Ch 18 - Personal Selling and Sales Promotion

Areas if Sales Force Management

1. Establishing Sales Force Objectives 2. Determining Sales Force Size 3. Recruiting and Selecting Salespeople 4. Training Sales Personnel 5. Compensating Salespeople 6. Motivating Salespeople 7. Managing Sales Territories 8. Controlling and Evaluating Sales Force Performance

Steps of the Personal Selling Process

1. Prospecting 2. Preapproach 3. Approach 4. Making the presentation 5. Overcoming objections 6. Closing the sale 7. Following up

Dealer Loader

A gift, often part of a display, given to a retailer that purchases a specified quantity of merchandise

Merchandise Allowance

A manufacturer's agreement to pay resellers certain amounts of money for providing special promotional efforts, such as setting up and maintaining a display

Free Merchandise

A manufacturer's reward given to resellers that purchase a stated quantity of products (usually takes the form of a reduced invoice)

Scan-Back Allowance

A manufacturer's reward to retailers based on the number of pieces scanned during a specific time period

Consumer Sweepstakes

A sales promotion in which entrants submit their names for inclusion in a drawing for prizes

Sales Contest

A sales promotion method used to motivate distributors, retailers, and sales personnel through recognition of outstanding achievements

Buy-Back Allowance

A sum of money given to a reseller for each unit bought after an initial promotion deal is over

Buying Allowances

A temporary price reduction to resellers for purchasing specified quantities of a product Ex. Soap producer giving retailers $1 for each case of soap purchased

Dealer Listings

Advertisements that promote a product and identify the names of participating retailers that sell the product

Sales Promotion

An activity or material that acts as a direct inducement, offering added value or incentive for the product, to resellers, salespeople, or consumers Note: encompasses all promotional activities except personal selling, advertising, and public relations

Cooperative Advertising

An arrangement in which a manufacturer agrees to pay a certain amount of a retailer's media costs for advertising the manufacturer's products

Preapproach

Before contacting acceptable prospects, a salesperson finds out what potential buyers and decision makers consider most important and why they need a specific product. - involves identifying key decision makers, reviewing account histories, contacting other clients, preparing sales presentations, identifying product needs, etc.

Closing the Sale

Closing is the stage in the personal selling process when the salesperson asks the prospect to buy the product. Trial closing - asking questions during the presentation under the assumption the prospect will buy (i.e. financial terms, desired colors or sizes, delivery arrangements) Broad questions (what, how, why) to gather information & focused questions (who, when, where) to clarify and close the sale

Prospecting

Developing a database of potential customers - acquired through company sales records, trade shows, newspaper announcements (marriages, births, deaths), public records, telephone directories, etc. - most sales people prefer to use referrals (recommendations from current customers) to find prospects (leads to greater sales rates, larger initial transactions, more highly qualified sales leads)

Recruiting

Developing a list of qualified applicants for sales positions.

Making the Presentation

During the sales presentation, the salesperson must attract and hold the prospect's attention, stimulate interest, and spark a desire for the product. - Salesperson should monitor the selling situation and adapt their presentations to meet the needs of prospects - Salesperson should have the prospect touch, hold, or use the product note: it is very important that the salesperson not only talk, but also LISTEN! the sales presentation provides the greatest opportunity to determine specific needs by listening to questions and comments

Premium Money (Push Money)

Extra compensation to salespeople for pushing a line of goods (appropriate for personal selling)

Personal Selling Goals

Finding prospects Determining their needs Persuading prospects to buy Following up on the sale Keeping customers satisfied note: identifying potential buyers interested in the organization's products is critical

Overcoming Objections

Important to anticipate and counter objections before the prospect raises them note: this can risky because the salesperson may mention objections the prospect may not have raised

Premiums

Items offered free or at a minimal cost as a bonus for purchasing a product Ex. A prize in a Cracker Jack box, an extra pen in a Bic set

Trade Sales Promotion Methods

Methods intended to persuade wholesalers and retailers to carry a producer's products and market them aggressively

Following Up

Occurs after a successful closing; the salesperson determines whether the order was delivered on time and see if there were any problems; used to determine customers' future product needs and establish strong relationships and loyalty

Current-Customer Sales

One category of Order Getting Salespeople call on people and organizations that have purchased products from the firm before

New-Business Sales

Other category of Order Getting New-business sales personnel locate prospects and convert them into buyers (especially in organizations that sell real estate, insurance, appliances, automobiles, and B2B supplies and services)

Personal Selling

Paid personal communication that attempts to inform customers and persuade them to purchase products in an exchange situation; gives marketers the greatest freedom to adjust a message to satisfy customers' information needs; the most precise of all promotion methods; most effective way to form relationships with customers Ex. HP salesperson describing the benefits of the company's printers to a small-business customer

Cent-Off Offers

Promotions that allow buyers to pay a certain amount less than the regular price shown on the label or package to encourage purchase

Determining Sales Force Size

Sales force size influences the company's ability to generate sales and profits; affects compensation methods used, morale, and overall management.

