Chapters 8-14
advertising objectives
(1) cognitive—build awareness, (2) affective—gain interest and liking, and (3) behavioral—stimulate action.
Social media marketing may be more effective than traditional marketing communications channels because
(1) offers greater flexibility for content and duration, (2) has credibility similar to word-of-mouth communications, and (3) can build awareness and interest at a much lower cost than traditional media channels. traditional deploy one-way communication social media is more complex
personal selling 3 components
(1) persuasion, (2) customer assistance, and (3) mutual benefits.
Types of Sales Promotions
1) value added 2) Price off
Unique Selling Proposition (USP)
1.Each advertisement must make a proposition to the customer. Not just words, not just product puffery, not just show-window advertising. Each advertisement must say to the reader, "Buy this product, and you will get this specific benefit." 2.The proposition must be one that the competition either cannot, or does not, offer. It must be unique -- either a uniqueness of the brand or claim not otherwise made in that field of advertising. 3.The proposition must be so strong that it can move the masses, that is, pull new customers over to the product.
Empathy
A dimension of service quality—facilitating access and communication with customers to understand their needs.
Tangibles
A dimension of service quality—making the service tangible by using physical cues such as clean facilities, professional dress for staff, clearly displayed certifications, appropriate décor, and up-to-date equipment.
Assurance
A dimension of service quality—providing competent, courteous, credible, and secure service.
Break-even Analysis
A method for examining the relationships among price, costs, revenue, and profits to determine the break-even point at alternative prices and a given cost structure.
Role Perceptions
A person's role represents the sets of activities or behaviors to be performed in the organization. If there is role confusion, then salespeople will experience lower levels of job satisfaction and be less motivated. Role accuracy refers to an absence of a distinctly defined role of the demands placed on the salesperson.
Catchphrases
A powerful phrase that summarizes the brand in a few memorable words.
Cost-plus Pricing
A pricing strategy based on the cost of the product and a predetermined margin.
Competitive Pricing
A pricing strategy that considers pricing below, at, or above competitors' prices.
Value Pricing
A pricing strategy that considers the customer's perceived value of the product.
Tiger Service Providers
A service provider who performs high on service quality and high on service productivity.
Servant's Heart Service Providers
A service provider who performs high on service quality and low on service productivity.
Fox Service Providers
A service provider who performs low on service quality and high on service productivity.
Kittens
A service provider who performs low on service quality and low on service productivity.
Product Items
A specific version of a product.
Copy strategy. Target
Adults and kids looking for a delicious energy boost. Benefit - Snickers is delicious, satisfying, and nourishing. It is revitalizing. Reason to Believe - Snickers consists of peanut butter nougat topped with roasted peanuts and caramel, covered with milk chocolate. Tone - Snickers is upbeat. It revives and revitalizes.
Step 7: Follow-up
After a buyer decides to buy your products or services, they still need to be reassured that their purchase decision was the right decision. Research has repeatedly shown that buyer satisfaction and loyalty is a function of customer engagement activities after the sale.
Cost of Facebook Ads
Bids can be made based on cost-per-thousand-impressions (CPM), or based on cost-per-click (CPC). If the business chooses to pay using CPM, Facebook charges a fixed amount for every thousand page views, but will move the ad down to an unproductive location if the ad does not generate any clicks. If the business chooses to pay using CPC, each time a Facebook user views a page the ad will be assigned a productive spot if the ad wins the bid based on how much the business is willing to pay-per-click versus other businesses wanting the same spot. CPC- COST PER ACTION CRITICAL NUMBER
Image Brands
Brands that connect with consumers and differentiate from competitors by projecting a distinct and admired image.
Functional Brands
Brands that connect with consumers by satisfying functional needs. Functional brands differentiate from competitors by offering superior performance or superior economy.
Experiential Brands
Brands that connect with consumers through multi-sensory experiences that are co-created by the brand and the consumer at the time of consumption.
Love, Swing, and Hate groups
Candidates need a consistent message that rings true with the Love Group, while at the same time, they need to find ways to help the Swing Group see the issues through the eyes of the Love Group. Success or failure hinges on a candidate's ability to engage and tap into the power of their brand champions, that is, the Love Group. Oddly enough, the truth of Love Group political reality is often lost on modern-day businesses.
