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15
RETAIL MARKETING
WHAT IS A RETAILER?
• STORE-BASED RETAILERS
– Convenience stores
– Specialty stores
– Department stores
– Supermarkets
– Category killers
– Supercenters
Allsup’s
Dillard's
Kroger
Wal-Mart
WHAT IS A RETAILER?
• NONSTORE-BASED RETAILERS
–
– Telephone sales
–
– Vending machines
– Direct selling
–
–
LO2
CLASSIFYING RETAIL OUTLETS
LEVEL OF SERVICE
Self-Service
Limited Service
Full-Service
17-4
RETAIL CLASSIFICATION BY PRODUCT
LINE
Specialty Stores
Bath & Body
Department Stores
J.C. Penny
Supermarkets
Kroger
Convenience Stores
7-Eleven
Superstores
Wal-Mart (120,000+)
Automated Vending
ARAMARK
Category Killers
Container Store
Narrow Product Line, Deep Assortment i.e.
Wide Variety of Product Lines i.e. Clothing,
Home Furnishings, & Household Items
Wide Variety of Food, Laundry, & Household
Products
Limited Line of High-Turnover Convenience
Goods
Large Assortment of Routinely Purchased
Food & Nonfood Products, Plus Services
Specialty Operators Particular Category
(airports)
Giant Specialty Store that Carries a Very Deep
Assortment of a Particular Category
LO2
CLASSIFYING RETAIL OUTLETS
TYPE OF MERCHANDISE LINE
Depth of Product Line
• Specialty Outlets
• Category Killers
17-6
LO2
CLASSIFYING RETAIL OUTLETS
TYPE OF MERCHANDISE LINE
Breadth of Product Line
• General Merchandise Stores
• Scrambled Merchandising
•Several unrelated lines in a single
store.
17-7
CLASSIFICATION BY TYPE OF
ORGANIZATION
Merchandising
Conglomerates
Corporate
Chains
Gap
Franchise
Organizations
Voluntary
Chains
IGA
Retailer
Cooperatives
LO3
NONSTORE RETAILING
Automatic Vending
Direct Mail and Catalogs
17-9
LO4
RETAILING STRATEGY
POSITIONING A RETAIL STORE
Retail Positioning Matrix
• Breadth of Product Line
• Value Added
17-10
LO4
RETAILING STRATEGY
RETAILING MIX
Retailing Mix
the activities related to managing the
store and the merchandise in the
store, which includes retail pricing,
store location, retail communication,
and merchandise.
17-11
LO4
RETAILING STRATEGY
RETAILING MIX – PRICE TERMINOLOGY
MARGIN
MARK-UP
( (SP-C) / SP) *100
( (SP-C) / C )*100
MARK-DOWN
( I SPO-SPN I / SPO) *100
INVENTORY
TURNOVER
Average number of times a year a retailer
Expects to sell its inventory
17-12
LO4
RETAILING STRATEGY
RETAILING MIX
Off-Price Retailing
selling brand-name merchandise at lower
than regular prices.
• Warehouse Club
• Outlet Store
Overruns, Irregulars, Discontinued Excess
Inventory, Refurbished
• Single/One-Price Policy Store
/ Discount Stores
17-13
LO4
RETAILING STRATEGY
RETAILING MIX – STORE LOCATION
Shopping
Centers
Freestanding
Retailers
17-14
SITE SELECTION FACTORS
Site Evaluation
Population
Characteristics
•Traffic flow, parking, visibility from
the street, ease of delivery access,
zoning, amount of taxes, etc.
•Age profile, community life cycle,
and mobility of population.
Competition
•May locate in a saturated trade area
or an understored trade area.
Targeted Customers
•Match store type to target customer
needs and community environment.
TYPES OF SHOPPING CENTERS
NEIGHBORHOOD
COMMUNITY
REGIONAL
Supermarket and a
few other stores
Department store
and specialized
stores
Multiple
department stores
Heavily
convenience goods
Some
convenience but
mostly shopping
goods
~150,000+ sq. ft.
100+ other stores
~50,000+ sq. ft.
~400,000+ sq. ft.
ATMOSPHERICS [AMBIANCE]
Store Layout / Signage
Arrangement of Merchandise in the Store;
Grid Layout or Free-Flow Layout
Fixture Type & Merchandise Density
Shelves & Racks That Display Merchandise;
How Much “Stuff” is in the Sales Area
Sound / Music / Odor
Color and Lighting
Use Both to Set a Mood Within a Store
Employee Attitude
LO4
RETAILING STRATEGY
RETAILING MIX
Merchandise
• Category Management
•an approach
to managing the assortment of merchandise in which a manager
is assigned the responsibility for selecting
all products that consumers in a market segment might view as
substitutes for
each other, with the objective of maximizing sales and profits in
the category.
