Principles of Marketing

Promotion: Overview and Personal Selling

Promotion Mix
Personal Selling Advertising Publicity Sales Promotion

Elements in the Communication Process (Fig. 14.2)

Promotion Strategy
Strategic Objectives Appropriate Tasks Budget Implementation Evaluation and Control

Strategic Issues
Integration Relationships Goals: Information, Persuasion, Reminder Consumer Considerations: AIETA Model Target

Integrated Marketing Communications (Fig. 14.1)

Advertising Personal selling

Sales promotion Public relations

Direct marketing

A View of the Communications Process

Marketers View Communications as the Management of the Customer Relationship Over Time Through the Following Stages:
Preselling Selling

PostConsumption

Consuming

AIETA
The Adoption Process Product Life Cycle

AIETA and the Promotion Mix: The right tool for the job.
Awareness
Advertising -teaser campaigns -pioneering ads -jingles/slogans -outdoor -internet banners Publicity -newsworthy stunts -news announcements -trade announcements

Interest
Advertising -information ads -image ads

Evaluation
Advertising -persuasion ads -image ads -testimonials -comparative ads

Trial
Advertising -retailer co-op ads -POP materials -sales promotion ads

Adoption
Advertising -reminder ads

Publicity -news coverage -human interest stories

Publicity -consumer welfare reports

Personal Selling -mentions -samples -brochures, etc.

Personal Selling -benefits (prepared or formula approaches)

Personal Selling -consultative selling

Personal Selling -closed deal

Personal Selling -consultative selling

Sales Promotion -demonstrations -displays -tie-ins

Sales Promotion -trade discounts -trade allowances

Sales Promotion -samples -coupons -rebates -price packs -premiums

Sales Promotion -patronage rewards -contests

Promotion Targets Push/Pull

Promotion Mix Strategies

Strategy that Calls for Spending A Lot on Advertising and Consumer Promotion to Build Up (Pull) Consumer Demand. Strategy Selected Depends on: Type of ProductMarket & Product Life-Cycle Stage

Strategy that Calls for Using the Salesforce and Trade Promotion to Push the Product Through the Channels.

Setting the Total Promotion Budget

One of the Hardest Marketing Decisions Facing a Company is How Much to Spend on Promotion.
Affordable
Based on What the Company Can Afford

Percentage of Sales
Based on a Certain Percentage of Current or Forecasted Sales

Objective-and-Task
Based on Determining Objectives & Tasks, Then Estimating Costs

Competitive-Parity
Based on the Competitor s Promotion Budget

Objective and Task Method

Example of Objective and Task Budgeting

Sales Management and Personal Selling

Strategic objectives:
Awareness mentions, samples, etc. Interest benefit information, missionary Evaluation consultative selling Trial consultative selling (closing) Adoption consultative selling

The Role of the Sales Force

Personal selling is effective because salespeople can:
   

probe adjust negotiate build

Major Steps in Sales Force Management (Fig. 16.1)

Designing Salesforce Strategy and Structure Recruiting and Selecting Salespeople Training Salespeople Compensating Salespeople Supervising Salespeople Evaluating Salespeople

Some Traits of Good Salespeople

Selecting Salespeople
Sales Aptitude

Other Characteristics

Selection Process Usually Evaluates a Persons

Personality Traits

Analytical and Organizational Skills

Sales Force Organization

In-house
Flexible Directed Low variable costs Resource drain High fixed costs

Agents ( Mfr. Reps )

Simple Low fixed costs Less control High variable costs

Designing Sales Force Strategy and Structure

Sales Force Size

productive and expensive assets shrinking in size workload approach

Sales force size

Increases with

Decreases with

Training alespeople
T e verage ales Training rogram lasts for Four Mont s and Has t e Following Goals: Hel les eople K ow I entif it t e ompany earn out t e roducts earn out ompetitors and ustomers aracteristics earn How to Make Effective resentations Understand Field rocedures and Responsi ilities

Compensating Salespeople
To Attract Salespeople, a Company Must Have an Attractive Plan Made Up of Several Elements

Fixed Amount
Usually a Salary

Variable Amount
Usually Commissions Or Bonuses

Expense Allowance
For Job Related Expenses

Supervising Salespeople
Directing Salespeople
Identify Customer Targets & Call Norms Develop Prospect Target Use Sales Time Efficiently  Annual Call Plan  Time-and-Duty Analysis  Sales Force Automation

Motivating Salespeople
Organizational Climate Sales Quotas Positive Incentives  Sales Meetings  Sales Contests  Honors and Trips  Merchandise/ Cash

How Salespeople Spend Their Time (Fig. 16.2)

Service Calls 12.7% Administrative Tasks 16% Telephone Selling 25.1% Face-to-Face Selling 28.8% Waiting/ Traveling 17.4%

Companies Look For Ways to Increase the Amount of Time Salespeople Spend Selling.

