Download Fundamentals of Selling

Four Elements of the Marketing
Mix and Four Promotion Activities
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Marketing Mix – what is the goal?
The goal is to create a marketing mix that
contains the right product, at the right price, at
the right place and time, with the right
promotional effort to create awareness and
demand.
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Product
A product is a bundle of tangible and
intangible attributes, including package, color,
and brand, plus the services and even the
reputation of the seller
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Product – it’s more than you think.
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Price - it’s important to success
Price refers to the value or worth of a product
that attracts the buyer to exchange money or
something of value for the product
Based on cost
Based on market
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Place - it has to be available
Manufacturer > Wholesaler > Retailer >
Customer
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Products are Often
Distributed Through Resellers.
What are Resellers?
Resellers, such as wholesalers or retailers,
purchase products and then sell to
organizations and/or individuals
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Wholesaler/Distributor
Primarily engaged in buying, taking title to,
usually storing and physically handling goods
in large quantities, and reselling the goods,
usually in smaller quantities to
Retailers
Wholesalers
Manufacturers
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Promotion – you have to tell people
Promotion increases sales by communicating
product information to potential customers
The four basic components of a firm’s
promotional effort are: (PAPs)
Personal selling
Advertising
Publicity
Sales promotion
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Promotion Activities
Personal Selling
Personal communication of information to persuade
Advertising
Non-personal communication of information paid for
by an identified sponsor such as an individual or an
organization. Methods include TV, newspapers,
catalogs and the radio
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Promotion Activities
Publicity
Non-personal communication of information that is
not paid for by an individual organization.
Information appears in media such as television,
radio and newspapers
Sales promotion
Involves activities or materials used to create sales
for goods or services
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Promotion Activities
Two types of sales promotion
Consumer - includes free samples, coupons,
contests, and demonstrations to consumers
(“pull”)
Trade - encourages wholesalers and retailers to
purchase and to sell aggressively using devices
such as sales contests, displays, special
purchase prices, and free merchandise (“push”)
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Example – Crest Toothpaste
Prior to the 1960s tooth cleaners were in the
form of powder, then paste. They contained
cleaners, polishers, and eventually some
mouth freshener (mint oil).
By the 1960s dental care had reached a high
level, and a main enemy was identified –
dental caries.
Salespeople were asking customers (retail
drug stores) what could be done to improve
the product, and cavity prevention emerged.
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Example – Crest Toothpaste
Procter and Gamble scientists developed a
way to incorporate a known enamel hardener
– fluoride – into toothpaste.
Studies were done to confirm the positive
effects, and the product went to market.
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Example – Crest Toothpaste
Product:
“Crest” toothpaste with flouride.
Price:
Comparable with market – “penetration pricing”
Promotion:
Publicity – news articles about “new cavity
fighter”
Sales Promotions – “pull” using samples sent
to households
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Example – Crest Toothpaste
Sales Follow Up
Salespeople followed up to insure sales
commitments were being met (if they
weren’t = How can I help?)
Salespeople trained retail sales force in
stores.
Salespeople continued to provide feedback.
Salespeople sought new markets (grocery
stores, supermarkets)
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Example – Crest Toothpaste
This is what is meant by
“Relationship Marketing”
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Relationship Marketing
Relationship marketing is the
creation of customer loyalty
Targets a major customer
that you want to sell to now
and in the future
Establishes a long-term
collaborative relationship
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Three Levels of
Relationship Marketing
Transaction selling: customers are sold to
and not contacted again
Relationship selling: the seller contacts
customers after the purchase to determine if
they are satisfied and have future needs
Partnering: the seller works continually to
improve its customers’ operations, sales, and
profits
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Partnering with Customers
Encourages both the
buyer and seller to
share information
Two companies work
toward the same
objective
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Consultative Selling
The process of helping the customer achieve
strategic short and long-term goals through
the use of the seller’s goods and/or services
A highly interactive dialogue between a
salesperson and a customer
A balanced exchange of information
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The Role of Consultative Selling
The Long-Term Ally
Creates a “win–win” situation. As the customer’s
sales and profits grow, so do the salesperson’s
The ability of a salesperson to fulfill the role of
long-term ally is a pivotal factor in determining
whether a sales transaction is just a transaction
or the beginning of a relationship
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Avoid The Customer-Seller Relationship Gap
May occur when the salesperson’s interest in
the customer declines
Usually after the sale
Yet the customer’s interest increases after the
sale
This is one reason why service after the sales
is so important
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The Key to Success
Knowing target customers
Informing target customers of competitively
superior products
Guiding target customers towards good
purchase decisions
 Following up afterward to insure that goals of
both parties were met
 Looking ahead and anticipating the next
possible benefits to the customer
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Ethical Situation #1
The Cadillac Lease
1. A car salesman has presented a sales
price and payment to a customer, who
has agreed to the terms
2. A bank salesman suggests he offer the
customer a lease in order to lower the
payment.
3. The car salesman switches to a lease, but
increases the profit instead.
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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Ethical Situation #2
The Home Mortgage
1. A mortgage broker tells the customer he
is getting the lowest rate available.
2. Between the time the customer agrees to
the terms and then signs papers rates go
down.
3. The mortgage salesman keeps the rate
the same and is paid the difference by the
bank.
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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Ethical Situation #3
Overdraft Protection
1. The bank suggests that a customer sign
up for overdraft protection.
2. “It’s easy and convenient. It simply
charges your credit card to cover
overdrafts – no overdraft charges.”
3. Each time the customer overdraws his
account he is charged $5, and the interest
ticker begins on the entire credit card
balance.
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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Ethical Situation #3
Fees for Overdrafts
1. A bank Marketing Manager calculates
the actual costs of an overdraft at
$1.50.
2. His manager insists that the bank
“fee” be increased from $12 to $20.
3. The Marketing Manager decides to
resign rather than support the
increase.
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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Tomorrow:
• Ethics
• Why People Buy
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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