Chapter 14 Sales Promotion Personal Selling and Sales Management CHAPTER OVERVIEW Two tools commonly used to pr by rkd12895

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									                                Chapter 14
                   Sales Promotion, Personal Selling, and
                            Sales Management


CHAPTER OVERVIEW
Two tools commonly used to promote products are sales promotions and personal selling. Sales
promotions are designed to build interest in or encourage purchase of a product or service during a
specified time period. The use of this strategy has been increasing as it delivers short-term results.
Personal selling is often critical in business-to-business contexts when direct interaction with a
client’s management is required to clinch a big deal. Personal selling is not only appropriate but
necessary in a variety of other situations discussed in the text.

Both sales promotions and personal selling are used to supplement and complement a businesses’
entire marketing communication strategy delivering synergistic effects.


CHAPTER OBJECTIVES

   Explain what sales promotion is and describe the different types of trade and consumer sales
    promotion activities.
   Explain the important role of personal selling in the marketing effort.
   List the steps in the personal selling process.
   Explain the role of the sales manager.


CHAPTER OUTLINE

1.      DECISION TIME AT IBM
Sales managers and executives are often faced with the challenges of balancing the importance of
long-term client relationships with short-term business results. Esther Ferre, a managing director at
IBM is responsible for developing and managing the overall business relationship between IBM and
a single, large client in the information technology (IT) consulting and services industry.

A recent slowdown in corporate spending resulted in companies reducing their expenditures for IT
and related consulting and service, which lowered Ferre’s client’s revenue, profits, and new contract
signings. To make matters worse, the client also lost money when a few of its own clients in the
telecommunications and the airline sector filed bankruptcy, which further eroded its revenues and
profits. The client took significant actions to cut back on its expenses including expenditures for IT
technology,




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and IBM’s products. This directly affected the IBM team’s ability to achieve its revenue and profit
objectives.

Although it was declining, the revenue IBM generated from Ferre’s client was still significant, and
Ferre understood that maintaining a long-term relationship with the client was critical. However,
Ferre also knew that she had to lower her sales expenses while minimizing the effects with her
client. This was a delicate balancing act as relationships with established customers must be
maintained to ensure customer satisfaction and the opportunity to compete for new sales
opportunities. Three options were considered:

           Reduce IBM’s sales and support resources to an affordable level.
           Maintain the current level of sales and support resources.
           Evaluate lower-cost ways to provide sales and support resources such as call centers,
            Web support, and resource sharing.

The vignette ends by asking the student which option he/she would choose.


2.     ADVERTISING IS NOT THE ONLY GAME IN TOWN!
This chapter looks at two elements of the promotional mix: sales promotion and personal selling.


3.     SALES PROMOTION
Sales promotions are programs that marketers design to build interest in or encourage purchase of a
product or service during a specified time period. Marketers have been placing an increasing
amount of their total marketing communication budget into sales promotion for one simple
reason—these strategies deliver short-term results.

Sales promotion tends to focus on short-term objectives, while advertising campaigns are carefully
crafted to create long-term positive feelings about a brand, company, or store.

Sales promotion is very useful if the firm has an immediate objective, such as bolstering sales for a
brand quickly or encouraging consumers to try a new product. Sales promotions can also target
channel partners or the selling firm’s own employees.

Sales promotions must be coordinated with other promotion activities. Sales promotion rarely, if
ever, is used by itself as the sole form of marketing communication.

3.1    Sales Promotion Directed Toward the Trade
Trade promotions focus on members of the trade, which includes distribution channel members,
such as retail salespeople or wholesale distributors that a firm must work with in order to sell its
products.

Trade promotions take one of two forms: 1) discounts and deals and 2) increasing industry
visibility. Discount promotions (deals) reduce the cost of the product to the retailer or helps defray
its advertising expenses. They are designed to encourage stores to stock the item and be sure it’s



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given a lot of attention. Trade promotions that focus on increasing awareness and sales (increasing
industry visibility) do so by creating enthusiasm among salespeople and customers.

3.1.1 Discounts and Deals
One form of trade promotion is a price break. A manufacturer can reduce a channel partner’s costs
through sales promotions that discount its products. For example, a manufacturer can offer a
merchandising allowance, which reimburses the retailer for in-store support of a product, such as
an off-shelf display. Another way in which a manufacturer can reduce a channel partners’ cost is
through a case allowance, which provides a discount to the retailer or wholesaler based on the sale
volume of a product it orders from the manufacturer.

