13 Chapter - Promotion
Promotion - communicating information bw a seller and buyer/channel members to
influence attitudes/behavior. use several tools together to achieve a companys
overall promotion goals.
tells the t/m that the right Product is available in the right Place at the right Price.
Personal selling: direct spoken communication bw sellers and potential customers.
Immediate feedback, adapt the 4Ps now. Sales force - very expensive to build,
maintain.
Mass selling: communicating with large numbers of potential customers
simultaneously, t/m is large/dispersed (cheaper than PS), no immediate feedback.
A. Advertising any paid form of nonpersonal presentation of ideas, goods,
or services by an identified sponsor. tv, radio, magazines, billboards, direct
mail, Internet.
B. Publicity any unpaid form of nonpersonal presentation of ideas, goods, or
services. gets stories about companys products in mass media w/o paying
costs. A car company sent three automobile magazines some technical
information and explanations about the features of its innovative new model.
One of the magazines later printed a story about the car.
Sales promotion: interest, trial, purchase (customers/channel members). not
advertising, p/s, publicity. for consumers, middlemen, firms ee. Compliments PS
and MS
Ie: consumers: contests; coupons; aisle displays; free samples (expensive d/b
targets those w/ high interest); trade show displays; POP; banners; f/b programs;
sponsored special events.
Ie: middlemen: price deals; promotion allowances; sales contests; calendars; gifts;
trade show displays; meeting sponsorships; catalogs; videos; merchandising aids.
Ie: sales force: contests; bonuses; meeting sponsorships; customized portfolios;
displays; sales aids; training materials.
Implemented fast, get results sooner. Immediate results.
More money is spent on sales promotion and personal selling than on mass media
advertising.
Each has strengths, weaknesses, and activities. Make a plan for the parts of the
overall promo blend.
Sales managers: manage personal selling. Building/maintaining channels of
distribution/middlemen. may double as the marketing manager.
Adv managers: manage mass selling, in-house advertising, outside agencies. can
handle publicity
public relations (PR)communication with noncustomers, ie: labor, public
interest groups, govt
Sales promotion managers: manage the sales promotion effort.
Marketing manager: Decides appropriate promotion blend and coordinates them.
integrated marketing communications, firm can send a consistent and complete
message.
Promo Methods - different communication forms to encourage choosing product.
Objective - affect behavior positively: (1) reinforcing attitudes/relationships
leading to favorable behavior; (2) change attitudes/behavior of tm (DIFFICULT).
Basic promo objectives: Informing, persuading, and reminding . who is the
target, why.
1. Informing (educating). Product education. for really new products. MI
2. Persuading: convince/sway market to buy ours over competitor. MM
3. Reminding: jogs memory, were still here. SD
Promotion objectives related to:
Adoption process: process of adopting a new idea/product.
Informing and persuading: Affects customers knowledge/attitudes about a
product to bring about adoption. (brand recognition)
Remind customer about good experience, confirms adoption. (brand
preference/insistence).
AIDA model - promotion tries to accomplish:
Attention: Break through information and get audiences attention.
Interest: Curiosity, stimulates interest.
Desire: Emotional response, buy-in, develop strong desire for the product.
Action: buy now.
Communication process: create, transmit, receive, and interpret meaning from
one to another. how obstacles to effective communication can be overcome.
Source: Sender (seller) of message.
Receiver Intended audience. (target customer)
Encoding Deciding what to say and how to say it -- translating the meaning using
words/symbols that will mean the same thing to the receiver.
Decoding: Receiver (potential buyer) translates message sent by the source
(seller).
Seller starts the communication in traditional communication process.
Noise - affects message transmission in tcp.
Common frame of reference is needed to communicate effectively.
Words/symbols differ based on persons attitudes/experiences.(ethnic, social,
education, etc.). understand t/ms attitudes, how they decode message.
same message may be interpreted differently by different people.
other aspects to communication process.
Message channel: the carrier of the message. salesperson, mass medium (Good
Housekeeping). Email, social media, print ad, direct mail, etc
A message channel may enhance or detract from a message.
Personal selling advantage: immediate feedback.
