Principles of Marketing Promotion: Overview and Personal Selling
Promotion Mix • Personal Selling • Advertising • Publicity • Sales Promotion
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 Post- Consumption Consuming
AIETA • The Adoption Process • Product Life Cycle
Awareness Interest Evaluation Trial Adoption Advertising -teaser campaigns -pioneering ads -jingles/slogans -outdoor -internet banners Advertising -information ads -image ads Advertising -persuasion ads -image ads -testimonials -comparative ads Advertising -retailer co-op ads -POP materials -sales promotion ads Advertising -reminder ads Publicity -newsworthy “stunts” -news announcements -trade announcements 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 AIETA and the Promotion Mix: The right tool for the job.
Promotion Mix Strategies Strategy Selected Depends on: Type of Product-Market & Product Life-Cycle Stage Push Strategy Pull Strategy Strategy that Calls for Spending A Lot on Advertising and Consumer Promotion to Build Up (Pull) Consumer Demand. 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
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
Designing Salesforce Strategy and Structure Recruiting and Selecting Salespeople Major Steps in Sales Force Management (Fig. 16.1) Training Salespeople Compensating Salespeople Supervising Salespeople Evaluating Salespeople
Selecting Salespeople Sales Aptitude Selection Process Usually Evaluates a Person’s Other Characteristics Analytical and Organizational Skills Personality Traits
Sales Force Organization In-house Agents (“Mfr. Reps”)
Sales Force Size • productive and expensive assets • shrinking in size • workload approach
Sales force size Increases with Decreases with
Help Salespeople Know & Identify With the Company Learn About the Products The Average Sales Training Program lasts for Four Months and Has the Following Goals: Learn About Competitors’ and Customers’ Characteristics Learn How to Make Effective Presentations Training Salespeople Understand Field Procedures and Responsibilities
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 Compensating Salespeople Fringe Benefits Provide Job Security and Satisfaction
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 Supervising Salespeople
How Salespeople Spend Their Time (Fig. 16.2) Administrative Service Calls Tasks Companies Look For Ways to Increase the Amount of Time Salespeople Spend Selling. 12.7% 16% Telephone Selling 25.1% Face-to-Face Selling 28.8% Waiting/ Traveling 17.4%
Evaluation Match the measures with the objectives • Profit • Sales • Satisfaction • New products • New accounts • Costs
Steps in the Selling Process Prospecting Salesperson Identifies Qualified Potential Customers. Qualifying Process of Identifying Good Prospects and Screening Out Poor Ones. Preapproach Salesperson Learns as Much as Possible About a Prospective Customer Before Making a Sales Call. Approach Salesperson Meets the Buyer and Gets the Relationship Off to a Good Start.
Steps in the Selling Process Presentation Salesperson Tells the Product “Story” to the Buyer Using the Need-Satisfaction Approach. Handling Objections Salesperson Seeks Out, Clarifies, and Overcomes Customer Objections to Buying. Closing Salesperson Asks the Customer for an Order. Follow-Up Occurs After the Sale and Ensures Customer Satisfaction and Repeat Business.
SPIN Selling • “Professional selling” • Preliminaries are not important • Questions/Answers • SPIN • Situation • Problems • Implications • Needs-Payoffs
SPIN selling “Easiflo” • S: Do you use Contortomat machines? • B: Yes, three of them. • S: And, are they difficult for your operators to use? • B: Yes, rather hard, but they eventually learn. • S: 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 they’re hard to use. What effect does this have on your output? (Implication) B: Not much. We’ve specially trained three people. S: If you’ve only got three people who can use the Contortomats, doesn’t that create bottlenecks? (Implication) B:No, really, it’s only when an operator leaves that we have trouble. While we’re 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 don’t like using them, so operators usually don’t 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—that’s maybe $4000 in wages. Plus we pay Contortomat $500 for training. And, $1000 for travel, since that training is off-site. Hey, that’s about $5000 per—and we’ve trained at least five this year.
S: So, that’s $25,000 in training costs in less than 6 months. If you’ve trained that many people in so little time, the turnover must result in production losses, doesn’t 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: Doesn’t the overtime add even more to your costs? (Implication) B: Yes, that’s true. And, even at double pay, the operators don’t 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: That’s 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 contractor’s schedule? (Implication) B: You don’t want to know! I just got off the phone—three hours, chasing down a late delivery.
S: So, from what you’ve said, because the Contortomats are difficult to use, you’ve spent $25,000 in training costs this year and you’re getting expensive operator turnover. You’ve 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.
Contortomats are hard to use. $120,000 is far too much money to solve that problem Wrong 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 SPIN approach Build implications. “Let” the customer discover value.