Allowances and deals have a downside. Sales promotions have a limited duration so some channel
members engage in a practice called forward buying, in which large quantities of the product are
purchased during a discount period, warehoused, and not bought again until another discount is
offered. Some retailers and wholesalers take this to an extreme by diverting, an ethically
questionable practice. The retailer buys the product at the discounted price, warehouses it, and after
the promotion expires, sells the inventory to other retailers at a price that is lower than the
manufacturer’s nondiscounted price but high enough to turn a profit. Neither practice is the intent of
the sales promotion.

3.1.2 Increasing Industry Visibility
A discussion of several types of trade sales promotions follows:

Trade shows: are major vehicles for manufactures to show off their product lines to wholesalers
and retailers. An important benefit is the opportunity to develop customer leads.

Promotional products: some examples of promotional products include coffee mugs, visors, T-
shirts and refrigerator magnets, emblazoned with a company logo. The purpose is to build name
recognition and loyalty.

Incentive programs: are programs designed to motivate distributors and customers and to light a
fire under the firm’s own sales force. Push money, used to motivate a sales force, come in the
forms of cash bonuses, trips, etc.

3.2    Sales Promotion Directed Toward Consumers
The following is a discussion of several types of consumer-targeted sales promotions:

3.2.1 Price-Based Consumer Sales Promotion
Many sales promotions emphasize short-term price reductions or rebates that encourage people to
choose a brand, during the deal period. If used too frequently, consumers become conditioned to
purchase only when the product is at a low promotional price.

Coupons are certificates, redeemable for money off on a purchase, and are the most common price
promotion.

Price deals, refunds, and rebates are temporary price reductions to stimulate sales. The price deal
may be printed on the package itself, or it may be a price-off flag or banner on the store shelf.
Rebates allow the consumer to recover part of the purchase price via mail-ins to the manufacturer.

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Special/bonus packs involve giving the shopper more product instead of lowering the price. A
special pack also can be a separate product given away along with another product.

3.3    Attention-Getting Consumer Promotions
Attention-getting consumer promotions stimulate interest in and publicity for a company’s products.
Some typical types of attention-getting promotions include the following:

Contests and sweepstakes: a contest is a test of skill and a sweepstake is based on chance.

Premiums: are items offered free to people who have bought a product. They usually are novelty
items.

Sampling: encourages people to try a product by distributing trial-size versions in stores, in public
places, via the Internet, or through the mail.

Point-of-Purchase (POP): attempts to influence consumers while they are in the store by catching
their attention with creative displays or signs. POP activities include the use of in-store media such
as placards on shopping carts or closed-circuit television.

Product/brand placements: product placement refers to getting your brand featured in movies or
television shows. Advergaming means promoting to the video generation through brand
placements in video games.

Cross promotion (or cooperative promotion): markets two or more products or services, which
have joined forces to create interest using a single promotional tool. The products should share
some logical connection, be compatible in image, and put forth a message that helps both brands.


4.      PERSONAL SELLING
Personal selling occurs when a company representative interacts directly with a customer or
prospective customer to communicate about a good or service. Personal selling is a far more
intimate way to talk to the market. This personal touch can carry more weight than mass-media
material. In the business-to-business market, the personal touch translates into developing
relationships with clients.
Salespeople are the firm’s eyes and ears in the marketplace. They learn what competitors are doing.
They provide timely and accurate information about customers and the market.

Jobs in selling and sales management often provide high upward mobility.

4.1    The Role of Personal Selling
Table 14.2 summarizes some of the factors that make personal selling relatively more or less
important in an organization’s promotion mix.

Personal selling is more important when a firm engages in a push strategy, in which the goal is to
“push” the product through the channel of distribution so that it is available to consumers.



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Personal selling is likely to be crucial in business-to-business contexts when direct interaction with
a client’s management is required to clinch a big deal or when intense negotiations about price and
other factors will occur before the deal is signed. Firms whose products or services are complex or
very expensive often need a salesperson to explain, justify, and sell them.

Personal selling is often very useful, but there are situations in which it is not appropriate. When the
dollar amount of individual purchases is low, it doesn’t make sense to use personal selling. The cost
per contact with each customer is very high compared to other forms of communication.

Salespeople can make only so many calls a day. Thus, reliance on personal selling is effective only
when the success ratio is at its highest.

Telemarketing, in which person-to-person communication takes place via the telephone, is
growing in popularity because the cost of fielding salespeople is so high. However, the do-not-call
registries have slowed this a bit.

Resistance to telemarketing has given a boost to direct selling. In direct selling, independent sale
representatives do the selling in-person, in a customer’s home or place of business.