• Metrics
17-18
RETAILER BRAND OPTIONS
Retailers Have Several Options When
Deciding What Brands to Sell
National Brands
Manufacturers’ Brands
Coca-Cola
Brands That Are Owned & Sold
by a Retailer
Sam’s Cola
END OF LECTURE
LO5
FUTURE CHANGES IN RETAILING
Retail Life Cycle
Multichannel Retailers
utilize and integrate a combination of traditional store
formats and non-store formats such as catalogs,
television, and online retailing.
17-20
16
SERVICES MARKETING
SERVICES MARKETING
• SIMILAR TO PRODUCT MARKETING
• WITH SIGNIFICANT DIFFERENCES
GOODS – SERVICES COMPARISON
GOODS
SERVICES
IMPLICATIONS FOR A
PURE SERVICE
Tangible
Intangible
Cannot be physical
- or inventoried
- or displayed
Standardized
Heterogeneous
[Inconsistent]
Difficult to compare
Quality depends on
uncontrollable factors
Personalization ? [Amazon,
Dell]
- expectations / perceptions
- reputation
Production is separate
from consumption
Simultaneous AND
Inseparable
Short channels of
distribution
Nonperishable
Perishable [Limited
Inventory]
Cannot be
- stored, resold, or returned
- are subject to spoilage
SERVICES
Experienced
Services
Experienced
Benefits
Expected
Services
Expected
Benefits
Perceived
Services
Perceived
Benefits
CHALLENGE:
Maximize
customer
experience and
value!
SERVICES MARKETING OF
• PLACES
• IDEAS
• PEOPLE
DIFFERENTIATING SERVICES
• OFFER
– Constructed and presented
•
•
•
•
DELIVERY
IMAGE
INNOVATION
VALUE
– HOW?
– LOCATION?
LO3
CONSUMERS AND SERVICES
The Purchase Process
SEARCH
Attributes that the Customer Can
Examine Prior to Purchase.
Examples: Color, Style, Fit, & Smell
EXPERIENCE
Product Characteristics that
Customers Can Determine During or
After Consumption.
Example: Vacations
CREDENCE
Attributes that We Find Difficult to
Evaluate Even After We’ve
Experienced Them.
Example: Doctor’s Diagnosis
LO2
THE UNIQENESS OF SERVICES
SERVICES – GOODS CONTINUUM
Pure
Good
Groceries
TANGIBLE
Goods w/
Service
Hybrid
Autos
Restaurants
CHARACTERISTICS
Service
w/ Goods
Rental
Movies
Pure
Service
Medical
Care
INTANGIBLE
ACHIEVING SERVICE EXCELLENCE
• A STRATEGIC CONCEPT
• AN ORGANIZATIONAL COMMITMENT [CEO level]
• HIGH STANDARDS
• MONITOR AND IMPROVE QUALITY
• SATISFY PUBLICS
– CUSTOMERS, EMPLOYEES, SUPPLIERS
• MANAGE / MEASURE PRODUCTIVITY
LO3
ASSESSING SERVICE QUALITY
• DETERMINING METRICS
– WHAT ARE THE RELEVANT MEASURES?
– HOW DO WE COLLECT THE DATA?
• CRITICAL-INCIDENT TECHNIQUE
• IMPORTANCE-PERFORMANCE
ANALYSIS
5 DIMENSIONS OF SERVICE QUALITY
• RELIABILITY
– Delivering as promised
• RESPONSIVENESS
– Providing assistance in a timely manner
• ASSURANCE
– Quality of employees and their ability to exude
confidence and trust
• EMPATHY
– Caring, individualized attention
• TANGIBLES
– Appearance of facilities, personnel, and IMC
materials
IMPORTANCE-PERFORMANCE
ANALYSIS
Extremely important
B. Keep up the good work
C. Low priority
D. Possible overkill
Fair performance
Excellent performance
A. Concentrate here
Slightly important
INTERNAL SERVICE MARKETING
Everyone is a customer!
Compete
for Talent
Offer
a Vision
Empowerment
Train
Employees
Reward
Performance
Internal
Marketing
Activities
Stress
Teamwork
Know
Employees’
Needs
17A
INTEGRATED MARKETING
COMMUNICATIONS [IMC]:
OVERVIEW
INTEGRATED MARKETING
COMMUNICATIONS (IMC)
The concept under which the company has
careful integration and coordination of all
communication channels to deliver a clear,
consistent, and compelling message[s] about
the organization and / or its products to all its
publics.
