Marketing Management

GBA2006-01
Week 8 (Class 16)

Professor. Hyejin Lee

Personal Selling &
Direct Marketing
〮 Promotion Mix
〮 The Promotion Mix is the combination of tools firms use to communicate with
customers.

Promotional
Mix
Direct
Advertising Marketing

Sales Personal
Promotion Selling
〮 Hierarchy of Effects Model

On which steps would advertising be most effective?

How about personal selling and direct selling?

Loyal/
Awareness Familiarity Consideration Purchase Satisfaction Repeat
purchase

Sales promotion
Ad Ad (coupons etc.) Ad

& Personal selling

& Direct selling
〮 Personal Selling
〮 Personal Selling: Personal presentations by the firm’s sales force for the purpose of
making sales and building customer relationships.

Company Salesperson Customer

〮 Key Concepts
1. Transactional selling
2. Relationship selling
3. How sales creates value for customers
4. Order takers
5. Order getters
6. Sales teams
7. Sales partnering
8. Three steps in sales management
9. Direct marketing
〮 Personal Selling is Not Just One-Sided!
Transactional Selling Relationship Selling

〮 Focuses on pushing 〮 Focuses on learning

a one-time sale about needs

〮 Does more pushing 〮 Does more listening

than listening than selling

〮 Emphasizes adding 〮 Emphasizes building

new customers long-term relationships
〮 Key Concepts
1. Transactional selling
2. Relationship selling
3. How sales creates value for customers
4. Order takers
5. Order getters
6. Sales teams
7. Sales partnering
8. Three steps in sales management
9. Direct marketing
〮 How salespeople create value for customers

Identify Creative Solutions To Customer Problems

Customer
Ease The Customer Buying Process
Value

Follow-up After The Sale Is Made

〮 In-class Exercise In-class
exercise
#1.
〮 Let’s suppose you are a salesperson. Please pick any product of your
possession and try to sell it to your partner.
〮 Key Concepts
1. Transactional selling
2. Relationship selling
3. How sales creates value for customers
4. Order takers
5. Order getters
6. Sales teams
7. Sales partnering
8. Three steps in sales management
9. Direct marketing
〮 Forms of Personal Selling – Order Taker
〮 Order takers process routine orders or reorders for products already sold.
〮 There are two types of order takers
1. ___________ visit customers, arrange displays, and replace inventory
stocks of resellers.
〮 Forms of Personal Selling – Order Taker
2. ___________ take care of customers who call or visit their firm directly.
(e.g., checkout register)

〮 Order takers do very little selling.

〮 They often represent products that

are highly standardized.
〮 Forms of Personal Selling – Order Getter
〮 Identify prospective customers
〮 Persuade customers to buy products
〮 Close sales
〮 Follow up on customers after sales
〮 Forms of Personal Selling – Order Getter
〮 Key characteristics
〮 make personal sales calls – much autonomy in the job
〮 are costly to the firm
〮 enjoy high salaries and personal growth
〮 know the customer better than any other person in the company
〮 Comparing Order Takers with Order Getters
Basis of Comparison Order Takers Order Getters
Identify new customers
Handle _______ product
Objective and _______ customer
reorders
needs
Focus on straight rebuy or Focus on new buy and
Purchase situation simple purchase modified rebuy purchase
situations situations
Perform order processing Act as creative problem
Activity
functions solvers
Require significant sales,
Require significant clerical
Training product, and customer
training
training
〮 Key Concepts
1. Transactional selling
2. Relationship selling
3. How sales creates value for customers
4. Order takers
5. Order getters
6. Sales teams
7. Sales partnering
8. Three steps in sales management
9. Direct marketing
〮 Other Forms of Selling
〮 Sales team
: Individuals from different functional areas (e.g., a sales rep, an engineer, a
production person) working together to satisfy customer needs

〮 Sales partnering
: Also known as collaborative selling because an alliance is formed with the
customer to meet ongoing customer needs. The sales rep is an integral part of
buyer’s operation.
〮 Example of Sales Partnering
Alex is a sales representative for a company which sells medical equipment to
hospitals. He often goes to the hospitals in his sales territory and stays with
the doctors to observe how they work so he can understand what type of
equipment will best meet their needs. He also spends time training the
doctors on how to operate the medical equipment he sells. The hospitals
see Alex as an integral part of their operations.

