Principles of Marketing: Seventeenth Edition

Principles of Marketing
Seventeenth Edition
Topic 13
(Chapter 16)
Personal Selling and Sales Promotion
Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

1
Objectives Outline
Objective 1:
Discuss the role of a company’s salespeople in creating value for customers
and building customer relationships.
Objective 2:
Identify and explain the six major sales force management steps.
Objective 3:
Discuss the personal selling process, distinguishing between transaction-
oriented marketing and relationship marketing.
Objective 4:
Explain how sales promotion campaigns are developed and implemented.

2
Personal Selling
Personal selling is the interpersonal part of the promotion mix and can
include:
• Face-to-face communication
Communication either
• Telephone communication verbally or non-verbally
• Video or web/online conferencing
• Email or social media
 Salesperson can probe customers to learn about their problems and

adjust the marketing offer and presentation to fit each customer’s
special needs.

Personal Selling & Salesperson
Personal Selling Salesperson
Personal presentations by the firm’s An individual who represents a company

sales force for the purpose of: to customers by performing one or more
of the following activities:
• Engaging customers
• Making sales • Prospecting
• Building customer relationships • Communicating
• Selling
• Servicing
• Information gathering
• Relationship building

Personal Selling
The Nature of Personal Selling
Salespeople are an effective link between the company and its customers to
produce customer value and company profit by:
1. Representing the company to customers

- Find and develop new customers and communicate information about the
company’s product and services.
- They sell the products by engaging customers and learning about their
needs, presenting solutions, answering objections, negotiating prices and
terms, closing sales, servicing and maintaining account.

Personal Selling
The Nature of Personal Selling
2. Representing customers to the company
- Acting inside the firm as “champions” of customer interests and managing
buyer-seller relationship.
- Salesperson relay customer concerns about the company products and actions
back inside to those who can handle them.
- They learn about customer needs and work with other marketing and non
marketing people in the company to develop greater customer value.

Personal Selling
Coordinating Marketing and Sales
• Sales force and other marketing functions (marketing planners, brand
managers, marketing content managers, and researchers) should work
together closely to jointly create value for customers.
However, some companies treat sales and marketing as separate functions.
When things goes wrong, marketers blame the sales force, or sales force blames
marketers for not doing well.
• Action to be close together:

1. Increase communication between two groups (sales force and marketers)
2. Company can create joint objectives and reward system for sales and
marketing team.

Managing the Sales Force
Sales force management is the analysis, planning, implementation, and control of sales force
activities.
What is the goal this process (steps in sales force management)?
Company strive to build skilled and motivated sales team that will help in
engage customer, create customer value and build strong customer
relationships

Managing the Sales
Force
Designing Sales Force Strategy and Structure
Territorial sales force structure
Product sales force structure
Customer sales force structure
Complex sales force structure

1) Designing Sales Force Strategy and Structure
Territorial sales force structure:

• Sales force organization that assigns each salesperson to an exclusive
geographic territory in which that salesperson sells the company’s full line.
(each salesperson is assigned an exclusive geographic area and sells the
company’s full line of products and services to all customers in that territory.)
The company sells only ONE product line to one industry with customers in
MANY locations.
• Defines salesperson’s job

• Fixes accountability
• Lowers sales expenses
• Improves relationship building and selling effectiveness
Product sales force structure:

A sales force organization in which salespeople specialize in selling only a portion of
the company’s products or line. (each salesperson sells along product lines)
• The company sells many products to many types of customers. (If a company has
numerous and complex products)
• Improves product knowledge - no single salesperson can become an expert in all

product categories,
• Can lead to territorial conflicts
Example: printer equipment salesperson, server salesperson, microcomputer

salesperson, programmable calculator salesperson, etc.
Customer (or market) sales force structure:
A sales force organization in which salespeople specialize in selling on to certain
customers or industries. (each salesperson sells along customer or industry lines)
• Separate sales force serves different industries, serving current customers vs.
finding new ones, serves major account vs. regular account.
• Improves customer relationships
Example: Electrolux assigns individual sales force team to serve big retail
customers such as Aeon, Harvey Norman.

Complex sales force structure:
A wide variety of products is sold to many types of customers over a broad
geographic area, and it combines several types of sales force structures.
Conclusion:
No single structure is best for all companies and situations.
Each company should select a sales force structure that best serves the needs of
its customers and fits its overall marketing strategy.

