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Chapter 13: Sales Promotions and

sales management
1. Sales Promotion
Sales promotion= Programmes that marketers design to build interest in or encourage
purchase of a product or service during a specified time period
Why? immediate boost in sales or for the introduction of a new product. short-term
objective
For Who? to generate enthusiasm among retailers to take a chance on a new product
or provide more shelf space. can target channel partners or the selling firms own
employees as well as end customers
one part of the integrated marketing communication programme should be
coordinated with other promotional activities (never alone) used to support a more
extensive advertising, direct marketing, public relations and/or personal selling
initiative directed at two key groups: trade and consumers
to advertising focus on creating long-term positive feelings

1.1 Sales promotion directed at the trade.


Trade promotions focus on members of the trade (distribution channels, wholesalers).
Two forms:
1) discounts and deals reduce the cost of the product to the retailer or help
defray its advertising expenses; (encourage shops to stock the item or give it extra
attention)
2) increasing industry visibility create enthusiasm among salespeople and
customers

Discount and Deals.


Price break=one form of trade promotion discount on its product
- merchandising allowance: reimburses the retailer for in-store support of a
product off-shelf display for a brand.
- case allowance: provides a discount to retailer/wholesaler during a set period of
time based on sales volume of a product it orders from the manufacturer.

Downsides:
- forward buying: purchase large quantities during the discount period and store
them and dont buy them until the next promotion
- diverting: buying the product at the discounted promotion price, store it and, after
the promotion has expired, sell to other retailers at a price between the original and
the discounted price profit

Increasing industry visibility ex: elaborate exhibit at a convention keep the


companys name on top
- trade shows: shows held in big convention centers to show product lines, or give
away samples, to wholesalers/retailers ; there is an opportunity to develop customer
leads that the company then forwards to its sales force for follow-up. (Online trade
shows too)
- promotional products: items decorated with a company logo to give away for free
to build awareness
- incentive programmes: push money (cash bonuses, trips, or prizes employees
receive when they boost sales) (employee teams)

1.2 Sales promotion directed at customers.


create a buzz in the form of a contest or a special event fuel popularity

Price-based consumer sales promotion


Downside: consumers can become conditioned to purchase the product at only the
discounted price (dont do it too frequently).
- coupons: certificates that redeem for money off a purchase (most common price
promotion)
Ex: In US google use coupon service + patients will ask for the drug they have
the coupon of instead of the more economical generic version
- price deals, refunds, and rebates: temporary price reduction to stimulate sales
printed on package, price-off flag or banner on the shop shelf, or directly in credit
card
- frequency (loyalty/continuity) programmes: offer a consumer a discount or
free product for multiple purchases over time
- special/bonus packs: giving the shopper more product instead of a lower price
bigger bottle for the same price or separate product

Attention-getting consumer promotion


stimulate interest in and publicity for a companys products.
- contests and sweepstakes: a test of skill (contest) or based on chance
(sweepstake)
- premiums: items offered free for buying a product (prize in cereal, phone cards
with pictures etc)
- sampling: encourage trial by distributing free trial-size versions in the shop/public
places/mail or through sites on the internet
- point-of-sale promotions (POS): use creative displays/signs/in-store media (as
placards on shopping trolleys or tv inside the shop) to catch attention/ influence
- product/brand placements: getting your brand featured in film or tv shows
positive attitude
- advergaming: brand placements in video games, embedded in the action
- cross-promotion/ cooperative promotion: two or more products/services join
forces to create interest using a single promotional tool appears on each others
turf + share logical connection

2. Personal selling
Occurs when a company representative interacts directly with a customer or prospective
customer to communicate about a good or service develop a relationship with customer
(especially in B2B), or explain complex/expensive products/services (such as industrial
products)
Salespeople are the firms eyes and ears: learn which competitor talks to customers,
what is offered, new rival products, other competitive intelligence gain information
about customers and market

