Chapter 6

Sales Promotion
&
Personal Selling
 Content
• Overview of Sales Promotion ( definition, uses, pros and cons)

• Push and Pull Strategy

• Tools of Sales Promotion ( Customer-Oriented , Trade Sales Promotion)

• Combining Sales Promotion with other Promotion Mix elements.

• Overview of Personal Selling (definition, roles, objectives, pros and cons)

• Personal Selling process

• Combining Personal Selling with other promotional tools in IMC program.

• Characteristics to become a successful salesperson.

Learning Objectives
• To comprehend the uses of sales promotion and personal
selling in a company’s IMC program and to examine why it is
increasingly important.

• To examine the various objectives of sales promotion

programs and the combination of sales promotion and
advertising in IMC program.

• To examine the types of consumer and trade sales

promotion tools and the factors to consider in using them.

• To determine the effectiveness of personal selling efforts.

 SALES
PROMOTION
 Definitions of Sales Promotion
• According to American Marketing Association
(AMA):

“ Sales promotion is marketing activities other than

personal selling, advertising and and publicity that
enhance consumer purchasing and dealer
effectiveness such as display shows, expositions,
demonstrations and various non-recurrent selling
efforts not in the ordinary routine.”
 Introduce Introduce new products

Get Get existing customers to buy more

Uses of Attract Attract new customers

Combat Combat competition

Sales Maintain Maintain sales in off season

Increase Increase retail inventories

Promotion
Tie in Tie in advertising & personal selling

Enhance Enhance personal selling efforts

Sales Promotion: Pros and Cons
Pros Cons

Attracts consumer attention. Can dilute the brand image.

Can make loyal consumers cynical.
Offers strong incentives to try/purchase.
Can make them become conditioned
Can dramatize product & boost sales. consumers.

Invites & rewards quick customer response. Effects are short-lived.

Not as effective as building long term brand
preference & loyal customer relationships.
 Push and Pull Strategy
• The push strategy concentrates on middlemen or retailers who
push the sale of the product to the final consumers. The push
strategy asks the sellers or retailers to attract the layers. Trade
promotion is thus the main form of the push strategy.

• The pull strategy is directed toward the final buyers. It persuades

the buyers to go to the sellers to buy. Customer promotion is an
important form of the pull strategy.
Tools of Sales Promotion
Consumer Promotion Trade Promotion
§ Discounts § Trade allowances
§ Coupons/rebate § Advertising/promotion allowances
§ Competitions/contest § Display/merchandise allowances
§ Sampling § Bonus payment and incentives
§ Premiums/gifts § Co-marketing program
§ Bonus Packs § Sales contest
§ Sweepstakes/lucky draw § Trade show
CONSUMER SALES
PROMOTION
Objectives of Consumer – Oriented
Sales Promotion
To obtain trial
and purchase

Enhance IMC To increase

efforts and build consumption of an
brand equity Objectives established brand

To target a specific To maintain

segment current customers
Objectives of Consumer – Oriented
Sales Promotion
 Sampling
• A promotional program that allows the consumer the opportunity to try a product/service
for free.

• Method of sampling: direct mail, door-to-door delivery, newspapers and magazines, high-
traffic locations and events sampling, in-store sampling, cross-product sampling.
Case Study: Introducing Oreos in China
 Coupon
• A certificate that entitles consumer
to an immediate price reduction.
• Distribution methods: handouts at
store, direct mail, Internet,
newspapers & magazines, on- or
in- packages.
 Premium
• An extra item offered to the consumer, usually in exchange for some proof of purchase.

• Brand managers use several forms of premium offers to motivate desired consumer behaviors: (1) free-gift-with-
purchase premiums; (2) mail-in and online offers; (3) in-, on-, and near-pack premiums.
Price-Offs/Bonus Packs
 Sweepstakes/Contests/Games
Promotions that depend on chance or luck, with free
participants.
Example:

VINAMILK PROBI ACECOOK HẢO HẢO

Activity:
• What increases or decreases brand image/brand equity?
• OBJECTIVE? => TARGET AUDIENCE? => TECHNIQUE?
TRADE SALES
PROMOTION
Objectives of Trade – Oriented Sales
Promotion
Maintain trade
Obtain distribution of
support for existing
new products
products

Encourage retailers Objectives Build retail

to display existing
inventories
products
Reduce excess
inventories and
increasing turnover
Trade Allowances
Offered by manufacturers to channel partners, such as wholesales,
retailers, and distributors,… give them different incentives to push a
product/service.

By using trade allowances, manufacturers hope to accomplish two

interrelated objectives: (1) increase retailers’ purchases of the
manufacturer’s brand, and (2) increase consumers’ purchases of the
manufacturer’s brand from retailers.
Types of Trade Allowances
Off-invoice allowance A per-case rebate paid to retailers for an
order
Bill-back allowance Money paid to retailers to advertise or
(Ads/Display) display a product in prime locations.
Slotting fees Money paid to retailers to stock a new
product
Exit fees Money paid to retailers to remove an item
from their Stock Keeping Unit (SKU)
Inventory.
Cooperative Advertising

Horizontal

Cooperative
Advertising

Ingredient –
Vertical
Sponsored
The “Intel Inside” campaign is an example of
ingredient-sponsored cooperative advertising
• Firstly, Intel directly pays computer manufacturers in exchange for
an "Intel Inside" logo on the outside of the computer.

• At the same time, a series of advertisements throughout all media to

emphasize the technological strengths of Intel.

• In 1993, a huge budget approved for Intel Inside at CES – Consumer

Electronics Show to guarantee that all CES visitors are awareness of
“Intel Experience” zone.
 Trade Show
A trade show is an event in which firms in a particular industry display
and demonstrate their offerings to other organizations they hope will
buy them. There are typically many different trade shows in which one
organization can participate.
 Sales Contest
• which are often held by manufacturers or
vendors, provide incentives for salespeople
to increase their sales.
• The contests focus on selling higher-profit
or slow-moving products.
• The sales representative with the most sales
of the product wins a prize such as a free
vacation, company recognition, or cash.
 Combining Sales Promotion with
Advertising
• The best Sales Promotion Program has consider to coordinate
with advertising and the effective advertising campaign should
be coordinated by the sales promotion effort with consumers.

• Sales Promotion and Advertising should consider as

complementary tools. When properly planned and executed
together, advertising and sales promotion can have a more
supportive impact rather than standing alone.
 The Sales Promotion Dilemma
Our Company

All other companies Cut back promotions Maintain promotions

Cut back promotions Higher profits for all Market share goes to all
our company

Maintain promotions Market share goes to all Market share stay

other companies constant; profits stay low
 Activity:
1. In your opinion, Why is the Internet a good medium for offering sales
promotions to consumers? How has social media helped to provide
sales promotions to consumers?

2. Have you participated in online promotions (e.g., on Facebook), and

if so, what has been your experience?

3. Rather than offering discounts in the form of coupons, why don’t

brand managers simply reduce the prices of their brands?
PERSONAL SELLING
 Overview of Personal Selling
• Personal selling is the personal presentation by the firm’s sales force for the
purpose of making sales and building customer relationships.

• In an IMC program, personal selling is a partner with, not a substitute for

the other promotional mix elements.

• Personal selling involves developing customers relationship, discovering

and communicating customers needs, matching the appropriate products
with these needs.
When is it more useful?
• When the market is concentrated.

• When the personality of the salesman is need to establish rapport or create

confidence.

• When the product has higher unit value.

• Requires demonstration.

• Must be fitted to the individual customer’s needs.

• Is purchased frequently.
 Definitions of Personal Selling

According to Philip Kotler:

“As face-to-face interaction with
one or more prospective purchasers
for the purposes of making the
sales.”
Role of Personal Selling in IMC Program
• Personal selling differs from other forms of communication in that messages flow
from a sender(s) to receiver(s) directly (usually face-to-face).

• A greater ability to demonstrate a product’s functioning and performance

characteristics.

• It enables the salesperson to customize the message to the customer’s specific

interests and needs.
• This direct and interpersonal communication lets the sender immediately receive
and evaluate feedback from receiver.

• Frequent interactions with a customer permit the opportunity for developing

long-term relations and effectively merging selling and buying organizations.
 Objectives of Personal Selling
• Build brand and product awareness by educating customers on the company’s offerings and their benefits.

• Increase sales by identifying and persuading the prospects to buy a business’s offering.

• Building close long-term relationships with the customers by enforcing person-to-person two-way
communication.

• Supporting the customers of complex, technical, or high-priced items by providing detailed technical

information.

• Stimulating the offering’s demand by helping the customers throughout their decision-making process
and guiding them towards the business’s offering.

• Reinforcing the brand by building long term relationships with the customers over time by meeting them

and helping them in their decision-making process.

