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PRINCIPLES OF MARKETING
University of Management and Technology
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Arlington, VA 22209
Voice: (703) 516-0035 Fax: (703) 516-0985
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Module 13: Personal Selling
and Sales Promotion
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Copyright Warning
This presentation is the intellectual property of Pearson Education
Inc. 2011. Students are hereby advised that they may not copy or
distribute this work to any third party
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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.
Explain how sales promotion campaigns are developed and
implemented.
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First Stop
CDW’s Customer Focused Selling
Background
Personal Selling at CDW
History: CDW is a leading provider of
more than 100,000 technology
products and services. CDW has
made $8 billion in sales since being
founded 25 years ago.
Target Market: Small and midsize
businesses who need lots of help and
advice are CDW’s core market.
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Adding Value: CDW works closely
with buyers
to find solutions to
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customer’s technology problems.
Account Managers: Goal is to build
and manage relationships by being
trusted advisors.
Training: A required six week
orientation is followed by six months of
training on products and sales
techniques, and the training never
ends.
Service: CDW’s extranet and various
websites allow customers to selfserve. Account managers do not make
F2F visit, but rather consult with clients
over the phone.
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Personal Selling
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Personal presentation by
the firm’s sales force for
the purpose of making
sales and building
customer relationships.
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The Nature of Personal Selling
Most salespeople are well-educated,
well-trained professionals who work to
build and maintain long-term customer
relationships.
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Marketing in Action
The major responsibility for
managing customer relationships
falls to CDW’s energetic and
passionately customer-focused
account managers, who seek to
become trusted advisors for their
customers.
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Salesperson
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An individual representing a
company to customers by
performing one or more of the
following activities: prospecting,
communicating, selling, servicing,
information gathering, and
relationship building.
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The 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.
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The 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.
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Personal selling is more effective than advertising in complex selling
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situations.
The role of personal selling varies by firm.
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Marketing in Action
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Success in selling high-tech aircraft depends on building solid, long-term
relationships.
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The 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.
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Firms
can take several actions to bring marketing and sales functions
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closer.
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Figure 13.1:
Major Steps in Sales Force Management
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Sales Force Management
The analysis, planning,
implementation, and control
of sales force activities.
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Managing 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.
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Marketing in Action
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Medical supplier Hill-Rom adopted a customer-based sales force structure in
order to focus in more intensely on the needs of key customers.
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Managing 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.
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Managing 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.
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Team selling:
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Using teams of people from sales, marketing, engineering, finance, technical
support and even upper management to service large, complex accounts.
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Marketing in Action
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The web or phone selling can be as effective as a person sales call for
may situations.
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Fuel 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.
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Managing 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.
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Some people have trouble working in teams.
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Difficult to evaluate individual contributions.
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Managing the Sales Force
Careful recruiting and selection of salespeople can greatly enhance
overall sales force performance while minimizing costly turnover.
Key talents of successful salespeople:
Intrinsically motivated.
Disciplined work style.
Ability to close a sale.
Ability to build relationships with customers.
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Several recruiting sources exist.
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Managing the Sales Force
Recruiting Sources
Recommendations from current
sales force
Searching the Web
Employment agencies
Working with college placement
services
Classified ads
Recruit from other companies
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Managing 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.
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Online training is becoming more common.
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Marketing in Action
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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%.
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Managing the Sales Force
Compensating salespeople involves a mix of compensation
elements:
Fixed amount:
Salary = stable income.
Variable amount:
Commissions or bonuses = performance reward.
Expenses:
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Repays for job-related expenditures.
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Fringe benefits:
Vacations, sick leave, pension, etc.
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Managing 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.
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Laptops, smart phones, Webcams, wireless access.
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Figure 13.2:
How Salespeople Spend Their Time
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Managing the Sales Force
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.
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Marketing in Action
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Sales 2.0 lets sales people connect, learn, plan, collaborate and conduct
business in ways that weren’t even imagined years before. Visit this website to
watch short videos of interest to those in the sales profession.
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Managing the Sales Force
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.
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Sales
contests.
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Managing the Sales Force
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.
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Return on sales investment should be assessed for the sales force
as a whole.
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Figure 13.3:
Steps in the Selling Process
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The Personal Selling Process
Steps in the selling process include:
Prospecting and qualifying:
Identifying qualified potential customers.
Preapproach:
Learning as much as possible about a prospective customer before making
a sales call.
Approach:
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Meeting the customer for the first time.
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The Personal Selling Process
Steps in the selling process
include:
Presentation:
Telling the “value story” to the
buyer, showing how the firm’s
offer solves problems.
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Marketing in Action
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Weyerhauser created a customer-solutions focused sales organization that
promised customers access to all needed products, logistics, software and tech
services.
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The 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.
Follow-up:
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Following up after the sale to ensure customer satisfaction and repeat
business.
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The Personal Selling Process
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.
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Sales Promotion
Short-term incentives to
encourage the purchase
or sale of a product or
service.
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Some marketers use the term
“promotions” to refer to sales promotion.
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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).
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Sales Promotion
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.
Consumers have become more deal oriented.
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Growth
in sales promotion has resulted in promotion clutter.
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Marketing in Action
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.
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Sales 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 objectives include gaining more sales force support for
current or new products or getting salespeople to sign up new accounts.
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Sales Promotion
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.
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Marketing in Action
Starbucks ran ads
telling customers why
its coffee is worth a
higher price, then built
loyalty by promoting its
Starbucks Card
Reward program.
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Promotional discounts will detract from a
brand’s premium positioning, a fact which led
Starbucks to create a loyalty card program.
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Sales Promotion
Consumer Sales Promotion Tools
Samples
Point-of-purchase promotions
Coupons
Contests
Cash refunds
Sweepstakes
Price packs
Games
Premiums
Event marketing (event
sponsorships)
Advertising specialties
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Fuel For Thought
Many marketers are moving their couponing and sampling
efforts online. Consumers can request samples at All-FreeSamples.com, while CouponCabin and Krogers both offer
access to a variety of coupons.
What are the benefits of online coupon distribution?
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Marketing in Action
Contests can create
considerable consumer
involvement. The “Create
Dunkin’s Next Donut”
campaign resulted in 130,000
online creations.
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Sales Promotion
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.
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Push money.
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Specialty advertising items.
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Sales Promotion
Business promotions objectives:
Generate business leads.
Stimulate purchases.
Reward customers.
Motivate salespeople.
Business promotion tools:
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Conventions, trade shows, sales contests, and many of the same tools
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used
for consumer or trade promotions.
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Marketing in Action
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Some trade shows are huge. The International Consumer Electronics show
boasts 3000 exhibitors and attracts 110,000 professional visitors.
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Sales Promotion
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.
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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.
Explain how sales promotion campaigns are developed and
implemented.
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