chapter 16

Principles of MarketingPersonal Selling and Sales Promotion16

Learning ObjectivesAfter studying this chapter, you should be able to:Discuss the role of a companys salespeople in creating value for customers and building customer relationshipsIdentify and explain the six major force management stepsDiscuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketingExplain how sales promotion campaigns are developed and implemented16-2

Chapter Outline

Personal SellingThe Personal Selling ProcessSales Promotion

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Personal SellingThe Nature of Personal Selling

Examples of people who do the selling include:Salespeople Sales representativesDistrict managersAccount executivesSales engineersAgentsAccount development reps16-4

Personal SellingThe Nature of Personal Selling

Salespeople can include an order taker such as someone standing behind the counter or an order getter whose position demands more creative selling and relationship building16-5

Personal SellingThe Role of the Sales Force

Personal selling is the interpersonal part of the promotion mix and can include: Face-to-face communicationTelephone communicationVideo or Web conferencing16-6


Salespeople can be more effective than advertisingLearn about customer problems and adjust the marketing offer and presentation accordingly to meet the special needs of each customer

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Salespeople are an effective link between the company and its customers to produce customer value and company profit by:Representing the company to customersRepresenting customers to the company

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Personal SellingManaging the Sales Force

Sales force management is the analysis, planning, implementation, and control of sales force activities and includes:Designing the sales force strategy and structureRecruitingSelectingTrainingCompensatingSupervisingEvaluating

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Personal SellingManaging the Sales ForceSales Force Structure

Territorial sales force structureProduct sales force structure Customer sales force structureComplex sales force structure

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Territorial sales force structure refers to a structure where each salesperson is assigned an exclusive geographic area and sells the companys full line of products and services to all customers in that territoryDefines salespersons job Fixes accountabilityLowers sales expensesImproves relationship building and selling effectiveness16-11


Product sales force structure refers to a structure where each salesperson sells along product linesImproves product knowledgeCan lead to territorial conflicts16-12


Customer sales force structure refers to a structure where each salesperson sells along customer or industry linesImproves customer relationships16-13


Complex sales force structure refers to a structure where a wide variety of products is sold to many types of customers over a broad geographic area and combines several types of sales force structures16-14

Personal SellingManaging the Sales ForceSales Force Size

Salespeople are one of the companys most productive and expensive assets

Increases in sales force size can increase sales and costs16-15

Personal SellingManaging the Sales ForceSales Force Size

Workload approach to sales force size refers to grouping accounts into different classes according to size account status or other factors related to the amount of effort required to maintain them to determine the number of salespeople needed to call on each class of accounts the desired number of times16-16

Personal SellingManaging the Sales ForceOther Sales Force Strategy and Structure Issues

Outside and inside sales forcesTeam selling16-17


Outside salespeople call on customers in the field

Inside salespeople conduct business from their offices16-18


Inside salespeople provide support for the outside salespeopleTechnical sales support peopleSales assistants

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Team selling is used to service large complex accounts and can include experts from:SalesMarketingTechnical R&DEngineeringOperationsFinance16-20


Some challenges of team selling Customers used to working with one salesperson may become confused or overwhelmedSalespeople used to working alone can have difficulties working with and trusting teamsEvaluating individual contributions can lead to compensation issues16-21

Personal SellingRecruiting and Selecting Salespeople

Issues in recruiting and selecting include:Careful selection Increases sales performancePoor selectionIncreases recruiting and training costs Lost salesDisrupts customer relationships16-22

Personal SellingCompensating Salespeople

Compensation is made up of:Fixed amountsVariable amountsExpensesFringe benefits16-23


Fixed amounts, usually a salary, give the salesperson some stable income

Variable amounts can include commission or bonus based on sales performance; rewards the salesperson for greater effort and success16-24


Companies are moving from high commission plans that may drive salespeople to make short-term grabs for business and not develop long-term customer relationships

Companies are moving to compensation plans that reward salespeople for building customer relationships and growing long-term value with each customer16-25

Personal SellingSupervising and Motivating Salespeople

The goal of supervision is to help salespeople work smart by doing the right things in the right ways

The goal of motivation is to encourage salespeople to work hard and energetically toward sales force goals16-26


Sales force automation systems are computerized. Digitalized sales force operations let salespeople work more effectively anywhere, anytime, providing improved:Time managementCustomer serviceLower sales costsHigher sales performance

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Sales morale and performance can be increased through:Organizational climateSales quotasPositive incentives16-28


Organizational climate describes the feeling that salespeople have about their opportunities, value, and rewards for good performance16-29


Sales quotas are standards stating the amount salespeople should sell and how sales should be divided among the companys products16-30


Positive incentives include:Sales meetings that can provide social occasions to meet management and discuss opportunities and challengesSales contests to motivate the sales force to make additional effort16-31

Personal SellingEvaluating Salespeople and Sales Force Performance

Sales reportsCall reportsExpense reports

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The Personal Selling Process

The goal of the personal selling process is to get new customers and obtain orders from them16-33

The Personal Selling ProcessSteps in the Personal Selling Process

Prospecting and qualifyingPre-approachApproachPresentation and demonstrationHandling objectionsClosingFollow-up

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Prospecting identifies qualified potential customers through referrals from:CustomersSuppliersDealersInternet

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Qualifying is identifying good customers and screening out poor ones by looking at:Financial abilityVolume of businessNeedsLocationGrowth potential

