Topic 9 - Integrated Marketing Communications: Sales Promotion And Personal Selling (Part 2 - Promotions)

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This article is a topic within the subject Marketing Fundamentals.

Contents

Required Reading

Armstrong G., Adam S., Denize, S. and Kotler P.(2012) Principles of Marketing, 5th Edition, Sydney, Pearson/Prentice Hall., pp. 413-481.

Sales Promotion

[1] [2] Sales Promotion is the act of influencing consumer perception & behaviour to build market share & sales to reinforce brand image. Usually consists of short term incentives to encourage the purchase of a good or service but can have long term objectives. It must be communicated with other promotional mix elements advertising, personal selling & direct marketing.

Sales Promotion is linked with direct/online marketing, originates from FMCG but it is widely used, it has many meanings & covers a range of incentives promoted by mass media or direct/online.

Purpose Of Sales Promotion

  • Attract new triers, lure consumers away from competing products, regain past purchasers
  • Turn light users into heavy users
  • To get consumers to load up on a mature product
  • Reward brand loyal customers to retain them

Sales Promotion Objectives

  • Consumer Promotions – short term consumer buying (deal orientated groupon) & enhance customer brand involvement
  • Trade Promotions – promote products to retailers to carry new items & more inventory + shelf space
  • Salesforce – getting more sales force support for products & getting salespeople to sign up new customer accounts

Sales Promotion Tools

Consumers

Samples, coupons, cash back offers, cents off deals (price packs e.g. 2 for 1), premiums (Happy Meals), advertising specialties (apparel), competitions (skill & chance), patronage rewards, point of purchase, rebates (cash refund after purchase), events.

Trade Promotion

Tools include; discounts or allowances, free goods, push money (gifts), specialty advertising items Business Promotion: conventions & trade shows, sales contests

Developing Sales Promotion Programs

  1. Size of the Incentive - how much is needed as an incentive + how to promote & distribute
  2. Conditions for Participation – various restrictions
  3. Length of the Promotion
  4. Evaluation – have sales increased (based on criteria)

Personal Selling

[3]

The Nature Of Personal Selling

Personal Selling is the interpersonal arm of the promotion mix. It involves 2 way, personal communication between sales people & individual customers whether face to face, by telephone or by other means. Hence, personal selling can be more effective than advertising etc. in complex selling situations. This is because it can foster relationship marketing which is the process of creating, maintaining & enhancing strong value-laden relationships with customers & other stakeholders by creating superior customer value & satisfaction

There are many types of personal selling jobs including sales people, sales reps, account executives, agents etc.

Role of the Salesforce

To serve both masters, the buyer & seller

  • Linking the Company with its Customers
    • The firm communicates with the customer via the salesforce, whilst the customer communicates information back to the firm via the salesforce
    • Salesforce represents the customer (relay concerns, develop marketing intelligence & research)
    • Company (communicate offerings, negotiate, handle objections & closing sales)
  • Coordinating Marketing & Sales – bringing the marketing & sales functions closer together
  • Marketing creates demand, sales satisfy demand, marketers plan, sales force executes

Managing the Salesforce

MARK101291.jpg

  • Designing Salesforce Strategy, Size & Structure
    • Structure – territorial (geographic– little travel & local r/ships), product (many products), customer or complex
    • Size – depends on workload
    • Other Strategies/Structure Issues –outside (travel e.g. face 2 face more relationship building) or inside (office & can support e.g. confirm appointments & follow ups & telemarketing) salesforce? Team selling (gain range of expertise)
  • Recruiting & Selecting Salespeople - company selects the best of the many applicants to increase sales & avoid turnover
  • Training Salespeople – company provides continuing sales training seminars, sales meetings to ensure r/ship building $$$
  • Compensating Salespeople – to attract & retain goods salespeople
  • Supervising Salespeople – continuing supervision & encouragement given to new salespeople to help them do a better job
  • Evaluating Salespeople – sales report, call report (possible future sales), expense reports = feedback + RO sales investment

The Personal Selling Process - Major Steps in Effective Selling

MARK101292.jpg

TRANSACTION ORIENTATED – PERSUADING TO BUY

  • Prospective & Qualifyingidentifying qualified potential customers (e.g. leads by referral), avoid costly, hard to serve customers
  • Pre-Approachresearching background knowledge of potential customer (firm’s buying team) & decide how to approach
  • Approach – can be face to face or by other means
  • Presentation & Demonstrationpersuade the customer to buy (value story) via a customer solution approach & LISTEN

