personal selling and sales promotion chapter 13. copyright 2011, pearson education inc., publishing...

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Personal Selling Personal Selling and Sales Promotionand Sales Promotion

Chapter 13

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall 13 - 2

Chapter OutlineChapter Outline

The Nature of Personal Selling The Role of the Sales Force Managing the Sales Force The Personal Selling Process Sales Promotion


1. Discuss the role of a company’s salespeople in creating value for customers and building customer relationships.

2. Identify and explain the six major sales force management steps.

3. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing.

4. Explain how sales promotion campaigns are developed and implemented.

Previewing the ConceptsPreviewing the Concepts


Personal SellingPersonal Selling

Personal presentation by Personal presentation by the firm’s sales force for the firm’s sales force for the purpose of making the purpose of making sales and building sales and building customer relationships.customer relationships.


Most salespeople are well-educated, well-trained professionals who work to build and maintain long-term customer relationships.

The Nature of Personal SellingThe Nature of Personal Selling


SalespersonSalesperson

An individual representing a An individual representing a company to customers by company to customers by performing one or more of the performing one or more of the following activities: prospecting, following activities: prospecting, communicating, selling, servicing, communicating, selling, servicing, information gathering, and information gathering, and relationship building.relationship building.


The Nature of Personal SellingThe Nature of Personal Selling The term

salesperson covers a wide range of positions:– Order taker:

Department store clerk.

– Order getter: Demands creative selling and relationship building.


The Role of the Sales ForceThe Role of the Sales Force

Personal selling:– Interpersonal interactions between

salespeople and individual customers occur:• Face-to-face.• By telephone.• Through video or Web conferences.• By other means.

– Personal selling is more effective than advertising in complex selling situations.

– The role of personal selling varies by firm.


Marketing in ActionMarketing in Action

Success in selling high-tech aircraft depends on building solid, long-term relationships.


The Role of the Sales ForceThe Role of the Sales Force

The sales force serves as critical link between the company and its customers.– They represent the firm to the customers.– They represent the customers to the firm.– Goal = customer satisfaction and firm profit.

Sales and other marketing functions should work together to create value.– Firms can take several actions to bring

marketing and sales functions closer.


Sales Force ManagementSales Force Management

The analysis, planning, The analysis, planning, implementation, and control implementation, and control of sales force activities.of sales force activities.


Figure 13.1:Figure 13.1:

Major Steps in Sales Force Major Steps in Sales Force ManagementManagement


Managing the Sales ForceManaging the Sales Force

Types of sales force structure:– Territorial: Salesperson is assigned 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: Salespeople specialize in selling only to certain customers or industries.

– Complex: Combination of several types of structures.



Medical supplier Hill-Rom adopted a customer-based sales force structure in order to focus in more intensely on the needs of key customers.


Managing the Sales ForceManaging the Sales Force Sales force size:

– May range in size from only a few salespeople to tens of thousands.

– Increasing sales force size will increase both costs and sales.

– Workload approach can be useful in setting sales force size. This requires:

• Grouping accounts by factors related to the effort required to maintain them.

• Determining the number of people needed to call on each class of accounts.


Managing the Sales ForceManaging the Sales Force Other sales force strategy and structure

issues include decisions related to use of:– Outside sales force:

• Travels to call on customers in the field.– Inside sales force:

• Conducts business from their offices via telephone or the Internet, or visits from prospective buyers.

– Team selling:• Using teams of people from sales, marketing,

engineering, finance, technical support and even upper management to service large, complex accounts.



The web or phone selling can be as effective as a personal sales call for may situations.


Fuel for ThoughtFuel for Thought

Inside sales forces use the phone or Internet to service and contact customers.

For what types of products or services do you think that an inside sales force might be more effective than an outside sales force? Explain.



Team selling is used to service large complex accounts and can include experts from:– Sales– Marketing– Technical– R&D

– Engineering– Operations– Finance


Managing the Sales ForceManaging the Sales Force Key advantage of team selling:

– Can find problems, solutions, and sales opportunities that no single salesperson could alone.

Pitfalls of team selling:– Salespeople are competitive and have typically

been rewarded on the basis of individual performance.

– Team selling can confuse or overwhelm customers.

– Some people have trouble working in teams.– Difficult to evaluate individual contributions.


Careful recruiting and selection of salespeople can greatly enhance overall sales force performance while minimizing costly turnover.

Poor selection:• Increases recruiting and training costs• Lost sales• Disrupts customer relationships

Key talents of successful salespeople:– Intrinsically motivated.– Disciplined work style.– Ability to close a sale.– Ability to build relationships with customers.

Several recruiting sources exist.