SOME IMC COMMUNICATION VEHICLES
ADVERTISING
CONSUMER
PROMOTIONS
POINT
OF
PURCHASE
COLLATERAL
EVENTS
PUBLIC
RELATIONS
PACKAGING
& LABELING
DIRECT
MARKETING
SALES
AIDS
INTERNET
TRADE
SHOWS
TRADE
PROMOTIONS
LO1
THE COMMUNICATION PROCESS
Promotional Mix
• Inform Prospective Buyers
• Persuade Them To Try
• Remind Them of the Benefits
18-37
AD PERCEPTION
• Selective exposure
– Sees or hears it
• Doesn’t see or hear
• Selective attention
– Pays attention
• Selective
comprehension
– Understands
• Didn’t pay attention
• Misunderstood
• Selective retention
– Remembers
• Doesn’t remember
LO3
IMC—DEVELOPING THE
PROMOTIONAL MIX
CHANNEL STRATEGIES: PUSH STRATEGY
Through channels to consumers
Manufacturer
Reseller(s)
Advertising & promotion
Consumers
LO3
IMC—DEVELOPING THE
PROMOTIONAL MIX
CHANNEL STRATEGIES
To consumers and back through channels
Manufacturer
Reseller(s)
Advertising & promotion
Consumers
LO4
DEVELOPING AN IMC PROGRAM
Identifying the Target Audiences
Specifying Communication
Objectives
• Hierarchy of Effects [2 models]
 Awareness – Interest – Trial – Adoption Evaluation
 Attention – Interest – Desire – Action [AIDA]
LO4
DEVELOPING AN IMC PROGRAM
SETTING THE PROMOTION BUDGET
AFFORDABLE
METHOD
PERCENT-OFSALES METHOD
How much can we afford?
Revenue basis
COMPETITIVEPARITY METHOD
OBJECTIVE-&TASK METHOD
Meet / match competition
Planned & measured
SETTING THE PROMOTION MIX
ADVERTISING
Any paid form
of non-personal advertising
by a paid sponsor
PROMOTION
Short-term incentives
to stimulate sales
PUBLIC RELATIONS
Relating to various publics
by utilizing favorable messages
DIRECT MARKETING
------------------------------PERSONAL SELLING
[SALES]
SETTING THE PROMOTION MIX
ADVERTISING
PUBLIC RELATIONS
-Extensive reach
-Expressive
-Impersonal
-Believable
-Effective
-Economical
PROMOTION
DIRECT MARKETING
------------------------------SALES
-Incentives to buy
-Short-lived
-Collateral
-Support
MESSAGE EXECUTION STYLES
(Advertising appeals)
USP
Dominos
Testimonial
Evidence B2B execs
Slice of Life
Coca-Cola
Scientific
Evidence Scientists
Lifestyle
Pepsi
Technical
Expertise Engineers
Fantasy
Disney
Personality
Symbol CEOs
Mood or Image
[Humor, sex, fear]
Musical [Song or theme]
[Coca-Cola, Disney, McDonalds,…]
DEVELOPING EFFECTIVE
COMMUNICATIONS
Identify target audience
Set communication objectives
Designing the message
Choosing the media and source
Personal or impersonal;
SRDS; competitive reporting
Agency or other mix
17B
INTEGRATED MARKETING
COMMUNICATIONS:
ADVERTISING, SALES PROMOTION,
AND PUBLIC RELATIONS
LO1
TYPES OF ADVERTISEMENTS
An objective for every target market
Informative Advertising
Persuasive Advertising
Build Primary Demand
Build Selective Demand
New products
Major product changes
“Coldwater Tide”
“Buy brand X”
Stress some brand X benefits
Reminder Advertising
Comparison Advertising
Compares Brand A to B
Features & benefits
Keeps Consumers Thinking
About a Product
Repurchase
“Have you had your Wheaties
today?”
LO2
DEVELOPING THE AD PROGRAM
Advertising Categories
National (global) brand advertising
Retail (local) advertising
Directory advertising
Business-to-business advertising
Institutional advertising
Direct response advertising
Public service advertising
Internet advertising
LO2
DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA
1. Decide on Reach, Frequency, and Impact
Step 2. Choosing Among Major Media Types
Media Habits of Target Consumers / Segments
Nature of the Product - Type of Message
Cost
Step 3. Selecting Specific Media Vehicles
Specific Media Within a Given Type, i.e. TV’s ER.
