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Principles of Marketing: An Asian

Perspective

Instructor Supplements
Created by Geoffrey da Silva

Personal Selling and Sales Promotion

2012 Principles of Marketing: An Asian Perspective

16

Chapter 16 Outline
16.1
16.2
16.3
16.4

Personal Selling
Managing the Sales Force
The Personal Selling Process
Sales Promotion

2012 Principles of Marketing: An Asian Perspective

Opening Case
Prudential Assurance Company Limited
With the corporate credo Always
Listening, Always Understanding
Prudentials customer-focused sales
training has helped it to grow rapidly in
a changing and competitive business
environment.

2012 Principles of Marketing: An Asian Perspective

16.1
Personal Selling

16.1

2012 Principles of Marketing: An Asian Perspective

16.1 Personal Selling

Personal Selling, Sales Promotion

2012 Principles of Marketing: An Asian Perspective

16.1 Personal Selling

Personal Selling
The interpersonal part of the
promotion mix

2012 Principles of Marketing: An Asian Perspective

16.1 Personal Selling

The Nature of Personal Selling


The

term salesperson covers a wide range of positions.

At

one extreme, a salesperson might be an order taker, such as the


department store salesperson standing behind the counter.
At

the other extreme are order getters, whose positions demand


creative selling and relationship building for products and services
ranging from appliances to industrial equipment

2012 Principles of Marketing: An Asian Perspective

16.1 Personal Selling

Professional Selling

It takes more than fast


talk and a warm smile to
sell high-tech diesel
locomotives. GEs real
challenge is to win buyers
business by building
partnerships day-in, dayout, year-in, year-out,
with its customers.

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16.1 Personal Selling

Linking the Company with Its Customers


The

sales force serves as a critical link between a company and its


customers.

They represent the company to customers.

They represent customers to the company

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16.1 Personal Selling

The linking role between customers and company

The sales force serves as a critical link between a


company and its customers. They represent the
company to customers, and vice versa.
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16.1 Personal Selling

Coordinating Sales and Marketing

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16.1 Personal Selling

Coordinating Sales and Marketing


A company can take several actions to help bring its marketing and
sales functions closer together.
a)It

can increase communications between the two groups by


arranging joint meetings and by spelling out when and with whom
each group should communicate.
b)The company can create joint assignments.
c)The company can create joint objectives and reward systems for
sales and marketing.

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16.1 Personal Selling

Coordinating Sales and Marketing


d)They

can appoint marketing-sales liaisonspeople from marketing


who live with the sales force and help to coordinate marketing and
sales force programs and efforts.
e)The

firm can appoint a high-level marketing executive who oversees


both marketing and sales.

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16.1 Personal Selling

Reviewing the Key Concepts


Discuss the role of a companys salespeople in creating value for
customers and building customer relationships.

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16.2
Managing the Sales Force

16.2

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16.2 Managing the Sales Force

Sales Force Management


Sales force management is defined as
the analysis, planning, implementation,
and controlling of sales force activities.

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16.2 Managing the Sales Force


Design sales force
strategy and structure

Sales Management

Recruiting

Training

Compensation plan

Supervising

Evaluating

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16.2 Managing the Sales Force

Designing Sales Force Strategy and Structure


The

Sales Force Structure

company can divide sales responsibilities along any of several


lines:
1. Territorial Sales Force Structure
2. Product Sales Force Structure
3. Customer Sales Force Structure

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16.2 Managing the Sales Force

Sales Force Structure: Territorial

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16.2 Managing the Sales Force

Territorial Sales Force Structure


Each

salesperson is assigned to an exclusive geographic area and


sells the companys full line of products or services to all customers in
that territory.
Characteristics:
1. The organization defines each salespersons job and fixes
accountability.
2. The organization increases the salespersons desire to build
local customer relationships.
3. Because each salesperson travels within a limited geographic
area, travel expenses are relatively small.

