Personal selling and Sales promotion

GROUP ASSIGNMENT
---------- GROUP 12 ---------Course : Principles of Marketing
Class : International Business K56 (High-Quality Educational Program)
Topic: Personal selling and Sales promotion
Group Members:
1. Đặng Hương Giang
2. Phạm Thị Hoàng Diệu
3. Nguyễn Cẩm Tú
4. Nguyễn Thị Khánh Linh


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Table of Contents

PERSONAL SELLING AND SALES PROMOTION
I.

PERSONAL SELLING

Personal selling consists of interpersonal interactions with customers andprospects to make
sales and maintain customer relationships.
1. The Nature of Personal Selling

Personal Selling isone of the oldest professions in the world. People who do the selling go by
many names: salespeople, sales representatives, agents, district managers, account executives,


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sales consultants, and sales engineers.It is the personal presentations by the firm’s sales force

for the purpose of making sales and building customer relationships. Personal selling is the
interpersonal part of the promotion mix and can include:
•
•
•

Face-to-face communication
Telephone communication
Video or web conferencing

Salespeople can include an order taker such as someone standing behind the counter or an
order getter whose position demands more creative selling and relationship building.
2. The Role of the Sales Force

Personal selling can be more effective than advertising in more complex selling situations
because salespeople can learn about customer problems and adjust the marketing offer and
presentation accordingly to meet the special needs of each customer.
2.1.

Linking the Company with Its Customers

In many cases, salespeople serve two masters: seller and buyer. Salespeople are an effective
link between the company and its customers to produce customer value and company profit by:
•

Representing the company to customers: They find and develop new customers and
communicate information about the company’s products and services. They sell
products by approaching customers, presenting their offerings, answering objections,
negotiating prices and terms, and closing sales. In addition, salespeople provide

customer service and carry out market research and intelligence work.
• Representing customers to the company: Salespeople relay customer concerns about
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.
To many customers, the salesperson is the company - the only tangible manifestation of the
company that they see. Strong relationships with the salesperson will result in strong
relationships with the company and its products.


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2.2.

Coordinating Marketing and Sales

Sales force and other marketing functions (marketing planners, brand managers,and
researchers) should work together to create value for customers, however, some companiesstill
treat sales and marketing as separate functions. If not repaired, such disconnects between
marketing and sales can damage customer relationships andcompany performance.
A company can take several actions to help bring its marketing and sales functions closer
together by :
•

Increasing communications between the two groups by arranging joint meetings and
spelling out communications channels then create opportunities for salespeople and

marketers to work together.
• Creating joint objectives and reward systems for sales and marketing teams or appoint
marketing-sales liaisons-people from marketing who “live with the sales force” and help
coordinate marketing and sales force programs and efforts.

• Appointing a high-level marketing executive to oversee both marketing and sales.
3. Advantages and disadvantages of Personal selling
3.1.
Advantages of Personal Selling
- Convey More Information
You can express added information with personal selling when compared to any
other types of promotion, such as advertising. Personal selling is predominantly
beneficial when functioning with goods of high value. You will require
influencing buyers more with supplementary luxurious stuffs. Most enterprises
use notebook presentation, exhibitions and extremely comprehensive product
information when promoting goods like medical equipment, computers, and
-

industrial goods.
More Impact
• Personal selling has a superior impact on consumers than direct mail or
advertising. The buyers don’t require to wait long to get his queries responded.
He can find out what he requires to be acquainted with instantly. You as a retailer
also obtain an enhanced experience for what the consumer’s demands. You can
recommend specific goods if you have widespread merchandise line or adapt
your services, like discussing, to the buyer's specific requirements.


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Disadvantages of personal selling
Limited Reach
• One disadvantage is that your customer reach is limited through personal sales.
3.2.

-

As a result, it will require extended time period to create product awareness,
particularly if you don’t use other forms of advertising. Sales representatives
have to cover up one region or place at a time. As a Sales representative, you can
only talk to twenty five potential buyers per day and put together 3-5
presentations. Contact can be principally partial in rural regions where fewer
-

potential buyers are situated.
Expensive
• Personal selling isexpensive, particularly when bearing in mind the sales
representative's salary, bonus, commission as well as travel time. It requires
plenty of money to prepare sales representatives, educating them on a range of
goods and sales techniques. That is the reason it paramount to study the pros and
cons of personal selling against other forms of advertising.