Must Balance Media Cost Against Media Factors:
Audience Quality & Attention, Editorial Quality
Step 4. Deciding on Media Timing
Scheduling of Advertising Over the Course of a Year
Pattern of Ads: Continuity or Pulsing
Media Schedule
LO3
EXECUTING THE
ADVERTISING PROGRAM
IMPLEMENTING THE ADVERTISING PROGRAM
Creative Services
Develops Campaign’s
Strategy for Client
Media Planning
Determines Effective
Communication Vehicles /
Media Schedule
Dreams Up and Produces
the Ads / Materials
ADVERTISING CHALLENGES
TODAY
Technology Empowers the Consumer:
Internet
Greater Emphasis on Point-of-Purchase [POP]
The Rules Are Changing:
Cable, Internet
The Advertising Environment is Cluttered:
Much more noise
Some Consumers Are Turned Off by Advertising:
Gen Y: social networking – friends, family, online, … ads
Message
Money
Message generation
Factors to
consider:
Message evaluation
and selection
Mission
Stage in PLC
Sales
goals
Market share
and consumer base
Advertising
objectives
Competition
and clutter
Advertising
frequency
Product
substitutability
Message execution
Social-responsibility
review
Measurement
Communication
impact
Media
Reach, frequency,
impact
Major media types
Specific media
vehicles
Media timing
Geographical
media allocation
Sales
impact
DEVELOPING EFFECTIVE
COMMUNICATIONS
Target market segment profile and
identify your target audience – be very
specific!
Set communication objectives
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
LO3
ASSESSING THE
ADVERTISING PROGRAM
POSTTESTING THE ADVERTISING
Posttests – How well did the ad
perform?
Aided Recall
Noted – Seen - Read
Unaided Recall
Attitude - Inquiry - Sales tests
19-55
CONSUMER PROMOTION
Consumer-Promotion
Objectives
Consumer-Promotion
Tools
Advertising
Specialties
Increase Short-Term Sales
Build Long-Term Market
Share
Get Retailers to Carry New
Items
Sales Force Support for
Current or New Products
Consumer Relationship
Building
Cash Refunds
Patronage
Awards
Price Packs
Premiums
Point-of-Purchase
Displays
CONSUMER PROMOTION
Create Awareness
Slogans & Jingles
Make the consumer aware there is
a new product on the market.
Inform the Market
Internet / Advertising
Provide knowledge about the
benefits the product offers.
Create Desire
Status
Appeals
Create favorable feelings toward
the product and interest.
Encourage Trial
Encourage trial & use of
product among target users.
Build Loyalty
Convince customers to keep
purchasing product.
Coupons / Samples /
Promotions
Product Placement /
Repurchase Programs
LO4
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION
Loyalty Programs
Rebates
Product Placement
Introduce / Demonstrate new
products
19-58
LO4
SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION
Trade-Promotion
Objectives
Trade-Promotion
Tools
Persuade Resellers to Carry
a Brand
Price-Offs
Premiums
Obtain Brand Shelf Space
Allowances
Displays
Promote a Brand with
Advertising
Buy-Back
Guarantees
Discounts
“PUSH” a Brand
Free Goods
Specialty
Advertising
Items
TRADE PROMOTION
Industrial Customers
Trade-Promotion
Objectives
Generate Business Leads
Stimulate Purchases
Trade-Promotion Tools
Advertising
Allowances *
Initial Stock
Buy-Back *
Displays
Sales
Contests *
Discounts or
Free Goods
Reward Customers
Motivate Manufacturer or
Reseller Salespeople
Conventions
And Trade
Shows *
Specialty
Advertising
Programs
DEVELOPING A SALES PROMOTION
PROGRAM
Decide on the Scope of the Program and the Size of the
Incentive
Set Conditions for and Rules of Participation
Determine How to Roll-out [includes training at all levels]
and Distribute the Promotion Program
Determine the Length of the Program
Evaluate the Program
LO5
PUBLIC RELATIONS
PUBLICITY TOOLS
Public Relations
Publicity Tools
News release
Public service announcement
News conference
Invitational event
19-62
PUBLIC RELATIONS OBJECTIVES
Introducing New Products to
Manufacturers
Introducing New Products to
Consumers
Influencing Government
Legislation
Enhancing the Image of a City,
Region, or Country
Calling Attention to a Firm’s
Involvement with the Community
PUBLIC RELATIONS TOOLS
Strong PR Firm
Press releases / stories
(Firm and it products)
Public Affairs
(Community relations)
Lobbying
(Specialized firms & tasks)
Investor Relations
(almost always a corporate function)
Development & Miscellaneous
BUILDING AN IMC PLAN:
Coordinate and maximize the effectiveness of all the tools.
ADVERTISING
CONSUMER
PROMOTIONS
POINT
OF
PURCHASE
TRADE
PROMOTIONS
COLLATERAL
EVENTS
PUBLIC
RELATIONS
PACKAGING
& LABELING
DIRECT
MARKETING
SALES
AIDS
INTERNET
TRADE
SHOWS
PROMOTION MIX AND THE PLC
• ANY OR ALL ELEMENTS MAY CHANGE
• BY STAGE OF THE PLC
– ADVERTISING
– PUBLIC RELATIONS
– SALES
– SAMPLES
IMC CHALLENGES
•
•
•
•
•
•
FLOW
TIMING
ACCURACY
COORDINATION
CONTROL
MEASUREMENT
E-COMMERCE OBJECTIVES
• Must address integrate with your existing
business[es] with a minimum amount of
conflict and disruption.
