Week TEN: Direct Marketing, Sales Promotion & Personal Selling

Question 1

What is direct marketing, its objectives and strengths & limitations

Answer 1

= direct message to encourage immediate response or behaviour

OBJECTIVES

• Generate sales/orders/leads
• Stimulate enquiries
• Entries into competition
• Registration for event, loyalty carsd
• Build traffic at website
• Simulate product trial with incentives/coupons
• Deliver product-relevant info
• Gather info from database

STRENGTHS

• Targetability
• Measureability
• Accountability
• Efficiency
• Personalisation
• Speed

LIMITATIONS

• Cost
• Clutter
• Requires established knowledge
• Safety
• Ethics

Question 2

Outline the components of a direct-marketing campaign

Answer 2

1. Objective =>
2. Media (channels)
   - Postal mail
   - > Can be used to send free samples etc
   - > More likely to open if it has their name on it, significant increase in response and conversion rates as a result of personalisation
   - Email/digital
   - > Can track usage and recommend similar products, tailor to preferences
   - Tv
   - Print
   - Door-to-door
   - Phone (telemarketing)
3. Creative (messaging)
   - Get attention
   - Develop interest
   - Offer proof
   - Call for action
   - Be consistent with overall brand
4. Database
   - Up to date database allows companies to:
   - > Aim direct marketing to best prospects
   - > Target messages to different types of consumers
   - > Create long-term relationships with customers
   - > Enhance advertising productivity
   - > Calculate lifetime value of a customer/prospect -> customer lifetime value
   - Any sort of feedback (eg. from promotions, using loyalty card, warranty, rebate, telemarketing) can get added to database

5. Fulfillment 
= execution of direct marketing from front-end (getting material to audience) to back-end (managing responses)
- Recording responses
- Provide point of contact for communication
- Storage of marketing materials
- Picking, packing, dispatching
- Invoicing
- Forecasting
- Analysing and reporting
- Filling envelopes and postage
- Can be done in-house

Question 3

What are sales promotions and their objectives

Answer 3

= any incentive used by a manufacturer to encourage distributors (eg. wholesales, retailers) or consumers to buy a brand

Objectives;

• Invigorate sales of mature brand
• Facilitate introduction of new products to trade
• Increase on and off-shelf merchandising space
• Neutralise competitive advertising and sales promotions
• Obtain trial purchases from consumers
• Stimulate sales force enthusiasm for new, improved or mature product
• Encourage loyal customers by encouraging repeat purchases
• Increase product usage
• Pre-empt competition
• Reinforce advertising

Question 4

Outline the difference between a push and pull strategy

Answer 4

Push strategy: manufacturer’s selling and other promotional directed at gaining trade support from wholesalers and retailers for the manufacturer’s product

Pull strategy: efforts directed to ultimate consumers with the intent of influencing their acceptance of the manufacturer’s brand, manufacturer’s hope that the consumers will then encourage retailers to handle the brand

Question 5

What is personal selling, its objectives and strengths & limitations

Answer 5

= person-to-person communication in which a salesperson works with prospective buyers and attempts to influence their puchase needs in the direction of their company’s products/services

• Involves personal interaction and building relationships
• Relationship marketing = estbalish, maintain and enhance relationship with customers
• > Engaged customers buy 90% more frequemtly from a brand
• > Engaged customers spend 60% more dollars per transaction
• > Engaged customers 5x more likely to indicate it is the only brand they would buy from in the future

Objectives

• Generate and deliver sales
• Develop relationships with customers
• Provide additional/complex info
• Focus on brand benefits and increase brand equity

Strengths

• Attention
• Salesperson customising/flexibility
• Immediate feedback
• Communicate large volume of info
• Demonstrate capacity
• Long-term relationships

Limitations

• Efficiency (one client at a time)
• Labour intensive
• Variability/consistency
• Potential for dishonesty (agency problem)
• Training required

Question 6

What are the nine steps to performing the sales role

Answer 6

1. Generating sales leads (prospecting)
   - Direct marketing campaigns
   - Seminars and conferences
   - Directories
   - Trade shows
   - Cold calling
   - Referrals
   - Networking
2. Qualifying the best prospects
   - Is the person financially able to purchase?
   - Does the person have purchase authority?
   - Does the person currently have a need for your products?
3. Pre-approach
   - Objectives of sales call
   - > Give or get info, build relationships, sell
   - Background research
   - > Analyse customer’s environment to tailor message
   - > Match product benefits with needs
4. Approach
   - Build rapport by finding common ground
   - First impressions are key;
   - > Appearance, compliments, common ground, confidence/authority
   - > Reciprocity: servers get larger, tips when giving a mint
   - > Authority: higher trust to those in authority
   - > Liking halo effect, negotiations
   - > Scarcity: concord sales jumped when it was announced would be cancelled
   - > Consistency: foot in the door
   - > Consensus: social norms
5. Presentation (“The Pitch”)
   - Actively listen to understand needs
   - Match needs to product benefits
   - Take consultative selling approach
   - Script
6. Demonstration
   - Reduce perceived risk by demonstrating/showing products
7. Negotiation
   - Anticipate and prepare for buyer concerns
   - Know the value of your offering
   - Validate the problem
   - Create alternative solutions
   - Find points of agreement
8. Close
9. Servicing the Sale
   - Future success is based upon relationship building
   - Follow-up to identify unmet needs
   - Send additional info on complementary products
   - Reciprocity (eg. Christmas cards)

Question 7

What are the ways to predict success in personal selling

Answer 7

Skill:
- knowledge surrounding how to make a sale and how to engage with individuals
Personal Characteristics:
- appearance, age, size, race, gender
Aptitude:
- interests, intelligence (emotional), empathetic, ambitious
Motivation:
- time and energy one puts into the activities associated with the job (ego, competition, achievement/status, service/relationship-oriented)
Role Perceptions:
- understanding and appreciating your role (job satisfaction)
Adaptability:
- ability to adapt to situational circumstances