II.

MANAGING THE SALES FORCE:

Managing the sales forceis analyzing, planning, implementing and controlling sales force
activities.It includes designing sales forces strategy and structure, recruiting, selecting,
training, compensating, supervising and evaluating the firm’s sale people.


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1. Designing the sales force strategy and structure:

A marketing manager has to be careful in designing and structuring sales force and answers
these questions: How should salespeople and their tasks be structured? How big should the
sales force be? Should salespeople sell alone or work in team? Should they sell in the field, by
telephone or on web?
1.1.

The sales force structure:
1.1.1. Territorial sales force structure:

Each salesperson is assigned to an exclusive geographic area and sells the company’s full line
of products or services to all customers in that territory.
This structure is preferred for the company sells only one product line to one industry with
customer in many locations and building relationships with local customers there force it
improves selling effectiveness.
A particular example is Stanley Black & Decker which is a company sell tools and storage,
commercial electronic security and engineered fastening systems.each salesperson in Stanley


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Black &Decker who is territory sales representative, is responsible for selling all of the
company’s products in assigned territories. They start cover small areas such as Eastern
North Carolina then report to territory managers, cover larger areas like Carolinas and
Virginia. Next, territory managers report to regional managers, who cover region such as the
Southeast or West Coast. Finally, they report to director of sales.


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-

Advantages and Disadvantages:

+ Advantages:
•

Low cost
Because sales force divided into geography, salesperson of company travels within a

•

limited area, travel expenses are relatively small.
Low geographic duplication of effort
Salespeople in territory just focus resources on an area to make best customer value

•

and build customer relationships. Thus it has not duplication in geography.
Sensitive with demand of customers
In each region has different culture and custom, territory sales representative have
knowledge about customers can improve product fits to customer and caches trend.

+ Disadvantages:
•

•
•

Work best when products line is simple
If company have many products, personal selling would be too complex and
customers can be confused.
Lack of management control over product or customer emphasis.
Duplication of customers:
If salespeople are require quotas of sale, sometime salesperson in the same
geography area can competitive each other and approach same customers. In that
case, territorial sales force structure can effectiveness.
1.1.2. Product Sales Force Structure:

It is a sales force organization in which salespeople specialize in selling only a portion of the
company’s products or line. Salespeople must know their products and it can make them
stronger sellers. In addition, this structure leads the growth of product management.
Product structure is used for complex and un-related product portfolio. This is especially true
with products that are highly technical or which are sold to professionals such as medical
device and equipment sales, for example, requires a salesperson to have an in-depth
understanding of his product. Physicians who might purchase these products can have
complicated and technical questions that require the salesperson to have a thorough


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understanding of how the product works and the setting in which it is used. Here the sales
people are directly associated with research and development of the products.
Another example is FPT employ different sales forces within different products. Within FPT
Telecommunication, for instance, the company has separate sales forces for broadband
internet, television services: HD box, One TV..; online service: sendo.vn, Fshare…; leased
line; data center. FPT technology has sales forces for software copyright, telephone, tablet,…
-

Advantages and disadvantages

+ Advantages:
•
•

Sales reps develop product expertise
Management can guide selling efforts

+ Disadvantages:
• Higher costs due to duplication of effort within geographies and customer accounts.
• Coordination required when more sales reps have the same geography/accounts
1.1.3. Customer sales force structure:

Thesedays, more and more companies are now using a customer (or market) sales force
structure. In customer sales force structure, salespeople specialize in selling only to certain
customers or industries. This structure is used if the companies are operating different industry
or market segments. Every sales force specializes in a definite market and helps push a product
efficiently across the given market.
For instance, Vietnam Airlines divided its sales force into two customers based teams. One
sales force focuses on “key” customers (economy class) – large accounts that purchase
average equipment and price. The second sales force focuses on “prime” customers (Business
class) – smaller accounts that are generally more concerned about getting the high-end
feature and service they need for the best possible price.
-

Advantages and disadvantages:

+ Advantages:

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•
•

Sales reps know the needs of their customers and build stronger relationships with them
Management control can be strategically allocated to different markets