I'm willing to pay much less for fewer benefits.
Consumers attracted to this value positioning strategy are willing to give up some quality for much lower prices. Aldi, a discount supermarket, specializes in staple products such as food, beverages, paper products, and inexpensive household products. Customers willingly accept small product assortment and limited service for lower prices. Capsule hotels in Japan offers extremely small rooms, actual capsules (7 feet by 4 feet by 4 feet), stacked side by side and two units high, with communal washrooms at 25% of the cost of a traditional hotel room. Consumers are willing to pay much less for fewer benefits.
Fixed Costs
Costs that do not vary with output quantity.
Step 5: Handling Objections
During and after a sales presentation, buyers generally have objections or concerns about your products or services. Professional salespeople see objections as signs of interest or at least an indication that the buyer is actually thinking about your solution. Since purchases in B2B settings can be for millions of dollars, it is human nature to seek assurance, bargain, or even generate a little resistance to test seller conviction during the sales process. 1)restate and clarify 2)acknowledge objection 3) encourage customers to express concerns 4) offer proof
benefits of market segmentation
First, market segmentation provides an effective means for reaching customer groups. Second, market segmentation helps in allocating marketing resources. Finally, market segmentation identifies market opportunities for the company.
Total Costs
Fixed costs plus variable costs.
Segmentation groups
Geographic segmentation. Demographic segmentation. Psychographic segmentation. Behavioral Segmentation.
Google AdWords target potential customers when they are in the middle of a specific buying situation. They are the online version of the old Yellow Pages. So, rather than asking, "How do I optimize my website to better rank with search engines?" ask, "How can I optimize my brand so that it's a sought-after participant in relevant conversations?"
Geographic segmentation.
Grouping based on differences in geographic regions, population density, population size, and climate.
Psychographic segmentation.
Grouping based on differences in personality, motives, or lifestyle.
Behavioral Segmentation.
Grouping based on differences in the core benefits customers seek, usage situations, brand loyalty, usage rate, and price sensitivity.
Service Productivity
How effectively input resources in a process (service personnel interacting with customers) are transformed into economic results for the service provider.
Expectancies—How will my effort affect my performance?
If salespeople feel that their increased effort will lead to greater performance then they will be motivated to initiate action on a give sales task. However, when salespeople believe increased effort won't make a difference (e.g., material shortages, recession, etc.) in their sales performance then they are not likely to be motivated.
Step 6: Closing the Sale
If your product or service resolves a problem or provides an opportunity for a buyer, they are generally ready to sign an agreement. To make sure buyers are ready to close, salespeople often utilize a trial close. A trial close is simply a soft question to determine the customer's willingness to buy. A question such as, "is there anything else I can help you with in understanding our service", or "do you think this is something your firm would be interested in," are both good examples of a trial close.
Step 4: The Presentation
In the sales presentation, salespeople make their sales pitch which focus on matching the benefits or solutions of your product/service offering to the customer's needs. In B2B selling the presentation generally focuses on a "consultative selling" approach pioneered by Neil Rackham in his book titled SPIN Selling. Situation Problems Implications Need-payoff questions
Integrated Marketing Communications (IMC)
Integrated marketing communication focuses on the 4Cs rather than the 4Ps. The 4Cs being consumer rather than product, cost rather than price, convenience rather than place, and communication rather than promotion. ex. Ford focus
I'm willing to pay the same for more benefits.
Japanese auto manufacturers used this value positioning strategy when entering the high-end car market with Accura (Honda), Infiniti (Nissan), and Lexus (Toyota). The vehicles were offered at similar prices as those of US manufacturers, yet claim more benefits.
I'm willing to pay more for more benefits.
Luxury brands focus on this value positioning strategy by offering consumers more benefits than competitors, but also charging higher prices. Companies like Rolls Royce, Rolex, Mont Blanc, and Bottega Veneta use this positioning. Often, the price exceeds the incremental product quality, but consumers of these products are buying much more than quality products. They are buying prestige.
Targeting criteria/selecting segments
Market size. Is the market large enough to deliver expected profits for the company? Expected growth. Is the market growing? Competitive position. What is the level of competitive rivalry/intensity in the segment? Is your company's differentiated product offering valued by the segment? Cost to reach. Is the market economically accessible?
