Marketing Series: Sales Promotion, Direct Marketing, Personal Selling and Public Relation

 SALES PROMOTION

Sales promotions are programs that marketers design to build interest in or encourage purchase of a good or service during a specified time. Marketers today place an increasing amount of their total marketing communication budget into sales promotion due to growth of channels power and declining brand loyalty. Marketers target sales promotion activities either to ultimate consumers or to members of the channel such as retailers that sell their products. Thus, we divide sales promotion into two major categories: consumer-oriented sales promotion and trade-oriented sales promotion.

Video Lesson: Sales Promotion (Duration: 3.07 mins)

Sales Promotion Directed toward Consumers

For consumer sales promotion, the major reason for this is that most promotions temporarily change the price/value relationships.

1. Price-Based Consumer Sales Promotion

Many sales promotions emphasize short-term price reductions or rebates that encourage people to choose a brand, during the deal period. If used too frequently, consumers become conditioned to purchase only when the product is at a low promotional price.

• Coupons are certificates redeemable for money off on a purchase and are the most common price promotion.
• Price deals, refunds, and rebates are temporary price reductions to stimulate sales. This price deal may be printed on the package itself, or it may be a price-off flag or banner on the store shelf. Alternatively, companies may offer rebates that allow the consumer to recover part of the purchase price via mail-ins to the manufacturer.
• Frequency programs, also called loyalty or continuity programs, offer a consumer a discount or a free product for multiple purchases over time.
• Special/bonus packs involve giving the shopper more products instead of lowering the price. A special pack also can be in the form of a unique package such as a reusable decorator dispenser for hand soap.

2. Attention-Getting Consumer Sales Promotions

Attention-getting consumer promotions stimulate interest in a company’s products. Some typical types of attention-getting promotions include the following:

• Contests and sweepstakes: a contest is a test of skill, while a sweepstake is based on chance.
• Premiums are items offered free to people who have bought a product.
• Sampling encourages people to try a product by distributing trial-size and sometimes regular-size versions in stores, in public places such as student unions, or through the mail. Many marketers now distribute free.

 

REFLECTION Discuss some of your favorite sales promotions. Did the sales promotion actually cause you to buy the product being promoted? Explain how the promotion worked. Why did it work? What has been the impact on your future buying behavior? >REFLECT NOW<

 

Trade Sales Promotion: Targeting the B2B Customer

Sales promotions target the B2B customer—located somewhere within the supply chain. Such entities are traditionally referred to as “the trade.”

1. Discount Promotions

• Discount promotions (deals) reduce the cost of the product to the distributor or retailer or help defray its advertising expenses.

2. Co-Op Advertising

• Another type of trade allowance is co-op advertising. These programs offer to pay a portion, usually 50 percent, of the cost of any retailer advertising that features the manufacturer’s product.

3. Sales Promotion to Increase Industry Visibility

• Other types of trade sales promotions increase the visibility of a manufacturer’s products to channel partners within the industry.
• Forms of sales promotion include the following:
  • Trade shows
  • Promotional products
  • Point-of-purchase displays
  • Incentive programs
• Push money is a bonus paid by a manufacturer to a salesperson, customer, or distributor for selling its product

 

DIRECT MARKETING

Video Lesson: Direct Marketing (Duration: 3.10 mins)

Direct marketing refers to “any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order, a request for further information, or a visit to a store or other place of business for purchase of a product.” The following is a discussion of types of direct marketing:

1. Mail Order

• Today consumers can buy just about anything through the mail.  Mail order comes in two forms: catalogs and direct mail.
• A catalog is a collection of products offered for sale in book form, usually consisting of product descriptions accompanied by photos of the items. A catalog strategy allows the store to reach people in the United States who live in areas too small to support a store. In addition, more and more U.S. firms use catalogs to reach overseas markets as well.
• According to the Direct Marketing Association, over two-thirds of the U.S. adult population orders from a catalog at least once a year. Many stores use catalogs to complement their in-store efforts. A catalog strategy allows a store to reach people who live in areas too small to support a store. 
  

2. Direct Mail

• Unlike a catalog retailer that offers a variety of merchandise through the mail, direct mail is a brochure or pamphlet that offers a specific good or service at one point in time. A direct mail offer has an advantage over a catalog because the sender can personalize it. Just as with e-mail spamming, many Americans are overwhelmed with direct-mail offers—“junk mail”—that mostly end up in the trash. The direct-mail industry constantly works on ways to monitor what companies send through the mail and it allows consumers to “opt out” of at least some mailing lists.