4.2    Technology and Personal Selling
All sorts of technologies are available to enhance the personal selling process but they cannot
replace the process.

Customer relationship management (CRM) software is one technological advance. Others are
teleconferencing, videoconferencing, and improved corporate Web sites that include FAQ pages
that answer many customer inquiries.




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4.3    Types of Sales Jobs
The person who processes a computer purchase over the phone is an order taker. This person’s
primary function is to process transactions that the customer initiates.

A computer technician is a technical specialist who contributes expertise in the form of product
demonstrations, recommendations for complex equipment, and setup of machinery. This person’s
job is to provide sales support, not close the sale.

The person whose job is to stimulate clients to buy is called a missionary salesperson. These
people promote the firm and work to stimulate demand for its products but don’t actually take
orders for products.

The new-business salesperson is responsible for finding new customers and calling on them to
present the company’s products or services. This requires a high degree of creativity and
professionalism. Because this salesperson continues to service the client as the primary contact, a
relationship develops and the salesperson becomes an order getter. Order getters are usually the
people most directly responsible for a particular client’s business and may also have titles such as
“account manager.”

Often, firms are finding that the selling function is best handled by team selling. A selling team
may consist of a number of players who work together to develop products and programs to satisfy
a customer’s needs.

4.4     Approaches to Personal Selling
Selling is based on relationships with customers.

4.4.1 Transactional Selling: Putting on the Hard Sell
The hard sell is a high-pressure process. Hard sell tactics reflect transactional selling, an approach
that focuses on making an immediate sale with no concern for developing a long-term relationship
with the customer. This is a short-sighted approach, leaving customers feeling manipulated and
resentful.

4.4.2 Relationship Selling: Building Long-Term Customers
Relationship selling involves securing, developing, and maintaining, long-term relationships with
profitable 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.




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4.5     The Selling Process
Successful salespeople understand and engage in a series of activities to make positive transactions
happen. Successful personal selling is more likely if the salesperson undergoes a systematic series
of steps called the creative selling process. A description of the steps follows:

4.5.1 Step 1: Prospecting and Qualifying
Prospecting is the process of identifying and developing a list of potential customers, called
prospects or sales leads. Leads can come from many different sources.

An emerging technology for prospecting is the development of online social networks. These are
business networks that enable salespeople to create profiles, upload personal address books, and
invite business colleagues to join the network.

Another way to generate leads is through cold calling, when the salesperson simply contacts
prospects without prior introduction. A referral is a better way to gain an introduction. Leads also
come from a company’s Web site.

Along with identifying potential customers, salespeople need to qualify prospects to determine
how likely they are to become customers.

4.5.2 Step 2: Preapproach
The preapproach consists of compiling background information about prospective customers and
planning the sales interview. Information about a prospect comes from a variety of sources
including the company’s Web site or the salesperson’s CRM system. Informal sources such as other
salespeople are also useful.

4.5.3 Step 3: Approach
Approach means to contact the prospect. During this time, the salesperson tries to learn more about
the prospect’s needs, create a good impression, and build rapport. At the same time, the customer is
deciding whether the salesperson has something to offer of potential value.

4.5.4 Step 4: Sales Presentation
Many sales calls involve a formal sales presentation that lays out the benefits of the product over
the competition. The focus should be on the ways the salesperson and products can add value to the
customer.

4.5.5 Step 5: Handling Objections
The effective salesperson anticipates objections and is prepared to respond with additional
information or persuasive arguments. A salesperson should welcome objections because they show
the prospect is listening and considering the offer.




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4.5.6 Step 6: Close
The decision stage, where one or the other party has to move toward gaining commitment to the
objectives of the sales call, is called the close.

           A last objection close asks customers if they are ready to purchase and then addresses
            any concerns they have about the product.

           An assumptive or minor points close is when the salesperson acts as if the purchase is
            inevitable with only a small detail or two to be settled.

           A standing-room-only or buy-now close suggests the opportunity might be missed if the
            customer hesitates.

4.5.7 Step 7: Follow-Up
Follow-up after the sale includes arranging for delivery, payment, and purchase terms. It means
making sure the customer received delivery and is satisfied. Follow-up also allows the salesperson
to bridge to the next purchase. Once a relationship develops, the selling process is only the
beginning.

A new technology called voice-over Internet protocol (VoIP)—using a data network to carry voice
calls—is getting a lot of use in day-to-day correspondence between salespeople and customers.

4.6    Sales Management
Sales management is the process of planning, implementing, and controlling the personal selling
function.