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16.2 Managing the Sales Force

Sales Force Structure: Product

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16.2 Managing the Sales Force

Product Sales Force Structure


The

sales force sells along product lines.

This

structure can lead to problems if a single large customer buys


many different company products.

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16.2 Managing the Sales Force

Customer Sales Force Structure

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16.2 Managing the Sales Force

Customer Sales Force Structure


The

sales force is organized along customer or industry lines.

Separate

sales forces may be set up for different industries, for


serving current customers versus finding new ones, and for major
accounts versus regular accounts.

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16.2 Managing the Sales Force

Customer Sales Force Structure

IBMs shift from a product-based


structure to a customer-based one
contributed to their dramatic
turnaround in recent years.
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16.2 Managing the Sales Force

Sales Force Structure: Complex

Complex Sales Force


Structures: A company
often combines several
types of sales force
structures when it sells a
wide variety of products to
many types of customers
over a broad geographic
area.
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16.2 Managing the Sales Force

Complex Sales Force Structure

HP had so many layers of


management that customers
had to go through to get a
question answered. Things
changed only when the
companys newly appointed
CEO, at that time, took over.
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16.2 Managing the Sales Force

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16.2 Managing the Sales Force

Sales Force Size

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16.2 Managing the Sales Force

Sales Force Size


Sales

force size may range in size from only a few salespeople to


tens of thousands.
Workload

approach: A company first groups accounts into different


classes according to size, account status, or other factors related to
the amount of effort required to maintain them. It then determines
the number of salespeople needed to call on each class of accounts
the desired number of times.

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16.2 Managing the Sales Force

Sales Force Structure

OUTSIDE
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INSIDE

16.2 Managing the Sales Force

Outside and Inside Sales Forces


Outside

salespeople travel to call on customers in the field.

Inside

salespeople conduct business from their offices via


telephone, the Internet, or visits from buyers.

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16.2 Managing the Sales Force

Inside Sales Forces


Inside

salespeople conduct business from their offices via


telephone, the Internet, or visits from buyers.
Technical sales support people provide technical information and
answers to customers questions.
Sales assistants provide administrative backup for outside
salespeople.
Telemarketers and Web sellers use the phone and Internet to find
new leads and qualify prospects or to sell and service accounts
directly.

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16.2 Managing the Sales Force

Telemarketing

Telemarketers use the phone to find new leads


and qualify prospects or to sell and service
accounts directly.
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16.2 Managing the Sales Force

Team Selling
Most

companies now use team selling to service large, complex


accounts. Sales teams can unearth problems, solutions, and sales
opportunities that no individual salesperson could.
Such

teams might include experts from any area or level of the


selling firmsales, marketing, technical and support services, R&D,
engineering, operations, finance, and others.
In

team selling situations, the salesperson shifts from soloist to


orchestrator.

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16.2 Managing the Sales Force

Team Selling

A single salesperson cant


handle all of a large
customers needs. Hence,
companies now use team
selling to service large,
complex accounts.

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16.2 Managing the Sales Force

Shortcomings of team selling:


Salespeople

who are used to having customers all to themselves may


have trouble learning to work with and trust others on a team.
Selling

teams can confuse or overwhelm customers who are used to


working with only one salesperson.
Difficulties

in evaluating individual contributions to the team selling


effort can create some sticky compensation issues.

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16.2 Managing the Sales Force

Recruiting

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16.2 Managing the Sales Force

Recruiting Salespeople
In

a typical sales force, the top 30 percent of the salespeople might


bring in 60 percent of the sales.
The best salespeople possess four key talents:
Intrinsic motivation
Disciplined work style
The ability to close a sale
The ability to build relationships with customers
When recruiting, companies should analyze the sales job itself and
the characteristics of its most successful salespeople to identify the
traits needed by a successful salesperson in their industry.