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Pre-approach is the process of learning as much as possible about a prospect, including needs, who is involved in the buying, and the characteristics and styles of the buyers16-37

The Personal Selling ProcessObjectivesQualify the prospectGather informationMake an immediate saleApproachesPersonal visitPhone callLetter

16-38Steps in the Personal Selling Process

In the pre-approach stage, the salesperson sets call objectives and the best approach


Approach is the process where the salesperson meets and greets the buyer and gets the relationship off to a good start, and involves the salespersons:AppearanceOpening linesFollow-up remarks16-39


Opening lines should be positive, build goodwill, and be followed by key questions to learn about the customers needs or by showing a display or sample to attract the buyers attention and curiosity

The most important attribute is for the salesperson to:Listen16-40


Presentation is when the salesperson tells the product story to the buyer, presenting customer benefits and showing how the product solves the customers problems

Need-satisfaction approach: Buyers want solutions, and salespeople should listen and respond with the right products and services to solve customer problems16-41


Buyers dislike salespeople that are:PushyLateDeceitfulDisorganizedUnprepared

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Buyers appreciate salespeople that are:Good listenersEmpatheticHonestDependableThoroughFollow-up types16-43


Handling objections is the process where salespeople resolve problems that are logical, psychological, or unspoken

When handling objections from buyers, salespeople should:Be positiveSeek out hidden objectionsAsk the buyers to clarify any objectionsTake objections as opportunities to provide more informationTurn objections into reasons for buying16-44


Closing is the process where salespeople should recognize signals from the buyer, including physical actions, comments, and questions to close the sale16-45


Closing techniques can include:Asking for the orderReviewing points of agreementOffering to help write up the orderAsking if the buyer wants this model or another oneMaking note that the buyer will lose out if the order is not placed nowOffering incentives to buy, including lower price or additional quantity16-46

The Personal Selling ProcessPersonal Selling and Customer Relationship Management

Personal selling is a transaction-oriented approach to close a specific sale with a specific customer, with the long-term goal to develop a mutually profitable relationship16-47

The Personal Selling ProcessPersonal Selling and Customer Relationship Management

Attributes of a favorable supplier include the ability to:Deliver a coordinated set of products and services to many locationsWork with customer teams and improve products and processesListen to customers and understand their needs16-48

Sales Promotion

Sales promotion is the short-term incentives to encourage purchases or sales of a product or service16-49

Sales PromotionRapid Growth of Sales PromotionTypes of Sales Promotions

Consumer promotionsTrade promotionsSales force promotions16-50

Sales PromotionRapid Growth of Sales PromotionFactors in the Growth of Sales Promotions

Product managers are under pressure to increase current salesCompanies face more competitionCompeting brands offer less differentiationAdvertising efficiency has declined due to rising costs, clutter, and legal constraintsConsumers have become more deal-orientedLarge retailers are demanding more deals from suppliers16-51

Sales PromotionRapid Growth of Sales PromotionFactors in the Growth of Sales Promotions

Developing a sales promotion programSet sales promotion objectivesSelect sales promotion tools16-52

Sales PromotionSales Promotion Objectives

Setting sales promotion objectives include using:Consumer promotions Trade promotions Sales force promotions16-53


Consumer promotions objectives are to:Urge short-term customer buyingEnhance long-term customer relationships

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Trade promotions urge retailers to:Carry new items or more inventoryBuy in advanceAdvertise company productsGet more shelf space

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Sales force promotion objectives include getting:More sales force support for new or current productsSalespeople to sign up new accounts16-56

Sales PromotionMajor Sales Promotion Tools

Consumer promotion toolsTrade promotion toolsBusiness promotion tools16-57

Sales PromotionSamplesCouponsCash refundsPrice packsPremiumsAdvertising specialties

Patronage rewardsPoint of purchase displaysDemonstrationsContestsSweepstakesGames

16-58Major Sales Promotion Tools

Consumer Promotion Tools

Sales PromotionMajor Sales Promotion Tools Consumer Promotion Tools

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 productAdvertising specialties are useful articles imprinted with the advertisers name, logo, or message that are given as gifts to consumers

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Samples offer a trial amount of a productCoupons are certificates that give buyers a saving when they purchase specified productsCash refunds are similar to coupons except that the price reduction occurs after the purchase

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

Point-of-purchase promotions include displays and demonstrations that take place at the point of sales16-61


Contests, sweepstakes, and games give consumers the chance to win something, such as cash, trips, or goods, by luck or through extra effortContests require an entry by a consumerSweepstakes require consumers to submit their names for a drawingGames present consumers with something that may or may not help them win a prize16-62

Sales PromotionMajor Sales Promotion Tools Trade Promotion Tools

Trade promotion tools persuade resellers to:Carry a brandGive the brand more shelf spacePromote the brand in advertisingPush the brand to consumers16-63

Sales PromotionMajor Sales Promotion Tools Trade Promotion Tools

Trade promotion tools include:DiscountAllowanceFree goodsSpecialty advertising16-64

Sales PromotionMajor Sales Promotion Tools Business Promotion Tools

Business promotion tools are used to:Generate leadsStimulate purchasesReward customersMotivate salespeopleConventions and trade showsSales contests16-65

Sales PromotionMajor Sales Promotion Tools Business 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 period16-66

Sales PromotionDeveloping the Sales Promotion Program

Size of the incentiveConditions for participationPromote and distribute the programLength of the programEvaluation of the program16-67

The End

chapter 16

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