Searching the Web Working with

college placement services

Recruit from other companies

Recommendations from current sales force

Employment agencies

Classified ads


Recruiting Sources


Managing the Sales ForceManaging the Sales Force Seminars, sales meetings, and Web e-

learning form the basis of many sales training programs.

Though expensive, training can yield dramatic results.

Training programs have several goals.– Customer knowledge.– The selling process.– Company, product, and market knowledge.

Online training is becoming more common.



E-training can make sales training more efficient and fun. The Rep Race role playing video game used by Bayer Healthcare Pharmaceuticals increased sales rep effectiveness by 20%.


Compensating salespeople involves a mix of compensation elements:– Fixed amount:

• Salary = stable income. – Variable amount:

• Commissions or bonuses = performance reward.– Expenses:

• Repays for job-related expenditures.– Fringe benefits:

• Vacations, sick leave, pension, etc.



Managing the Sales ForceManaging the Sales Force Goal of supervision is to encourage

salespeople to “work smart” by:– Helping them to identify customers and set call

norms.– Specifying time to be spent prospecting via:

• Annual call plan.• Time-and-duty analysis.

– Helping salespeople to work more efficiently using sales force automation systems.

• Laptops, smart phones, Webcams, wireless access.



How Salespeople Spend Their TimeHow Salespeople Spend Their Time



Selling and the Internet:– The internet is the fastest-growing sales

technology tool.– Uses include training, servicing accounts,

and conducting live sales meetings with sales force or customers.

– The internet can save time & travel dollars and give sales people a new tool.

– Sales 2.0 technologies are costly and can intimidate workers or customers.


Supervising and Motivating SalespeopleSupervising and Motivating SalespeopleSelling and the InternetSelling and the Internet

Sales 2.0 is the merging of innovative sales practices with

Internet 2.0 technologies to improve sales force effectiveness and efficiency



Sales 2.0 lets sales people connect, learn, plan, collaborate and conduct business in ways that weren’t even imagined years before.



Goal of motivating the sales force is to encourage salespeople to “work hard”.

Management can boost sales force morale and performance via:– Organizational climate.– Sales quotas.– Positive incentives.

• Sales meetings.• Sales contests.



Organizational climate describes the feeling that salespeople have about their opportunities, value, and rewards for good performance.



Sales quotas are standards that state the amount a salespersonshould sell.



Positive incentives include:– Sales meetings that can provide

social occasions to meet management and discuss opportunities and challenges.

– Sales contests to motivate the sales force to make additional effort.



Evaluating salespeople and sales force performance requires:– Getting regular information from salespeople

via sales reports, call reports, and expense reports.

– Clear standards for judging performance.– Providing constructive feedback to the sales

people that can motivate them to perform. Return on sales investment should be

assessed for the sales force as a whole.


The Personal Selling ProcessThe Personal Selling Process

The goal of the personal selling process is to get new customers and obtain orders from them.



Steps in the Selling ProcessSteps in the Selling Process



Steps in the selling process include:– Prospecting and qualifying:

• Identifying qualified potential customers, and screening out poor ones.

– Preapproach: • Learning as much as possible about a

prospective customer before making a sales call.

– Approach: • Meeting the customer for the first time.



Steps in the selling process include:– Presentation:

• Telling the “value story” to the buyer, showing how the firm’s offer solves problems.


The Personal Selling ProcessThe Personal Selling Process Steps in the selling process include:

– Handling objections: • Seeking out, clarifying, and overcoming

customer objections to buying.– Closing:

• Asking the customer for an order. Salespeople should recognize signals from the buyer, including physical actions, comments, and questions to close the sale.

– Follow-up: • Following up after the sale to ensure

customer satisfaction and repeat business.



Personal selling and managing customer relationships:– The selling process just covered is transaction

oriented.– But building profitable relationships is a key

goal for most firms.– Building relationships requires listening to

customers, understanding their needs, and carefully coordinating the whole firm’s efforts to create value.


Sales PromotionSales Promotion

Short-term incentives to Short-term incentives to encourage the purchase encourage the purchase or sale of a product or or sale of a product or service.service.

Some marketers use the term “promotions” to refer to sales promotion.



Sales promotion:– Can be targeted toward:

•Final buyers (consumer promotions).•Retailers and wholesalers (trade

promotions).•Business customers (business

promotions).•Members of the sales force (sales force

promotions).


Several factors have contributed to the rapid growth of sales promotion:– Product managers are facing more pressure to

increase their current sales.– Companies face more competition from less

differentiated brands.– Advertising efficiency has declined due to

rising costs, clutter, and legal constraints.– Consumers have become more deal oriented.– Large retailers are demanding more deals

from suppliers. Growth in sales promotion has resulted in

promotion clutter.