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16.2 Managing the Sales Force

Selecting the right type of person for selling jobs

The best salespeople possess intrinsic


motivation, disciplined work style,
the ability to close a sale, and
perhaps most important, the ability
to build relationships with customers.
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16.2 Managing the Sales Force

Sources of new potential hires


The

human resources department gets names from current


salespeople, using employment agencies, placing classified ads,
searching the Web, and working through college placement services.
Another

source is to attract top salespeople from other companies

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16.2 Managing the Sales Force

Training

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16.2 Managing the Sales Force

Training Salespeople
Training programs have several goals.
a)The training program must teach them about different types of
customers and their needs, buying motives, and buying habits.
b)It must teach them how to sell effectively and train them in the
basics of the selling process.
c)The training program teaches them about the companys objectives,
organization, and chief products and markets, and about the
strategies of major competitors

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16.2 Managing the Sales Force

Training Salespeople

Some companies provide


continuing sales training
via seminars, sales
meetings, and the Web
throughout the
salespersons career.
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16.2 Managing the Sales Force

Web-based training for salespeople


Many

companies are adding e-learning to their sales training


programs.
Most

elearning is Web-based but many companies now offer ondemand training via smartphones and even iPod-type devices.

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16.2 Managing the Sales Force

Compensation
Straight

salary

Straight

Commission

Salary

+ Bonus

Salary

+ commission

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16.2 Managing the Sales Force

Sales force Compensation


Compensation

is made up of several elementsa fixed amount, a


variable amount, expenses, and fringe benefits.
Management

must decide what mix of compensation elements makes


the most sense for each sales job.

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16.2 Managing the Sales Force

Sales force Compensation


Different combinations of fixed and variable compensation give rise to
four basic types of compensation plans:
A.Straight

salary
B.Straight commission
C.Salary plus bonus
D.Salary plus commission

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16.2 Managing the Sales Force

Sales force Compensation


The

average salespersons pay consists of about 67 percent salary


and 33 percent incentive pay.
Compensation

should direct salespeople toward activities that are


consistent with overall sales force and marketing objectives.

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16.2 Managing the Sales Force

Link between marketing strategy and sales force


compensation

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16.2 Managing the Sales Force

Supervise, Motivate

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16.2 Managing the Sales Force

Supervising and Motivating Salespeople


Companies

vary in how closely they supervise their salespeople.

The

annual call plan shows which customers and prospects to call on


and which activities to carry out.
The

timeandduty analysis shows the time the salesperson spends


selling, traveling, waiting, taking breaks, and doing administrative
chores.

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16.2 Managing the Sales Force

Supervising and Motivating Salespeople

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16.2 Managing the Sales Force

Supervising and Motivating Salespeople


On

average, active selling time accounts for only 10 percent of total


working time!
Sales

force automation systems: Computerized, digitized sales force


operations that let salespeople work more effectively anytime,
anywhere.

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16.2 Managing the Sales Force

Sales force automation

Many sales forces have gone high tech, equipping salespeople with everything from smartphones,
wireless Web connections, and videoconferencing to customer-contact and relationship
management software that helps them to be more effective and efficient.
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16.2 Managing the Sales Force

Internet and selling

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16.2 Managing the Sales Force

Selling and the Internet


Perhaps

the fastest-growing technology tool is the Internet.

Sales

organizations around the world are now using the Internet to


support their personal selling effortsnot just for selling but also for
everything from training salespeople to conducting sales meetings
and servicing accounts.

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16.2 Managing the Sales Force

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16.2 Managing the Sales Force

Internet and selling

Machinery manufacturer
Makino makes extensive use
of online social networking
everything from proprietary
online communities and
webinars to Twitter, Facebook,
and YouTube.
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16.2 Managing the Sales Force

Motivating Salespeople
Salespeople

often need special encouragement to do their best.

Organizational

climate describes the feeling that salespeople have


about their opportunities, value, and rewards for a good performance.
Sales

Quotas are standards stating the amount they should sell and
how sales should be divided among the companys products.
Compensation

is often related to how well salespeople meet their

quotas.