*Once the company has set its structure, it is ready to consider sales force size. It may
range in size from only a few salespeople to tens of thousands.
• Salespeople are one of the company’s most productive and expensive assets.
• Workload approach to sales force size refers to grouping accounts into different classes
to determine the number of salespeople needed.
*Sales management should determine who will be involved in selling effort and how
various sales and support people work together.
• Company may have outside salespeople call on customers in the field.
• Company may have inside salespeople conduct business from their offices and often
provide support for the outside salespeople.
• Technical sales support people
• Sales assistants
• Team selling is used to service large, complex accounts. (Using team of expert people
from sales, marketing, engineering, finance, technical support, and even upper
management to service large, complex accounts.)
2) Recruiting and Selecting Salespeople
Recruit: Attract as Select: Choose the

many people as best one.
possible to apply for
the job.
• Successful sales force operation is the recruitment and selection of good

salespeople. (selection is the process after recruitment)
• Careful selection and training increases sales performance.
• Poor selection increases recruiting and training costs, leads to lost sales, and
disrupts customer relationships.
• Best salespeople possess 4 key talents: Intrinsic motivation, disciplined work
style, the ability to close sales, and the ability to build relationships with
customers.
3) Training Salespeople
After initial training ends, most companies provide continuing sales training via
seminars, sales meeting, and online learning throughout salesperson’s career.
• Goals of training programs:
a) Know about customers and build relationships with them.
b) Teach salespeople about different types of customers and their needs,
buying motives and buying habits.
c) Salespeople need to know knowledge of the company, its products and its
competitors.
d) Organization must teach salespeople on how to sell effectively and train
them on the basic of selling process.
Many company adding digital e-learning (online learning) components to their
sales training program.

Managing the Sales
Force
4) Compensating Salespeople The variable amount, which might
be commissions or bonuses
based on sales performance,
The fixed amount, usually a Fixed Variable rewards the salesperson for
salary, gives the salesperson greater effort and success.
some stable income. amounts amounts
Fringe
Expenses
benefits
Salespeople in the organization, travel. Some of this travel is Fringe benefits are forms of compensation that
around town from one location to another during the day. Other provide to employees outside of a stated wage
travel requires the sales person to be "on the road" for some or salary. Example, medical and dental
period of extended time away from home. However, most insurance, use of a company car, housing
organizations reimburse the employee for these expenses. allowance, educational assistance, vacation
Payments to the employees are not classified as income to the pay, sick pay, meals and employee discounts.
employee. Copyright © 2018 Pearson Education Ltd. All Rights Reserved.
5) Supervising and Motivating Salespeople
• The goal of supervision is to help salespeople work smart by doing the right
things in the right ways.
- Many help salespeople identify target customers and set call objectives.
- Some specify how much time should salespeople spend in finding prospecting
for new accounts & set other time management priorities.
- Tool:
- i) weekly, monthly, or annual call plan shows which customers and prospects to
call.
- ii) Time-and-duty analysis on which activity to carry out.

5) Supervising and Motivating Salespeople
• The goal of motivation is to encourage salespeople to work hard and

energetically toward sales force goals.
• Management can boost sales force morale and performance through:
 Organizational climate: the feeling that salespeople have about their
opportunities, value, and rewards for a good performance.
 Sales quotas: set standards stating the amount they should sell and how
sales should be divided among the company’s products. Compensation is
often related to how well salespeople meet their quotas.
 Positive incentives: Increase sales force effort (e.g. sales contest, cash
awards, trips, profit sharing plans)

Managing the Sales
Force
6) Evaluating Salespeople and Sales Force Performance
• This process requires good feedback, which means getting regular information about
salespeople to evaluate their performance.
• Management gets information about its salespeople in several ways:
a) Sales reports: including weekly or monthly work plans and longer-term territory
marketing plans.
b) Calls reports: Salespeople also write up their completed activities.
c) Expense reports: reports for which they are partly or wholly reimbursed. The
company can also monitor the sales and profit performance data in the
salesperson’s territory.
Company may use personal observation, customer surveys, and talks with other
salespeople. As with other marketing activities, the company wants to measure its
return on sales investment.

The Personal Selling Process
• The selling process consists of several steps that salespeople must master.
These steps focus on the goal of getting new customers and obtaining
orders from them.
Steps in the Personal Selling Process
Prospecting identifies qualified potential customers through referrals from:
• Customers
• Suppliers
• Dealers
• Internet

Qualifying involves identifying good customers and screening out poor
ones by looking at:
• Financial ability
• Volume of business
• Needs
• Location
• Growth potential

Preapproach is the process of learning as much as possible about a prospect,
including needs, who is involved in the buying, and the characteristics and styles of
the buyers.
(salesperson learns as much as possible about a prospective customer before
making a sales call)
Objectives Approaches
• Qualify the prospect • Personal visit

• Gather information • Phone call
• Make an immediate sale • Letter/e-mail

Approach is the process where the salesperson meets and greets the
buyer and gets the relationship off to a good start and involves the
salesperson’s (salesperson meets the customer for the first time) :
• Appearance
• Opening lines (key questions to learn more about the customer’s
needs/ showing sample to attract customer)
• Follow-up remarks

Presentation is when the salesperson tells the product story to the buyer,
presenting customer benefits and showing how the product solves the customer’s
problems.
• Need-satisfaction approach is when buyers want solutions and salespeople

should listen and respond with the right products and services to solve customer
problems.

Handling objections is the process where salespeople resolve problems that
are logical, psychological, or unspoken.
• Salesperson should use positive approach, ask buyer to clarify objections,
take objections as opportunities to provide more information and turn it into
reason for buying.