Key competitors
Milky Way, a fluffy and light alternative to other chocolate bars targeted at young women. Butterfinger, a crispy and crunchy alternative to other chocolate bars targeted at rebellious young adults. M&M's, colorful, button-shaped candy-coated chocolates broadly targeted at all candy eaters; particularly those valuing convenience and the "Melts in your mouth, not in your hand" tagline.
Missionary salespeople.
Missionary salespeople usually do not close sales, but travel to meet with potential customers to hand out literature and describe products. Pharmaceutical sales representatives are good examples of missionary salespeople. They detail medical products and drugs to doctors to encourage them to prescribe their products. Missionary salespeople are well trained and earn compensation matching their level of productivity.
Order getters.
Order getters have the ability to close sales, find new customers, and increase purchases by current customers. Order getters receive extensive sales training and earn compensation matching their level of productivity.
Order takers.
Order takers may work in retail sales, inbound phone sales, or business-to-business counter sales. Order takes do not receive a lot of training and generally earn low salaries.
Price Promotions
Price promotions can undermine brand equity and trade temporary increases in market share for permanent decreases in sales margin. Price promotions usually work best for products that are consumed faster when greater quantities are in the home.
Shopping Products
Products for which consumers spend considerable search activity and evaluation effort to find and compare product attributes such as price and quality. Examples are furniture, clothing, and home appliances.
Convenience Products
Products for which consumers spend little time and effort on the buying process. Generally these products are inexpensive, frequently purchased, and widely available. Examples are candy bars, soda, and soap.
Unsought Products
Products that consumers do not actively seek, either from lack of awareness or lack of interest. Examples are life insurance, blood donations, funeral services, and burial plots.
Supplies and Services
Products that facilitate the production process and are consumed in the process of producing other products. Examples are lubricants and cleaning supplies. Services that assist with the operations of the business. Examples are accounting and legal services.
Specialty Products
Products that have unique attributes that make them singularly important to the buyer. Consumers are willing to extend significant search effort and are reluctant to accept substitutes. Examples are luxury automobiles, jewelry, and high-end video/audio equipment.
Retail salespeople
Retail salespeople often do many other things than selling. They may help set up point-of-purchase displays, assist customers, restock shelves, and hand out free samples. Retail salespeople do not receive a lot of training and generally earn low salaries.
Reward Valences—how much do I value the reward?
Salespeople must value the reward being offered by the firm to be motivated. While most salespeople value more pay, other salespeople are more likely to desire opportunities for personal growth, promotions, and vacation time, given they have adequate compensation.
Motivation
Salespeople who (1) initiate action on a certain task, (2) have the desire and energy to expend effort on a given sales task, and (3) persist in expending effort over a period of time are said to be motivated. As the framework shows, motivation results from both performance and satisfaction of the reward. expectancies instrumentalities reward valences
Service salespeople.
Service salespeople work with business-to-business customers after the sale is complete. They arrange for training, follow-up purchases, and maintain the positive relationship between vendor and client.
Price Skimming
Setting the price of a new product relatively high to capture consumer surplus from the market—those customers willing to pay the relatively high price.
Price Penetration
Setting the price of a new product relatively low to capture market share quickly.
Skills
Skills are usually something that can be learned. Salesperson skills are proficiencies at performing specific tasks, which can change rapidly with learning and experience. maintenance skills coping skills active selling skills
I'm willing to pay less for the same benefits.
Store brands (or private label brands) like Costco's Kirkland brand, Walmart's Great Value brand, and Kroger's Big K brand offer products with national brand quality at store brand prices. Hyundai uses this same value positioning in an attempt to steal market share away from Honda and Toyota. The company promotes Hyundai cars with Honda quality at lower prices.
Technical salespeople.
Technical salespeople are generally part of a business-to-business sales team. Engineers or other technical people help in the selling process by explaining technical innovations and describing how the innovations fit with and enhance a customer's business operation.
Brand legacy
The Snickers brand was introduced in the 1930s. It is the best-selling candy bar of all time and has annual global sales of over $2 billion. Snickers consists of peanut butter nougat topped with roasted peanuts and caramel, covered with milk chocolate. The brand is known for its ability to satisfy, replenish needed energy,and indulge cravings for something sweet and nourishing.