2.1 The role of personal selling.


Some elements of personal selling is essential to land a commitment to purchase or a
contract, making this type of marketing communication an important part of any
marketing plan. Important in
- When companies engage in push strategy
- B2B in contexts where big deals take place, and often when intense negotiations are
needed.
- When customers need hands-on assistance
- For products that customers buy infrequently
- Products are complex or very expensive explain and justify
Drawbacks: too expensive when amount of individual purchases is low, or for low-price
(mass) products high cost per contact/ customer
Telemarketing/teleselling: person-to-person communication via phone
Direct selling bypass channel intermediaries and sell directly from manufacturer to
consumer through personal, one-to-one contact selling in person in a customers home,
a place of business, Demonstrate the product in front of a group of people (=party
plan)
2.2 Technology and personal selling.
Personal selling= for marketing communication in which one person interacts directly
with another person to communicate about a good or service.
Technology is used and helps, but is not a substitute for personal selling due to the
relational aspect
- Teleconferencing, videoconferencing, improved corporate websites (add FAQ),
intranets and blogs
- customer relationship management (CRM) software: inexpensive & easy to
use and allows the salespeople to track all aspects of customer interaction Online
CRM (firms rent it by months)
- partner relationship management (PRM): link information between buying and
selling firms strive for a win-win solution
- Voice-over Internet Protocol (VOIP) : ex: Skype

2.3 Types of sales jobs


Order taker: deals with transactions that the customer initiates lowest paying
position
Technical specialist: contributes expertise in the form of product demonstrations,
recommendations for complex equipment, and setup of the machine provide sales
support rather than making actual sales
promote the firm and tries to stimulate demand for a product
Missionary salesperson: promote the firm and work to stimulate demand for its
products but dont actually take orders for products Ex: pharmaceutical
representation influencing the doctors
New-business salesperson: responsible for finding new customers and present the
products/ services
high degree of creativity and professionalism well paid establish the relationship
and becomes the primary contact as long as the client continues to buy from the
company. Then become:
Order getter/ account manager: the people most directly responsible for a
particular clients business, may also have titles such as account manager; long-term
relationship building role.
Team selling: all kinds of players (salesperson, technical specialist, someone from
engineering and design, other players) who work together to develop and sell products
cross-functional team

2.4 Approaches to personal selling.


Oldest form. Tarnish by smooth-talking salesman to lie to make the sale but based on
relationships
Transactional selling: putting on the hard sell old way
- transactional selling hard sell approaches focus on making an immediate sale
with no concern for developing a long-term relationship with the customer threat to
satisfaction and loyalty
makes people feel manipulated and resentful
Relationship selling: building long-term customers
- relational selling securing, developing and maintaining long-term relationships
with profitable customers seek mutually satisfying win-win relationship with
customers
- Securing a customer relationship means converting an interested prospect into
someone who is convinced that the product or service holds value for him.
- Developing a customer relationship means ensuring that you and the customer find
more ways to add value.
- Maintaining a customer relationship means building customer satisfaction and
loyalty.

2.5 The creative selling process.


Seek out potential customers, analyze their needs, determine how
product attributes provide benefits and then decide how best to
communicate this to prospects.
Step 1: Prospecting and qualifying
prospecting: identifying and developing a list of potential customers
(prospects/ sales leads).
Leads can come from existing customer lists, telephone directories
and commercially available databases.
Sometime, companies generate leads by though advertising by
letting customers request more information.
use online social networks, or cold calling (simply contact prospects
cold without introduction or arrangement)
rely on referrals (ex: suggested I call you)
qualifying: asking questions to determine how likely they are to
become customers
Step 2: Pre-approach
consists of compiling background information about prospective customers and
planning the sales interview. Plan it to be able to use information about the customer
probe purchase history, look at current needs, find info about their interests, financial
data + use internal CRM system inside info comes from informal source (ex: non-
competing salesperson who have dealt with the prospect before)
background information set goals and plan the strategy for the sales call