 The Nature of Personal Selling
Thomas Wotruba identifies 5 distinct stages of personal selling evolution:

Provider stage: Selling activities are limited to accepting orders

1
for the supplier's available offering and conveying it to the buyer.

Persuader stage: Selling involves an attempt to persuade market

2
members to buy the supplier's offerings.

Prospector stage: Activities include seeking out selected buyers

3 who are perceived to have a need for the offering as well as the
resources and authority to buy it.
The Nature of Personal Selling (cont)
Problem-solver stage: Selling involves obtaining the participation of
4 buyers to identify their problems, which can be translated into needs,
and then presenting a selection from the supplier's offerings that
corresponds with those needs and can solve those problems.

Procreator stage: Selling defines the buyer's problems or needs and

5 their solutions through active buyer-seller collaboration and then
creates a market offering uniquely tailored to the customer.
Essential steps in the Personal Selling Process
The first step - Prospecting refers to 1. Prospecting
locating potential customers.

There are many sources from which

potential customers can be found:
name, addresses, e-mail leads,
telephone numbers, social media sites,
corporate websites, internal information
(company records, membership lists,…)
and external sources (referrals from
existing customers, friends,…)
 2. The Pre-approach
• This stage involves the collecting of as much meaningful
information about the prospects and their business as
possible prior to the meeting.

• The initial sales meeting might be arranged in a variety of ways:

by sending a personal letter or email to prospects, by calling to
set up a meeting, or by having a present customer introduce
and request an interview,….
3. The Approach
• The approach refers to the first few moments that the salesperson
spends with the prospect. This initial greeting and first impression is
critical to the salesperson’s chances that they will eventually make
the sale.

• Salespeople can use a variety of approach techniques, often in

combination with one another, to gain the prospect’s attention and
interest, as well as facilitating him/her to relax and open up.
4. Sales Presentation

This stage involves the salesperson presenting the product or

service, describing its qualities and possibly demonstrating
features of the product. Ideally the sales presentation will be
individualized to match the needs and desires of the prospective
customer.
 5. Handling Objectives

In some cases, after receiving the sales presentation, the prospective

customer will have some questions or concerns. In order to secure a
sale, the salesperson must address these questions or concerns; this
step is referred to as ‘handling objectives’.
 6. Closing the sales

This stage refers to finalizing the sale and persuading the

potential customer to make the purchase. During this step, prices
and payment options may be negotiated.
7. Follow up
This final step involves the salesperson contacting the customer
after the sale to ensure that the customer is satisfied. If the
customer has any existing issues with the product, the salesperson
will address them. A successful follow up stage of personal selling
can be very effective in ensuring repeat sales, evaluating the
effectiveness of the salesperson, and obtaining additional
referrals from the satisfied customer.
Personal Selling: Pros and Cons
Pros Cons
Can build buyer’s preferences & actions. Inconsistent messages.
Allows personal interaction (two-way). High cost.
Allows customer relationships to develop. Conflict salesforce/management.
Buyers usually needs to listen & respond. Can’t reach a mass audience.
Lack of distraction. Potential ethical issues
Source of research information.
Combining personal selling with
other Promotional tools in IMC

• Personal Selling & Advertising

• Personal Selling & Public Relations

• Personal Selling & Direct Marketing

• Personal Selling & Sales Promotion

Evaluating the Personal Selling Effort
• Review of all target accounts.
• Evaluate all cross-functional selling activities or the lack of them.
• Review of specific territory objectives including planned sales and planned gross
profit, and assigned account objectives.
• Knowledge of products, customers and customer organizations.
• Ability to apply market knowledge.
• Development of favorable attitude as it pertains to knowledge and skill
applications.
• Participate in training courses.
Traits of a wildly successful salespeople

• The First Impression • Self-Esteem

• Depth of Knowledge • Extended Focus

• Breadth of Knowledge • Sense of Humor

• Adaptability • Creativity

• Sensitivity • Taking Risks

• Enthusiasm • Sense of Honesty and Ethics

 Activity:
1. Personal selling is better than Advertising when?

2. Distinguish between working hard and working smart. As a student,

which behaviour better characterizes your own performance? What
behaviours would a salesperson manifest in demonstrating an ability
to work smart rather than simply hard? Be specific.

3. Imagine your classmates to take the role of “buyers”, while you play
the role of the “salesperson.” Then select a product as you can sale
for your friends.