3. Telemarketing

• Telemarketing is direct marketing an organization conducts over the telephone (but why do they always have to call during dinner?). It might surprise you to learn that telemarketing actually is more profitable for business markets than for consumer markets. When business-to-business (B2B) marketers use the telephone to keep in contact with smaller customers, it costs far less than a face-to-face sales call yet still lets these clients know they are important to the company.

4. Direct-Response Advertising

• Direct-response advertising allows the consumer to respond to a message by immediately contacting the provider to ask questions or order the product. This form of direct marketing can be very successful. Although for many companies the Internet has become the medium of choice for direct marketing, this technique is still alive and well in magazines, newspapers, and television.
• Direct-response TV (DRTV) includes short commercials of less than two minutes, 30-minute or longer infomercials, and the shows home shopping networks such as QVC and HSN broadcast.
• The primitive sales pitches of the old days have largely given way to the slick infomercials we all know and love (?) today. These half hour or hour-long commercials resemble a talk show, often with heavy product demonstration and spirited audience participation, but of course, they really are sales pitches.

 

5. M-Commerce 

• One final type of direct marketing is m-commerce. The “m” stands for “mobile,” but it could also stand for massive – because that’s how big the market will be for this platform. M-commerce refers to the promotional and other e-commerce activities that smartphones and other mobile devices.
• M-commerce through text messages (such as an ad for a concert or a new restaurant) is known as short-messaging system (SMS) marketing.

PERSONAL SELLING: ADDING THE PERSONAL TOUCH TO THE PROMOTION MIX

• Personal selling occurs when a company representative interacts directly with a customer or prospective customer to communicate about a good or service. This form of promotion is a far more intimate way to talk to customers. Another advantage of personal selling is that salespeople are the firm’s eyes and ears in the marketplace. They learn which competitors talk to customers, what they offer, and what new rival goods and services are on the way—all valuable competitive intelligence. Many organizations rely heavily on personal selling because at times the “personal touch” carries more weight than mass-media material. For a business-to-business market situation, the personal touch translates into developing crucial relationships with clients.
• Personal selling has special importance for students (that’s you) because many graduates with a marketing background will enter professional sales jobs. Jobs in selling and sales management often provide high upward mobility if you are successful because firms value employees who understand customers and who can communicate well with them.

Video Lesson: Personal Selling (Duration: 3.18 mins)

The Role of Personal Selling in the Marketing Mix

• In general, a personal selling emphasis is more important when a firm engages in a push strategy, in which the goal is to “push” the product through the channel of distribution so that it is available to consumers.
• Personal selling also is likely to be crucial in business-to-business contexts where the firm must interact directly with a client’s management to clinch a big deal—and often when intense negotiations about the price and other factors will occur before the customer signs on the dotted line. In consumer contexts, inexperienced customers may need the hands-on assistance that a professional salesperson provides.
• Some drawbacks limit the role personal selling plays in the marketing communication mix. First, when the dollar amount of individual purchases is low, it does not make sense to use personal selling—the cost per contact with each customer is very high compared to other forms of promotion.

Technology and Personal Selling

• All sorts of technologies can enhance the personal selling process, and clearly today, the smartphone is the communication hub of the relationship between salesperson and client. 
• Customer relationship management (CRM) software is one technological advance. Recently, some sales organizations have turned to a new-generation system called partner relationship management (PRM), which links information between selling and buying firms.
• Others are teleconferencing, videoconferencing, and improved corporate websites that include FAQ pages that answer many customer inquiries. VoIP (voice-over-Internet protocol) is being used for day-to-day correspondence between salespeople and customers (e.g., Skype). An increasing number of salespeople telecommute from a virtual office. 
• Smart sales organizations can find the right blend of technology and personal touch, tailored to their particular clientele and product offerings, which make the most of building strong customer relationships. 

Future Trends in Professional Selling

• Professional selling continues to evolve.  Huge advances in new technology continue to rock the sales industry. Three trends of note are the influence of artificial intelligence (AI), the rising influence of millennials as both buyers and sellers, and account-based selling, the practice of choosing the best way to sell to B2B individual customers.