4.6.1 Setting Sales Force Objectives
Sales force objectives state what the sales force is expected to accomplish and when. Common
objectives are new customer development, new product suggestions, training, reporting on
competitive activity, reducing expense, and so forth.

Sales managers also work with their salespeople to develop individual objectives. There are two
types of individual objectives. Performance objectives are readily measurable outcomes, such as
total sales and total profits per salesperson. Behavioral objectives specify the action salespeople
must accomplish, such as the number of prospects to identify, the number of sales calls, and the
number of follow-up contacts she should make.

4.6.2 Creating a Sales Force Strategy
A sales force strategy establishes important specifics such as the structure and size of a firm’s sales
force. Each salesperson has the responsibility for a set group of customers—a sales territory. The
territory structure allows salespeople to have an in-depth understanding of customers and their
needs through frequent contact, both business and personal.

A geographic sales force structure usually is sized according to how many customers are found in a
given area.




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Industry specialization means salespeople focus on a single industry or a small number of
industries.

Large clients are often referred to as key accounts or major accounts.

Determining the optimal number of salespeople is an important decision. A contributor to success is
keeping salespeople in front of customers as much of the time as possible. Virtual meetings (or
videoconferencing) have cut down on non-selling time for salespeople.

4.6.3 Recruiting, Training, and Rewarding the Sales Force
The quality of a sales force can make or break a firm. Good salespeople have the following
qualities:

          Good listening skills.
          Effective follow-up skills.
          The ability to adapt sales styles from situation to situation.
          Tenacity.
          A high level of personal organization

Sales training teaches salespeople about the organization and its products and how to develop the
skill, knowledge, and attitudes to facilitate success.

Development strives to prepare salespeople personally and professionally for new challenges.

Paying salespeople is a good way to motivate them. A straight commission plan is based solely on a
percentage of sales the person closes. A commission-with-draw plan means earning are based on
commission plus a regular payment of “draw,” that may be charged against future commission if
current sales are inadequate to cover the draw. With a straight salary compensation plan, the
salesperson is paid a set amount regardless of sales performance. Sometimes straight salary plans
are augmented with a quota-bonus plan, in which salespeople are paid a salary plus a bonus for
sales above an assigned quota or for selling certain products that may be new or more profitable.
Sales contests provide prizes for selling specific products during a specific time period and can
provide a short-term boost to sales.

Daily call reports are a plan of action detailing which customers were called on and how things
went.




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4.6.4 Evaluating the Sales Force
Individual salesperson performance is normally measured against sales quotas for individual sales
territories. Sales calls and sales reports may also be used in the evaluation. These are all quantitative
techniques.

Qualitative measures are also used such as salesperson attitude, product knowledge, communication
skills, customer satisfaction, loyalty, and retention/turnover.

The salesperson’s expense account for travel and entertainment may be considered as well.


CHAPTER REVIEW

MARKETING CONCEPTS: TESTING YOUR KNOWLEDGE

1. What is sales promotion?

    Sales promotion—short-term programs to build interest in, or encourage purchase of, a good or
    service during a specified time period. Sales promotion has become more important in recent
    years because advertising has become very expensive, less effective, and brand loyalty has
    deteriorated. Sales promotion activities are effective for smaller markets, and marketers can
    measure the results of sales promotions.

2. Explain some of the different types of trade sales promotions frequently used by marketers.

    See Table 14.1 for additional information and explanation of trade promotions. Trade
    promotions can roughly be divided into two types: First, there are efforts to make retailers’ lives
    easier by giving them a break on what they pay for a product or on advertising. Second, there
    are efforts to generate product awareness and orders by creating opportunities for the retailer
    and other members of the distribution channel to be exposed to one’s products. With respect to
    the first form, manufacturers provide local advertisers support (cooperative advertising
    allowances) or sales training. Next, they may give a break on prices (price allowance—a type of
    trade sales promotion in which a manufacturer reduces prices to retailers). Lastly, trade shows,
    specialty advertising, and incentive programs can aid sales force effectiveness and industry
    promotions.

3. Explain some of the different types of consumer sales promotions frequently used by marketers.

    See Table 14.1 for additional information and explanation of consumer promotions. Consumer
    sales promotions may be classified as attention-getting activities, point-of-purchase (POP)
    activities, or price-based promotions. Attention-getting promotions involve the consumer in the
    company’s marketing efforts and include giveaways, contests, and sweepstakes, and premiums
    delivered to the consumer in, on, or near the package or through the mail. POP activities include
    in-store sampling, product displays, and signs, as well as in-store media. Price-based consumer
    promotions include coupons, which are most often delivered via newspaper free-standing inserts



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   (FSIs), price-offs, rebates, and special packs, such as bonus packs. In addition, samples and
   frequency programs are illustrations of this form.

