Which is cheaper and easier to measure? sales promotion or advertising?
Sales promotion is usually cheaper than advertising and easier to measure
Consumer sales promotion
targeted to the ultimate consumer market
Trade sales promotion
directed to members of the marketing channel, such as wholesalers and retailers.
What is an effective tool for strengthening brand loyalty?
frequent buyer program,which rewards consumers for repeat purchases
Types of Consumers and Sales Promotion Goals
loyal customers, Competitor's customers, Brand switchers, Price buyers
Coupons and Rebates
certificate that entitles consumers to an immediate price reduction when they buy the product.Rebates are similar to coupons in that they offer the purchaser a price reduction; however, because the purchaser must mail in a rebate form and usually some proof of purchase, the reward is not as immediate.
Premiums
an extra item offered to the consumer, usually in exchange for some proof that the promoted product has been purchased
Loyalty marketing programs , or frequent buyer programs
reward loyal consumers for making multiple purchases. The objective of loyalty marketing programs is to build long-term, mutually beneficial relationships between a company and its key customers.
Contests and sweepstakes
generally designed to create interest in a good or service, often to encourage brand switching. Winning a sweepstakes, on the other hand, depends on chance and participation is free. Sweepstakes usually draw about ten times more entries than contests do.
Sampling
allows the customer to try a product risk-free.
point-of-purchase (P-O-P) display
includes any promotional display set up at the retailer's location to build traffic, advertise the product, or induce impulse buying. P-O-P displays include shelf "talkers"(signs attached to store shelves), shelf extenders (attachments that extend shelves so products stand out), ads on grocery carts and bags, end-aisle and floor-stand displays, television monitors at supermarket checkout counters, in-store audio messages, and audiovisual displays.
Online Sales Promotion
Sales promotions online have proved effective and cost-efficient, generating response rates three to five times higher than off-line promotions. The most effective types of online sales promotions are free merchandise, sweepstakes, free shipping with purchases, and coupons.
Trade allowances
is a price reduction offered by manufacturers to intermediaries such as wholesalers and retailers.
push & pull?
Whereas consumer promotions pull a product through the channel by creating demand, trade promotions push a product through the distribution channel
Push money (Tools for Trade Sales Promotion)
Intermediaries receive push money as a bonus for pushing the manufacturer's brand through the distribution channel
Training(Tools for Trade Sales Promotion)
Sometimes a manufacturer will train an intermediary's personnel if the product is rather complex�as frequently occurs in the computer and telecommunications industries
Free merchandise(Tools for Trade Sales Promotion)
Often a manufacturer offers retailers free merchandise in lieu of quantity discounts.
Store demonstrations(Tools for Trade Sales Promotion)
Manufacturers can also arrange with retailers to perform an in-store demonstration.
Business meetings, conventions, and trade shows (Tools for Trade Sales Promotion)
Trade association meetings, conferences, and conventions are an important aspect of sales promotion and a growing, multi-billion-dollar market
what promotion is popular among manufacturers?
Trade promotions are popular among manufacturers for many reasons. Trade sales promotion tools help manufacturers gain new distributors for their products, obtain wholesaler and retailer support for consumer sales promotions, build or reduce dealer inventories, and improve trade relations. Car manufacturers annually sponsor dozens of auto shows for consumers.
personal selling
a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. In a sense, all businesspeople are salespeople
ADVANTAGES OF PERSONAL SELLING
Personal selling provides a detailed explanation or demonstration of the product. This capability is especially needed for complex or new goods and services.The sales message can be varied according to the motivations and interests of each prospective customer. Moreover, when the prospect has questions or raises objections, the salesperson is there to provide explanations. In contrast, advertising and sales promotion can only respond to the objections the copywriter thinks are important to customers.Personal selling can be directed only to qualified prospects. Other forms of promotion include some unavoidable waste because many people in the audience are not prospective customers.Personal selling costs can be controlled by adjusting the size of the sales force (and resulting expenses) in one-person increments. On the other hand, advertising and sales promotion must often be purchased in fairly large amounts.Perhaps the most important advantage is that personal selling is considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer.
Personal selling is more important if ...
The product has a high value.It is a custom-made product.There are few customers.The product is technically complex.Customers are concentrated.Examples: Insurance policies, custom windows, airplane engines
Advertising and sales promotion are more important if ...
The product has a low value.It is a standardized product. There are many customers.The product is easy to understand.Customers are geographically dispersed.Examples: Soap, magazine subscriptions, cotton T-shirts
Relationship selling , or consultative selling
a multistage process that emphasizes personalization and empathy as key ingredients in identifying prospects and developing them as long-term, satisfied customers. Relationship selling is more typical with selling situations for industrial-type goods, such as heavy machinery or computer systems, and services, such as airlines and insurance, than for consumer goods.
sales process, or sales cycle
simply the set of steps a salesperson goes through to sell a particular product
Seven Steps in the Personal Selling Process
Generating leads,Qualifying leads,Approaching the customer and probing needs,Developing and proposing solutions,Handling objections,Closing the sale,Following up
diff btw Traditional selling and relationship selling
They differ in the relative importance placed on key steps in the process. Traditional selling efforts are transaction oriented, focusing on generating as many leads as possible, making as many presentations as possible, and closing as many sales as possible. Minimal effort is placed on asking questions to identify customer needs and wants or matching these needs and wants to the benefits of the product or service. In contrast, salespeople practicing relationship selling emphasize an up-front investment in the time and effort needed to uncover each customer's specific needs and wants and meet them with the product or service offering.
Step 1: Generating Leads
Lead generation , or prospecting, is the identification of those firms and people most likely to buy the seller's offerings.
