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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 Preselling Selling Selling PostPostConsumption Consumption Consuming 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 Percentage of Sales Percentage of Sales
Based on What the Company Can Afford Based on a Certain Percentage Based on a Certain Percentage of Current or Forecasted Sales of Current or Forecasted Sales Based on the Competitor’s Based on the Competitor’s Promotion Budget Promotion Budget Objective-and-Task Objective-and-Task Based on Determining Based on Determining Objectives & Tasks, Then Objectives & Tasks, Then Estimating Costs Estimating Costs Competitive-Parity Competitive-Parity 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 Designing Salesforce Strategy and Structure Recruiting and Selecting Salespeople Recruiting and Selecting Salespeople Training Salespeople Training Salespeople Compensating Salespeople Compensating Salespeople Supervising Salespeople Supervising Salespeople Evaluating Salespeople Evaluating Salespeople
Some Traits of Good Salespeople Selecting Salespeople Sales Aptitude Sales Aptitude Other Characteristics Other Characteristics Selection Process Usually Evaluates a Person’s Personality Traits Personality Traits Analytical and Analytical and Organizational Skills 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 Salespeople The Average Sales Training Program lasts for Four Months and Has the Following Goals: Help Salespeople Know & Identify With the Company Learn About the Products Learn About Competitors’ and Customers’ Characteristics Learn How to Make Effective Presentations Understand Field Procedures and Responsibilities Compensating Salespeople To Attract Salespeople, a Company Must Have an To Attract Salespeople, a Company Must Have an Attractive Plan Made Up of Several Elements Attractive Plan Made Up of Several Elements Fixed Fixed Amount Amount
Usually a Usually a Salary Salary Variable Variable Amount Amount Usually Usually Commissions Commissions Or Bonuses Or Bonuses Expense Expense Allowance Allowance For Job For Job Related Related Expenses Expenses Supervising Salespeople Directing Salespeople Directing Salespeople ?????? Identify Customer Targets & Identify Customer Targets & Call Norms Call Norms ?????? Develop Prospect Target Develop Prospect Target ?????? Use Sales Time Efficiently Use Sales Time Efficiently Annual Call Plan Annual Call Plan Time-and-Duty Analysis Time-and-Duty Analysis Sales Force Automation Sales Force Automation
Motivating Salespeople Motivating Salespeople Organizational Climate ?????? Organizational Climate Sales Quotas ?????? Sales Quotas Positive Incentives ?????? Positive Incentives Sales Meetings Sales Meetings Sales Contests Sales Contests Honors and Trips Honors and Trips Merchandise/ Cash 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 Prospecting Prospecting Qualifying Qualifying Preapproach Preapproach Approach Approach Salesperson Identifies Qualified Potential Salesperson Identifies Qualified Potential Customers. Customers. Process of Identifying Good Prospects Process of Identifying Good Prospects and Screening Out Poor Ones. and Screening Out Poor Ones. Salesperson Learns as Much as Possible Salesperson Learns as Much as Possible About a Prospective Customer Before About a Prospective Customer Before Making a Sales Call.
Making a Sales Call. Salesperson Meets the Buyer and Gets Salesperson Meets the Buyer and Gets the Relationship Off to a Good Start. the Relationship Off to a Good Start. Steps in the Selling Process Presentation Presentation Handling Handling Objections Objections Closing Closing Follow-Up Follow-Up Salesperson Tells the Product “Story” to Salesperson Tells the Product “Story” to the Buyer Using the Need-Satisfaction the Buyer Using the Need-Satisfaction Approach. Approach. Salesperson Seeks Out, Clarifies, and Salesperson Seeks Out, Clarifies, and Overcomes Customer Objections to Overcomes Customer Objections to Buying.
Buying. Salesperson Asks the Customer for an Salesperson Asks the Customer for an Order. Order. Occurs After the Sale and Ensures Occurs After the Sale and Ensures Customer Satisfaction and Repeat Customer Satisfaction and Repeat Business. Business. 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 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. 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.