4. What is the role played by personal selling within the marketing function?

   For most firms, some form of personal selling is essential for a transaction (the sale) to occur, so
   this type of promotion is an important part of an organization’s overall marketing plan. Through
   one-on-one selling, the salesperson can directly address customer objections, can furnish other
   customer services (such as installations, setup, and instruction), can provide the company with
   feedback on the marketing effort, and is a source of competitive intelligence.

5. What is relationship selling? How is it different from transactional selling?

   Relationship selling—a form of personal selling in which the salesperson seeks to develop a
   mutually satisfying relationship with the customer so the parties can work together to satisfy
   each other’s needs. This process tends to build long-term relationships.

   Transactional selling—a form of personal selling that focuses on making an immediate sale
   with little or no attempt to develop a relationship with the customer. This approach is often
   associated with the hard sell or high-pressure selling process.

6. What is prospecting? What does it mean to qualify the prospect? What is the preapproach? Why
   are these steps in the creative selling process that occur before you ever even contact the buyer
   so important to the sale?

   Prospecting is the process of identifying and developing a list of potential customers, called
   prospects or sales leads. Salespeople need to qualify prospects to determine how likely they
   are to become customers. The preapproach consists of compiling background information
   about prospective customers and planning the sales interview.

   These steps are important as a salesperson needs to be prepared. They need to learn as much as
   possible about qualified prospects to not risk losing a sale.

7. What are some different ways you might approach a customer? Would some work better in one
   situation or another?

   The hard sell is a high-pressure process. Hard sell tactics reflect transactional selling, an
   approach that focuses on making an immediate sale with no concern for developing a long-term
   relationship with the customer. This is a short-sighted approach, leaving customers feeling
   manipulated and resentful.

   Relationship selling involves securing, developing, and maintaining, long-term relationships
   with profitable customers.

8. What is the objective of the sales presentation? How might you overcome buyer objections?

   A sales presentation lays out the benefits of the product over the competition. The focus should
   be on the ways the salesperson and products can add value to the customer.

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    Buyer objections can be handled in the following ways:

    A last objection close asks customers if they are ready to purchase, and then addresses any
    concerns they have about the product.

    An assumptive or minor points close is when the salesperson acts as if the purchase is inevitable
    with only a small detail or two to be settled.

    A standing-room-only or buy-now close suggests the opportunity might be missed if the
    customer hesitates.

9. Why is follow-up after the sale so important in relationship selling?

    Follow-up allows the salesperson to bridge to the next purchase. Once a relationship develops,
    the selling process is only the beginning.

10. Describe the role of sales managers. What key functions do they perform?

    Sales managers are responsible for planning, implementation, and controlling the personal
    selling function. See Figure 14.2 for a review of some of the major decisions sales managers
    make. Some of the key functions performed by sales managers include:

           Set sales force objectives.
           Create a sales force strategy.
           Recruit, train, and reward the sales force.
           Evaluate the sales force.




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MARKETING CONCEPTS: DISCUSSING CHOICES AND ISSUES

1. Companies sometimes teach consumers a “bad lesson” with the overuse of sales promotion. As
   a result, consumers expect the product always to be “a deal.” What are some examples of
   products where this has occurred? How do you think companies can prevent this?

   Most products that students will be able to name come from the grocery area. Some examples
   might include cereals, milk, beer, soda, candy, many canned goods, and bread. Others that they
   might recall are the “value meals” at fast-food restaurants and quantity discounts in certain
   clothing stores. One method for preventing the phenomenon is to avoid constant sales
   promotion campaigns. Another approach is that the marketer can have clear sales promotional
   goals, vary the campaigns, and make clear to the consumer what the “real” retail price is and
   stick to it. Consumers that only value deals do not usually seek to build a lasting relationship
   with the store. Few loyalties are developed with constant deals.

2. In general, professional selling has evolved from hard sell to relationship selling. Is the hard sell
   still used? If so, in what types of organizations? What do you think the future holds for these
   organizations? Will the hard sell continue to succeed—that is, are there instances where
   transactional selling is still appropriate? If so, when?

   To some extent, hard sell organizations still exist. The examples of encyclopedias, refrigerators,
   and televisions come to mind. In general, organizations whose purpose is to sell to the consumer
   only once or a few times use the hard sell technique. But as consumers, the hard sell technique
   makes us feel manipulated and resentful. The truly professional salesperson, on the other hand,
   plans for the long term and works hard to build a relationship with customers. The future is not
   bright for the hard sell organization (even though the form will probably continue for some
   time). Relationship selling is rapidly replacing the hard sell. As more success comes to those
   that use relationship selling and as consumers grow to appreciate and expect its benefits, the
   hard sell will end up being no sell at all.

