 25 Organizational climate • Describes the feeling that salespeople have about opportunities, value, and rewards for a good performance Sales quotas • Standard that states the amount a salesperson should sell and how sales should be divided among the company’s products Sales meetings • Provides social occasions, breaks from the routine, chances to meet and talk with company brass, and opportunities to air feelings and identify with a larger group Evaluating Salespeople and Sales Force Performance • Management gets information about its salespeople from: • • • • Sales reports Call reports Expense reports Monitoring the sales and profit performance data in the salesperson’s territory • Personal observation, customer surveys, and talks with other salespeople 13 - 27 Evaluating Salespeople and Sales Force Performance • Formal evaluation • Forces management to develop and communicate clear standards for judging performance • Provides salespeople with constructive feedback and motivates them to perform well • Company should measure its return on sales investment 13 - 28 Steps in the Selling Process • • • • • • • Prospecting and qualifying Preapproach Approach Presentation and demonstration Handling objections Closing Follow-up Figure 13.3 – Steps in the Selling Process 13 - 30 Steps in the Selling Process • Prospecting and qualifying • Prospecting: Identifying qualified potential customers • Qualifying – Identifying good ones and screening out poor ones • Preapproach: Learning as much as possible about a prospective customer before making a sales call 13 - 31 Steps in the Selling Process • Approach: Meeting the customer for the first time • Presentation and demonstration: • Presentation: Telling the value story to the buyer, showing how the company’s offer solves the customer’s problems • Handling objections: Seeking out, clarifying, and overcoming any customer objections to buying 13 - 32 Steps in the Selling Process • Closing: Asking the customer for an order • Follow-up: Following up after the sale to ensure customer satisfaction and repeat business This classic ad from Boise makes the point that good selling starts with listening. “Our account representatives have the unique ability to listen to your needs.” 13 - 33 Personal Selling and Managing Customer Relationships • Most companies want their salespeople to practice value selling • Value selling requires: • Listening to customers • Understanding their needs • Carefully coordinating the whole company’s efforts to create lasting relationships based on customer value 13 - 34 Sales promotion • Short-term incentives to encourage the purchase or sales of a product or a service 13 - 35 Targets of Sales Promotion • Final buyers (consumer promotions) • Retailers and wholesalers (trade promotions) • Business customers (business promotions) • Members of the sales force (sales force promotions) Magazines are loaded with offers like this one that promote a strong and immediate response 13 - 36 Factors Contributing to the Growth of Sales Promotion • Product managers view promotion as an effective short-run sales tool • Competitors use sales promotion to differentiate their offers • Advertising efficiency has declined • Sales promotions help attract today’s more thrift-oriented consumers 13 - 37 Sales Promotion Objectives • Sales promotions: • Are used together with other promotion mix tools • Help reinforce product’s position and build long-term customer relationships Customer loyalty programs: Kroger keeps its Plus Card holders coming back by linking food purchases to discounts on gasoline prices 13 - 38 Consumer promotion • Sales promotion tools used to boost short-term customer buying and involvement or to enhance long-term customer relationships 13 - 39 Consumer Promotion Tools • Samples – Offers of a trial amount of a product • Coupons – Certificates that save buyers money when they purchase specified products • Cash refunds (or rebates) – Price reduction occurs after purchase to the manufacturer, which then refunds part of the purchase price 13 - 40 Marketing at Work • Mobile marketing can be very effective • Coupons by phone offer an alluring opportunity As mobile phones become appendages that many people can’t live without, companies from Target and Sears to Chick-fil-A and Enterprise Rent-A-Car are testing the mobile couponing waters Consumer Promotion Tools • Price packs (or cents-off deals) – Offer consumers savings off the regular price of a product • Premiums – Goods offered either free or at low cost as an incentive to buy a product • Advertising specialties (or promotional products) – Useful articles imprinted with an advertiser’s name, logo, or message 13 - 42 Consumer Promotion Tools • Point-of-purchase (POP) promotions – Displays and demonstrations that take place at the point of sale • Contests, sweepstakes, and games – Give consumers the chance to win something • Event marketing: Creating a brand-marketing event or serving as a sole or participating sponsor of events created by others 13 - 43 Companies use sweepstakes and contests to create brand attention and boost consumer involvement. Enter this year’s “Dads Making a Difference Contest” and you could win your dad up to $30,000 in support of a community project Trade promotion • Sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers 13 - 45 Trade Promotion Tools • • • • • • • • Contests Premiums Displays Discounts/Price-off/Off-invoice/Off-list Allowances Free goods Push money Specialty advertising items 13 - 46 Business promotion • Sales promotion tools used to generate business leads, stimulate purchases, reward customers, and motivate salespeople 13 - 47 Business Promotion Tools • Include many of the same tools used for consumer or trade promotions • Conventions and trade shows – Help vendors find new sales leads, contact customers, introduce new products, etc. • Sales contests – Contest for salespeople or dealers to motivate them to increase their sales performance over a given period 13 - 48 Developing the Sales Promotion Program • Marketers must: • Determine the size of the incentive • Set conditions for participation • Determine how to promote and distribute the promotion program itself • Set the length of promotion • Evaluate the promotion 13 - 49 Rest Stop: Reviewing the Concepts • Discuss the role of a company’s salespeople • • in creating value for customers and building customer relationships Identify and explain the six major sales force management steps Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing 13 - 50 Rest Stop: Reviewing the Concepts • Explain how sales promotion campaigns are developed and implemented 13 - 51 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 13 - 52