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16.2 Managing the Sales Force

Positive Incentives
Companies

use various positive incentives to increase sales force

effort:
Sales meetings provide social occasions, breaks from routine,
chances to meet and talk with company brass, and opportunities to
air feelings and to identify with a larger group.
Companies also sponsor sales contests to spur the sales force to
make a selling effort above what would normally be expected.
Other

incentives include honors, merchandise and cash awards, trips,


and profitsharing plans.
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16.2 Managing the Sales Force

Evaluation

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16.2 Managing the Sales Force

Evaluating Salespeople and Sales Force Performance


Management

sources of salesperson information:


Sales reports
Call reports
Expense reports
Formal evaluation forces management to develop and communicate
clear standards for judging performance and provides salespeople
with constructive feedback and motivates them to perform well.
As with other marketing activities, the company wants to measure its
return on sales investment

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16.2 Managing the Sales Force

Reviewing the Key Concepts


Identify and explain the six major sales force management steps.

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16.2 Managing the Sales Force

FOLLOWUP
CLOSE THE
SALE

PROSPECT/
QUALIFY

The
Selling
Process

HANDLE
OBJECTIONS

APPROACH
SALES
PRESENTATION

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PREAPPROACH

16.3
The Personal Selling Process

16.3

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16.3 The Personal Selling Process

Steps in the Selling Process


a) The selling process consists of seven steps:
b) Prospecting and qualifying
c)
Pre-approaching
d) Approaching
e) Presentation and demonstrating
f)
Handling objections
g) Closing
h) Following up

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16.3 The Personal Selling Process

Major steps in effective selling

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16.3 The Personal Selling Process

Prospect/Qualify

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16.3 The Personal Selling Process

Prospecting
Prospecting

is identifying qualified potential customers.


The best source of prospects is referrals.
Sources of referrals:
Current customers
Suppliers and dealers
Noncompeting sales-people
The Web or other social networks
Dropping in unannounced on various offices (a practice known as
cold calling)

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16.3 The Personal Selling Process

Qualifying
Qualifying

a lead is knowing how to identify the good ones and


screen out the poor ones.
Prospects

can be qualified by:


Their financial ability
Volume of business
Special needs
Location
Possibilities for growth

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16.3 The Personal Selling Process

Preapproach

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16.3 The Personal Selling Process

Preapproaching
Preapproaching

is the stage in which the salesperson learns as


much as possible about the organization (what it needs, who is
involved in the buying) and its buyers (their characteristics and
buying styles).
Call objectives is the task of qualifying the prospect, gathering
information, or making an immediate sale.
Other call objectives include deciding on the best approach, the best
timing, and a determination of the overall sales strategy for the
account.

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16.3 The Personal Selling Process

Approach

During the
approaching step, the
salesperson should
know how to meet and
greet the buyer and get
the relationship off to a
good start
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16.3 The Personal Selling Process

Presentation

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16.3 The Personal Selling Process

Presenting and Demonstrating


When

presenting, the salesperson tells the value story to the buyer,


showing how the companys offer solves the customers problems.
The

customer-solution approach fits better with a relationship


marketing focus.
But

before salespeople can present customer solutions, they must


develop solutions to present.

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16.3 The Personal Selling Process

Dislikes and likes of presentations:

Todays advanced presentation


technologies allow for full multimedia
presentations to only one or a few
people. Online presentation
technologies and handheld and laptop
computers with presentation software
have replaced the old flip chart.
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16.3 The Personal Selling Process

Using technology for presentations


The

qualities that buyers dislike most in salespeople include


being:
Pushy
Late
Deceitful
Unprepared or disorganized
Overly talkative

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16.3 The Personal Selling Process

Using technology for presentations


The

qualities that buyers value most in salespeople include:


Good listening
Empathy
Honesty
Dependability
Thoroughness
Follow-through

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16.3 The Personal Selling Process

Handling objections

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16.3 The Personal Selling Process

Handling objections
In

handling objections, the salesperson should:


Use a positive approach
Seek out hidden objections
Ask the buyer to clarify any objections
Take objections as opportunities
Turn the objections into reasons for buying

Every

salesperson needs training in the skills of handling objections.