• Need to define measurable goals
INTEGRATING E-COMMERCE
STRATEGY AND ACTIVITY
• Scope
• Types of transactions
• Order size
• …
17C
INTEGRATED MARKETING
COMMUNICATIONS [IMC]:
DIRECT MARKETING
TRENDS CAUSING GROWTH IN DIRECT
MARKETING
• Growth and specialization of databases
allows better definition of market segments
and niche marketing.
– Marriott, Hilton
• Lack of time drives the need for
convenience.
– Both parents work combined with the social
schedules of the children reduce the available
time to shop.
BENEFITS OF DIRECT MARKETING
Benefits to customers
Fun, Convenient & HassleFree
Benefits to companies
Buy Mailing Lists for
Almost Any Market
Customized Offers
Improved Selection
Ongoing Relationships
with Customers
More Comparison
Shopping
Timed to Achieve Higher
Readership & Response
Order Products for
Themselves or Others
Direct Access to Markets
Not Location Dependent
Reduced Inventory ?
Shopping Privacy
MASS vs. 1:1 MARKETING
Mass Marketing
One-to-One Marketing
Average Consumer
Individual Customer
Customer Anonymity
Customer Profile
Standard Product
Customized Market Offering
Mass Production
Customized Production
Mass Distribution
Individualized Distribution
Mass Advertising
Individualized Messages
Individualized Incentives
Mass Promotion
Two-Way Messages
One-Way Message
Economies of Scale
Economies of Scope
Share of Mind
Share of Customer
All Customers
Profitable Customers
Customer Attraction
Customer Retention
THE ROLE OF DIRECT MARKETING
MARKETS OR
INDUSTRIES
RESELLER ACCOUNTS
OTHER ACCOUNTS
HOW DO WE COST-EFFECTIVELY REACH TARGET MARKETS OF SMALL ACCOUNTS?
SEGMENTATION IS CRITICAL TO DIRECT
MARKETING SUCCESS AND COSTEFFICIENCY
A firm has a fish or fish related
product, so it targets 44511 &
44522 [71,095 firms].
More information is needed to
also target 44512, 44521,
44529, and 445299 [48,513
firms].
Approaching all 148,528 firms
in 445 would have resulted in a
large waste of money. You
may have spent money going
after up to 77,433 firms that do
not have any use for the
product!
CONSUMER DIRECT MARKETING
CONSUMER
TYPES
IN-HOME
SALES
DOOR
TO
DOOR
PARTIES
DIRECT
MAIL
CATALOG
INTERNET
FLYERS
INTERNET BENEFITS*
CONSUMER
CONVENIENCE
SPEED-TIME-PLACE
COMPREHENSIVE
PRODUCT SELECTION
AND INFORMATION
“THE OVERWHELMED
CONSUMER”
BUSINESS
DIRECT MARKET ACCESS
-MICROMARKETING
POTENTIAL
SALES-PROFITS-COST
REDUCTION
INTERNET – THE DIFFERENCES ARE …
PREVIOUSLY ALL SEPARATE VEHICLES
CHANNEL
MARKET
TARGET
RESEARCH
MARKETS
CHANNELS
SALES
ORGS.
ARE NOW INTEGRATED INTO ONE NEW APPROACH!
IMC
INTERNET ISSUES – STRATEGIC FIT
• WHAT TYPE OF BUSINESS DO YOU
WANT?
• HOW DOES THE INTERNET FIT WITH
THE REST OF THE BUSINESS?
