copyright © 2003 by south-western. all rights reserved. chapter sixteen promoting goods and...

Copyright © 2003 by South-Western. All Rights Reserved.

CHAPTER SIXTEENCHAPTER SIXTEEN

PROMOTING GOODS AND PROMOTING GOODS AND SERVICES USING IMCSERVICES USING IMC

Text by Profs. Gene Boone & David KurtzText by Profs. Gene Boone & David KurtzMultimedia Presentation byMultimedia Presentation byProf. Milton PressleyProf. Milton PressleyThe University of New OrleansThe University of New Orleans

[email protected]@uno.edu


• Relate the concept of integrated marketing Relate the concept of integrated marketing communications to the development of a communications to the development of a firm’s promotional strategyfirm’s promotional strategy

• Explain the concept of a promotional mix Explain the concept of a promotional mix and list the objectives of promotion and list the objectives of promotion

• Summarize the different types of Summarize the different types of advertising and advertising media advertising and advertising media

• Describe the role of sales promotion in Describe the role of sales promotion in promotional strategy promotional strategy

LEARNING GOALSLEARNING GOALSLEARNING GOALSLEARNING GOALS


• Identify the various personal selling tasks Identify the various personal selling tasks and the steps in the sales process and the steps in the sales process

• Explain how public relations supports other Explain how public relations supports other elements of the promotional mix elements of the promotional mix

• Identify the factors that influence the Identify the factors that influence the selection of a promotional mix selection of a promotional mix

• Contrast pushing and pulling promotional Contrast pushing and pulling promotional strategies strategies

• Discuss major ethical issues involved in Discuss major ethical issues involved in promotion promotion

LEARNING GOALSLEARNING GOALSLEARNING GOALSLEARNING GOALS


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CHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEW

• Promotion: Promotion: function of function of informing, persuading, and informing, persuading, and influencing a purchase decisioninfluencing a purchase decision


Figure 16.1 Figure 16.1 Promotional Campaign to Stimulate Primary DemandPromotional Campaign to Stimulate Primary Demand


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CHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEW• Integrated marketing Integrated marketing

communications (IMC): communications (IMC): coordination of all promotional coordination of all promotional activities -- media advertising, direct activities -- media advertising, direct mail, personal selling, sales mail, personal selling, sales promotion, and public relations -- to promotion, and public relations -- to produce a unified customer-focused produce a unified customer-focused messagemessage• Avoids confusing the consumerAvoids confusing the consumer• Focuses positive attention on the Focuses positive attention on the

promotional messagepromotional message


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CHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEW• Explains the role of IMCExplains the role of IMC• Discusses the objectives of promotion Discusses the objectives of promotion

and the importance of promotional and the importance of promotional planningplanning

• Examines the components of the Examines the components of the promotional mix -- advertising, sales promotional mix -- advertising, sales promotion, personal selling, and public promotion, personal selling, and public relations -- and demonstrates how relations -- and demonstrates how marketers incorporate them into an marketers incorporate them into an IMC planIMC plan


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CHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEWCHAPTER OVERVIEW• Examines promotional strategies Examines promotional strategies

and techniques for selecting a and techniques for selecting a promotional mix and measuring promotional mix and measuring its effectivenessits effectiveness

• Concludes with a brief discussion Concludes with a brief discussion of ethical issues related to of ethical issues related to promotion promotion


INTEGRATED MARKETING INTEGRATED MARKETING COMMUNICATIONSCOMMUNICATIONSINTEGRATED MARKETING INTEGRATED MARKETING COMMUNICATIONSCOMMUNICATIONS• Focuses on customer needs to create a Focuses on customer needs to create a

unified promotional messageunified promotional message• Firms need a broad view of promotion to Firms need a broad view of promotion to

implement IMCimplement IMC• Cannot rely on traditional broadcast and print Cannot rely on traditional broadcast and print

media and direct mailmedia and direct mail• Must include all forms of customer contact --Must include all forms of customer contact --

packaging, store displays, sales promotions, packaging, store displays, sales promotions, sales presentations, and online and interactive sales presentations, and online and interactive mediamedia

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INTEGRATED MARKETING INTEGRATED MARKETING COMMUNICATIONSCOMMUNICATIONSINTEGRATED MARKETING INTEGRATED MARKETING COMMUNICATIONSCOMMUNICATIONS• Must present an integrated approach . . . Must present an integrated approach . . .

with a consistent message from all sources with a consistent message from all sources • Alternatively consumers become confused by Alternatively consumers become confused by

receiving conflicting messages receiving conflicting messages

• Unified personality for the good, brand, or Unified personality for the good, brand, or service should be createdservice should be created

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Designing Effective IMC ProgramsDesigning Effective IMC ProgramsDesigning Effective IMC ProgramsDesigning Effective IMC Programs

• First, goals and objectives for the firm’s First, goals and objectives for the firm’s promotional strategy are setpromotional strategy are set