Establishing Sales Force Objective

Sales objectives tell salespeople what they are expected to accomplish during a specified time period; give the sales force direction and purpose; serve as standards for evaluating and controlling the performance of sales personnel Objectives should be stated in precise, measurable terms; specify the time period and geographic areas involved; and be achievable. Entire force goals - stated in sales volume, market share, profit Individual goal - stated in dollars or unit sales volume

Demonstrations

Sales promotion methods a manufacturer uses temporarily to encourage trial use and purchase of a product or to show how a product works

Consumer Contests

Sales promotion methods in which individuals compete for prizes based on their analytical or creative skills Ex. Photo contests

Consumer Games

Sales promotion methods in which individuals compete for prizes based primarily on chance Ex. McDonald's Monopoly - collecting pieces of real estate from drink and french fry packages

Rebates

Sales promotion technique in which a consumer receives a specified amount of money for making a single product purchase

Money Refunds

Sales promotion technique that offers consumers a specified amount of money when they mail in a proof of purchase, usually for multiple purchase products

Consumer Sales Promotion Methods

Sales promotion techniques that encourage or stimulate consumers to patronize specific retail stores or try particular products

Support Personnel

Sales staff members who facilitate selling but usually are not involved solely with making sales. Responsibilities also include marketing industrial products, locating prospects, educating customers, etc.

Inside Order Takers

Salespeaple who typically receive orders by mail, telephone, and the Internet; sell from within the firm (but some communicate with customers face to face) Note: retail salespeople are considered inside order takers

Trade Salespeople

Salespeople involved mainly in helping a producer's customer promote a product - direct effort toward helping customers (especially retail stores) promote the product Tasks include restocking shelves, obtaining more shelf space, setting up displays, demonstrations, distributing samples Note: commonly employed by food producers

Order Takers

Salespeople who primarily seek repeat sales; generate the bulk of many firms' total sales Engage in repetitive tasks to establish long-lasting customer relationships; ensure customers have sufficient product quantities

Order Getters

Salespeople who sell to new customers and increase sales to current customers Note: also known as "creative selling"; requires recognizing potential buyers' needs and giving them the necessary information

Field Order Takers

Salespeople who travel to customers; often develop interdependent relationships (buyer relies on salesperson to take orders periodically and sales person relies on buyer to purchase a certain quantity)

Point-of-Purchase (POP) Materials

Signs, window displays, display racks, counter pieces, and similar devices used to attract customers Ex. Sniff-teasers for perfume

Missionary Salespeople

Support personnel (usually employed by manufacturers) who assist the producer's customers in selling to their own customers. May call on retailers to inform and persuade them to buy the manufacturer's products. Note: retailers then purchase from wholesalers Note: Manufacturers of medical supplies and pharmaceuticals often use missionary salespeople called DETAIL REPS to promote products to physicians, hospitals, and pharmacists

Technical Salespeople

Support personnel who give technical assistance to a firm's current customers; advise customers on product characteristics and applications, system designs, and installation procedures. Salesperson is often trained in engineering or the physical sciences. Often sell technical industrial products (computers, heavy equipment, steel)

Relationship Selling

The building of mutually beneficial long-term associations with a customer through regular communications over prolonged periods of time; especially used in B2B marketing - Philosophy for personal selling - Also called consultative selling - Involves finding solutions to customers' needs by listening to them, gaining understandings of their organizations, understanding their challenges, and providing support after the sale - Differs from traditional personal selling due to LONG-TERM PERSPECTIVE Note: Soft selling is spending more time listening to customers than marketing products to them

Approach

The manner in which a salesperson contacts a potential customer; creating a favorable impression and building rapport with prospective clients are important tasks of this step

Team Selling

The use of a team of experts from all functional areas of a firm, led by a salesperson, to conduct the personal selling process - Appropriate for high-tech business products (jet aircraft and medical equipment) - Philosophy for personal selling Note: Salesperson joins with people from firm's financial, engineering, and other functional areas

Coupons

Written price reductions used to encourage consumers to buy a specific product