Types of Sales Jobs

• There are several different types of sales jobs from which to choose.  Each type has its own unique characteristics.
• An order taker is a salesperson that processes transactions the customer initiates. Many retail salespeople are order takers, but often wholesalers, dealers, and distributors employ salespeople to assist their business customers. Because little creative selling is involved in order taking, this type of sales job typically is the lowest-paid sales position. 
• In contrast, a technical specialist contributes considerable expertise in the form of product demonstrations, recommendations for complex equipment, and the setup of machinery. The technical specialist provides sales support rather than actually closing the sale.
• Then there is the missionary salesperson whose job is to stimulate clients to buy. Like technical specialists, missionary salespeople promote the firm and encourage demand for its goods and services but do not actually take orders.
• The new-business salesperson is responsible for finding new customers and calls on them to present the company’s products. As you might imagine, gaining the business of a new customer usually means that the customer stops doing business with one of the firm’s competitors (and they won’t give up without a fight). New-business selling requires a high degree of creativity and professionalism, so this type of salesperson is usually very well paid. Once a new business salesperson establishes a relationship with a client, she often continues to service that client as the primary contact as long as the client continues to buy from the company. In that long-term-relationship-building role, this type of salesperson is an order getter. Order getters are usually the people most directly responsible for a particular client’s business; they may also hold the title of “account manager.”
• Increasingly, firms find that the selling function works best via team selling. A selling team may consist of a salesperson, a technical specialist, someone from engineering and design, and other players who work together to develop products and programs that satisfy the customer’s needs. Key account refers to very large customer organizations with the potential for providing significant sales revenue. When the company includes people from a range of areas, it often calls this group a cross-functional team. Multilevel selling is a form of team selling in which the team consists of company personnel from various managerial levels, each calling on their counterpart in the customer organization. Another popular sales model is direct selling. Direct sellers bypass channel intermediaries and sell directly from the manufacturer to consumer through personal, one-to-one contact. 

 

Two Approaches to Personal Selling

Selling has moved from a transactional, hard-sell approach to an approach based on relationships with customers. 

1  Transactional Selling: Putting on the Hard Sell

• Hard-sell tactics reflect transactional selling, an approach that focuses on making an immediate sale with little concern for developing a long-term relationship with the customer. As customers, the hard sell makes us feel manipulated, resentful, and it diminishes our satisfaction and loyalty.

2 Relationship Selling: Building Long-Term Customers

• Relationship selling is the process by which a salesperson secures, develops, and maintains long-term relationships with profitable customers. 
• Securing a customer relationship means converting an interested prospect into someone who is convinced that the good or service holds value for her.  Developing a customer relationship means ensuring that you and the customer work together to find more ways to add value to the transaction. Maintaining a customer relationship means building customer satisfaction and loyalty—thus, you can count on the customer to provide future business and stick with you for the long haul.

 

The Creative Selling Process Successful salespeople understand and engage in a series of activities to make positive transactions happen. A salesperson’s chances of success increase when she undergoes a systematic series of steps we call the creative selling process.  Step 1: Prospect and Qualify Prospecting is the process by which a salesperson identifies and develops a list of prospects or sales leads (potential customers). Leads come from existing customer lists, telephone directories, commercially available databases, and of course through diligent use of web search engines like Google. Another way to generate leads is through cold calling, in which the salesperson simply contacts prospects “cold,” without prior introduction or arrangement. It always helps to know the prospect, so salespeople might rely instead on referrals. Current clients who are satisfied with their purchase often recommend a salesperson to others—yet another reason to maintain good customer relationships. After they identify potential customers, salespeople need to qualify these prospects to determine how likely they are to become customers. Step 2: Preapproach In the preapproach stage, you compile background information about prospective customers and plan the sales interview. Salespeople can draw information about a prospect from a variety of sources. Of course, if the salesperson’s firm has a CRM system she can use it to see whether the database includes information about the prospect.  Step 3: Approach After the salesperson lays the groundwork with the pre-approach, it is time to approach, or contact, the prospect. The salesperson tries to learn even more about the prospect’s needs, create a good impression, and build rapport. During the approach, the customer decides whether the salesperson has something to offer that is of potential value.  Step 4: Sales Presentation Many sales calls involve a formal sales presentation, which lays out the benefits of the product and its advantages over the competition. The focus of the sales presentation should always be on ways the salesperson, her goods and services, and her company can add value to the customer (and in a business-to-business setting, to the customer’s company). Step 5: Handle Objections The effective salesperson anticipates objections—reasons why the prospect is reluctant to make a commitment—and she has prepared to respond with additional information or persuasive arguments. Actually, the salesperson should welcome objections because they show that the prospect is at least interested enough to consider the offer and seriously weigh its pros and cons. Step 6: Close the Sale But there still comes a point in the sales call at which one or the other party has to move toward gaining commitment to the objectives of the call—presumably a purchase. This is the decision stage, or close. A last objection close asks customers if they are ready to purchase and then addresses any concerns they have about the product. An assumptive or minor points close means a salesperson acts as if the purchase is inevitable with only a small detail or two to be settled. A standing-room-only or buy-now close suggests the opportunity might be missed if the customer hesitates. Step 7: Follow-Up The follow-up after the sale includes arranging for delivery, payment, and purchase terms. It also means the salesperson makes sure the customer received delivery and is satisfied. Follow-up also allows the salesperson to bridge to the next purchase. Once a relationship develops, the selling process is only beginning. Even as one cycle of purchasing ends, a good salesperson already lays the foundation for the next one.

