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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
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C. The Role of the Creative Agency
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
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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
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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?
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d. Motivation
e. Organizational, Environmental and
Personal Factors
f. Rewards
g. Satisfaction
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.
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
persuade customers to buy their firm’s product from distributors or other suppliers.
technical selling Selling that requires a salesperson to have technical understanding of the
product or service.
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.
APPLICATION QUESTIONS
1. Consider the concept of advertising wearout.
a. What is advertising wearout?
Advertising wearout is when customers become bored with an existing advertising
campaign. Due to increased exposure, the effectiveness of the advertisement is
diminished.
b. What do you think are some causes of the wearout?
The primary cause of wearout is considered to be multiple repetition of the
advertisement. In addition, the decline in advertising effectiveness may be due to the
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.
Customers demand a close, strategic relationship with suppliers and, as the primary point of
contact with the company, salespeople are expected to build and support the customer
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Personal selling offers three distinct advantages over other marketing communications
methods.
Immediate feedback to the customer – Customers don’t want to wait for information.
Increasingly, they demand accurate information quickly putting pressure on companies for
immediate, personal communication with a salesperson or customer service representative2.
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.
Students may benefit most from finding ads that could be more effective with a different
approach or a different choice of media.
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?
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?
Some students may be under the impression that they are immune to promotion of all types
and are fully rational decision makers, but most will recognize that the availability of a
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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.
c. Give your opinion of how they handled the crisis. What would you recommend that they
could have done better?
Points of evaluation could include 1) speed of response, 2) clarity of communications, 3)
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
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takeaway from the case is that marketers have options and that there are pros and cons to each
approach.
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
change, this campaign reflected real changes in the profile of the company. In their early
years, Intel’s business was all about PCs, but now, that is just one of the products that utilize
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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be very familiar with the heyday of the ad agency in the 1960s. While large companies like
Intel can justify an inhouse operation for the reasons cited in the case, they still find value in
employing outside help. Agencies have specialized creative talent and what they lack in
inside company knowledge, they make up for with a high level of motivation to deliver a
successful campaign (so they will be retained for the next one). Agencies also have staff who
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
the company wants to reach and at what cost. If broadcast or cable TV is a cost-efficient
way to get messages in front of consumers of interest, then either or both should be used
along with digital options. A note for discussion here might be the difference between
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agencies are involved, they should report to an individual in the company who reports up to
the senior executive. A clear policy should be in place for approval of messaging. A process
should be in place to facilitate communications among the various groups involved in
creating and executing promotional messaging.
SUGGESTED VIDEO
Selling at GPI Procurement Services (5:26 minutes)
Description: This video discusses how GPI Procurement Services maintains its customer
relationships by having excellent salespeople. Their main focus is communicating, listening,
knowing their product, installing trust, and providing the best for their clients.
1. The salesperson in this video notes that expanding business with existing customers is one of
the best ways to increase total sales. Why is this the case? What are some of the keys (from
the video and your own ideas) for increasing the amount of business that you get from
existing customers?
For many types of products/services (particularly B2B services as in this video), there are
many steps that must be completed before a prospect becomes a customer (requiring time
and money). Conversely, the existing customer has already become convinced of the value