Evaluation
Match the measures with the objectives Profit Sales Satisfaction New products New accounts Costs

Steps in the Selling Process

Salesperson Identifies Qualified Potential Customers. Process of Identifying Good Prospects and Screening Out Poor Ones. Salesperson Learns as Much as Possible About a Prospective Customer Before Making a Sales Call. Salesperson Meets the Buyer and Gets the Relationship Off to a Good Start.

Prospecting Qualifying Preapproach Approach

Steps in the Selling Process

Salesperson Tells the Product Story to the Buyer Using the Need-Satisfaction Approach. Salesperson Seeks Out, Clarifies, and Overcomes Customer Objections to Buying. Salesperson Asks the Customer for an Order. Occurs After the Sale and Ensures Customer Satisfaction and Repeat Business.

Presentation Handling Objections Closing Follow-Up

SPIN Selling
Professional selling Preliminaries are not important Questions/Answers SPIN
   

Situation Problems Implications Needs-Payoffs

SPIN selling Easiflo

S: B: S: B: S: Do you use Contortomat machines? Yes, three of them. And, are they difficult for your operators to use? Yes, rather hard, but they eventually learn. We could solve that operating difficulty with our new Easiflo system. B: What does your system cost? S: The basic system is about $120,000, and B: $120,000!!! Just to make a machine easier to use? You must be kidding!

Example: Selling Easiflo

S: Do you use Contortomat machines? (Situation) B: Yes, three of them. S: And, are they difficult for your operators to use? (Problem) B: Yes, rather hard, but they eventually learn. (Implied need) S: We could solve that operating difficulty with our new Easiflo system. (Solution) B: What does your system cost? S: The basic system is about $120,000, and B: $120,000!!! Just to make a machine easier to use? You must be kidding!

SPIN selling Easiflo

S: And, are they difficult for your operators to use? B: Yes, rather hard, but they eventually learn. S: You say theyre hard to use. What effect does this have on your output? (Implication) B: Not much. Weve specially trained three people. S: If youve only got three people who can use the Contortomats, doesnt that create bottlenecks? (Implication) B: No, really, its only when an operator leaves that we have trouble. While were waiting for a replacement to be trained.

S: It sounds like the difficulty of using the Contortomat machines may be causing a turnover problem with operators. Is that right? (Implication) B: Yes, people dont like using them, so operators usually dont stay with us long. S: What does this turnover mean in terms of training costs? (Implication) Well, it takes a couple months to get proficient thats maybe $4000 in wages. Plus we pay Contortomat $500 for training. And, $1000 for travel, since that training is off-site. Hey, thats about $5000 perand weve trained at least five this year.

S: So, thats $25,000 in training costs in less than 6 months. If youve trained that many people in so little time, the turnover must result in production losses, doesnt it? (Implication) B: Not really. As I said, we avoid bottlenecks by getting the other operators to work overtime. Or, we send the work out. S: Doesnt the overtime add even more to your costs? (Implication) B: Yes, thats true. And, even at double pay, the operators dont like working it. That probably contributes to the turnover.

S: I can see how sending the work outside must increase your costs, but are there other implications? Does the quality stay the same? (Implication) B: Thats actually the biggest problem. I can control the quality in house, but not the contract stuff. S: I suppose that sending work out puts you at the mercy of the contractors schedule? (Implication) B: You dont want to know! I just got off the phone three hours, chasing down a late delivery.

S: So, from what youve said, because the Contortomats are difficult to use, youve spent $25,000 in training costs this year and youre getting expensive operator turnover. Youve got bottlenecks in production, and they result in expensive overtime and force you to send jobs outside. But sending jobs outside reduces quality and creates scheduling problems. B: When you look at it that way, those Contoromat machines are creating a very serious problem indeed.

Wrong approach
Contortomats are hard to use. $120,000 is far too much money to solve that problem

SPIN approach
Contortomats cause: Difficulty in use $25,000 training Turnover Overtime costs Cost of outside work Loss of quality Scheduling problems $120,000 may be a bargain

Build implications. Let the customer discover value.