Lecture Principles of Marketing - Chapter 13: Communicating customer value: Personal selling and direct marketing

This chapter discuss the role of a company’s salespeople in creating value for customers and building customer relationships, identify and explain the six major sales force management steps, discuss the personal selling process, distinguishing between transaction-oriented marketing and relationship marketing,...

Chapter Thirteen

Communicating Customer Value:

Personal Selling and Direct Marketing

Roadmap: Previewing the Concepts

1 Discuss the role of a company’s

salespeople in creating value for customers and building customer relationships.

2 Identify and explain the six major sales

force management steps.

3 Discuss the personal selling process,

distinguishing between transaction-oriented marketing and relationship marketing.

4 Define direct marketing and discuss its

benefits to customers and companies.

5 Identify and discuss the major forms of

Personal Selling’s Role

combines personal selling with strong Web presence.

manage relationships by being trusted advisors.

salespeople must be knowledgeable and customer focused.

The Nature of Personal Selling

 Most salespeople are well-educated,

well-trained professionals who work to build and maintain long-term customer relationships.

 The term salesperson covers a wide

range of positions:

– Order taker: Department store clerk

– Order getter: Creative selling in different

environments

The Role of the Sales Force

 Personal selling is a paid, personal form

of promotion.

– Involves two-way personal communication

between salespeople and individual

customers.

 Salespeople:

– Probe customers to learn about problems – Adjust marketing offers to fit special needs – Negotiate terms of sales.

– Build long-term personal relationships.

The Role of the Sales Force

 Sales force serves as critical link

between company and its customers.

– They represent the company to the

Sales Force Management

 The analysis, planning,

implementation, and control of sales force activities.

Sale Force Structure

 Territorial:

– Salesperson assigned to exclusive area and sells

full line of products.

Outside & Inside Sales Forces

 An outside sales force travels to call on

customers in the field.

 An inside sales force conducts

business from their offices via

telephone or visits from perspective

Team Selling

 Used to service large, complex accounts.

 Can find problems, solutions, and sales

opportunities that no single person could.

 Can include experts from different areas of selling firm.

 Pitfalls:

– Can confuse or overwhelm customers.

– Some people have trouble working in teams.

– Hard to evaluate individual contributions.

Successful Salespeople

 Careful selection can greatly enhance overall sales force performance while minimizing costly turnover.

 Key talents of successful salespeople:

– Intrinsic motivation.

– Disciplined work style.

– Ability to close a sale.

– Ability to build relationships with

customers.

Recruiting Salespeople

 Searching the Web

 College placement services

 Recruit from other companies

Sales Force Training Goals

 Learn about different types of

customers and their needs, buying motives, and buying habits.

 Learn how to make effective sales presentations.

 Learn about and identify with the

company, its products and its

competitors.

Supervising Salespeople

 Goal of supervision is to encourage

salespeople to “work smart.”

– Help them identify customers and set call

norms.

– Specify time to be spent prospecting:

• Annual call plan

• Time-and-duty analysis

• Sales force automation systems

Motivating Salespeople

 Goal of motivating sales force is to

encourage salespeople to “work hard.”

• Recognition and honors

• Cash awards, trips, profit sharing

The Personal Selling Process

 Prospecting:

– The salesperson identifies qualified potential

customers (called prospects).

 Preapproach:

– The salesperson learns as much as possible

about a prospect before making a sales call.

 Approach:

– The salesperson meets the customer for the first

time.

 Presentation:

– The salesperson tells the “product story” to the

buyer, highlighting customer benefits.

The Personal Selling Process

 Handling Objections:

– The salesperson seeks out, clarifies, and

overcomes customer objections to buying.

 Closing:

– The salesperson asks the customer for an order.

 Follow-up:

– The salesperson follows up after the sale to

ensure customer satisfaction and repeat

business.

 The selling process is transaction oriented; most firms go beyond this and attempt to

Direct Marketing

 Direct marketing consists of direct

connections with carefully targeted

individual consumers to both obtain an immediate response and cultivate

lasting customer relationships.

– One-on-one communication in which

offers are tailored to needs of narrowly

defined segments.

– Usually seeks a direct, immediate, and

measurable consumer response.

The New Direct-Marketing Model

 Some firms use direct marketing as a

supplemental medium.

 For many companies, direct marketing constitutes a new and complete model for doing business.

 Some firms employ the direct model as

their only approach.

 Some see this as the new marketing

model of thismillennium.

Benefits of Direct Marketing

Benefits of Direct Marketing

 Benefits to Sellers:

– Powerful tool for building customer relationships – Can target small groups or individuals.

– Can tailor offers to individual needs.

– Can be timed to reach prospects at just the right

moment.

– Gives access to buyers they could not reach

through other channels.

– Offers a low-cost, efficient way to reach markets.

Direct Marketing Forms

 Used in both consumer and B2B

markets.

 Can be outbound or inbound calls.

 Do-Not-Call legislation has impacted the telemarketing industry.

Direct-Mail Marketing

 Involves sending an offer, reminder, announcement, or other item to a

person at a particular address.

 Permits high target-market selectivity.

 An be personalized, and is flexible.

 Higher CPM yields better prospects than mass media.

 Easy to measure results.

Catalog Marketing

 With the Internet, more and more

catalogs are going digital.

 Print catalogs still the primary medium.

 Expected sales in 2008 = $175 billion.

 Web catalogs have specific advantages and disadvantages when compared to printed catalogs.

Direct Response TV Marketing

 Direct-response advertising:

– TV spots that are 60 or 120 seconds long.

 Infomercials:

– A 30 minute or longer advertising program

for a single product.

 Home shopping channels:

– Entire cable channels dedicated to selling

multiple brands, items, and services.

Kiosk Marketing

 Information and ordering machines

generally found in stores, airports, and other locations.

– Example: In-store Kodak kiosks allow

customers to transfer pictures from digital storage devices, edit them, and produce high-quality color prints.

Integrated Direct Marketing

 Involves carefully coordinated media, multiple-stage campaigns.

multiple-– Marketers try to improve response rates

and profits by adding media and stages

that contribute more to additional sales

than to additional costs.

– Example: Integrating a paid ad with

response channel (Web or phone), direct mail, outbound telemarketing, face-to-face sales call, continuing communication.

Public Policy and Ethical Issues in Direct Marketing

 Irritating to consumers

 Taking unfair advantage of impulsive

or less sophisticated buyers

 Targeting TV-addicted shoppers

 Deception, fraud

 Invasion of privacy

Rest Stop: Reviewing the Concepts

1 Discuss the role of a company’s salespeople

in creating value for customers and building customer relationships.

2 Identify and explain the six major sales force

management steps.

3 Discuss the personal selling process,

distinguishing between transaction-oriented marketing and relationship marketing.

4 Define direct marketing and discuss its

benefits to customers and companies.

5 Identify and discuss the major forms of