+ Disadvantages:
Higher costs
Geographic duplication
1.1.4. Complex sales force structure:
When a company sell a wide variety of products to many types of customers over a broad
•
•

geographic area, it often combines several types of sale forces structures. Salespeople can be
specialized by customer and territory; product and territory; customer and product or all of three
customer, product and territory.
For example, unilever is a multinational company with a number of product lines. And Unilever
have used all three structures. Within Unilever shampoo, it has product for male customer and
female customer. In female customer it has many products for types of hair: Dove, Clear…And
all products have salespeople in different regions like Hanoi to Vietnam, Asia and, finally
director of sales.
⇒No single structure is best for all companies and situations. Therefore, each company should
select a sales force structure that the best serves the needs of its customers and fits its overall
marketing strategy.
1.2.
Sales force size:

Once the company has set its structure, it is ready to consider sales force size. The addition of
salespeople increases sales considerably more than the selling cost. However, as salespeople
continue to be added, sales increases tend to decline until a point is reached when the costs to add
a salesperson are more than the revenue that salesperson can make.
Some sales force are huge such as PepsiCo employs 36 000 salespeople.
Many companies use some form of workload approach to set sales force size.
The number of salespeople =_____Totalselling effort needed_____
Average selling effort per salesperson
Suppose we have 1000 A-level accounts and 2000 B-levels accounts.
A-level accounts requires 36 calls per year
B-level accounts requires 12 calls per year
The sales force’s workload – the number of calls it must make per year – is 60 000 calls
(1000*36 + 2000*12)
Average salesperson can make 1000 calls a year


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Therefore, the salespeople need = 60 000/1000= 60
1.3.
Other Sales Force Strategy and Structure Issues:
1.3.1. Outside and inside sales force:
Outside sales force (or field sales force) work from the office, but frequently visit prospect
and client sites to call on customers in the field and may be involved in overnight travel for this
purpose.
Inside salespeople conduct business from their offices via telephone, the internet or visit from
buyers.Telemarketers and Web sellers use the phone and internet to find new leads and qualify
prospects or sell and service account directly. The company may have an outside sales force,
an inside sales force or both.Some inside salespeople provide support for the outside sales
force. More specifically, technical sales support people provide technical information and

answer customer’s questions. Sales assistants provide administrative backup for outside
salespeople.Combination of inside and outside salespeople can help serve important customer
better.
1.3.2. Team selling

Team sellingis using teams of people from sales, marketing, engineering, finance, technical
support and even upper management to service large, complex accounts.
For example,P&G used team selling for a long time and its organized into Customer business
development (CBD) teams.
-

Advantages and disadvantages of team selling

+ Advantages:
•
•

Save time
More effectively

+ Disadvantages:
•
•
•

Conflict in team selling.
Difficulty in evaluating individual contributions.
Confuse or over whelm customers who are used to working with only one salesperson.

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2.

Recruiting and Selecting Salespeople:

Recruitment of talented employees is an essential part of any company's ability to maintain
success and ensure the achievement of standards within an organization.
When a salesperson quits, the cost of finding and training a new salesperson can be very high.
In addition, a sales force with many new people is less productive and disrupts important
customer relationship.
It is research suggest that the best salespeople possess four key talents:
-

Intrinsic motivation
Some salespeople are driven by money, a desire for recognition, or the satisfaction of
competing and winning. Others are driven by the desire to provide service and build

-

relationship.
Disciplined work style
The good salespeople also lay out detailed, organized plans and then follow through in a

-

timely way.
Ability to close a sale
Super salespeople build the skills and knowledge to understand their customers need.
They are also are excellent customer problems solvers. Last but not least, they want to

-

add value for their customers.
Ability to build relationship with customers
Personal selling plays an important role in building profitable customer relationships.
And top performers have to have: good listener, empathetic, patient, caring and
responsive.

Before recruiting, company should analyze the sales jobs itself and the characteristics of its
most successful sales people to identify the traits needed by a successful salesperson in their
industry.
Test typically measured sales attitude, analytical and organization skills, personal traits and
other characteristics. After that, the company must select the best candidates.

3.