3. One reason cited by experts for the increase in consumer catalog shopping is the poor quality of
   service available at retail stores. What do you think about the quality of most retail salespeople
   you come in contact with? What are some ways retailers can improve the quality of their sales
   associates?

   To be fair, this discussion should probably be initiated by asking what students like and dislike
   about retail sales experiences and retail salespeople. Can these statements be categorized into
   several common areas? If so, then those negative areas are a place to begin to remedy the
   problem of the retail sales environment. Common complaints are that retail salespeople are rude,
   inexperienced, do not know about the products or services offered, are only trying to make a
   sale rather than satisfy the customer, don’t really want to wait on the customer, don’t pay any
   attention to the customer, and (even though they are underpaid—sometimes only receiving
   minimum wage—or over worked) they aren’t worth their salary. This list should generate
   discussion on how to fix the situation at the retail sales level.

4. Based on the salesperson compensation figures supplied in the chapter, do you think
   professional salespeople are appropriately paid? Why or why not? What is it that salespeople do
   that warrant the compensation indicated?

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    Students might not have thought of this question before and may not even have the background
    needed for initial discussion. You might begin the discussion by sharing the average take-home
    wage of citizens in your state. You might find salaries of other professionals to use as a basis of
    comparison. Once student have compensation figures to relate to, the discussion will begin to
    flow.

5. Would training and development needs of salespeople vary depending on how long they have
   been in the business? Why or why not? Would it be possible (and feasible) to have different
   training programs for salespeople at different career stages?

    Students will probably think that salespeople would need different training and development as
    their careers progressed and would probably agree with different training programs for different
    career stages. Ask the students how feasible this would be? Would the expense outweigh the
    benefits? Is motivation needed as much if not more than training?

6. What would be the best approach for a sales manager to take in determining the appropriate
   rewards program to implement for his or her salespeople? What issues are important when
   determining the rewards to make available?

    Firms must maximize their revenue while at the same time fairly and adequately pay and
    motivate their sales staff.

    When determining rewards, a firm must consider issues such as whether or not the salesperson
    met their objectives or quotas. The compensation plan might be affected if the salesperson is
    new to the job or if the salesperson is asked to sell a completely new product. In addition outside
    issues such as the economy, the competitive environment, the political environment, and other
    uncontrollable issues must be addressed.




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MARKETING PRACTICE: APPLYING WHAT YOU’VE LEARNED

1. Assume you are a member of the marketing department for a firm that produces several brands
   of household cleaning products. Your assignment is to develop recommendations for trade and
   consumer sales promotion activities for a new laundry detergent. Develop an outline of your
   recommendations for sales promotions.

   One effective way to begin this project is to visit Procter & Gamble’s Web site at www.pg.com
   to see what this company is doing with respect to sales promotion. Next, visit a local grocery
   store and observe any sales promotional activities connected with the household cleaning
   products. Interview a store manager if possible. Once all of these fact-finding activities have
   been completed, the student should be prepared to apply the information found in the chapter
   with respect to recommendations for products in this area. Have several of the best plans read in
   class and have the class critique these efforts.

2. Timing is an important part of a sales promotion plan. Marketers must decide when is the best
   time to mail out samples, to offer trade discounts, and/or to sponsor a sweepstakes. Assume the
   introduction of the new laundry detergent in question 1 is planned for April 1. Place the
   activities you recommended in question 1 on a 12-month calendar. In a role-playing situation,
   present your plan to your supervisor. Be sure to explain why you have included certain types of
   promotions and the reasons for your timing of each promotion activity.

   This question is linked to question 1, therefore, do not assign unless question 1 has been
   completed. This question asks students to think about how information should be “rolled out” in
   a sales promotion campaign. Have students share their calendars with classmates so corrections
   can be made. Find a great illustration from the class and present that illustration in class to
   generate further discussion.

3. Assume you have just been hired as a field salesperson by a firm that markets university
   textbooks. As part of your training, your sales manager has asked you to develop an outline of
   what you will say in a typical sales presentation. Write that outline.

   One way to help students focus on the activities requested in this question is to have them
   attempt to sell this textbook. Students should review the material in the chapter on personal
   selling, paying special attention to the action tactics and selling steps. For example, will the
   student choose a transactional or relationship approach? To choose, the student must remember
   the target audience and what is important to this audience. The instructor might relate what a
   sales call is like when a textbook representative calls on him or her. Role-playing is a good
   technique to use with this question.