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16.3 The Personal Selling Process

Close the sale


Salespeople should be confident about closing the order, and follow
up with the customer to ensure customer satisfaction and repeat
business.
Salespeople can use one of several closing techniques:
1. Ask for the order
2. Review points of agreement
3. Offer to help write up the order
4. Ask whether the buyer wants this model or that one
5. Note that the buyer will lose out if the order is not placed
now.
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16.3 The Personal Selling Process

Follow-up
Follow-up is necessary if the salesperson wants to ensure customer
satisfaction and repeat business.

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16.3 The Personal Selling Process

Personal Selling and Managing Customer Relationships

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16.3 The Personal Selling Process

Transaction versus Relationship Orientations in Selling


Transaction

orientation: The purpose is to help salespeople close a


specific sale with a customer.
Relationship

orientation: The purpose is to serve the customer over


the long haul in a mutually profitable relationship.
Todays

large customers favor suppliers who can sell and deliver a


coordinated set of products and services to many locations, and who
can work closely with customer teams to improve products and
processes.

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16.3 The Personal Selling Process

Reviewing the Key Concepts


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

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16.4
Sales Promotion

16.4

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16.4 Sales Promotion

Short-term incentives to encourage purchases or sales of a product or


service.

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16.4 Sales Promotion

Sales Promotions

Short-term incentives
such as discount
coupons encourage the
purchase or sale of a
product or service.
Basically, it offers
reasons to buy now.
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16.4 Sales Promotion

Sales Promotions
Sales

promotion tools are targeted toward final buyers (consumer


promotions), retailers and wholesalers (trade promotions), business
customers (business promotions), and members of the sales force
(sales force promotions).
Today,

in the average consumer packaged-goods company, sales


promotion accounts for 74 percent of all marketing expenditures.

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16.4 Sales Promotion

Factors leading to growth in sales promotions


Several

factors have contributed to the rapid growth of sales


promotion:
1. Product managers face greater pressures to increase their
current sales.
2. The company faces more competition and competing brands
are less differentiated.
3. Advertising efficiency has declined.
4. Consumers have become more deal oriented.

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16.4 Sales Promotion

Sales promotion clutter

Consumers are increasingly tuning out


advertisement and promotions, weakening
their ability to trigger immediate purchase.
Manufacturers now have to search for ways
to rise above the clutter.

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16.4 Sales Promotion

Sales promotions objectives:


Sales
1.
2.

3.

promotion objectives vary widely.


Consumer promotions: Urge short-term customer buying or to
enhance customer brand involvement.
Trade promotions: Get retailers to carry new items and more
inventory, buy ahead, or promote the companys products and give
them more shelf space.
Sales force: Get more sales force support for current or new
products or getting salespeople to sign up new accounts.

Sales

promotions should help to reinforce the products position and


build long-term customer relationships.
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16.4 Sales Promotion

Sales Promotion aimed at Consumers

The consumer
promotions include a
wide range of tools.

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16.4 Sales Promotion

Sales Promotion aimed at Consumers

Coupons, price deals

Samples

Patronage rewards

POP displays

Contests, games

Demonstrations

Premiums

Advertising
specialties

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16.4 Sales Promotion

Consumer Promotions:
Samples

are offers of a trial amount of a product.


Sampling is the most effectivebut most expensiveway to
introduce a new product or to create new excitement for an existing
one.
Coupons are certificates that give buyers a savings when they
purchase specified products.
Most major consumer goods companies are issuing fewer coupons
and targeting them more carefully.
Cash refunds (or rebates) are like coupons except that the price
reduction occurs after the purchase rather than at the retail outlet.

