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

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

13 - 7

Salespeople link the company with its customers. To many customers, the salesperson is the company.

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.

Recruiting and Selecting Salespeople

13 - 16

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

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

13 - 18

E-Training can make sales training more efficient—and more fun. Bayer HealthCare Pharmaceuticals’ role-playing video game—Rep Race—helped improve sales rep effectiveness by 20 percent.

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

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

13 - 33

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.”

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

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)

13 - 36

Magazines are loaded with offers like this one that promote a strong and immediate response

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

13 - 38

Customer loyalty programs: Kroger keeps its Plus Card holders coming back by linking food purchases to discounts on gasoline prices

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

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

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

13 - 52

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. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall