Marketing Reserved for Hifsa

LECTURE #6

Personal Selling, Sales Promotion, and Direct Marketing

As we enter into our last week of on-line dialogue, we'll continue our discussion of Integrated Marketing Communications (IMC) focusing on Personal Selling, Sales Promotion, and Direct Marketing. We will close with discussions of how to integrate the five IMC tools. I trust you are all enjoying the IMC discussions.

Personal Selling is commonly used in most all organizations. In many cases, Personal Selling is the focal point of a company's marketing efforts. We see corporations with a large outside sales force, a nationwide network of independent contractors, or a department full of outbound telemarketers. The first important thing to learn about Personal Selling is that whether it is used on the front end of a marketing campaign or as the stand alone primary marketing tool, (both described above), it is expensive, dangerous and an incorrect application of the Personal Selling function.

When Personal Selling is used on the front end as an unqualified first step (such as cold calling from business to business, or dialing for dollars with outbound telemarketing), it is on an exposure by exposure basis, the most expensive of all tools, (even more expensive on a per exposure basis than broadcast media advertising).

Never use personal selling unless it is highly targeted to pre-qualified prospects or pre-existing customers, prequalified in the sense that there have been multiple exposures to the company "linked" together. For example, we might create image and awareness through PR or advertising and induce trial through the use of sales promotion (which will discussed in this lecture later in greater detail) and then, implement the personal selling function.

Personal Selling is in many cases, critical to the final sale of the product or service. Most of the time, we prefer to buy a new car from a real person and we want our hair done or our taxes done by somebody we know or trust. Personal Selling is the focal point of the relationship in these examples. Personal Selling is even more necessary when the product or service is either highly technical or very expensive.

It is important to note (and this will also be discussed later in this lecture in greater detail) that many traditional Personal Selling functions are being replaced by Direct Marketing functions. For example, many traditional retail purchases are being made today via catalogue or internet.

Sales Promotion is something we are all very familiar with. It comes in many disguises such as 1.9% financing, auto rebates, buy one and get one free, and Pepsi for 99 cents per liter. In other words, we think sales promotion is giving something away for free or offering at a discount price, and while that is true, sales Promotion also includes many "non-price" promotions such as described above. An easy way to identify a Sales Promotion is to see if ultimately the offer reduces the marketers profit margins (as in all the examples listed above).

Sales Promotion when used effectively is used on the front end of an IMC campaign. Why? Because it is the greatest of all response motivators. It is best used when integrated with Advertising or Public Relations. The Advertising or PR creates awareness of the Sales Promotion which is designed to induce trial of a new product or service. When we see Pepsi or Coke on sale, it is an incorrect use of Sales Promotion. It is the use of Sales Promotion on the back end of an IMC strategy. Why induce trial of an already known product or service? It makes no sense. It becomes nothing more than an entry into the price war game. Think about 99 cent Whoppers. We've already tried them, so the sales promotion does nothing but impact our consumer behavior. This is the biggest danger of Sales Promotions being used by themselves or on the back end, it creates huge declines in brand loyalty.

So let's briefly summarize what we've learned so far. There are 5 IMC tools which must be used in an integrated fashion to achieve the greatest value, the greatest synergy. The appropriate mix will be different for each company depending on the circumstances. In every case, when tools are used stand alone (by themselves), there is waste, clutter, decline in brand loyalty, etc. There are tools which must be used in the beginning or at the front end of the IMC mix and there are tools which are most appropriate on the back end of the IMC mix. Advertising is a front end tool which is designed to create image and awareness, it can be used as a back end tool when the objective is brand positioning rather than image and awareness (usually, done with Coke, Nike, or large global marketers).

When advertising is used alone, it is not measurable and therefore must be integrated with another front-end tool, usually Sales Promotion. Sales Promotion is very dangerous when used alone as it will be considered a discount price promotion and lead to price wars and great declines in brand loyalty. However, if used appropriately to induce trial it is the greatest of all response motivators. It should be used to induce trial or motivate response and then, quickly turned off before it can lead to price wars or declines in brand loyalty. Personal Selling is powerful and sometimes the only way to close the deal. However, it must be used as a back end IMC tool otherwise it is the most expensive tool of all. It must be used when the relationship is already established and when dialogue has already taken place. When items (or services) are expensive or highly technical, Personal Selling becomes even more necessary.

The final IMC tool is Direct Marketing which really means two things. Direct Marketing by purist definition means to bypass traditional channels of distribution (go direct to the customer). Traditional channels have become so clogged up with heavy competition, price wars, battles for retail shelf space, volume rebates, co-op advertising, and things like no questions asked return policies. Today. if a marketer wants to sell his of her products in Ralphs, Albertson's, Target, WalMart or any number of other traditional retailers, they will be forced to come in at rock bottom prices, take all retrurns no questions asked, pay volume rebates, co-op the advetsing and all the while, be on the shelf next to store brands marked down to significantly lower prices. The power of technology and the computer which has allowed for database marketing now allow the marketer to go direct. Direct channels of distribution could be catalogues, or even internet commerce. The key is that direct marketing must be database driven when traditional channels are bypassed.

The second definition of Direct Marketing is that it is equal to Relationship Marketing. It must be pre-qualified, timely, relevant, and highly personal. As Peppers and Rogers state, it must be delivered through individually addressable media. It is definitely a back end tool most of the time because it is only possible when we know the customer deep down the funnel to an individualized or customized level. The customer has already said "I want to play the game with you". They have already told us about the products and services they nedd and ask us to deliver in exchange for their loyalty. In other words, Direct Marketing programs are almost never geared toward churning in new customers, but rather, to gain more business from our existing best customers.

Discussion Questions (all responses due no later than Day 3)

Initial responses to the discussion questions must be posted as a reply to the threads created in the Main Newsgroup. Responses should not be posted as file attachments. Responses do not have to be posted in APA format. Responses should be approximately 250-300 words in length.

1.) Identify a product, service, or cause which has been negatively or positively affected by publicity in recent years. Analyze any responses the company or organization took to deal with the problems or opportunities created by the publicity.

2.) Please discuss why you think P.R. is a great alternative to advertising and why in fact, it can be much more effective.

3.) Please tell me what you think is the most significant concept covered in the text readings for week 6. Any comments or further questions?

Revised 8/14/19