Augmented Product
The ancillary products and services that complement the core product and actual product.
Product Life Cycle
The course of a product's sales and profits over its lifetime, which includes four distinct stages—introduction, growth, maturity, and decline.
Perceived Value
The customer's perception of the relationship between the benefits and costs of a product.
Consumer Surplus
The difference between the maximum price consumers are willing to pay and the lower amount they actually pay.
Cost of Goods Sold
The direct costs attributed to the production of a product (goods sold) that includes materials costs and labor costs.
Laggards
The fifth group of consumers (16%) to adopt a new product.
Innovators
The first group of consumers (2.5%) to adopt a new product.
Late Majority
The fourth group of consumers (34%) to adopt a new product.
Product Mix
The full set of products offered for sale by a firm.
Step 1: Prospecting and Qualifying
The most fundamental step in any sales process is prospecting and qualifying. In personal selling, you must start strong to end strong. You are only as successful as your pipeline of potential buyers. Prospecting involves the process of finding people
Step 2: Pre-approach
The next step in the sales process is the pre-approach. In this step the salesperson gathers data about the individual and firm of each prospect. Data are gathered from the Internet, firm's website, and mined databases to understand the background and unique selling environment (e.g., type of industry) of each prospect. Business intelligence is used to determine (1) the best way to resolve a prospect's needs or problems or (2) the best way to capitalize on potential opportunities. T
Internal Reference Price
The price consumers think they should pay, given past experience and the buying situation.
External Reference Price
The price everyone else is paying for the product.
Total Revenue
The price per unit multiplied by the total number of units sold.
Market Segmentation
The process of grouping customers into relatively homogeneous sets or groups such that customers within a segment are similar to one another in the way they respond to the marketing efforts directed toward them.
Break-even Point
The sales volume at which total revenue equals total cost. At this point, profits are zero.
Brand Loyalty
The situation in which a consumer generally buys the same brand's product repeatedly over time rather than buying from multiple suppliers within the category.
Idea Generation
The stage of the new product development process in which ideas are sought for new products. These ideas may be created in-house or sought from outsiders.
Business Analysis
The stage of the new product development process in which marketers attempt to make the business case for the new product idea, including sales forecasts, cost estimates, and profit projections. In addition, legal issues such as patents, copyrights, and other IP protections are considered.
Idea Screening
The stage of the new product development process that provides a formalized process for qualifying ideas. Screening may include scoring models, checklists, and personal judgments to predict the firm's ability to make the product and market the product successfully.
Early Majority
The third group of consumers (34%) to adopt a new product.
InsideView, Zoominfo, InsideSales, and Leadspace.
These sales tools are popular technologies for capturing quality inbound leads by reducing the time and effort for prospecting.
B2B selling process
These steps are prospecting and qualifying, pre-approach, approach, presentation and demonstration, handling objections, closing, and follow-up.
The Sales Technology Stack.
To boost sales performance in dynamic ever-changing markets, sales organizations today rely on a wide variety of technologies to help salespeople succeed during various stages of the sales process. These technologies or sales tools are referred to as
Total Contribution
Unit contribution multiplied by the total number of units sold. The amount of money available to "contribute" to fixed costs and then to profits.
Unit Contribution
Unit price minus the unit variable cost.
media buying
When making decisions about where and when, marketing managers consider cost-per-thousand impressions (CPM), gross rating points (GRP), and target rating points (TRP). Marketing managers also evaluate ad placement using GRP. A GRP is reach multiplied by frequency.
Trade Promotions
When marketing managers offer buying incentives to retailers rather than consumers, they are doing a trade promotion. In a trade promotion, retailers are offered reduced prices called trade allowances, as well as free product displays, free merchandise, or other incentives. Trade promotion is often needed to encourage large retailers to stock a manufacturer's products. Of all trade promotions, trade allowances are the most popular. Examples of trade allowances are reducing unit price for (1) purchasing larger quantities, (2) offering eye-level or end-of-aisle shelf space, (3) highlighting the product with in-store advertising, and (4) having store salespeople
Key customer groups
Young adults aged 18-34 years living active lives and often too busy for regular meals wanting something delicious, filling, and energy-infusing. Older adults aged 35 years and above looking for a delicious and satisfying energy boost. Parents purchasing candy for children looking for a nourishing and satisfying alternative to sugar-only candy.
