978-1259637155 Chapter 14

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LEARNING OBJECTIVES

LO 14-2 Identify various approaches to sales promotion and how each might be used.

LO 14-4 Understand the role of personal selling in marketing communications.

LO 14-6 Understand the major job responsibilities of sales management.

CHAPTER OUTLINE

I. ADVERTISING

A. Types of Advertising

i. Institutional Advertising

ii. Product Advertising

B. Advertising Execution and Media Types

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C. The Role of the Creative Agency

II. SALES PROMOTION

A. Sales Promotion to Consumers

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B. Sales Promotion to Channel Members

III. PUBLIC RELATIONS (PR)

A. Gaining Product Publicity and Buzz

B. Securing Event Sponsorships

C. Crisis Management

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IV. PERSONAL SELLING – THE MOST PERSONAL

FORM OF COMMUNICATION

A. Activities in Personal Selling

i. Communicate

ii. Sell

iii. Build Customer Relationships

iv. Information Management

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B. Sales in B2C versus B2B Markets

C. Classifying Sales Positions

i. Trade Servicer

ii. Missionary Seller

iii. Technical Seller

iv. Solution Seller

D. The Personal Selling Process

i. Prospect for Customers

ii. Open the Relationship

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iii. Qualify the Prospect

iv. Sales Presentation

a. Setting Goals and Objectives

b. Characteristics of a Great Sales

Presentation

c. Handling Objections – Negotiating Win-

Win Solutions

i. Product Need

ii. Company trust

iii. More time

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iv. Price

d. Closing the Sale

e. Follow-Up after the Sale

E. Organizing the Sales Force

i. Company Sales Force or Independent Agents

ii. Geographic Orientation

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iii. Product Orientation

iv. Customer Type or Market Organization

F. Managing the Sales Force

i. Performance: Motivating the Sales Force

a. Role Perceptions

b. Sales Aptitude: Are good Salespeople

Born or Made?

c. Sales Skill Levels

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d. Motivation

e. Organizational, Environmental and

Personal Factors

f. Rewards

g. Satisfaction

ii. Recruiting and Selecting Salespeople

iii. Training

iv. Compensation and Rewards

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v. Evaluating Salesperson Performance

V. SUMMARY

KEY TERMS

advertising wearout When customers become bored with an existing advertising campaign.

advertising response function An effect in which, beyond a certain ad spending level,

diminishing returns tend to set in.

institutional advertising Advertising that promotes industry, company, family of brands, or

some other issues broader than a specific product.

product advertising Advertising designed to increase purchase of a specific offering.

pioneering advertising Advertising intended to stimulate primary demand, typically during the

introductory or early growth stages of an offering.

competitive advertising Advertising intended to build sales of a specific brand through the use

of emotional appeals, persuasion, and providing information.

comparative advertising Advertising in which two or more brands are directly compared

against each other on certain attributes.

reach The percentage of individuals in a defined target market that are exposed to an ad during a

specific time period.

frequency The average number of times a person in the target market is exposed to the message.

advertising execution The way an advertisement communicates the information and image.

clutter The level of competing messages on a particular medium.

trade show An industry- or company-sponsored event in which booths are set up for the

dissemination of information about offerings to members of a channel.

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cooperative advertising and promotion When a manufacturer provides special incentive

money to channel members for certain promotional performance.

personal selling A two-way communication process between salesperson and buyer with the

goal of securing, building, and maintaining long-term relationships with profitable customers.

trade servicer A salesperson who sells to resellers such as retailers or distributors and provides

assistance to those channel members to help them resell the company’s products.

missionary salespeople Salespeople who do not take orders from customers directly but

outsourcing the sales force Using independent sales agents to sell a company’s products.

transactional cost analysis (TCA) A tool that measures the cost of using different types of

selling agents.

sales skill levels The individual’s learned proficiency at performing necessary sales tasks.

motivation The stimulating power that induces and then directs an individual’s behavior.

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intrinsic rewards Rewards salespeople attain primarily for themselves, including feelings of

accomplishment, personal growth, and self-worth.

salary A fixed sum of money paid at regular intervals.

incentive Generally, commissions tied to sales volume or profitability, or bonuses for meeting or

exceeding specific performance targets.

commission Payment based on short-term results.

nonfinancial incentives Sales force motivators beyond financial compensation.

APPLICATION QUESTIONS

1. Consider the concept of advertising wearout.

a. What is advertising wearout?

b. What do you think are some causes of the wearout?

c. Come up with as many ads as you can that, for you, are “worn out?” Can you recall how

long each ad interested you before wearout began to set in?

2. You are the Vice President of Sales for a $30 million manufacturer of home building

materials. The company employs 50 salespeople around the country to market the

company’s products to hardware stores and major building contractors. The CEO believes

the company needs to cut costs and wants to reduce the sales force by 50%. You have been

asked to come in and explain why that is a bad long term strategy for the company. Discuss

why sales people are critical to the success of the company.

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3. Review the Common Approaches to Advertising Execution (Exhibit 14.2) and Pros and Cons

of Key Advertising Media (Exhibit 14.3). Review some ads in any three of the seven

different types of media identified, watching for examples of the different execution

approaches.

a. Make notes about the ads you reviewed and the different types of media execution you

witnessed. Which ads do you think were the most effective? Why?

b. For the same ads, based on the chapter’s list of pros and cons for each, identify specific

examples of ads for which one or more of the pros and cons apply.

c. Share your findings with another student or with the class.

4. Exhibit 14.4 presents some of the most common consumer sales promotion approaches.

Select any three of the approaches and think of a purchase you have made in response to

each. How important was the availability of the sales promotion to your ultimate decision to

buy?

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a. Crisis management is a very important function of any type of organization including for–

profit firms, nonprofits, governmental entities, and others. Identify an example of an

organization that faced a crisis of some type that was highly publicized. This could be a

product recall that challenged a firm, a management or financial scandal, a natural

disaster faced by a governmental body or charitable agency, or any other such issue.

b. How did the organization address the crisis? What specifically did they do once it was

evident a crisis was afoot?

c. Give your opinion of how they handled the crisis. What would you recommend that they

could have done better?

MANAGEMENT DECISION CASE

Intel Uses Storytelling to “Let the inside out”

This case about a familiar high-tech company covers some important themes: brand evolution,

innovative advertising and alternative approaches to the creation of advertising content. Many

students in class will likely be staring at laptops with the little Intel sticker pasted in the lower

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Questions for Consideration

1. What was the issue with Intel’s old branding? Was this just change for change’s sake?

Why might it be important for Intel’s future business success to promote a new brand

image?

Intel realized that by focusing on being “inside”, they ran a real risk of becoming invisible.

As the old saying goes, “Out of sight, out of mind.” Rather than just change for the sake of

2. Intel uses both their new internal creative team and outside advertising agencies as well.

What are the pros and cons of using an internally-staffed creative advertising team?

What activities that an ad agency performs might be more efficiently handled by an

outside group?

Management must make many internal/external choices: employees or contractors? In–

house manufacturing or offshore? Janitorial service or company custodians? In each of

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3. Intel shows their storytelling ads on both TV and via the internet. Is TV still a viable

media choice for tech companies like Intel or should they migrate all these ads to the

internet? If they use both types of media, how can they ensure that there is consistency

between the two media strategies to optimize their advertising spend?

Customers might question the tech “cred” of a tech company that does not advertise in

digital media. The decision to use traditional media in the mix should be a question of who

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