Training salespeople:


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Training is essential to remain ahead of the competition. Sales force needs training before
entering the market as well as training at different stage of the product life cycle. New
salespeople may spend anywhere from a few weeks or months to a year or more in training.
Training is expensive but yields strong returns.
Most companies provide continuing sales training tools throughout the salesperson’s career by
via seminars, sales meeting and Web e-learning.
Training programs have several goals:
•

Know about customers how to build relationship with customers: Training program
must teach salespeople about different types of customers and their needs, buying

•

motivates and buying habits.
Know how to sell effectively: Salespeople are also trained basic of the selling process,
know company’s objectives, organization, products and the strategy of major
competitors.

These days, many companies are adding Web-based sales training programs which build sales
skills to sophisticated simulations that re-create the dynamics of real-life sales calls.
Training online have many advantages such as:
Cut travel and other training costs
Take up less of a salesperson’s selling time
Can practice many times
Easy to understand
4. Compensating salespeople:
•
•
•
•

To attract good salespeople, a company must have an appealing compensation plan.
Compensation consists of four elements:
•
•

A fixed amount: usually a salary, gives the salesperson some stable income
A variable amount: might be commissions or bonuses based on sales performance,

•
•

reward the salesperson for greater effort and success.
Expenses
Fringe benefit

Management must determine what mix of these compensation elements makes the most sense.


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Variable compensation give rise to four basic compensation plan:Straight salary, straight
commission, salary plus bonus, salary plus commission
A sales force compensation plan can both motivate salespeople and direct their activities,
however, the company
Dir should direct salespeople toward activities consistent with overall sales
Re
Ter
ect
force and marketing ritgio
objectives.
nal
or

of
yma

For example, if strategy is to acquire new business, grow rapidly, gain marketshare.

na
ma
sal

ger
na
es

 Compensationreger
plan: a larger commission component, coupled with new account bonus
s
s
pr
to encourage high
sales performance and new account development.
es
en
In contrast, if the goal
is to maximize current account profitability
ta
tiv

 Compensation plan: contain a larger base-salary component with additional incentives
e

for current account sales or customer satisfaction
Company should designing compensation plans that reward salespeople for building customer
relationships and growing the long-run value of each customer.
When the times get tough economically, some companies cut sales force compensation. This
cost-cutting measure complete does not effective and if you burn the salesperson, you might

burn the customer relationships.
In case must be reduced: keep the pay up for the top performers and turn the low performers
loose.
5.

Supervising and Motivating Salespeople:
Supervising salespeople:

5.1.

Supervision on sales force is decided on the profile of product portfolio. The goal of
supervision is to help salespeople work smart by doing the right things in the right ways.
There are four mainly tool to supervise salespeople:
•

Weekly, monthly, or annual call plan that shows which customers and prospects to call
on and which activities to carry out.


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•
•
•

Time-and-duty analysis
Sales force automation systems assists in creating more efficient sales force operation
The internet is the fastest growing-sales technology tool: laptop, smartphone, wireless
web connection, webcams for videoconferencing,....

⇒Better time management, improved customer service, lower sales costs, higher sales

performance.
Selling and the Internet:

5.2.

The internet offers explosive potential for conducting sales operations and interacting with and
serving customers.
Sales organizations are now using Internet approaches to: train sales reps, hold sales meeting,
service accounts, conduct live meeting with customers
Web 2.0enables a way of interacting, collaborating and information sharing. Sales 2.0 will not
make salespeople obsolete. It will make them a lot more productive and effective.
+ Advantages of Web-based technologies:
•
•
•
•

Help conserve salespeople’s valuable time
Save travel expense
Give new vehicle for selling and servicing accounts
Creating new avenues for connecting with customers

+ Disadvantages:
•

Not cheap for starter

Systems can intimidate low-tech salespeople or clients.
For example, the social networking site Facebook, many companies have fan-page, therefore,
they can advertising new products, text direct with customer,…

5.3.

Motivating salespeople:

Motivation is a key aspect for management of the sales force. Here compensation plays an
important in driving up the motivational level.