• Then, various elements of the strategy are Then, various elements of the strategy are woven into an integrated communications woven into an integrated communications planplan• Plan becomes a central part of the Plan becomes a central part of the

firm’s total marketing strategy firm’s total marketing strategy

• Feedback completes the process by Feedback completes the process by identifying any deviations from the plan identifying any deviations from the plan

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THE PROMOTIONAL MIXTHE PROMOTIONAL MIXTHE PROMOTIONAL MIXTHE PROMOTIONAL MIX

• Promotional mix:Promotional mix: combination of combination of personal and nonpersonal selling personal and nonpersonal selling techniques designed to achieve techniques designed to achieve promotional objectives promotional objectives

• Marketers combine these techniques to:Marketers combine these techniques to:• Meet the needs of their firm’s target Meet the needs of their firm’s target

customerscustomers• Effectively and efficiently communicate Effectively and efficiently communicate

the firm’s message to themthe firm’s message to them

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• Personal selling: Personal selling: a direct person-to-a direct person-to-person promotional presentation to a person promotional presentation to a potential buyerpotential buyer• The communication can occur during a The communication can occur during a

face-to-face meeting or via telephone, face-to-face meeting or via telephone, videoconference, or interactive videoconference, or interactive computer link. computer link.

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• Nonersonal selling: Nonersonal selling: consists of consists of advertising, sales promotion, direct advertising, sales promotion, direct marketing, and public relationsmarketing, and public relations• Although advertising is the best-known Although advertising is the best-known

form of nonpersonal selling, sales form of nonpersonal selling, sales promotion accounts for about two-thirds promotion accounts for about two-thirds of marketing expenditures in of marketing expenditures in this category this category

© Milton M. Pressley


Figure 16.2Five Major Promotional Objectives

Figure 16.2Five Major Promotional Objectives

Objectives of Objectives of Promotional Promotional StrategyStrategy

Objectives of Objectives of Promotional Promotional StrategyStrategy


ProvidingProvidingInformationInformation

• Major portion of U.S. advertising is Major portion of U.S. advertising is information-oriented information-oriented • Example: Large sections in Example: Large sections in

Wednesday and Thursday editions of Wednesday and Thursday editions of daily newspapers consist of ads and daily newspapers consist of ads and inserts that tell shoppers about inserts that tell shoppers about featured specials at grocery stores and featured specials at grocery stores and other local retail outlets other local retail outlets

Objectives of Promotional Objectives of Promotional

StrategyStrategy



DifferentiatingDifferentiatinga Producta Product

• Promotion also used to Promotion also used to differentiate a firm’s goods and differentiate a firm’s goods and services from the competitions’services from the competitions’

• Positioning: Positioning: establishing a place establishing a place in the minds of customers by in the minds of customers by communicating meaningful communicating meaningful distinctions about the attributes, distinctions about the attributes, price, quality, or use of a good or price, quality, or use of a good or service service


StrategyStrategy




IncreasingIncreasingSalesSales

• Most common objective of a Most common objective of a promotional strategypromotional strategy

• Example: Example: Naturalizer became Naturalizer became the third-largest seller of the third-largest seller of women’s dress shoes by women’s dress shoes by appealing to Baby Boomersappealing to Baby Boomers


StrategyStrategy





Stabilizing Stabilizing SalesSales

• Sales contests often used during Sales contests often used during slack periodsslack periods• Motivates salespeople by offering Motivates salespeople by offering

prizes such as vacation trips, TV sets, prizes such as vacation trips, TV sets, cell phones, and cashcell phones, and cash

• Sales promotion materials often Sales promotion materials often distributed to customers to distributed to customers to stimulate sales during off-seasons.stimulate sales during off-seasons.


StrategyStrategy





Stabilizing Stabilizing SalesSales

AccentuatingAccentuatingthe Product’sthe Product’s

ValueValue

• Promotional strategies can enhance Promotional strategies can enhance product values by explaining often product values by explaining often unrecognized ownership benefits unrecognized ownership benefits • Examples:Examples:

• Car makers offer long-term Car makers offer long-term warranty programs and promote warranty programs and promote the excellence of their repair the excellence of their repair servicesservices

• Promotional efforts can focus on Promotional efforts can focus on low-price aspects of value low-price aspects of value


StrategyStrategy


Promotional PlanningPromotional PlanningPromotional PlanningPromotional Planning

• Increasing complexity and Increasing complexity and sophistication of marketing sophistication of marketing communications requires careful communications requires careful planning to coordinate IMC strategiesplanning to coordinate IMC strategies

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ADVERTISINGADVERTISINGADVERTISINGADVERTISING• Advertising:Advertising: paid, nonpersonal paid, nonpersonal

communication delivered communication delivered through various media and through various media and designed to inform or persuade designed to inform or persuade members of a particular members of a particular audienceaudience