Closing is the process where salespeople should recognize signals from the
buyer—including physical actions, comments, and questions—to ask for a order
and finalize the sale.
Closing techniques can include:

• Asking for the order
• Reviewing points of agreement
• Offering to help write up the order
• Asking if the buyer wants this model or another one
• Making note that the buyer will lose out if the order is not placed now
• Offering incentives to buy, including lower price or additional quantity
Follow-up is the last step in which the salesperson follows up after the sale to
ensure customer satisfaction and repeat business.

As shown in Figure 16.3, the selling process must be understood in the context
of building and maintaining profitable customer relationships.
• Personal selling is transaction-oriented to close a specific sale with a specific

customer.
• The long-term goal of personal selling is to develop a mutually profitable
relationship.

Sales Promotion
Sales promotion refers to the short-term
incentives to encourage purchases or sales
of a product or service now.

Sales Promotion
Rapid Growth of Sales Promotion
Why there is a need to have sales promotion?
• Product managers are under pressure to increase current sales.
• Companies face more competition.
• Competing brands offer less differentiation.
• Advertising efficiency has declined due to rising costs, clutter, and legal
constraints.
• Consumers have become more deal-oriented.

Sales Promotion
Setting sales promotion objectives includes using:
• Consumer promotions- urge short-term customer buying and enhance long-term customer
relationships.
• Trade promotions- urge retailer and wholesaler to:
• Carry new items or more inventory
• Buy in advance
• Advertise company products
• Get more shelf space
• Generate business leads
• Stimulate purchases
• Reward customers
• Motivate salespeople
• Business promotions- urge business customers are used to:
• Generate business leads
• Stimulate purchases
• Reward customers
• Motivate salespeople
• Sales force promotions - include getting more sales force support for new or current
products and getting salespeople to sign up new accounts. Copyright © 2018 Pearson Education Ltd. All Rights Reserved.
Sales Promotion
Major Sales Promotion Tools
1) Samples offer a trial amount of a product.
2) Coupons are certificates that give buyers a saving when they purchase specified
products.
3) Rebates are similar to coupons except that the price reduction occurs after the
purchase.
4) rice packs offer consumers savings off the regular price of a product. (two for the
price of one or two related products banded together)
5) Premiums are goods offered either for free or at a low price.
6) Advertising specialties are useful articles imprinted with the advertiser’s name,
logo, or message that are given as gifts to consumers.
7) Point-of-purchase promotions include displays and demonstrations that take
place at the point of sale.

Sales Promotion
Major Sales Promotion Tools
8) Contests, sweepstakes, and games give consumers the chance to win
something—such as cash, trips, or goods—by luck or through extra effort.
• Contests require an entry by a consumer.
• Sweepstakes require consumers to submit their names for a drawing.
• Games present consumers with something that may or may not help them win a
prize.
9) Event marketing or event sponsorship is creating a brand-marketing event or
serving as a sole or participating sponsor of events created by others.

Coupons
Rebates/ cash refunds

Premiums:
Price packs McDonald’s has offered a variety of premiums in its Happy Meals – Rilakuma,
My Little Pony, Thomas and friends.

Advertising specialties or promotional products.
(imprinted with an advertiser’s name, logo, or Event sponsorship
message that are given as gifts to customer)

Point of purchase

Contest, sweepstakes and games

Sales Promotion
Major Tools for Trade Promotions - persuade resellers to carry a brand, give it
shelf space, promote it in advertising, and push it to consumers
Discount Allowance
Specialty
Free goods
advertising

Sales Promotion
Major Tools for Trade Promotions
1) a straight discount off the list price on each case purchased during a stated period of
time (also called a price-off, off-invoice, or off-list).
2) allowances (usually so much off per case) in return for the retailer’s agreement to
feature the manufacturer’s products in some way. For example, an advertising allowance
compensates retailers for advertising the product, whereas a display allowance
compensates them for using special displays.
3) free goods, which are extra cases of merchandise, to resellers who buy a certain
quantity or who feature a certain flavor or size.
4) specialty advertising items that carry the company’s name, such as pens, calendars,
memo pads, flashlights, and tote bags.

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Principles of Marketing

Personal Selling and Sales Promotion

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

 Salesperson can probe customers to learn about their problems and

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Personal presentations by the firm’s An individual who represents a company

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

1. Representing the company to customers

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

• Action to be close together:

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

What is the goal this process (steps in sales force management)?

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Territorial sales force structure

Product sales force structure

Customer sales force structure

Complex sales force structure

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Territorial sales force structure:

• Defines salesperson’s job

Product sales force structure:

• Improves product knowledge - no single salesperson can become an expert in all

• Can lead to territorial conflicts

Example: printer equipment salesperson, server salesperson, microcomputer

• Improves customer relationships

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Recruit: Attract as Select: Choose the

• Successful sales force operation is the recruitment and selection of good

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

• The goal of motivation is to encourage salespeople to work hard and

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

• Qualify the prospect • Personal visit

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

• Need-satisfaction approach is when buyers want solutions and salespeople

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Closing techniques can include:

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

• Personal selling is transaction-oriented to close a specific sale with a specific

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Rebates/ cash refunds

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.