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Management can boost sales force morale and performance through three tools:
•

Organizational climate: describe the feeling that sales people have about their opportunities,

value, reward for a good performance.
• Sales quotas: standards stating the amount they should sell and how sales should be divided
among the company’s products.
• Positive incentives: increase the sales force effort.
+ Sales meetings
+ Sales contest
+ Honors, merchandise and cash award, trips, profit-sharing plans
6. Evaluating Salespeople and sales force performance:
Evaluation is essential to management of a sales force. Sales reports sent by the sales force
serve a good starting point of evaluation.
Management gets information about its salespeople in several ways:
•
•
•

Sales report
Call reports
Expense reports

Sales management evaluates salespeople on their ability to “Plan their work, work their plan”.
It also provide constructive feedback, motivate salespeople perform well.
Formal evaluation forces management to develop and communicate clear standard for judging
performance.
III.

PERSONAL SELLING PROCESS

The goal of the personal selling process is to get new customers and obtain orders from them
The Selling Process consists of seven steps


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1. Prospecting and Qualifying

The first step in the selling process is Prospecting—identifying qualified potential customers.
The salesperson must often approach many prospects to get only a few sales. Although the
company supplies some leads, salespeople need skill in finding their own. The best source is
referrals.
•
•
•
•

Current customers

Suppliers, dealers, and noncompeting salespeople
The web or other social network contacts
Unannounced office visits (a parcatice known as “cold calling”)

Qualifying a lead requires knowing how to identify the good one and screen out the poor ones.
Prospects can be qualified by looking at various factors
Financial ability
Volume of business
Specian needs
Location
Possibilities for growth
2. Pre-approach
•
•
•
•
•

Pre-approach is the process of learning as much as possible about the organization (what it
needs, who is involved in the buying) and its buyers (their characteristics and buying styles).


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The salesperson should set call objectives, which may be to qualify the prospect, gather
information, or make an immediate sale. Another task is to determine the best approach, which
might be a personal visit, a phone call, or a letter or an e-mail.
3. Approach

Approach is the process where the salesperson meets and greets the buyer and gets

therelationship off to a good start, and involves the salesperson’s appearance, opening lines,
and follow-up remarks.
4. Presentation and Demonstration

During the presentation step of the selling process, the salesperson tells the “value story” to the
buyer, showing how the company’s offer solves the customer’s problems.
The customer-solution approach fits better with a relationship marketing focus than does a hard
sell or glad-handing approach.
Before salespeople can present customer solution, they must develop solution to present.
Qualities thatbuyers dislike most in
salespeople
•
•
•
•

Pushiness
Being late
Deceitfulness
Being unprepared or disorganized

Qualities that buyers value most in
salespeople
•
•
•
•
•
•

Good listening skills
Empathy
Honesty
Dependability
Thoroughness
Follow-through

5. Handling Objections

In handling objections, the salespeople should following:
•
•
•
•
•

Use a positive approach
Seek out hidden objections
Ask the buyer to clarify any objections
Take objections as opportunities
Turn the objections into the reasons for buying

Every salespeople needs training in the skills of handling objections.


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6. Closing

Salespeople can use one of several closing techniques:
•

•
•
•
•

Ask for the order
Review points of agreement
Offer to help write up the order
Ask whether the buyer wants this model or that one
Note that the buyer will lose out if the order is not placed now

7. Follow-up

Follow-up is necessary if the salesperson wants to ensure customer satisfaction and repeat
business. The salesperson should complete any details on delivery time, purchase terms, and
other matters and schedule a follow-up call to make sure proper installation, instruction, and
servicing occur.
This visit would reveal any problems, assure the buyer of the salesperson’s interest, and reduce
any buyer concerns that might have arisen since the sale.

IV.

SALES PROMOTION

Sales promotion consists of short-term incentives to encourage the purchase or sales of a
product or service.Whereas advertising offers reasons to buy a product or service, sales
promotion offers reasons to buy now.
Examples:a comestic store offers discount 20% on every products due to Reunification Day April 30and International Workers' Day - May day- May 1. A hardware store chain receives a
10 percent discount on selected Stihl power lawn and garden tools if it agrees to advertise
them in local newspapers.