• Of the world’s top ten Of the world’s top ten advertisers, half are advertisers, half are headquartered outside the U.Sheadquartered outside the U.S


Figure 16.3Top Ten Worldwide Advertisers

Figure 16.3Top Ten Worldwide Advertisers


Types Of Types Of AdvertisingAdvertisingTypes Of Types Of AdvertisingAdvertising• Product Product

Advertising:Advertising: consists of consists of messages designed messages designed to sell a particular to sell a particular good or servicegood or service


Types Of AdvertisingTypes Of Advertising

• Institutional Advertising:Institutional Advertising: involves involves messages that promote concepts, ideas, messages that promote concepts, ideas, philosophies, or goodwill for philosophies, or goodwill for industries, companies, organizations, industries, companies, organizations, or government entitiesor government entities

• Advocacy Advertising (Cause Advocacy Advertising (Cause Advertising):Advertising): promotes a specific promotes a specific viewpoint on a public issue as a way to viewpoint on a public issue as a way to influence public opinion and the influence public opinion and the legislative processlegislative process

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Figure 16.4Figure 16.4Advocacy Advertising Advocacy Advertising Figure 16.4Figure 16.4Advocacy Advertising Advocacy Advertising


Advertising and the Advertising and the Product Life CycleProduct Life CycleAdvertising and the Advertising and the Product Life CycleProduct Life Cycle• Product and Institutional Product and Institutional

Advertising fall into one of three Advertising fall into one of three categories, based on whether the categories, based on whether the ads intend to inform, persuade, or ads intend to inform, persuade, or remindremind• Informative Advertising:Informative Advertising: used to used to

build initial demand for a product in build initial demand for a product in the introductory phase of the product the introductory phase of the product life cyclelife cycle


Advertising and the Advertising and the Product Life CycleProduct Life CycleAdvertising and the Advertising and the Product Life CycleProduct Life Cycle

• Persuasive Advertising:Persuasive Advertising: attempts to attempts to improve the competitive status of a improve the competitive status of a product, institution, or concept, usually product, institution, or concept, usually in the growth and maturity stages of in the growth and maturity stages of the product life cyclethe product life cycle


Figure 16.5 Figure 16.5 Use of Persuasive Advertising by the U.S. ArmyUse of Persuasive Advertising by the U.S. Army


Advertising and the Advertising and the Product Life CycleProduct Life CycleAdvertising and the Advertising and the Product Life CycleProduct Life Cycle

• Comparative Advertising:Comparative Advertising: form form of persuasive product advertising of persuasive product advertising that compares products directly that compares products directly with their competitors with their competitors

• Reminder-oriented Reminder-oriented advertising: advertising: often appears in often appears in the late maturity or decline stages the late maturity or decline stages of the product life cycle to of the product life cycle to maintain awareness of the maintain awareness of the importance and usefulness of a importance and usefulness of a product, concept, or institution product, concept, or institution


Advertising MediaAdvertising MediaAdvertising MediaAdvertising Media

• Must choose how to allocate Must choose how to allocate advertising budgetadvertising budget

• All media offer advantages and All media offer advantages and disadvantagesdisadvantages

• Must consider cost and which media Must consider cost and which media is best suited for communicationis best suited for communication

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Figure 16.6 Carving Up the Advertising Media PieFigure 16.6 Carving Up the Advertising Media Pie


NewspapersNewspapersNewspapersNewspapers

• Continue to dominate local Continue to dominate local advertisingadvertising

• Ads easily tailored for local Ads easily tailored for local tastes and preferencestastes and preferences

• Can coordinate newspaper Can coordinate newspaper messages with other messages with other promotional effortspromotional efforts

• Disadvantage: relatively short Disadvantage: relatively short life span life span


TelevisionTelevisionTelevisionTelevision• America’s leading national America’s leading national

advertising mediumadvertising medium• Combines sound with dynamic Combines sound with dynamic

visuals of products . . . and their visuals of products . . . and their associated imagesassociated images

• AAn expensive advertising mediumn expensive advertising medium• Price for a 30-second ad during Price for a 30-second ad during

weeknight prime time on network weeknight prime time on network television generally ranges from television generally ranges from $100,000 to more than $500,000$100,000 to more than $500,000


RadioRadioRadioRadio

• Average U.S. household owns five Average U.S. household owns five radiosradios

• Captive audience of listeners as Captive audience of listeners as they commute to and from workthey commute to and from work

• In major markets, many stations In major markets, many stations serve different demographic groups serve different demographic groups with targeted programmingwith targeted programming

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MagazinesMagazinesMagazinesMagazines

• Includes consumer publications and Includes consumer publications and trade journals trade journals

• Can often customize their Can often customize their publications and target advertising publications and target advertising messages to different regions of the messages to different regions of the countrycountry

• A natural choice for targeted A natural choice for targeted advertisingadvertising