Aptitude
Your aptitude is your inborn physical or mental potential or natural ability for learning and proficiency. Generally, things you were born with are considered your aptitude. Your cognitive abilities, IQ, and verbal abilities are part of your DNA
Perceptual Mapping
a simple method for getting a feel for how customers perceive brands. To make a perceptual map, customers evaluate brands with respect to a set of relevant product features and benefits. Usually, each brand will be rated on a 0-to-10 scale where 0 means the attribute does not describe the brand at all and 10 means the attribute perfectly describes the brand.
Follow-up
after the sale allows the customer to ask questions, review any special arrangements, and enables the salesperson to reinforce the good feelings the customer had when making the purchase.
Hierarchical Values Analysis
another way to gain insight into product positioning. It is a three-step research process that consists of (1) eliciting distinctions, (2) pyramiding down, and (3) laddering up. It is straight forward, but it does require some patience and a researcher's keen interest in understanding customer pain-points, the product category, and the emotional touch points that bind product to person.
six determinants of salesperson performance:
aptitude, personal characteristics, skill level, role perceptions, motivation, organizational and environmental factors
Presentation and demonstration
are grouped into three categories. (1) carefully scripted presentation memorized by the salesperson, (2) formula presentation in which the salesperson asks specific questions and depending on the reply gives specific responses, (3) need-satisfaction presentation in which the salesperson uncovers the needs of a potential customer and proposes solutions based on his/her portfolio of products.
Value-added promotions
best at building brand loyalty, defining brand personality, and introducing new, complementary products to brand champions. These promotions also have potential for dramatically increasing sales as they transform into annual rituals. Each year McDonald's restaurants boost sales with their ever-popular Monopoly game
SalesLoft, Yesware, and LiveHive.
better automate their outbound messaging with prospective customers by using tools from
Gap analysis
compares brands based on the importance and performance of their differentiating features and benefits. Whereas perceptual mapping only asks customers to make judgments regarding the performance of a brand's features and benefits, gap analysis also asks customers to make judgments regarding the importance of a brand's features and benefits to the buying decision.
Public relations
consist of the activities designed to manage the public image of a person, organization, and/or brand. ex. cannon
creative brief
consists of (1) brand legacy, (2) copy strategy, (3) executional considerations, (4) profiles of key customer groups, and (5) profiles of key competitors
Preapproach
consists of researching the potential customer, their business needs, position in their industry, and other factors helping the salesperson understand potential needs and how their products may add value.
Step 3: The Approach
first few minutes or first impression of a sales call are critical for building strong relationships and client trust. In the approach, salespeople generally begin with a positioning statement. A positioning statement includes two components: (1) An introduction explaining who you are and the company you represent, and (2) a value proposition or reason to believe why buyers should take time out of their busy schedules to listen to you.
Direct marketing
focuses on direct communication with consumers to encourage a direct response for a purchase, request for information, or visit to a website. Marketers use a variety of direct marketing activities including direct mail, catalog, online retailing, mobile marketing, television home shopping, and telemarketing. Thes ex. LL BEAN
Closing
gives a potential customer the opportunity to purchase. Although salespeople use a variety of closing techniques, one of the most effective methods for closing the sale is the summary-of-benefits close. With this method, the salesperson summarizes the two or three key benefits for the customer and then simply asks, "Based on what we have talked about today, do you feel comfortable purchasing our product?" For the less confident salesperson, an alternative is, "Based on what we have talked about today, how do you feel about purchasing our product?"
Deal shoppers
have high brand sensitivity and high price sensitivity. That is, they purchase leading brands at a discount. They will purchase their favorite brand only when it is on promotion. Products like diapers, hand and body soap, and pet food have a high percentage of deal shoppers.
Brand-loyal shoppers
have high brand sensitivity and low price sensitivity. That is, they will pay as much as they need in order to purchase their favorite brand. Products like toothpaste, cigarettes, coffee, and soda have a high percentage of brand-loyal shoppers.