4. In this chapter, you were introduced to several key success factors sales managers look for when
   hiring relationship salespeople. Are there other key success factors you can identify for
   relationship salespeople? Explain why each is important.

   You might begin this discussion by asking students for examples of good sales experiences.
   What made the transaction so positive? Will the student go back to the salesperson? Why or
   why not?

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    Students might also share what made a sales transaction a negative experience. Without letting
    the students get too carried away, you might document their comments and then ask how a
    relationship salesperson might have acted in a similar situation.

5. For you personally, what are the pros and cons of personal selling as a career choice? Make a
   list under the two columns and be as specific as you can in explaining each pro and con.

    This will make a good discussion question. It will quickly be obvious who is interested in sales
    as a profession and who isn’t.


MARKETING MINIPROJECT: LEARNING BY DOING

The purpose of this miniproject is to help you understand the impact of different sales promotion
activities.

1. With several of your classmates, first select a product that most college students buy regularly
   (e.g., toothpaste, shampoo, pens, pencils, soft drinks, and so on).

2. Develop a questionnaire that describes scenarios in which students find a new brand of the
   product with different sales promotion offers (e.g., a price-off package, a bonus pack, a coupon,
   and so on). Ask whether the students would buy the new brand with each offer and how many
   units of the product they would buy.

3. Report the results to your class along with recommendations you would give a company
   planning to introduce a new brand to the market.

    Through three specific questions (or exercises) marketing teams are asked to review how
    college students buy something as simple as toothpaste, shampoo, pens, pencils, soft drinks, etc.
    Next, the students construct a questionnaire that describes different scenarios when the student
    finds a new product that has a sales promotion associated with it. Several possible sales
    promotion alternatives are mentioned. The experiment is concluded by asking students whether
    they would purchase the new product (as influenced by the sales promotional item). A
    recommendation is then requested.


REAL PEOPLE, REAL SURFERS: EXPLORING THE WEB

A problem that has confronted marketers for several years is how to efficiently distribute coupons.
Some companies find the Internet to be a useful medium. In fact, a number of Web sites have been
developed solely for the purpose of distributing coupons. Some of these follow:

               www.hotcoupons.com
               www.valupage.com
               www.suzicoupon.com
               www.couponsonline.com


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                                         Chapter 14: Sales Promotion, Personal Selling, and Sales Management


              www.couponcraze.com

Visit several of these Web sites or use an Internet search engine to identify other coupon sites. Then
evaluate the different sites you’ve visited by answering the following questions:

1. Generally, describe each coupon Web site you visited. What kinds of coupons were there? How
   do consumers take advantage of the offers?

   The kind of coupons found on the various Web sites somewhat depends on which sites were
   visited. In general, however, most of these sites have basic consumer goods coupons (most are
   grocery products). Customers can receive coupons in several ways—through the mail, via
   downloads and e-mails, or some are just announcements where consumers find the deals in local
   stores.

2. What in the design of each Web site is most useful to you as a consumer?

   This is a judgment call, however, most will find quick screen build-ups, downloads, product
   information, and announced deals to be of the most value.

3. Do you think the coupons offered by the Web sites are useful to many consumers? Do you think
   consumers visit the Web site on a regular basis? What do you think would be some of the
   characteristics of the type of consumer most likely to be a regular visitor to these sites?

   This question calls for an opinion. Students will probably see that coupons are useful. In fact,
   many students use them. Do coupons build brand loyalty? Do coupons adjust spending and
   consumption behavior? The answer to both questions is probably yes. Have students profile a
   coupon user. The results should be interesting.

4. As a marketer, would you be likely to try to distribute coupons for your products over the Web
   sites? Why or why not?

   Much of this depends on the company and its promotion objectives and the product or service
   being sold. As more and more consumers turn to Web sites for product information, auctions, e-
   commerce, and the announcement of deals, coupons will probably increase in their presence.

5. How would you improve each of the Web sites you visited?

   Most will find these sites somewhat cluttered. These sites are probably different from the usual
   surfing activities of students, therefore, some bias will be present. Change suggestions should
   revolve around increasing business and not just increasing aesthetics.


MARKETING PLAN EXERCISE

Assume for a moment that you are Esther Ferre at IBM. Consider the nature of her business—its
products and services and the markets in which she competes for business. In developing her
marketing plan, she must be very careful to use the elements of the marketing communication mix


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1) in an integrated way so that she communicates a consistent message and 2) in a way that
represents the best investment of promotional dollars that will give her the greatest returns.