Thus, Alex’s job best represents an example of (an)…

_______________
〮 Key Concepts
1. Transactional selling
2. Relationship selling
3. How sales creates value for customers
4. Order takers
5. Order getters
6. Sales teams
7. Sales partnering
8. Three steps in sales management
9. Direct marketing
〮 Sales Management
〮 The salesforce - Order Takers and Order Getters - must be managed.

〮 A group of managers, sales managers, work with order getters and order
takers to help them achieve company goals.
〮 The Sales Management Process
〮 Effective sales management involves three steps:
1. Sales Plan Formulation – Designing an effective sales plan to generate sales
and keep existing customers.

2. Sales Plan Implementation – A sales plan is put into practice based off of the
sales plan formulation.

3. Sales Force Evaluation and Control – Involves evaluating the sales force
objectives and ensuring that sales policies are being followed.
〮 Account Management Policy Grid

Relationship Strength
Strong Relationship with Weak Relationship with
Customer Customer
High Account Gold Mine: Build the Relationship:
Customer Potential Allocate much resources Allocate much resources
Potential Low Account Reduce the Relationship: End the Relationship:
Potential Reduce resources Allocate resources away
〮 The Sales Management Process
〮 Effective sales management involves three steps:
1. Sales Plan Formulation – Designing an effective sales plan to generate sales
and keep existing customers.

2. Sales Plan Implementation – A sales plan is put into practice based off of the
sales plan formulation.

3. Sales Force Evaluation and Control – Involves evaluating the sales force
objectives and ensuring that sales policies are being followed.
〮 Sales Plan Implementation
〮 Involves three tasks:
1. Recruitment – Managers must recruit differently based on the type of sales
person they are hiring (e.g. order takers vs. order getters).
2. Training – This is an ongoing event which covers both new and seasoned
salespeople.
3. Motivation and Compensation – To effectively motivate salespeople
a manager should do the following:
〮 Write a clear job description
〮 Implement and follow effective sales management techniques.
〮 Help develop personal sales goals for each person on their sales force.
〮 Provide proper compensation, incentives, or rewards for meeting company and personal
sales goals.
〮 The Sales Management Process
〮 Effective sales management involves three steps:
1. Sales Plan Formulation – Designing an effective sales plan to generate sales
and keep existing customers.

2. Sales Plan Implementation – A sales plan is put into practice based off of the
sales plan formulation.

3. Sales Force Evaluation and Control – Involves evaluating the sales force
objectives and ensuring that sales policies are being followed.
〮 The Sales Management Process
〮 Involves two tasks:
1. Quantitative Assessments – Quotas, sales calls completed, selling expenses,
and reports are all ways to keep track of the success of a sales team.

2. Behavior Evaluation – Attitude, attention to customers, product knowledge,

communication skills, and professional demeanor must be monitored to ensure
a productive sales force.
〮 Key Concepts
1. Transactional selling
2. Relationship selling
3. How sales creates value for customers
4. Order takers
5. Order getters
6. Sales teams
7. Sales partnering
8. Three steps in sales management
9. Direct marketing
〮 Promotion Mix
〮 The Promotion Mix is the combination of tools firms use to communicate with
customers.

Promotional
Mix
Direct
Advertising Marketing

Sales Personal
Promotion Selling
〮 Direct Marketing
〮 Connecting directly with carefully targeted segments or individual
consumers, often on a one-to-one, interactive basis.

〮 Direct marketing skips the middleman (e.g., retailer) and approaches

customers directly.

〮 Direct Marketing is one of the fastest growing marketing communication

tools used today. Reasons:
1. Computerization has made it easier to create 1-1 interaction with customers today.
2. The rapid growth of information gathered by databases.
〮 Examples of Direct Marketing
〮 Telemarketing
〮 Direct mail (brochures, catalogs, flyers)
〮 Online shopping
〮 Home shopping
〮 SNS shopping
〮 In-class Exercise In-class
exercise
#2.
〮 Have you ever purchased any product from SNS, home shopping channel
or Live commerce?
〮 What kinds of products are more suitable for sales through these platforms?