– ORDER PROCESSING AND ORDER SIZE
– COST OF DISTRIBUTION
– TYPES OF TRANSACTIONS
CONSUMER DIRECT MARKETING
CONSUMER
TYPES
IN-HOME
SALES
DOOR
TO
DOOR
PARTIES
DIRECT
MAIL
CATALOG
FLYERS
INTERNET
END
CAP
POINT-OF-PURCHASE
FLOOR
STAND
COUNTER
STAND
TAG
ALONG
VENDING
MACHINE
KIOSK MARKETING
END CAP
FLOOR
STANDS
COUNTER
STAND
COUNTER
STAND
CONSUMER DIRECT MARKETING
CONSUMER
TYPES
IN-HOME
SALES
DOOR
TO
DOOR
PARTIES
DIRECT
MAIL
CATALOG
FLYERS
INTERNET
(E-COMMERCE)
END
CAP
POINT-OF-PURCHASE
FLOOR
STAND
COUNTER
STAND
TELESALES
AND
TELEMARKETING
TAG
ALONG
VENDING
MACHINE
INSERTS
MAGAZINES
NEWSPAPERS
TV / RADIO
SHOPPING
DiIR RESPONSE
DIRECT MARKETING LIFETIME VALUE:
Membership Program Example
Cost of Campaign:
100 new members @ $70
1st year “cost”
$10,000
$ 7,000
$ 3,000
-$10,000
- 3,000
2d Year
80 renewals @ $70
$ 5,600
+ 2,600
3d Year…
$ 5,600
+ 8,200
18A
PERSONAL SELLING, ETHICS, AND
SALES SKILLS
SALES RESPONSIBILITIES
•
– Feedback about client developments
– Feedback about your company
– Feedback about competitors
•
– Implement the marketing plan
– Communicate your company policies and/or positions
– Not an agent
• IMPECCABLE ETHICS AND INTEGRITY
MAJOR SALES APPROACHES
•
– Product oriented—profit through sales volume
•
– Problem-solving—profit through problem solving
•
– Understand their business—profit through strategic relationships,
customer loyalty and satisfaction
• Joint Efforts / Joint Teams
•
– Integrate organizations—profit through sales volume
– Strong advantage for large firms competing against smaller firms
– Long-term alliances
LO2
FORMS OF PERSONAL SELLING
SALES PRESENTATION TYPES
A stimulus-response presentation is a format which
assumes that given the appropriate stimulus, the prospect will
buy.
A formula selling presentation consists of information
which must be provided in an accurate, thorough, and step-bystep manner to inform the prospect.
A need-satisfaction presentation emphasizes probing
and listening by the salesperson to identify needs and interests
of prospective buyers.
20-86
LO2
FORMS OF PERSONAL SELLING
SALES PRESENTATION TYPES
Adaptive selling is a need-satisfaction presentation format
that involves adjusting the presentation to fit the selling
situation, such as knowing when to offer solutions and when to
ask for more information.
Consultative selling is a need-satisfaction presentation
format that focuses on problem identification, where the
salesperson serves as an expert on problem recognition
and resolution.
20-87
SALES FUNCTIONS
1.
MANAGING THE PROSPECT FUNNEL
2.
THE SALES CYCLE
3.
CUSTOMER / PROSPECT CARE
4.
INFORMATION DISSEMINATION
5.
TERRITORY MANAGEMENT
6.
PROFESSIONAL DEVELOPMENT
SUSPECT TO GREAT CUSTOMER
•
•
•
•
•
•
•
•
•
Suspect
Inquiry
Prospect
Qualified
Hot prospect
Proposal / quote
First purchase
Repeat purchaser
Long-term or high value customer
• Past customer
MARKETING
DEPARTMENT
LEADS VS. COLD
CALLS
NEEDS &
PROSPECT
EFFECTIVENESS
APPROACH & QUALIFY
PRESENT
VALUE
FAB
REAL, FALSE,
STALLS
HOT PROSPECT
DEMONSTRATE
HANDLE OBJECTIONS
CLOSE
Trial / Actual Close
COGNITIVE DISSONANCE
Copyright A. Whitebread, 2001-2010.
QUALIFIED !
FOLLOW-UP
CUSTOMER !
YOUR SALES OPPORTUNITY
Suspects
First-time
Prospects customers
Disqualified
prospects
Repeat
customers
Clients
Inactive and
Ex-customers
Advocates
Partners
CUSTOMER & PROSPECT CARE
• BUILDING A RELATIONSHIP
– TRUST
– CREDIBILITY COMES THROUGH
• KNOWLEDGE
– There is no substitute for product knowledge!
• PERFORMANCE
– Products & services, the organization, and you!
• DELIVERING AS ADVERTISED
– INFORMATION
– FOLLOW-UP AND FOLLOW-THROUGH
– ORGANIZE ADDITIONAL RESOUCES
INFORMATION DISSEMINATION
• TO CUSTOMERS AND PROSPECTS
– STANDARD COMMUNICATION
– NEW PRODUCTS AND PROGRAMS
• TO THE COMPANY
– CUSTOMER AND PROSPECT REACTIONS
– COMPETITIVE INFORMATION
• REPORT SIGNIFICANT EVENTS
– What do you think would be a significant
customer event?