1. The rapid growth of sales promotion
1.1.
Target


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This tool userstarget toward final buyers (consumer promotions), retailers and whole-salers
(trade promotions), business customers (business promotions), and members of the sales force
(sales force promotions).sales promotion accounts for 77 percentof all marketing expenditures.
1.2.
Facters contributed to the growth.
• Internally, Product managers face greater pressures to increase current sales, and they

view promotion as an effective short-run sales tool.
• Externally, Company faces more competition, and competing brands are less
differentiated. Competitors are using sales promotion tohelp differentiate their offers.
• Advertising efficiency has declined because of rising costs, media clutter, and legal
restraints.
• Consumers have become more deal oriented.
1.3.
Sales Promotion Objectives

Sellers may use consumer promotions to urge short-term customer buying or enhance
customer brand involvement. Objectives for trade promotions include getting retailers to
carry new items and more inventory, buy ahead. For the sales force, objectives include getting
more sales force support for current or new products. However, rather than creating only shortterm sales or temporary brand switching, sales promotions should help to reinforce the
product’s position and build long-term customer relationships. Marketers should avoid “quick
fix,” price-only promotions in favor of promotions that are designed to build brand equity.All
kinds of companies now offer rewards programs. Such promotional programs can build loyalty

through added value rather than discounted prices.
For example, rather than offering promotional discounts that might damage its premium
positioning, Starbucks ran ads telling customers why its coffee is worth the higher price. Then,
to build loyalty,the company promoted the Starbucks Card Rewards.
2. Major sales promotion tools
2.1.
Consumer Promotions

Consumer promotions include a wide range of tools from samples, coupons, refunds,
premiums, and point-of-purchase displays to contests, sweepstakes, and event sponsorships.
Sales promotion tools used to boost short-term customer buying and involvement or enhance
long-term customer relationships.


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•

Samples are offers of a trial amount of a product.It is the most effective but most

expensive way to introduce a new product or create new excitement for an existing one.
• Coupons are certificates that give buyers a saving when purchasing specified products.
• Cash refunds (or rebates) are like coupons except that the price reduction occurs after
thepurchase rather than at the retail outlet.
• Price packs (cents-off deals) offer consumers savings off the regular price of aproduct.
• Premiums are goods offered either free or at low cost as an incentive to buy a
•

product,ranging from toys included with kids products to phone cards and DVDs.
Advertising specialties, also called promotional products, are useful articles imprinted

withan advertiser’s name, logo, or message that are given as gifts to consumers.
• Point-of-purchase (POP) promotions include displays and demonstrations that take
placeat the point of sale.
• Contests, sweepstakes, and sponsorship games give consumers the chance to win
•

something, such ascash, trips, or goods, by luck or through extra effort.
Finally, marketers can promote their brands through event marketing (or event
sponsorships).They can create their own brand-marketing events or serve as sole or
participating sponsors of events created by others.Procter & Gamble creates numerous
events for its major brands. Consider this example:

For example, P&G has sponsored a holiday event promotion for its Charminbrand in New
York’s Times Square, where it can be very difficult to find a public rest-room. P&G sets up 20
free, sparkling clean Charmin-themed mini-bathrooms, eachwith its own sink and a bountiful
supply of Charmin. The event is the ultimate in experiential marketing touching people in
places advertising wouldn’t dare go. Overthe past 3 holiday seasons, the event has been flush
with success. More than 1million people have gratefully used the facilities.
2.2.

Pros and cons of consumers promotion
PROS

Samples

- Increase the number of new customers.
- Entice former customers to return.
- Be easy to make impression to customers right
away, right there to help them remember about the
companyproduct.

Coupon

- Reward current customer- customer are satisfied

CONS
- Not to be easy to measured as
other promotional strategies.
- Not be effective if the company
set the incorrect sampling goup.
- Be difficult to ask to give
customer sample
- The coupon may not best fit for


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Price
packs

when they receive a gift of saving.
- Provide the marketers with higher measurable
promoting program.
- Increase the number of new customer. Name on
the coupon even when the coupon is not redeemed

target customers
- Have no monetary value

- Allow the company to new segment in price

sensitive group of customers.

- Effect the brand image
- May reflect the dropping in price
quantity
- Break the law of other company

- Provide product with lower cost, attract more
customers.
Premiu
m

- Increase brand loyalty
- Impact at point-of-sale due to their visibility
- Other immediate consumer gratification

Contest
and
game
Refund
and
rebates

- Not effective if the company set
the wrong target
- Don’t expect the premium to
increase the profit

- Maintain current customer

- Not as easy as other promotion to
measure.