Manufacturers have had to seek new ways of breaking through sales promotion clutter via larger coupon values, more dramatic POP displays, or use of interactive media.


Sales PromotionSales Promotion Sales promotion objectives:

– Consumer promotions urge short-term sales or attempt to enhance customer brand involvement.

– Trade promotions attempt to get retailers to carry new items and more inventory, to buy ahead, to promote the firm’s brand, and to give the company more shelf space.

– Sales force promotions include gaining more sales force support for current or new products or getting salespeople to sign up new accounts.



Sales promotions should be used with and supported by other promotion mix tools.

Sales promotion should focus on reinforcing the product’s position and building long-term customer relationships, rather than simply encourage brand switching or short-term sales only.– Use of frequency cards and loyalty programs

has grown.


Marketing in ActionMarketing in ActionStarbucks ran ads telling customers why its coffee is worth a higher price, then built loyalty by promoting its Starbucks Card Reward program.

Promotional discounts will detract from a brand’s premium positioning, a fact which led Starbucks to create a loyalty card program.



Point-of-purchase promotions

Contests Sweepstakes Games Event marketing (event

sponsorships)

Samples Coupons Cash refunds Price packs Premiums Advertising

specialties

Consumer Sales Promotion Tools


Samples offer a trial amount of a product.

Coupons are certificates that give buyers a saving when they purchase specified products.

Cash refunds are similar to coupons except that the price reduction occurs after the purchase.

Consumer Sales Promotions ToolsConsumer Sales Promotions Tools


Fuel For ThoughtFuel For Thought Many marketers are moving their

couponing and sampling efforts online. Consumers can request samples at All-Free-Samples.com, while CouponCabin and Krogers both offer access to a variety of coupons.

What are the benefits of online coupon distribution?

http://www.all-free-samples.com/

http://www.all-free-samples.com/

http://www.couponcabin.com/index.htm

http://www.couponcabin.com/index.htm

http://www.kroger.com/in_store/Pages/coupon_landing.aspx

http://www.kroger.com/in_store/Pages/coupon_landing.aspx


Price packs offer consumers savings off the regular price of a product.

Premiums are goods offered either free or at low cost to buy a product.

Advertising specialties are useful articles imprinted with the advertiser’s name, logo, or message that are given as gifts to consumers.



Patronage rewards are cash or other awards offered for the regular use of a certain company’s products or services

Point-of-purchase promotions include displays and demonstrations that take place at the point of sales



Contests, sweepstakes, and games give consumers the chance to win something, such as cash, trips, or goods, by luck or through extra effort.– Contests require an entry by a consumer.– Sweepstakes require consumers to submit their

names for a drawing.– Games present consumers with something that

may or may not help them win a prize.



Marketing in ActionMarketing in ActionContests can create considerable consumer involvement. The “Create Dunkin’s Next Donut” campaign resulted in 130,000 online creations.

https://www.dunkindonuts.com/donut/

https://www.dunkindonuts.com/donut/


Trade PromotionsTrade PromotionsTrade promotions are sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to the consumer



Trade promotions:– More sales promotion dollars are

directed toward retailers and wholesalers than to the final consumers.

– Several trade promotion tools exist:• Discounts.• Allowances.• Free goods.• Push money.• Specialty advertising items.


Business PromotionsBusiness PromotionsBusiness Promotions are sales promotion tools used to generate business leads, stimulate purchases, reward customers, and motivate salespeople.



Business promotions objectives:– Generate business leads.– Stimulate purchases.– Reward customers.– Motivate salespeople.

Business promotion tools:– Conventions, trade shows, sales contests, and

many of the same tools used for consumer or trade promotions.


Sales PromotionSales PromotionBusiness Promotion Tools Conventions and trade shows are

effective ways to reach many customers not reached with the regular sales force.

Sales contests are effective in motivating salespeople or dealers to increase performance over a given period.



Some trade shows are huge. The International Consumer Electronics show boasts 3000 exhibitors and attracts 110,000 professional visitors.



Developing the sales promotion program:– Decide on the size of the incentive.– Set conditions for participation.– Decide how to promote and distribute

the promotion program.– Determine the length of the program.– Evaluate the promotion program.


1. Discuss the role of a company’s salespeople in creating value for customers and building customer relationships.

2. Identify and explain the six major sales force management steps.

3. Discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing.

4. Explain how sales promotion campaigns are developed and implemented.

Reviewing the ConceptsReviewing the Concepts

personal selling and sales promotion chapter 13. copyright 2011, pearson education inc., publishing...

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