Price shoppers
have low brand sensitivity and high price sensitivity. That is, they purchase lowest-price products regardless of brand. Products like plastic food bags, frozen pizza, and detergents have a high percentage of price shoppers.
Convenience shoppers
have low brand sensitivity and low price sensitivity. That is, these shoppers maximize their velocity through shopping environments, buying products without regard to brand or price. Products like energy drinks, junk food, eggs, dairy products, and over-the-counter medications have a high percentage of convenience shoppers.
Personal characteristics
including physical traits, family background, education, work experience, and sales experience affect salesperson performance.
Handling objections
is generally part of the selling process because customers push back or raise questions. Salespeople handle objections by acknowledging them and then moving on with their presentation. For example, a potential customer may raise an objection regarding the high price of a product. The salesperson will acknowledge the high price by saying, "Yes, we cost more than the competitors and let me tell you why." The salesperson will then move on with the presentation.
4 key drivers of determinants of salesperson
motivation skill level aptitutde role perceptions
Role perceptions
of the job and understanding the expectations of role partners (e.g., sales managers and customers) affect salesperson performance.
Aptitude
onsists of native abilities and enduring personal traits relevant to job performance such as mental abilities and personality.
Skill level
or learned proficiencies at performing job activities can increase salesperson performance.
Motivation
or the desire to expend effort on specific job activities influences salesperson performance.
Types of Salespeople
order takers, order getters, retail salespeople, missionary salespeople, technical salespeople and service salespeople.
pull strategy
producers direct their marketing activities toward the final consumer to encourage them to ask retailers (channel members) for the product. Demand from final consumers causes retailers to order the product from producers or manufacturers. Thus, the product is pulled through the channel of distribution. ex: image building mass media advertising and public relations build brand preference and loyalty better long term
push strategy
pushes products through the channel of distribution. Producers direct their marketing activities toward channel members (wholesalers and retailers) to encourage them to order and stock the product. Personal selling and trade promotions play important roles in this process. Channel members then use marketing activities to push the products to final consumers. The objective is to push products from producer to channel member and then from channel member to final consumers. ex: price-oriented trade promotions and price discounts stimulates immediate market results by low prices, samples tempting for immediate results but dangerous
three primary objectives of social media
reach, engage, and convert. build awareness with potential customers (reach), generate leads for new sales (reach), strengthen relationships with current customers (engage), improve customer retention (engage), and win new customers (convert).
Prospecting and qualifying r
require identifying potential customers and determining if they have the appropriate resources and buying authority to make a purchase.
Approach
s the first formal contact with a potential customer. The first contact is directed at building a relationship with the potential customer. As first impressions are lasting impressions, the approach is critically important to making a sale. Salespeople usually cannot win a sale with good approach, but they certainly can lose a sale with a poor approach.
criteria for effective segmentation
simpler is better. Measurable: Individuals can be assigned to a segment and the number of individuals in the segment can be counted. Accessible: Individuals in the segment can be reached through the company's promotion and distribution channels. Durable: Segment membership and its size is relatively constant over time. Substantial: The segment is large enough to make products profitable. Unique needs: The needs and/or benefits-sought of the segment membership are homogeneous within each segment and heterogeneous across the segments.
Demographic segmentation.
simplest! Grouping based on differences in age, gender, income, level of education, social class, family composition, religion, and ethnicity.
Organizational and environmental factors
such as the company's competitive strength in the market or the salesperson's territory potential can affect salesperson performance.
Instrumentalities—How will my performance be rewarded?
t is important for sales organizations to make a strong linkage between expended effort and reward (an often recognition). If salespeople believe their efforts are rewarded, then motivation increases.
Executional considerations. Strategic goals
the Snickers brand has an upbeat, revitalizing nature that provides a delicious way for people to live life to the fullest. Tactical goals - increase the rate of use by highlighting many different usage occasions. Execution style - humorous advertising in step with Snickers' upbeat, revitalizing nature
Early Adopters
the second group of consumers (13.5%) to adopt a new product.
Commercialization
the stage (usually the last) of the new product development process in which the product is launched to the market.
measure effectiveness
there are three questions marketing managers need to ask: (1) What percentage of people can remember the ad and product being advertised? (2) What percentage of people remembering the product can also remember the brand? (3) What percentage of people remembering the product and the brand can also remember the key benefit?