Direct MailDirect MailDirect MailDirect Mail

• Average American household Average American household receives about 550 pieces of receives about 550 pieces of direct mail each year, direct mail each year, including 100 catalogsincluding 100 catalogs

• Direct-mail advertising a $44 Direct-mail advertising a $44 billion business due to:billion business due to:• Huge growth in the variety of Huge growth in the variety of

direct-mail offeringsdirect-mail offerings• Convenience offered to today’s Convenience offered to today’s

busy shoppers busy shoppers



Direct MailDirect MailDirect MailDirect Mail

• Every dollar spent on direct-Every dollar spent on direct-mail advertising generates $10 mail advertising generates $10 in salesin sales• Over twice as effective as Over twice as effective as

television advertisingtelevision advertising

• Carefully targeted direct-mail Carefully targeted direct-mail effort, with an interesting effort, with an interesting message, can work well for message, can work well for small budget advertiserssmall budget advertisers



Figure 16.7Figure 16.7Using Telephone and Using Telephone and Internet Access to Internet Access to Support the Lands’ Support the Lands’ End CatalogEnd Catalog

Figure 16.7Figure 16.7Using Telephone and Using Telephone and Internet Access to Internet Access to Support the Lands’ Support the Lands’ End CatalogEnd Catalog


Outdoor AdvertisingOutdoor AdvertisingOutdoor AdvertisingOutdoor Advertising• Accounts for just over 1 percent of Accounts for just over 1 percent of

total advertising expenditurestotal advertising expenditures• Share is growingShare is growing

• Majority of spending on outdoor Majority of spending on outdoor advertising is for billboardsadvertising is for billboards• Other types of outdoor advertising Other types of outdoor advertising

(signs in transit stations, stores, (signs in transit stations, stores, airports, and sports stadiums) is airports, and sports stadiums) is growinggrowing


Outdoor AdvertisingOutdoor AdvertisingOutdoor AdvertisingOutdoor Advertising

• Advertisers exploring new forms of Advertisers exploring new forms of outdoor media -- many of which outdoor media -- many of which involve technology involve technology

• Disadvantages include the facts Disadvantages include the facts that:that:• Brief messages are requiredBrief messages are required• Mounting concern for aesthetic and Mounting concern for aesthetic and

environmental issues environmental issues


Interactive MediaInteractive MediaInteractive MediaInteractive Media

• Range from Web sites and CDs to Range from Web sites and CDs to information kiosks information kiosks

• Currently commands only a tiny Currently commands only a tiny portion of media spending, but is portion of media spending, but is the fastest-growing media segmentthe fastest-growing media segment


SponsorshipsSponsorshipsSponsorshipsSponsorships

• Sponsorship:Sponsorship: involves providing involves providing funds for a sporting or cultural funds for a sporting or cultural event in exchange for a direct event in exchange for a direct association with the eventassociation with the event

Logictier: An Official Sponsor for the Salt Lake Olympics Games


SponsorshipsSponsorshipsSponsorshipsSponsorships• Sports sponsorships attract two-Sports sponsorships attract two-

thirds of total sponsorship dollarsthirds of total sponsorship dollars • Primary benefits: exposure to the Primary benefits: exposure to the

event’s audience and association event’s audience and association with the image of the activity with the image of the activity


Other Media OptionsOther Media OptionsOther Media OptionsOther Media Options• Infomercials:Infomercials: 30-minute programs 30-minute programs

that resemble regular TV programs, that resemble regular TV programs, but are devoted to selling goods or but are devoted to selling goods or servicesservices

• Other Media options include:Other Media options include:• Ads in movie theatersAds in movie theaters• Ads on airline movie screensAds on airline movie screens• Printed programs Printed programs • Subway ticketsSubway tickets• Turnpike toll receiptsTurnpike toll receipts• Automated teller machines Automated teller machines

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SALES PROMOTIONSALES PROMOTIONSALES PROMOTIONSALES PROMOTION

• Sales promotion:Sales promotion: nonpersonal nonpersonal marketing activities other than marketing activities other than advertising and public relations that advertising and public relations that stimulate consumer purchasing and stimulate consumer purchasing and dealer effectiveness; includes displays, dealer effectiveness; includes displays, trade shows, demonstrations, and trade shows, demonstrations, and various nonrecurrent selling effortsvarious nonrecurrent selling efforts


• Potential advantages:Potential advantages:• Short-term increased salesShort-term increased sales• Increased brand equityIncreased brand equity• Enhanced customer relationshipsEnhanced customer relationships

SALES PROMOTIONSALES PROMOTIONSALES PROMOTIONSALES PROMOTION


Consumer-Oriented PromotionsConsumer-Oriented PromotionsConsumer-Oriented PromotionsConsumer-Oriented Promotions

• Goals of a consumer-oriented sales Goals of a consumer-oriented sales promotion include:promotion include:• Getting new and existing customers to Getting new and existing customers to

try or buy productstry or buy products• Encouraging repeat purchases by Encouraging repeat purchases by

rewarding current usersrewarding current users• Increasing sales of complementary Increasing sales of complementary

productsproducts• Boosting impulse purchases Boosting impulse purchases

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Figure 16.8Spending on Consumer-Oriented Promotions