TERRITORY MANAGEMENT
• TIME MANAGEMENT
• ASSEMBLE RESOURCES
• MAINTAIN CONTROL
• REPORTING
– Call reports, expense, sales …
• TERRITORY PLANS AND FORECASTING
PERSONAL IMPROVEMENT
• EFFICIENCY / TIME MANAGEMENT
• SALES SKILLS
•
• PROVING THROUGH RESPONSE
•
•
• PROFESSIONAL DEVELOPMENT
REQUIRED BASIC SALES SKILLS
• ASKING OPEN-ENDED QUESTIONING
• LISTENING
• EVALUATING
• PROVIDING INFORMATION
• CLOSING THE SALE
TRAITS OF GOOD SALES PERSONNEL
•
•
• VERY KNOWLEDGEABLE
•
• IMPECCABLE INTEGRITY AND ETHICS
SALES PERSONNEL TRAITS
• IMPECCABLE INTEGRITY AND ETHICS
– ETHICAL AND LEGAL ISSUES
•
•
•
•
• NO FAVORITISM
• NO DISCRIMINATION
18B
SALES FORCE MANAGEMENT
LO4
THE SALES MANAGEMENT PROCESS
SALES PLAN FORMULATION
20100
SALES MANAGEMENT ISSUES
1.
2.
3.
4.
5.
6.
7.
8.
Organization, strategy, and structure
Implementation and orchestration
Recruiting and selecting
Training and developing
Compensation
Direct, supervise, and motivate individuals
Evaluation
Retention
SALES MANAGEMENT
• 1-ORGANIZATION STRATEGY
AND STRUCTURE--Continued
• SALES FORCE SUPPORT REQUIREMENTS
– MARKETING
» SUPPORT
» NEW PRODUCTS & SERVICES
» HELP WITH ISSUES
– COLLATERAL
» WHAT TYPES
» FOR WHOM?
– CUSTOMER SERVICES
SALES MANAGEMENT
• 1-ORGANIZATION STRATEGY
AND STRUCTURE--Continued
• SALES FORCE SUPPORT REQUIREMENTS
– MARKETING
» SUPPORT
» NEW PRODUCTS & SERVICES
» HELP WITH ISSUES
– COLLATERAL
» WHAT TYPES
» FOR WHOM?
– CUSTOMER SERVICES
TYPES OF SALES FORCES
DIRECT SALES
TELESALES
NATIONAL
ACCOUNTS
DIRECT MAIL
OEM
CATALOG
INTERNET
RESELLER
PARTNERSHIPS
MANUF. REP’S
FRANCHISES
GOVERNMENT
LICENSEES
HOUSE
JOINT
VENTURES
Copyright A. Whitebread, 2001-2010.
PRODUCT SALES STRUCTURE
VP
MARKETING
PRODUCT
MANAGER
GROUP 1
PRODUCT
MANAGER
GROUP n
SALES
MANAGER
GROUP 1
SALES
MANAGER
GROUP n
MARKETING
COMMUN.
MANAGER
ADVANTAGE
DISADVANTAGE
SPECIALIZED KNOWLEDGE FOR
SPECIALIZED PRODUCTS
MAJOR ACCOUNT PROBLEM
WITH MULTIPLE PRODUCT LINE
PURCHASES
Copyright A. Whitebread, 2001-2009.
GEOGRAPHIC SALES STRUCTURE
VP
MARKETING
PRODUCT
MANAGER
GROUP 1
PRODUCT
MANAGER
GROUP 2
EASTERN
SALES
MANAGER
WESTERN
SALES
MANAGER
MARKETING
COMMUN.
MANAGER
ADVANTAGE
DISADVANTAGE
LOW COST OF SALES AND
ADMINISTRATION
NO SPECIALIZATION - COMPLETE
PRODUCTS KNOWLEDGE
REQUIREMENT
Copyright A. Whitebread, 2001-2009.
CUSTOMER SALES STRUCTURE
VP
MARKETING
PRODUCT
MANAGER
GROUP 1
PRODUCT
MANAGER
GROUP 2
NATIONAL
SALES
MANAGER
NATIONAL
ACCOUNTS
MAJOR
ACCOUNTS
MANAGER
MARKETING
COMMUN.
MANAGER
OEM
FEDERAL
GOV'T.
ADVANTAGE
DISADVANTAGE
DRIVEN BY CUSTOMER TYPE IMPROVED CUSTOMER
FEEDBACK
HIGHER SELLING AND
ADMINISTRATIVE COSTS
Copyright A. Whitebread, 2001-2009.
COMPLEX SALES STRUCTURE - 1
VP
MARKETING
NATIONAL
SALES
MANAGER
DIRECT
SALES
MANAGERS
RESELLER
SALES
MANAGER
DIRECT
MARKETING
MANAGER
TELESALES
MANAGER
OUTSIDE SALES
GROUP
PRODUCT
MANAGEMENT
INTERNET
SALE
MANAGER
S
NATIONAL
ACCOUNTS
INSIDE SALES
MAJOR
ACCOUNTS
MANAGER
OEM
MARKETING
COMMUN.