In mass selling, marketing research or sales figures provide the feedback.
toll-free numbers, Web addresses - speeds feedback.
Noise: any distractions that reduce the effectiveness of the communication process.
motorist doesn't hear a radio ad because she is being stopped by a police officer for
speeding.
Direct marketing: direct communication bw seller and buyer using a promotion
other than personal selling. To generate a direct response. makes targeting specific
consumers easier.
direct-mail advertising, telephone, print, e-mail, Internet/website, etc.
Coordinate direct-response efforts with other promotion.
Direct response promotion - relies on d/b to target specific individuals.
communicates a very specific message to a very select, well-identified group of
consumers. focuses on achieving a measurable, direct response from specific target
customers. can contain information about past purchase behavior and other
segmenting characteristics.
Customer-initiated interactive communication: Buyer starts the process,
controls where he/she gets info and amount. interactive technology plays a big
role. Action is more immediate. customer is already involved in the promotion and
purchase of a product. Make search process easy for customer, distinguish our
products from competitors.
Noise may still be a factor affecting the message transmission.
Action/purchasemay be immediate. Internet, shortens long decision cycles
(expensive).
Custom communications more personalized. Today, no reason not to
personalize your message.
There is no one right promotion blend. Who is the firm trying to influence?
Examine situation and adapt promotion tools to address the needs of target
customers in each situation. WHO IS YOUR AUDIENCEWHERE ARE THEY?
Pushing producer uses normal promotion efforts--personal selling, sales
promotion, and advertising--to sell whole marketing mix to possible channel
members
Promotion to middlemen emphasizes personal selling
Emphasizes personal selling.
Sales rep shows wholesalers/retailers that demand exists and it is profitable.
Sales promotions targeted at middlemen - to improve the middlemans profits. Ie:
free cases of merchandise, contests, or premium offers.
Push within a firm by promoting to employees. Increases awareness of promotion
objectives among the firms employees, salespeople.
Pulling: customers to ask middlemen for product.
middlemen are reluctant to handle a new product.
Using combination of push and pull is common. Ie: producer sends discount
coupons, go to stores to buy product, its out of stock. ask stores to carry it. Within
days of the coupon distribution, producers sales reps visit stores buyers and offer
special promotions so theyll stock the product.
Promotion to final consumers: Due to lg number, emphasize advertising/sales
promotion.
Promotion to business customers - personal selling dominates promo blend.
technical specifications, lg orders, and smaller numbers of customers, adjust needs
of customer. high costs of maintaining a sales force have led some producers to use
mass selling techniques.
Consumer market personal selling for cars, electronics expensive
goods/specialty products.
Each market segment may need a unique promotion blend. A shotgun mass
marketing approach vs more targeted one.
Adoption curve shows when different groups accept ideas. varies across
different groups. Promotion must vary for different adopter groups. Somewhat
related to PLC
Innovators: First to buy, risk takers. Target this group for new products, informing
promo method . Search out info, rely on impersonal and scientific sources (other
innovators) when making decisions. Young, well educated, mobile
Early adopters: well respected by peers and serve as opinion leaders. Highest
contact with salespeople. High satisfaction can aid word-of-mouth information,
highly credible.
Early majority: avoid risks, waits to consider a new idea until many early
adopters have tried a product and like it. Deliberate decision makers. extensive
contact with salespeople, mass media, and early adopter opinion leaders.
Late majority: cautious. often older than the early majority, set in their ways.
Little use of marketing info. Conservative. respond to social pressure from other
late adopters than to salespeople.
Laggards/nonadopters: traditionalists, suspicious of new ideas. Older, less well
educated. Laggards listen to other laggards, difficult to reach. TM is
skeptical/cautious about new ideas. Strong social pressure from peer group needed
before adopting new product.
Stage of the PLC influences promotion blends. Selecting promo blend: analyze
nature of competition, budget, plc stage.
MI education (inform). builds primary demand. this new idea is good.
MG inform, our brand is best. builds selective demanddemand for the
companys own brand. Mass selling more feasible among final consumers.,
personal selling and sales promotion important in business markets.
MM - Persuasion.our brand is better, really. Mass selling and sales promotion
for consumer products. Business products - aggressive personal selling. Firms that
have strong brands can use reminder-type promotion at this stage.