- Create a buzz about your product.
- Draw traffic to your website or store.

-To set up event company has to be
rely on sponsorship.

- Maintain current customers.

- Require procedures and assume
the out-the-door price when
considering the purchase.

- Offer customers lower price.
- Easy to measure the effectiveness of the sales
promotion campaign

- Most of them are exaggerated.
- Customers need more skill to
receive benefit.

2.3.

Trade Promotions

Manufacturers direct more sales promotion dollars toward retailers and wholesalers (81%) than
to final consumers. Trade promotions can persuade re-sellers to carry a brand, give it shelf
space, promote it in advertising, and push it to consumers. Shelf space is so scarce these days

that manufacturers often have to offer price-offs,allowances, buy-back guarantees, or free
goods to retailers and wholesalers to get products on the shelf , once there, to keep them on it.


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Manufacturers use several trade promotion tools:
•

An allowance (usually so much off per case) in return for the retailer’s agreement to

feature the manufacturer’s products in some way.
• Offer free goods, which are extra cases of merchandise, to resellers who buy a certain
quantity or who feature a certain flavor or size.
• Free specialty advertising items that carry the company’s name, such as pens, pencils,
2.4.

calendars, paperweights, matchbooks, memo pads, and yardsticks.
Business promotion

Business promotions are used to generate business leads, stimulate purchases,
rewardcustomers, and motivate salespeople. Many companies and trade associations organize
conventions and trade shows to promotetheir products. Firms selling to the industry show their
products at the trade show.Some trade shows are huge. For example, at this year’s International
Consumer Electronics Show, 3,000 exhibitors attracted some 120,000 professional visitors.
Even more impressive, at the BAUMA mining and construction equipment trade show in
Munich, Germany, more than 3,100 exhibitorsfrom 53 countries presented their latest product
innovations to more than 415,000 attendees from more than 200 countries. Total exhibition
space equaled about 5.9 million square feet (more than 124 football fields).
A sales contest is a contest for salespeople or dealers to motivate them to increase their sales

performance over a given period. Sales contests motivate and recognize good company
performers, who may receive trips, cash prizes, or other gifts.
3. Developing the sales promotion program.

Beyond selecting the types of promotions to use, marketers must make several decisions in
designing the full sales promotion program. First, they must determine the size ofthe
incentive.The marketer also must set conditions for participation. Incentives might be offered
to everyone or only to select groups.Marketers must determine how to promote and distribute
the promotion program itself. Increasingly, marketers are blending several media into a total
campaign concept. The length of the promotion is also important. If the sales promotion period
is too short, many prospects (who may not be buying during that time) will miss it. Clearly,
sales promotion plays an important role in the total promotion mix.


Page 25 of 26

THE DIFFIRENCES BETWEEN PERSONAL SELLING & SALES

V.

PROMOTION
BASIS FOR
CUSTOMER
Meaning
Consequence
Cost involved
Communication
Customers
Incentive schemes and
offers

Nature of product
Method used for which
kind of product
-

PERSONAL SELLING

SALES PROMOTION

Personal Selling is a marketing tool
in which the sales person presents
the goods to the customers and
instigates them to purchase it.
Long term increase in sales
High
Face to face
Few
Not always present

Sales Promotion is a range of
non-personal marketing activities
that are carried on to initiate sales
of product and service.
Short term increase in sales
Comparatively less
Indirect
Many
Always present

Customized and technically

complex
High value

Standardized and easy to
understand
Low value

Purpose
• Personal Selling: is to create awareness and build a long term relationship which
will lead to closing the sale.
Sales Promotion: is to increase the sales and dispose of stocks in a short time.
Personal Interaction
• Personal Selling: is performed by individuals and has a face to face interaction
•

-

where customers are offered information on products, and mutual long-term
relationships are built.
• Sales Promotion: does not have any personal interaction and offers incentives to
-

encourage purchase and to disseminate information.
Incentives
• Personal Selling: is negotiation based, and incentive is an option. But, it’s not
mandatory.
• Sales Promotion: would definitely have an incentive element to entice
customers to increase sales.