RELATIONSHIP ORIENTATED – TRYING TO ESTABLISH A LONG TERM MEANINGFUL RELATIONSHIP

  • Handling Objectionssalesperson seeks out, clarifies & overcomes customer objections to buying
  • Closingasking the customer for an order
  • Follow Upsalesperson follows up after the sale to ensure customer satisfaction & repeat business

Direct Marketing: Methods of Interacting With Customers

[4] Direct marketing is an interactive system of marketing which uses 1 or more advertising media (e.g. mobile, internet, mail, telephone & Email) to effect a measurable response &/or transaction at any location. It consists of connecting directly with carefully targeted individual consumers to obtain an immediate response & to cultivate lasting customer relationships

  • Benefits for Buyersgives buyers access to a wealth of information on different products & a greater measure of control
    • Convenient, easy to use, interactive, immediate & private
  • Benefits for Sellersable to target small group or individual consumers, high flexibility, greater reach via a new channel
    • Low cost, efficient & speedy alternative to reach the target market

Digital Marketing: Internet And Mobile

Digital marketing entails interacting with consumers via electronic network tools & technologies in real time (e.g. social networks or mobile phones / internet) allowing firms to ensure customer relationship management (particularly on a targeted or individual basis 1 to 1). Globalisation, digitisation & deregulation has lead to this new marketing dimension.

Firms of direct/online marketing include direct print & reproduction (catalogues), direct response (TV & radio), telemarketing, electronic shopping, electronic dispensing & kiosks – EFTPOS ATMS, sales promotion, direct selling & integrated database marketing that aim to inform, persuade & remind.

Direct And Online Database Marketing – Integrated Database Marketing

This involves the development & maintenance of electronic databases to interact with customers on a 1 to 1 basis , often in real time to maintain value-laden relationships & to generate a measurable response &/or transaction via the integrated use of electronic network tools & technologies.

A customer database is an organised collection of comprehensive data about individual customers or prospects (demographics – (age, income), psychographics- (AIO) & behavioural data – (frequency of past purchases) or key contacts for B2B marketing). Databases are used to:

  • Identify Prospects – build database with a response feature (#, reply cards, web form sites) in advertising
  • Deciding Which Customers Should Receive an Offer – identify the ideal profile for the offer
  • Deepening Customer Loyalty – build customer interest by remembering their preferences & sending appropriate info/gifts
  • Reactivating Customers – making attractive offers of product replacements, upgrades or complementary products when customers are ready to act
  • Data Mining – checking database for patterns/trends that are hypothesized to exist & to find connections

Databases are still in their infancy in AUS & NZ. This marketing channel struggles in developing countries due to the lack of infrastructure & security – people are uncomfortable to give out details.

Setting Up An Online Presence

  • Creating a Search Engine Optimised Website (corporate/brand websites don’t sell products directly)
    • Context (layout), content, community, customisation, communication, connection & commerce
  • Search Engine Marketing & Online Ads – banners, pop ups, rich media, search related ads, interstitials, pop under
    • Content sponsorship, alliances & affiliate programs, viral marketing, social networks
  • Participating in Social Networks – where people socialise & exchange information & opinions
  • Using Email

Mobile Marketing – conducted over the internet but accessed via data capable mobile phone networks

Evaluation Direct Marketing Results

Sales Growth, Market Share & Profit Contribution are widely used.

Sales lead generation, database generation, profitability, sales response, return on investment, lifetime customer value, hits/accessed (web centric), audience/network centric (ISP’s), online channel performance, CRM. Database performance can be evaluated with recency, frequency & monetary value of purchase.

Public Policy

Aggressiveness of direct marketing may lead to irritation, deception & fraud. We don’t want spam, long infomercials, identity theft & financial fraud.

End

This is the end of this topic. Click Marketing Fundamentals to go back to the main subject page for Marketing Fundamentals

References

Textbook refers to Armstrong G., Adam S., Denize, S. and Kotler P.(2012) Principles of Marketing, 5th Edition, Sydney, Pearson/Prentice Hall.

  1. Armstrong G., Adam S., Denize, S. and Kotler P.(2012) Principles of Marketing, 5th Edition, Sydney, Pearson/Prentice Hall., pp.431-432
  2. Mohammed Razzaque, UNSW
  3. Armstrong G., Adam S., Denize, S. and Kotler P.(2012) Principles of Marketing, 5th Edition, Sydney, Pearson/Prentice Hall., pp.413-431
  4. Armstrong G., Adam S., Denize, S. and Kotler P.(2012) Principles of Marketing, 5th Edition, Sydney, Pearson/Prentice Hall., pp.449-481
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