SD Remind, lets tell those who still want our product. More targeted
promotion needed.
Promotion budget - consider objectives to accomplish, resources, objectives
feasible, consider total costs and cost per person.
Most common method - compute a percentage of past or anticipated future
sales. Does not consider situational variables, market forces.
Matching the competition spending) (parity - spending similar to competition.
Budgeting by sales unit: determines how much to promote each unit expected to
sell.
Budgeting from uncommitted resources (all you can afford) - uses whats
available. portion of projected profits, investment.
Task method (zero-based budgeting) - How to reach promo and sales objectives.
embodies mkt concept, customer-oriented. Most sensible. different mkt expenses
from year-year.
Chapter 14 Personal Selling
Salespeople are communicators who build relationships.
Personal selling requires strategy decisions:
1. how many and what kind of salespeople are needed.
2. what kind of sales presentation should be used.
3. the technology support the salespeople need;
4. how to select and train salespeople, and
5. how to compensate and motivate them.
Salespeople must satisfy customer needs and company expectations.
good salespeople try to help customers buy. In meeting customer needs,
salespeople build lasting relationships with customers.
Salespeople represent the whole companyand customers too. How the
salesperson behaves is all many customers will ever know about the company.
The sales force aids in the market information function, providing feedback to the
company on what customers think, feel, and want.
Salespeople can be strategy planners, making decisions every day about how to
manipulate promotional mix elements to fit the needs of their customers. may
negotiate prices or diagnose technical problems when a product doesn't work well.
PS is often a company's largest single operating expense
Salespeople are likely to be responsible for:
1. providing market information to the firm.
2. providing technical support/know tech details. I&A
3. attaining sales goals.
4. maintaining customer relations.
5. to be able to discuss general business conditions with their top executives. IA
6. to know the details of their particular applications of the product. IA
7. Using persuasion in sales presentation
Personal selling is divided into three tasks.
order-getting; order-taking; and supporting.
Order getters and order takers obtain orders on behalf of a company.
Supporting salespeople are not directly interested in orders; help the order-oriented
salespeople.
Order getters: establish relationships with new customers, develop new business.
experts about products. find new market opportunitiesnew prospects, new
accounts, and new channels of distribution. problem solvers. Ie: Ms. A works for a
cable co. She makes phone calls to sell cable services to nonsubscribers.
(Manufacturers Rep). Many orders are lost bc the salesperson doesnt ask for the
business.
Order-getting: seeking possible buyers with a sales presentation to sell a good,
service, or idea.
Wholesalers order getters work with retailers and may be involved in training
retail employees, doing product demonstrations, working on retail promotions, etc.
Retail order getters influence consumer behavior, help to move products from the
market introduction stage to the market growth stage of the product life cycle,
especially for heterogeneous shopping products and unsought products. Not
Convenience products.
Order takers: sell to regular customers, complete sales transactions and maintain
relationships. highly trained, competent individuals. make the difference bw
keeping/losing customers. train, explain and collaborate. improve the relationship
with customer. Little aggressive selling if any. Ie: fastfood counter people;
customer service reps, retail sales clerks.
Order-taking: routine completion of sales made regularly to target customers.
Even if computers handle routine reorders, someone has to perform basic tasks
such as making adjustments, handling complaints, and keeping customers informed
of new developments.
Wholesalers order takers are involved not in getting orders but in keeping them.
Knowledgeable, courteous, helpful salesclerks can play an important role in a
retailers marketing mix.
Order-oriented salespeople--don't try for orders themselves:
1. Supporting salespeople help the order-oriented salespeople but dont try to get
orders themselves. Provide specialized services and information, aimed at
enhancing the relationship with the customer and getting sales.
2. Missionary salespeople: supporting salespeople who work for producers by
calling on their middlemen and customers, increase sales by creating goodwill,
providing training, help train middlemen's salespeople and set up retail displays.
often an entry position for higher level sales and marketing jobs. Ie: Megan
Winters works for a large cosmetics company. She calls on retailers to tell them
about her firm's new products, to train the retailers' salespeople, and to set up
promotion displays.