 

PUBLIC RELATIONS

• Public relations (PR) is the communication function that seeks to build good relationships with an organization’s publics; these include consumers, stockholders, legislators, and other stakeholders in the organization.
• The basic rule of good PR is, Do something good, and then talk about it. The big advantage of this kind of communication is that when PR messages are placed successfully they are more credible than if the same information appeared in a paid advertisement.
• Public relations strategies are crucial to an organization’s ability to establish and maintain a favorable image. Proactive PR activities stem from the company’s marketing objectives. For example, marketers create and manage publicity which is unpaid communication about an organization that gets media exposure.
• As many of the other functions of public relations blend into buzz marketing activities, perhaps the most important function it still “owns” is crisis management.  This refers to the process of managing a company’s reputation when some negative and often unplanned event threatens the organization’s image. Even a single negative event can cause permanent damage to a company, the success of its products, and its stockholder equity. 

Plan a PR  Campaign

• A public relations campaign is a coordinated effort to communicate with one or more of the firm’s publics. This is a three-step process that develops, executes, and evaluates objectives. 
• Marketing communication experts know that PR strategies are best used in conjunction with advertising, sales promotion, and personal selling to send a consistent message to customers and other stakeholders. As part of the total marketing communication plan, they often rely on PR to accomplish the following objectives:
  • • Introduce new products to retailers and consumers.
    • Influence government legislation.
    • Enhance the image of an organization.
    • Provide advice and counsel for top management.
    • Enhance the image of a city, region, or country.
    • Manage a crisis.
    • Call attention to a firm’s involvement with the community.

PR Tactics

All PR activities strive for the same goal—to create and maintain the positive image the organization needs.

Video Lesson: Public Relations (Duration: 4.48 mins)

1. Press Release

• The most common way for PR specialists to communicate is by a press release. This is a report of some event or activity that an organization writes and sends to the media in the hope that it will be published free. A newer version of this idea is a video news release (VNR) that tells the story in a film format instead. Some of the most common types of press releases include the following:
• Timely topics deal with topics in the news. Universities publish research project stories to highlight breakthroughs by faculty researchers. Consumer information releases provide information to help consumers make product decisions.
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2. Internal PR and External Stakeholders

• Internal PR activities target employees; they often include company newsletters and closed-circuit television to keep people informed about company objectives, successes, or even plans to 
• “downsize” the workforce. Often company newsletters also are distributed outside the firm to suppliers or other important
• publics. Investor relations’ activities focus on communications to those whose financial support is critical; this is especially vital for publicly held companies. 
• Lobbying means talking with and providing information to government officials to persuade them to vote a certain way on pending legislation or even to initiate legislation or regulations that would benefit the organization.

3. Speech Writing and Corporate Communications

• An important job of a firm’s PR department is speech writing; specialists provide speeches for company executives to deliver. While some executives do actually write their own speeches, it is more common for a speechwriter on the PR staff to develop an initial draft of a speech to which the executive might add his own input. PR specialists also provide input on corporate identity materials, such as logos, brochures, building design, and even stationery that communicates a positive image for the firm. 
• One of the tasks of the PR professional is to develop close media relations to insure the organization will receive the best media exposure possible for positive news, such as publicizing the achievements of an employee who has done some notable charity work or for a product it developed that saved someone’s life.

4. Sponsorships and Special Events

• Sponsorships are PR activities through which companies provide financial support to help fund an event in return for publicized recognition of the company’s contribution. A related task is to plan and implement special events.

5. Brand Ambassadors and Evangelists

• Many marketers realize that they cannot create a buzz by themselves; they recruit loyal customers as brand ambassadors or brand evangelists to help them.  These zealous consumers can be the best salespeople a company can ever find. They often work without pay. 
• They are heavy users, take a product seriously, care a great deal about it, and want it to succeed. In addition, they know the target audience better than anyone since they are a part of it.