1. Would personal selling be a high priority for Esther in her marketing plan? Why or why not?

2. What approach to personal selling would you recommend she build into her plan? Why do you
   recommend this approach?

3. Is there any place for sales promotion within Esther’s marketing plan? Justify your answer. If
   you believe sales promotion should be planned for, what type(s) do you recommend, and why?

    This is a good question that ties the chapter together. Students should be able to integrate
    concepts to help formulate the marketing plan. Students should consider the nature of the
    product as well as the nature of the target market. In addition students should consider the
    relationship developed as part of the value of the product and create a plan accordingly.


STUDENT PROJECTS

1. Interview a sales manager. Ask how he/she manages a sales force. Ask how he/she progressed
   into management. Ask about motivating and compensating the sales force. Ask about hiring
   practices—what characteristics does the firm look for?

2. Interview a successful salesperson. Ask what makes this person successful. Ask about a typical
   day, a typical week, or a typical month. What are the best parts or the job?




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   The worst? How does the person stay motivated? Ask about the sales process. If the person
   travels quite a bit, how do they maintain a family life?

3. Discuss some of your favorite sales promotions. Did the sales promotion actually cause you to
   buy the product being promoted? Explain how the promotion worked. Why did it work? What
   has been the impact on your future buying behavior?

4. Brainstorm ways to offer allowances and deals to the trade while at the same time prohibiting
   forward buying or diverting. Would these strategies work if everyone else in the industry allows
   forward buying or diverting?

5. Bring a couple of Sunday newspapers to class. Ask the students to count the number of coupons.
   Ask the class how many coupons they will actually cut out compared to the number that gets
   used.

6. Divide the class into groups of three to five students. Ask each group to interview a local retailer
   and learn about the value of POP displays. Are there times when a product is displayed and the
   price is actually set higher? How does the retailer decide which products to display? How
   effective are POP displays? How does the retailer decide where to put the POP? What are
   current trends in POP displays?


ASSIGNMENTS

SMALL GROUP ASSIGNMENTS

1. Divide the class into groups of three to five students. Ask each student to pick a product they are
   very familiar with. Develop a sale promotion strategy for the product.

2. Divide the class into groups of three to five students. Ask each class to come up with three new
   cross promotions. Vote on the idea that has the most potential and reward that group.


INDIVIDUAL ASSIGNMENTS

1. Find three articles from business publications on effective sales techniques. Abstract the articles.


2. Look at the fast-food industry in your area. What are some of the current promotions? Pick one
   and describe the techniques used. Make sure to analyze the objectives and target market. Is cross
   promotion taking place? You may need to interview the manager of the business or conduct
   secondary research. To get started, you might remember when Burger King was promoting
   Spider Man 2.


THINK—PAIR—SHARE


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1. Think about the following questions. Devise an answer. Turn to a classmate and share your
   thoughts.

           Is there still a place in the market for transactional selling?
           Why do I want to become a salesperson?
           Why don’t I want to go into sales?
           What are the advantages and disadvantages of cold calling?
           Do sales promotions aid in creating loyal customers?
           What is the future of telemarketing?

2. A common philosophy regarding paying salespeople says the following: “keep them hungry but
   don’t let them starve.” What does this mean? Do you agree or disagree with this philosophy?


OUTSIDE EXAMPLES

1. SmartSource.com is a Web site that provides access to coupons. According to their Web site,
   “We’re the company that brings you weekly coupon savings in your Sunday newspaper, and
   stocks your favorite grocery and drug stores with little red coupon dispensing machines. And
   now SmartSource has become the leading provider of online coupons that you can print right
   from your own computer!”

    Critique the Web site. How user friendly is it? After you register, how does the company use
    your information? How likely are you to print coupons? Now? On a regular basis? Who do you
    think is the target market? What are the objectives of the site?

2. The Standard & Poor’s 500 Directory lists information about larger companies. Visit their Web
   site at www.advisorinsight.com/pub/indexes/500_dir.htm and click on a business. Describe how
   you would use the information as a tool in your sales preapproach.

3. According to the ClickZ Web site at www.clickz.com/about. “The ClickZ Network is the largest
   resource of interactive marketing news, information, commentary, advice, opinion, research,
   and reference in the world, online or off-. From search to e-mail, technology to trends, our
   coverage is expert, exclusive, and in-depth.” Visit their Web site and conduct a search for an
   article on advergaming. Abstract the article and report back to class.




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