3. Technical specialists: experts who know product applications, provide technical
support before and after the sale, help rather than persuading customers, usually
dont have a science/engineering backgrounds. Ie: help customers install computer
equipment after the sale.
The three basic sales tasksorder-taking, order-getting, and supporting may have
to be blended, or they may be assigned to several salespeople.
Team selling: when different sales reps work together on a specific account. it may
be necessary to have more than one rep call on a single customer if different skills
are needed.
Different target markets need different selling tasks -- they differ in support and
information needs -- and so managers often have more than one sales force mix
when the company serves many different target markets.
Major accounts sales force: sells to large accounts directly. big accounts get special
treatment.
Some salespeople specialize in telephone selling, Telemarketing:
quick/inexpensive and can provide a way to serve customers who would otherwise
be too expensive to support.
Sales territory: geographic area that is the responsibility of a salesperson or several
working together.
Managers must weigh distance, number of customers, the complexity of account
service, and the potential profitability in setting up sales territories.
The size of the sales force depends on workload.
New software/hardware provide a competitive advantage: sales forecasting, shelfspace management, customer contact management, time management, spreadsheet
analysis, electronic presentations.
Selecting good salespeople takes judgment, plus multiple interviews with company
executives, systematic selection procedures, good job descriptions, background
checks.
Motivating salespeople is important
Job description: a statement of what a salesperson is expected to do. level of
compensation should be suggested by the job description. S/b specific and in
writing. tool for recruiting candidates whose qualifications are a good match for
the job, training needed, salespeople to be selected, what selling tasks are needed,
how salespeople should be paid.
All salespeople need some training--even those with natural ability.
Training is required to learn: selling methods, customer needs, organization skills,
how to promote the product line, and how to constantly update this knowledge
with new information.
At minimum, a sales training program should cover: company policies and
practices; product information; building relationships with customers; and
professional selling skills..
Regarding level of compensation, the amount of money a person can make s/b
comparable to competitors compensation, pay for other jobs in the firm, amount of
direct control desired by the firm, amount of selling vs nonselling time.
Compensation varies with the job and needed skills. Need job description FIRST
Salespeople are typically compensated by:
1. straight salary; gives control close supervision. does what sales manager
wants. Safest. simple to understand/administer. same regardless of sales
Commission - more complicated, adds flexility. As sales volume inc, sales costs:
increase at the fastest rate for a straight commission plan;
increase at a lesser rate for a combination plan; and
remain constant with a straight commission plan
2. straight comm. -%age of sales, tends to be his/her own boss. provides most
INCENTIVE
3. combination of salary and commission. Combo of safety &
motivation/aggressiveness
Combination plans - most common. Commissions motivate. Incentives should link
efforts to results.
sales quotas the specific sales or profit objectives that salespeople are expected to
achieve. Varies by territory, results in over/underworked salespeople, some
underpaid for the same effort.
Compensation plans should be clear, easy to understand.
Once the compensation level for a producer's salespeople has been set, the
METHOD of payment depends on the need for incentive, setting of sales quotas,
desire for simplicity, need for control
Limitations on working capital or market uncertainty may compel a company to
choose a straight commission plan, or combination plan with a large commission
component.
Each step in the personal selling process involves its own set of skills. Prospecting,
making presentation, planning presentation, follow ups after sale
Prospecting: following all the leads in the target market to identify potential
customers and allocating time to potential customers based on their potential
all customers are not equal.
The personal selling process continues with the sales presentation:
3 approaches:
1. Prepared sales presentation: a memorized presentation that is not adapted to each
individual customer. only a short presentation is possible, or salesperson is not yet
very skilled.
This canned approach has the virtue of standardizing the presentation but suffers
from the weakness of being rigid and treating all customers alike.
2. Consultative selling approach: involves developing a good understanding of the
individual customers needs before trying to close the sale, so it builds on the
marketing concept.
After making general opening comments, the salesperson asks the customer
questions and listens carefully to the answers to identify unique customer needs.
acts as a consultant
3. Selling formula approach: starts with a rehearsed presentation, but moves toward
more customer interaction, questioning, and participation during the course of the
presentation. The selling formula approach is some of both other approaches.