- Step 3: Approach
contact the prospect (use referrals) learn about needs, create good impression
(good vocabulary, well dressed need to be interested in the call no second chance),
build rapport

- Step 4: Sales presentation


lays out benefits of the product and advantages over competition (incorporate dvd
and laptops) focus on being value-adding to the customer should be clear and
invite involvement (opportunity to ask questions, give feedbacks, discuss their
needs) listening skills really important

- Step 5: Handling objections


prepare responses to objections (reasons why the prospect may be reluctant
never accept everything the salesperson says) prepare to respond with additional
information or persuasive arguments should welcome objections as it shows the
interest of the customer

- Step 6: Close to the sales


gain commitment to the objectives (the sale) should be a natural progression of
the dialogue
- last objection close: ask customer if they are ready to purchase and salesperson
can address any concerns
- assumptive close: the salesperson acts like the purchase is inevitable, with just
details to be settled
- standing-room-only/ buy-now close: suggests the consumer misses the
opportunity if it hesitates
Should no stretch the truth for short-term gain

- Step 7: Follow up
includes delivery, payment, purchase terms etc makes
sure it is receive and the customer is satisfied bridge to
next purchase

2.5 Sales management.


team efforts careful planning and availability of
salespersons
Sales management=The process of planning implementing and
controlling the personal selling function

2.6 Setting sales force objectives


What the sales force is expected to accomplish and when performance objectives
- Customer satisfaction, loyalty, and retention
- New customer development, new product suggestions, training, reporting on
competitive activity and community involvement
Individual objectives: performance objectives (total sales and profits), behavioral
objectives (specify the actions salespeople must accomplish: Ex: number of prospects to
identify)

2.7Creating a sales force strategy.


Sales territory: the responsibilities of the salespeople for a set group of customer
Structures: allows in depth understanding of customers and their need through
frequent contact
- geographical sales force structure: sized according to how many customers are
in a given are.
minimize travel and other field expenses
- Based on different classes of products: if the product line is diverse and
technologically complex
- industry specialization: salespeople focus on a single industry or a small number
of industries.
Need to determine the optimum number of salespeople is important not too less or
too many
Keep salespeople in front of customers as much of the time as possible
Virtual meetings (videoconferencing) cut substantially on non-selling time fore
salespeople + cut non-customer related travel cost
Virtual office through telecommuting no need to drive from home to work more
tome to visit customers

2.8 Recruiting, training and rewarding the sales force.


Hire the right set of people and for development turn to outside consultants
Important skills: listening, effective follow-up skills, ability to adapt sales style to
situation, tenacity, high level of personal organization, etc
Development: strives to prepare salespeople personally and professionally for new
challenges (ex: promotions and management responsibilities)
throughout the salespersons career and training from outside consultant
Rewards:
straight commission plan= based solely on a percentage of sales the person closes
commission-with-draw plan= earnings are based on commission plus regular
payment or draw that may be charged against future commissions if current sales are
inadequate to cover the draw.
straight salary plan= salesperson is paid a set amount regardless of performance
sometimes augmented with a quota-bonus plan (salary plus bonus for sales above a
quota)
sales contests: provide prizes for selling specific products during a specific time
period and can provide a needed short-term boost to sales not long term
Supervision is needed for an effective sales forces monthly, weekly or daily Call
report: plan of action detailing which customers were called on and how the call went
provide marketing managers with timely information about customers responses,
competitive activity, and any changes in the firms customer base
2.9 Evaluating the sales force.
- determine if the sales force is meeting its objectives + figure out the causes
- measure individual salesperson performance against sales quotas for individual
sales territories
- use Quantitative and qualitative performance measures
- evaluate the salesperson on qualitative indicators of performance, e.g. attitude,
product knowledge and communication skills
- customer satisfaction, loyalty and retention
- consider salespersons expense account for travel and entertainment