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16.4 Sales Promotion

Sampling

Sampling is the most effectivebut most


expensiveway to introduce a new product or to
create new excitement for an existing one.
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16.4 Sales Promotion

Sampling

With the increase in the number of


smartphone users, mobile phone coupons are
gaining popularity.

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16.4 Sales Promotion

Consumer Promotions
Price

packs (also called cents-off deals) offer consumers savings off


the regular price of a product.
Premiums are goods offered either free or at low cost as an incentive
to buy a product.
Advertising specialties, also called promotional products, are useful
articles imprinted with an advertisers name, logo, or message that
are given as gifts to consumers.
Point-of-purchase (POP) promotions include displays and
demonstrations that take place at the point of sale.

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16.4 Sales Promotion

Advertising Specialties

Advertising specialties,
also called promotional
products, are useful
articles imprinted with an
advertisers name, logo,
or message that are given
as gifts to consumers.
They typically include
items such as bumper
stickers, stationary, mugs,
keychains, and T-shirts.

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16.4 Sales Promotion

Consumer Promotions
Contests,

sweepstakes, and games give consumers the chance to


win something.
1. A contest calls for consumers to submit an entry to be judged.
2. A sweepstakes calls for consumers to submit their names for a
drawing.
3. A game presents consumers with something every time they
buy.

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16.4 Sales Promotion

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16.4 Sales Promotion

Event Marketing
Event

marketing (or event sponsorships) allows companies to


create their own brand marketing events or serve as sole or
participating sponsors of events created by others.
The events might include anything from mobile brand tours to
festivals, reunions, marathons, concerts, or other sponsored
gatherings.
Event marketing is huge, and it may be the fastest growing area of
promotion, especially in tough economic times.
Event marketing can provide a less costly alternative to expensive TV
commercials.

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16.4 Sales Promotion

Event Sponsorships
For the past few years, P&G has
sponsored a holiday event promotion for
its Charmin brand in New Yorks Times
Square, where it can be very difficult to
find a public restroom. P&G sets up 20
free, sparkling clean Charmin-themed
mini-bathrooms, each with its own sink
and a bountiful supply of Charmin. The
event is the ultimate in experiential
marketingtouching people in places
advertising wouldnt dare go. Over the
past three holiday seasons, the event has
been flush with success. More than 1
million people have gratefully used the
facilities.

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16.4 Sales Promotion

Sales Promotion aimed at Trade

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16.4 Sales Promotion

Trade Promotions
Trade

promotions persuade resellers to carry a brand, give it shelf


space, promote it in advertising, and push it to consumers.
Manufacturers use several trade promotion tools:
1. A straight discount (also called a price-off, off-invoice, or off-list)
2. An allowance (usually so much off per case)
3. Free goods
4. Push money
5. Free specialty advertising items
Sales contests: Contests for salespeople or dealers to motivate them
to increase their sales performance over a given period.

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16.4 Sales Promotion


Sales Promotion aimed at Trade

Allowance

Discount

Free goods

Specialty advertising

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16.4 Sales Promotion

Business Promotions
Business promotions
are used to generate
business leads, stimulate
purchases, reward
customers, and motivate
salespeople.

Some trade shows are huge. At the


2010 International Consumer
Electronics Show, 3,000 exhibitors
attracted more than 112,000
professional visitors.
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16.4 Sales Promotion

Benefits of Conventions and Trades Shows to the Vendors:


Opportunities

to find new sales leads


Contact customers
Introduce new products
Meet new customers
Sell more to present customers
Educate customers with publications and audiovisual materials
Reach many prospects not reached through their sales forces

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16.4 Sales Promotion

Developing The Sales Promotions


Marketers
1.
2.
3.
4.
5.

must decide:
Size of the incentive
Conditions for participation
Promotion and distribution
Length of the promotion
Evaluation

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16.4 Sales Promotion

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16.4 Sales Promotion

Company Case
Procter & Gamble:
Coming Face to Face with Customers

114 2012 Principles of Marketing: An Asian Perspective

Thank
you

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