Figure 16.8Spending on Consumer-Oriented Promotions


Coupons, Rebates, Samples, Coupons, Rebates, Samples, and Premiumsand PremiumsCoupons, Rebates, Samples, Coupons, Rebates, Samples, and Premiumsand Premiums

• The most widely used sales The most widely used sales promotion techniques are coupons, promotion techniques are coupons, advertising clippings, and cards advertising clippings, and cards included in packagesincluded in packages

• CouponsCoupons offer small price discounts offer small price discounts • May persuade a customer to try a new May persuade a customer to try a new

or different productor different product



Coupons, Rebates, Samples, Coupons, Rebates, Samples, and Premiumsand Premiums

Coupons, Rebates, Samples, Coupons, Rebates, Samples, and Premiumsand Premiums• RebatesRebates offer cash offer cash

back to consumers back to consumers • Help Help

manufacturers:manufacturers:• Increase purchase Increase purchase

ratesrates• Promote multiple Promote multiple

purchasespurchases• Reward product Reward product

usersusers



• Sample:Sample: a gift of a product a gift of a product distributed by mail, door-to-door, in distributed by mail, door-to-door, in a demonstration, or inside a demonstration, or inside packages of another product packages of another product • Expensive, butExpensive, but• Generates a higher response rate than Generates a higher response rate than

most other sales promotion techniquesmost other sales promotion techniques



• Premium: Premium: item given free item given free or at a reduced price with the or at a reduced price with the purchase of another productpurchase of another product

• Should choose a premium Should choose a premium that is likely to get that is likely to get consumers thinking and consumers thinking and caring about the brand and caring about the brand and the product the product


Contests and SweepstakesContests and SweepstakesContests and SweepstakesContests and Sweepstakes

• Offering cash, merchandise or travel Offering cash, merchandise or travel as prizes to participating winnersas prizes to participating winners

• Often used to introduce new goods Often used to introduce new goods and services and to attract additional and services and to attract additional customerscustomers

• Court rulings and legal restrictions Court rulings and legal restrictions have limited the use of contestshave limited the use of contests• Companies must proceed carefully in Companies must proceed carefully in

advertising their contests and prizesadvertising their contests and prizes


Specialty AdvertisingSpecialty AdvertisingSpecialty AdvertisingSpecialty Advertising

• Because these specialty advertising Because these specialty advertising products are useful, people tend to products are useful, people tend to keep and use them keep and use them • Gives advertisers repeated exposureGives advertisers repeated exposure

• Originally designed to identify and Originally designed to identify and create goodwill for advertiserscreate goodwill for advertisers

• Now generates sales leads and Now generates sales leads and develops traffic for stores and trade develops traffic for stores and trade show exhibitors.show exhibitors.



Trade-Oriented PromotionsTrade-Oriented PromotionsTrade-Oriented PromotionsTrade-Oriented Promotions

• Trade promotion:Trade promotion: sales sales promotion geared to marketing promotion geared to marketing intermediaries intermediaries

• Used to encourage retailers to:Used to encourage retailers to:• Stock new productsStock new products• Continue carrying existing onesContinue carrying existing ones• Promote products effectively to Promote products effectively to

consumers. consumers.

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• Successful trade promotions:Successful trade promotions:• Offer financial incentivesOffer financial incentives• Require careful timing, Require careful timing,

attention to costs, and easy attention to costs, and easy implementation for implementation for intermediariesintermediaries

• Should bring quick results and Should bring quick results and improve retail sales improve retail sales

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• Point-of-purchase (POP) Point-of-purchase (POP) advertising:advertising: displays or displays or demonstrations that promote demonstrations that promote products when and where products when and where consumers buy themconsumers buy them

• Takes advantage of many Takes advantage of many shoppers’ tendencies to make shoppers’ tendencies to make purchase decisions in the storepurchase decisions in the store


• Trade shows:Trade shows: promote goods or promote goods or services to intermediariesservices to intermediaries

• Often organized by industry trade Often organized by industry trade associationsassociations• Typically held during annual meetings Typically held during annual meetings

or conventionsor conventions• Particularly important in fast-changing Particularly important in fast-changing

industriesindustries• Especially effective for introducing new Especially effective for introducing new

products and generating sales leadsproducts and generating sales leads


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PERSONAL SELLINGPERSONAL SELLINGPERSONAL SELLINGPERSONAL SELLING

• Personal selling:Personal selling: interpersonal interpersonal promotional process involving a promotional process involving a seller’s face-to-face presentation to a seller’s face-to-face presentation to a prospective buyerprospective buyer

• Considered by many companies as Considered by many companies as the key to marketing effectivenessthe key to marketing effectiveness