Step 2: Qualifying Leads
When a prospect shows interest in learning more about a product, the salesperson has the opportunity to follow up, or qualify, the lead. Personally visiting unqualified prospects wastes valuable salesperson time and company resources. Many leads often go unanswered because salespeople are given no indication as to how qualified the leads are in terms of interest and ability to purchase. Unqualified prospects give vague or incomplete answers to a salesperson's specific questions, try to evade questions on budgets, and request changes in standard procedures like prices or terms of sale. In contrast, qualified leads are real prospects who answer questions, value your time, and are realistic about money and when they are prepared to buy.
Lead qualification involves determining whether the prospect has three things:
A recognized need:The most basic criterion for determining whether someone is a prospect for a product is a need that is not being satisfied. The salesperson should first consider prospects who are aware of a need but should not disregard prospects who have not yet recognized that they have one. With a little more information about the product, they may decide they do have a need for it. Preliminary interviews and questioning can often provide the salesperson with enough information to determine whether there is a need.Buying power: Buying power involves both authority to make the purchase decision and access to funds to pay for it. To avoid wasting time and money, the salesperson needs to identify the purchasing authority and his or her ability to pay before making a presentation. Organizational charts and information about a firm's credit standing can provide valuable clues.Receptivity and accessibility: The prospect must be willing to see the salesperson and be accessible to the salesperson. Some prospects simply refuse to see salespeople. Others, because of their stature in their organization, will see only a salesperson or sales manager with similar stature.
Step 3: Approaching the Customer and Probing Needs
Before approaching customers, the salesperson should learn as much as possible about the prospect's organization and its buyers. This process, called the preapproach , describes the "homework" that must be done by the salesperson before contacting the prospect.
needs assessment
salesperson's ultimate goal during the approach is to conduct this to find out as much as possible about the prospect's situation
needs assessment on the product/service
The product or service: Product knowledge is the cornerstone for conducting a successful needs analysis. The consultative salesperson must be an expert on his or her product or service, including technical specifications, the product's features and benefits, pricing and billing procedures, warranty and service support, performance comparisons with the competition, other customers' experiences with the product, and current advertising and promotional campaign messages. For example, a salesperson who is attempting to sell a Xerox copier to a doctor's office should be very knowledgeable about Xerox's selection of copiers, their attributes, capabilities, technological specifications, and postpurchase servicing.
needs assessment on the Customers and their needs
The salesperson should know more about customers than they know about themselves. That's the secret to relationship and consultative selling, where the salesperson acts not only as a supplier of products and services but also as a trusted consultant and adviser. The professional salesperson brings each client business-building ideas and solutions to problems. For example, if the Xerox salesperson is asking the "right" questions, then he or she should be able to identify copy-related areas where the doctor's office is losing or wasting money. The Xerox salesperson can act as a "consultant" on how the doctor's office can save money and time rather than just selling a copier.
needs assessment on The competition
The salesperson must know as much about the competitor's company and products as he or she knows about his or her own company. Competitive intelligence includes many factors: who the competitors are and what is known about them, how their products and services compare, advantages and disadvantages, and strengths and weaknesses. For example, if the Canon copy machine is less expensive than the Xerox copier, the doctor's office may be leaning toward purchasing the Canon. But if the Xerox salesperson can point out that the cost of long-term maintenance and toner cartridges is lower for the Xerox copier, offsetting its higher initial cost, the salesperson may be able to persuade the doctor's office to purchase the Xerox copier.
needs assessment on The industry:
Knowing the industry involves active research on the part of the salesperson. This means attending industry and trade association meetings, reading articles published in industry and trade journals, keeping track of legislation and regulation that affect the industry, being aware of product alternatives and innovations from domestic and foreign competition, and having a feel for economic and financial conditions that may affect the industry. It is also important to be aware of economic downturns, as businesses may be looking for less expensive financing options.
Step 4: Developing and Proposing Solutions
A sales proposal is a written document or professional presentation that outlines how the company's product or service will meet or exceed the client's needs. The sales presentation is the formal meeting in which the salesperson has the opportunity to present the sales proposal.
Step 5: Handling Objections
Instead, the prospect often raises objections or asks questions about the proposal and the product. The potential buyer may insist that the price is too high or that the good or service will not satisfy the present need. OFTEN, IF THE SALESPERSON HAS DEVELOPED A STRONG WITH THE CUSTOMER, ONLY MINIMAL EFFORTS ARE NEEDED TO CLOSE A SALE.
Step 6: Closing the Sale
At the end of the presentation, the salesperson should ask the customer how he or she would like to proceed. If the customer exhibits signs that he or she is ready to purchase and all questions have been answered and objections have been met, then the salesperson can try to close the sale.
Step 7: Following Up
the final step in the selling process, in which they must ensure delivery schedules are met, goods or services perform as promised, and buyers' employees are properly trained to use the products. In the traditional sales approach, follow-up with the customer is generally limited to successful product delivery and performance. A basic goal of relationship selling is to motivate customers to come back, again and again, by developing and nurturing long-term relationships.
The Impact of Technology on Personal Selling
Experts agree that a relationship between the salesperson and customer will always be necessary. Technology, however, can certainly help to improve that relationship. Cell phones, laptops, pagers, e-mail, and electronic organizers allow salespeople to be more accessible to both clients and the company. Moreover, the Internet provides salespeople with vast resources of information on clients, competitors, and the industry. In fact, many companies are utilizing technology to stay more in touch with their own employees. For instance, when IBM held an electronic brainstorming session, a total of 52,600 employees logged on to the event to discuss issues of employee retention, work efficiency, quality, and teamwork.
E-business
buying, selling, marketing, collaborating with partners, and servicing customers electronically using the Internet