MANAGER
GOVERNMENT
OUTSIDE SALES
ADVANTAGE
ISSUE
DISADVANTAGE
DRIVEN BY CUSTOMER
TYPE - SPECIALIZED SALES
SKILLS
[RE]CLASSIFICATION OF
ACCOUNTS
REQUIRES A LOT OF
COORDINATION
Copyright A. Whitebread, 2001-2009.
COMPLEX SALES STRUCTURE - 2
VP
MARKETING
NATIONAL
SALES
MANAGER
DIRECT
SALES
MANAGERS
DIRECT
MARKETING
MANAGER
RESELLER
SALES
MANAGER
TELESALES
MANAGER
GROUP
PRODUCT
MANAGEMENT
INTERNET
SALES
MANAGER
NATIONAL
ACCOUNTS
MAJOR
ACCOUNTS
MANAGER
OEM
MARKETING
COMMUN.
MANAGER
GOVERNMENT
THIS BECOMES EVEN MORE COMPLEX
WITH
-MANUFACTURER’S REPRESENTATIVES
-CUSTOMER SERVICES
-TECHNICAL SALES SUPPORT
-INTERNATIONAL SALES AND SUPPORT
WHERE DO YOU THINK CUSTOMER SERVICES SHOULD REPORT?
Copyright A. Whitebread, 2001-2009.
THE SALES ORGANIZATIONS
• 2-IMPLEMENTATION / ORCHESTRATION
– UNIT PERFORMS AS A SINGLE ENTITY
– COMMON HIGH-LEVEL GOALS AND INDIVIDUAL
UNIT GOALS
– SIMILAR STRATEGIES AND TACTICS
– TEAMWORK
LO4
THE SALES MANAGEMENT PROCESS
SALES PLAN IMPLEMENTATION
3 - Salesforce Recruitment and
Selection
• Job Analysis
• Job Description
• Seek those with good skills
• Emotional Intelligence, Aptitude, Fit
LO4
THE SALES MANAGEMENT PROCESS
EMOTIONAL INTELLIGENCE
 the ability to understand one’s own emotions
and the emotions of people with whom one
interacts on a daily basis.
• Self-Motivation Skills
• Self-Awareness
• Managing One’s Emotions
• Empathy
• Social Skills
20112
SALES MANAGEMENT
• 4-TRAINING & DEVELOPING
• BASIC SALES SKILLS
–
–
–
–
PSS OR EQUIVALENT SALES TRAINING
MAKING PRESENTATIONS
LISTENING
READING BODY LANGUAGE
» Peace Corps
http://www.peacecorp.gov/wws/multimedia/videos/culturalgaffes/
• WHY SALES TRAINING?
– STRONGER CUSTOMER RELATIONS
– IMPROVED MORALE
– INCREASED PRODUCTIVITY
SALES MANAGEMENT
• 4-TRAINING & DEVELOPING-continued
• KNOW THEIR TERRITORY AND THEIR
CUSTOMERS
• TIME MANAGEMENT
• TERRITORY MANAGEMENT
– TYPES OF ACCOUNTS
SALES MANAGEMENT
• 4-TRAINING & DEVELOPING-continued
• EXCELLENT COMPANY, PRODUCT, & PROGRAM
KNOWLEDGE
• LEARN TO MAKE EFFECTIVE PRESENTATIONS
• UNDERSTAND SALES PROCEDURES AND
RESPONSIBILITIES.
• BE PRODUCTIVE AND EFFICIENT
LO4
THE SALES MANAGEMENT PROCESS
SALES PLAN IMPLEMENTATION
Salesforce Compensation
Objectives, Control, Equitable
Plan design
•
•
•
•
Straight salary
Straight commission
Combination with commission or bonus]
Nonmonetary
20116
SALES MANAGEMENT
• 6-DIRECT, SUPERVISE, & MOTIVATE
INDIVIDUALS
– BUDGETING AND EXPENSE CONTROL
– MOTIVATING AND COACHING
• TWO DRIVING FORCES
– MONEY [COMMISSIONS AND / OR BONUSES]
– RECOGNITION [EGO]
» HONORS, AWARDS
» SALES INCENTIVE PROGRAMS [Trips, gifts]
» SALES MEETINGS
SALES MANAGEMENT
• 7-EVALUATION
• QUALITATIVE
• QUANTITATIVE: THE ROLE OF QUOTAS
–
–
–
–
OBJECTIVES
DESIRED RESULTS
DETERMINING A FAIR QUOTA
OVERASSIGNMENT
THE SALES MANAGEMENT PROCESS
LO4
SALESFORCE AUTOMATION AND CUSTOMER
RELATIONSHIP MANAGEMENT
Salesforce Automation (SFA)
20119