PERSONAL SELLINGPERSONAL SELLINGPERSONAL SELLINGPERSONAL SELLING

• Likely to emphasize personal selling Likely to emphasize personal selling rather than advertising or sales promotion rather than advertising or sales promotion when:when:• Customers Customers are relatively few in number and are relatively few in number and

geographically concentratedgeographically concentrated• ProductProduct is technically complex, involves is technically complex, involves

trade-ins, and requires special handlingtrade-ins, and requires special handling• Product is high inProduct is high in price price• Product moves through Product moves through direct-distribution direct-distribution

channelschannels

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Figure 16.9Figure 16.9Listening: At the Listening: At the Core of Personal Core of Personal Selling Selling

Figure 16.9Figure 16.9Listening: At the Listening: At the Core of Personal Core of Personal Selling Selling


OrderOrderProcessingProcessing

• Order Processing: Order Processing: selling, mostly at the selling, mostly at the wholesale and retail wholesale and retail levels, that involves levels, that involves identifying customer identifying customer needs, pointing them out needs, pointing them out to customers, and to customers, and completing orderscompleting orders

• Efficient and accurate Efficient and accurate order processing is order processing is critical to satisfying critical to satisfying customers’ needscustomers’ needs

Sales TasksSales TasksSales TasksSales Tasks

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• Creative Selling:Creative Selling: personal selling personal selling involving situations in involving situations in which a considerable which a considerable degree of analytical degree of analytical decision making on decision making on the buyer’s part the buyer’s part results in the need for results in the need for skillful proposals of skillful proposals of solutions for the solutions for the customer’s needs customer’s needs


CreativeCreativeSellingSelling

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• Missionary Selling: Missionary Selling: indirect form of selling indirect form of selling in which specialized in which specialized salespeople promote salespeople promote goodwill among indirect goodwill among indirect customers, often by customers, often by assisting customers in assisting customers in product useproduct use

• Missionary salespeople Missionary salespeople sometimes to help their sometimes to help their clients with questions not clients with questions not directly related to their directly related to their employers’ productsemployers’ products


CreativeCreativeSellingSelling

Missionary Missionary SellingSelling

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Figure 16.10Seven Steps in the Sales Process

Figure 16.10Seven Steps in the Sales Process

The Sales ProcessThe Sales Process


Prospecting Prospecting and and

QualifyingQualifying


• ProspectingProspecting involves involves identifying potential customersidentifying potential customers

• QualifyingQualifying involves identifying involves identifying potential customers who have potential customers who have the financial ability and the financial ability and authority to buy. authority to buy.


Prospecting Prospecting and Qualifyingand Qualifying

ApproachApproach


• Before making the initial contact:Before making the initial contact:• Careful preparations are madeCareful preparations are made• Available data about a prospective Available data about a prospective

customer and other pertinent customer and other pertinent information is analyzed information is analyzed

• First impression is important in First impression is important in influencing a customer’s attitudes influencing a customer’s attitudes

• Successful salespeople learn to Successful salespeople learn to “read” customers and to determine “read” customers and to determine their needs their needs



ApproachApproach

PresentationPresentation


• Involves communicating Involves communicating promotional messagespromotional messages

• Major features of the product, Major features of the product, highlights of the advantages, highlights of the advantages, and examples of satisfied and examples of satisfied consumers are typically consumers are typically presentedpresented



ApproachApproach


DemonstrationDemonstration


• Involves the prospect in the Involves the prospect in the sales presentationsales presentation

• Reinforces the message that the Reinforces the message that the salesperson has been salesperson has been communicatingcommunicating

• Often a critical step in the sales Often a critical step in the sales processprocess


Handling Handling ObjectionsObjections


ApproachApproach




• Allows sales personnel to Allows sales personnel to remove obstacles and complete remove obstacles and complete the salethe sale

• Can become a positive part of Can become a positive part of the sales process the sales process

• Allows the salesperson to Allows the salesperson to present additional information present additional information


Handling Handling ObjectionsObjections ClosingClosing


ApproachApproach




• Critical point in a selling Critical point in a selling relationship -- the time at which relationship -- the time at which the salesperson actually asks the salesperson actually asks the prospect to buythe prospect to buy

• If the presentation effectively If the presentation effectively matches product features to matches product features to customer needs, the closing customer needs, the closing should be a natural conclusion. should be a natural conclusion.




ApproachApproach




Follow-upFollow-up

• Salesperson’s actions after the saleSalesperson’s actions after the sale• May well determine whether the May well determine whether the

customer will make another customer will make another purchasepurchase

• Seller should:Seller should:• Process the order quickly and Process the order quickly and

efficientlyefficiently• Reassure the customer about the Reassure the customer about the

purchase decisionpurchase decision




ApproachApproach




Follow-upFollow-up

• Vital activity for building a long-Vital activity for building a long-term relationship with customersterm relationship with customers

• By calling soon after a purchase, the By calling soon after a purchase, the salesperson provides psychological salesperson provides psychological reinforcement for the customer’s reinforcement for the customer’s decision to buydecision to buy

• Also gives the seller a chance to Also gives the seller a chance to correct any problemscorrect any problems


Recent Trends in Personal SellingRecent Trends in Personal SellingRecent Trends in Personal SellingRecent Trends in Personal Selling

• Especially in business-to-Especially in business-to-business situations involving business situations involving technical products, customers technical products, customers expect sales reps to:expect sales reps to:• Answer technical questionsAnswer technical questions• Understand technical jargonUnderstand technical jargon• Communicate using sophisticated Communicate using sophisticated

technological tools -- or bring technological tools -- or bring along someone who canalong someone who can

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Recent Trends in Personal SellingRecent Trends in Personal SellingRecent Trends in Personal SellingRecent Trends in Personal Selling

• Patience is requiredPatience is required• Sales cycle, may take months orSales cycle, may take months or

even years . . . especially for even years . . . especially for large, expensive equipmentlarge, expensive equipment

• Companies are turning to:Companies are turning to:• Relationship sellingRelationship selling• Consultative sellingConsultative selling• Team sellingTeam selling• Sales force automation Sales force automation

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TelemarketingTelemarketingTelemarketingTelemarketing

• Telemarketing:Telemarketing: personal personal selling conducted entirely by selling conducted entirely by telephone, provides a firm’s telephone, provides a firm’s marketers with a high return marketers with a high return on their expenditures, an on their expenditures, an immediate response, and an immediate response, and an opportunity for personalized, opportunity for personalized, two-way conversationtwo-way conversation

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TelemarketingTelemarketingTelemarketingTelemarketing

• Two forms of telemarketing :Two forms of telemarketing :• Outbound telemarketing: Outbound telemarketing: when a when a

sales representative calls you at your sales representative calls you at your place of business place of business

• Inbound telemarketing: Inbound telemarketing: when the when the customer calls a toll-free phone number customer calls a toll-free phone number to get information or place an order.to get information or place an order.

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Relationship Selling and Relationship Selling and Consultative SellingConsultative SellingRelationship Selling and Relationship Selling and Consultative SellingConsultative Selling• Relationship Selling:Relationship Selling:

when a salesperson builds when a salesperson builds a mutually beneficial a mutually beneficial relationship with a relationship with a customer through regular customer through regular contacts over an extended contacts over an extended periodperiod

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Relationship Selling and Relationship Selling and Consultative SellingConsultative SellingRelationship Selling and Relationship Selling and Consultative SellingConsultative Selling• Consultative selling:Consultative selling: meeting meeting

customers’ needs by listening to customers’ needs by listening to them, understanding and caring them, understanding and caring about their problems, paying about their problems, paying attention to details, suggesting attention to details, suggesting solutions, and following through solutions, and following through after the saleafter the sale

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Team SellingTeam SellingTeam SellingTeam Selling• Team selling:Team selling: joins salespeople joins salespeople

with specialists from other with specialists from other functional areas of the firm to functional areas of the firm to complete the selling processcomplete the selling process

• Complements relationship and Complements relationship and consultative selling strategiesconsultative selling strategies

• Can be formally assigned teams or Can be formally assigned teams or assembled for specific, temporary assembled for specific, temporary selling situationsselling situations

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Sales Force AutomationSales Force AutomationSales Force AutomationSales Force Automation

• Sales force automation (SFA): Sales force automation (SFA): incorporates a broad range of tools, incorporates a broad range of tools, from e-mail, telecommunications from e-mail, telecommunications devices like pagers and cell phones, devices like pagers and cell phones, and laptop computers to and laptop computers to increasingly sophisticated software increasingly sophisticated software systems that automate the sales systems that automate the sales processprocess

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• Helps sales managers:Helps sales managers:• Develop account territoriesDevelop account territories• Plan sales campaignsPlan sales campaigns• Perform detailed analyses of sales Perform detailed analyses of sales

trendstrends• Forecast future salesForecast future sales


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• Sales personnel can use the system to:Sales personnel can use the system to:• Analyze customer databases to develop Analyze customer databases to develop

leadsleads• Schedule sales campaignsSchedule sales campaigns• Automatically file orders and expense Automatically file orders and expense

reportsreports• Tap into company databases for instant Tap into company databases for instant

updates on prices, and product availability updates on prices, and product availability


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Public RelationsPublic RelationsPublic RelationsPublic Relations• Public Relations:Public Relations: organization’s organization’s

nonpaid communications and nonpaid communications and relationships with public relationships with public audiencesaudiences

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Public RelationsPublic RelationsPublic RelationsPublic Relations

• Publicity: Publicity: stimulation of demand stimulation of demand for a good, service, place, idea, for a good, service, place, idea, person, or organization by person, or organization by disseminating news or obtaining disseminating news or obtaining favorable media presentations not favorable media presentations not paid for by the sponsorpaid for by the sponsor

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PROMOTIONAL STRATEGIESPROMOTIONAL STRATEGIESPROMOTIONAL STRATEGIESPROMOTIONAL STRATEGIES• By blending advertising, sales promotion, By blending advertising, sales promotion,

personal selling, and public relations, personal selling, and public relations, marketers create an integrated promotional marketers create an integrated promotional mix that reflects the market, product type, mix that reflects the market, product type, stage in the product life cycle, price, and stage in the product life cycle, price, and promotional budgetpromotional budget

• They then implement one of two promotional They then implement one of two promotional alternatives: pulling or pushing strategiesalternatives: pulling or pushing strategies

• Finally, the effectiveness of the promotional Finally, the effectiveness of the promotional strategies must be measured strategies must be measured

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Selecting a Promotional MixSelecting a Promotional MixSelecting a Promotional MixSelecting a Promotional Mix

• Guidelines for allocating promotional Guidelines for allocating promotional efforts and expenditures among efforts and expenditures among personal selling and advertising:personal selling and advertising:• What is your target market?What is your target market?• What is the value of the product?What is the value of the product?• What time frame is involved?What time frame is involved?

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Figure 16.11 Advertising in Nike’s Promotional MixFigure 16.11 Advertising in Nike’s Promotional Mix


Pushing and Pulling StrategiesPushing and Pulling StrategiesPushing and Pulling StrategiesPushing and Pulling Strategies• Pushing strategy:Pushing strategy: promotional promotional

effort by a seller to members of the effort by a seller to members of the distribution channel intended to distribution channel intended to stimulate personal selling of the stimulate personal selling of the good or service, thereby pushing it good or service, thereby pushing it through the channelthrough the channel• Cooperative advertising:Cooperative advertising: allowances allowances

in which firms share the cost of local in which firms share the cost of local advertising of their product or line advertising of their product or line with channel partnerswith channel partners

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• Pulling strategy: Pulling strategy: promotional promotional effort by a seller to stimulate demand effort by a seller to stimulate demand among final users, who will then among final users, who will then exert pressure on the distribution exert pressure on the distribution channel to carry the good or service, channel to carry the good or service, pulling it through the distribution pulling it through the distribution channelchannel

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Pushing and Pulling StrategiesPushing and Pulling StrategiesPushing and Pulling StrategiesPushing and Pulling Strategies


ETHICS IN PROMOTIONETHICS IN PROMOTIONETHICS IN PROMOTIONETHICS IN PROMOTION

• Promotion ranks high among things Promotion ranks high among things raising the most ethical questionsraising the most ethical questions

• Many people view advertising Many people view advertising negatively, labeling it as negatively, labeling it as propaganda rather than informationpropaganda rather than information

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Puffery and DeceptionPuffery and DeceptionPuffery and DeceptionPuffery and Deception

• Puffery:Puffery: exaggerated claims exaggerated claims of a product’s superiority or use of a product’s superiority or use of doubtful, subjective, or vague of doubtful, subjective, or vague statementsstatements

• Usually considered unbelievable Usually considered unbelievable and is therefore legaland is therefore legal

• Raises ethical questionsRaises ethical questions


Puffery and DeceptionPuffery and DeceptionPuffery and DeceptionPuffery and Deception

• Other promotional elements can Other promotional elements can also involve also involve deceptiondeception• Sales promotions may tempt Sales promotions may tempt

unscrupulous companies to unscrupulous companies to deceive consumers by deceive consumers by inaccurately stating the odds of inaccurately stating the odds of winning sweepstakes or contestswinning sweepstakes or contests

• Salespeople have deceived Salespeople have deceived customers with misleading customers with misleading informationinformation


Promotion to Children and TeensPromotion to Children and TeensPromotion to Children and TeensPromotion to Children and Teens

• Risk of deception is Risk of deception is especially great with especially great with promotion targeted to promotion targeted to children and teenschildren and teens

• Children not sophisticated Children not sophisticated at analyzing promotional at analyzing promotional messagesmessages

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Promotion in Public Schools Promotion in Public Schools and on College Campusesand on College CampusesPromotion in Public Schools Promotion in Public Schools and on College Campusesand on College Campuses

• Includes promotional book covers, Includes promotional book covers, posters, and even curriculum materials posters, and even curriculum materials provided to today’s schoolsprovided to today’s schools

• Some schools sign contracts that give Some schools sign contracts that give certain brands exclusive access to their certain brands exclusive access to their students students

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WHAT’S AHEADWHAT’S AHEADWHAT’S AHEADWHAT’S AHEAD

• As discussion of how As discussion of how information systems, information systems, including the Internet, and including the Internet, and other forms of technology other forms of technology change the business change the business environment and help environment and help businesses succeed businesses succeed

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copyright © 2003 by south-western. all rights reserved. chapter sixteen promoting goods and...

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