〮 As a marketing manager, describe your expected advantages and disadvantages of

using these platforms.
 Place, Distribution,
and Marketing Channels
〮 Key Concepts
1. The concept of distribution (i.e., place) and how it can help the firm
serve its target customers
2. The three functions of distribution channels
3. Different types of channels–direct, indirect channels, and multi-channels
4. Factors that can help a firm select distribution channels–direct or indirect
channels
5. Three types of distribution strategies
〮 Marketing Channels (= place, distribution)
〮 A set of interdependent organizations that help a product or service
available for use or consumption by the consumer or business user.
〮 Think of a marketing channel as a pipeline through which products and
services flow from the manufacturer to customers.
〮 Channels answer the question:

“Where will the consumer obtain

the product or service?”
〮 Marketing Channels
〮 Key Concepts
1. The concept of distribution (i.e., place) and how it can help the firm
serve its target customers
2. The three functions of distribution channels
3. Different types of channels–direct, indirect channels, and multi-channels
4. Factors that can help a firm select distribution channels–direct or indirect
channels
5. Three types of distribution strategies
〮 The Three Functions of Distribution Channels
〮 Well designed and managed channels allow the marketer to…
〮 Move products/services to customers or use the pipeline to move product from A to B.
〮 For example, channels help P&G move Tide Detergent from the plant to E-MART.

This action is a 1) function.

〮 The Three Functions of Distribution Channels
〮 Well designed and managed channels allow the marketer to…
〮 Create assortments of similar products, store them, and later sort through them to
compile sets of products demanded by customers.

〮 For example, channels help P&G move 1,000 cases of one Downy liquid softener
to Busan and 1,200 cases of a different Downy to Seoul.

This action is a 2) function.

〮 The Three Functions of Distribution Channels
〮 Well designed and managed channels allow the marketer to…
〮 Enhance the value of the product by offering service for the product, financing,
information and research to channel partners, like wholesalers and retailers

〮 For example, Cook Medical distributes their products using a variety of channels and
provides technical assistance on how to use the products.

This action is a 3) function.

〮 Marketing Channels
〮 Poorly designed and poorly managed distribution channels can result in…
1. Out-of-Stocks, which are the absence of product for customers.

What are the implications of stock outs for businesses?

Products are not available when customers want them.

→ Lost selling opportunities

→ Sales and profits ↓
→ Consumer may switch brands and/or retailers
〮 Marketing Channels
〮 Poorly designed and poorly managed distribution channels can result in…
2. Bloated inventories or too much product.

What are the implications of bloated inventories for businesses?

Huge inventories

→ Unnecessary price cuts

→ Inventory carrying costs
→ Lost opportunity to carry other products
〮 Marketing Channels
〮 Poorly designed and poorly managed distribution channels can result in…
3. Inefficient channels or costly channels.

What are the implications of inefficient channels for businesses?

Can have ramifications on other, more effective channels (e.g., lost
opportunities to focus on better channels, channel reactions, etc.)
〮 Key Concepts
1. The concept of distribution (i.e., place) and how it can help the firm
serve its target customers
2. The three functions of distribution channels
3. Different types of channels–direct, indirect channels, and multi-channels
4. Factors that can help a firm select distribution channels–direct or indirect
channels
5. Three types of distribution strategies
〮 Wholesalers vs. Retailers
〮 Wholesaler means “selling in large quantities” while retail means “selling in
small quantities.” In wholesale, the goods are mainly sold to the retailer
who sells it to the customers.

Manufacturer Wholesalers Retailers Customers

Buy products in bulk and

sell them to multiple retailers
〮 Types of Marketing Channels
〮 Direct Distribution – goes directly to consumer; includes on-line channels

Customers

This type of channel is growing in popularity

as online business functions grow
in sophistication.

Source: https://www.samsung.com/sec/eventList/Galaxy_Academy/?cid=sec_paid_ppc_google_pc_ecommerce_searchad_text_20201221_%EB%85%B8%E
D%8A%B8%EB%B6%81%EC%82%BC%EC%84%B1&utm_source=google&utm_medium=searchad&utm_campaign=pc&utm_term=%EB%85%B8%ED%8A
%B8%EB%B6%81%EC%82%BC%EC%84%B1&gclid=EAIaIQobChMI1ovNnaDS7gIVFa2WCh2o4wSiEAAYASAAEgL19fD_BwE
〮 Types of Marketing Channels
〮 Indirect Distribution - uses middlemen or specialists to help distribute
product, such as:

or
or

Wholesalers and retailers are called channel intermediaries,

middlemen, or channel partners.
〮 Types of Marketing Channels
〮 Multi-channel distribution – simultaneously employing multiple channels to
reach customers (very common)

and
and
and Manufacturer Customers
〮 Key Concepts
1. The concept of distribution (i.e., place) and how it can help the firm
serve its target customers
2. The three functions of distribution channels
3. Different types of channels–direct, indirect channels, and multi-channels
4. Factors that can help a firm select distribution channels–direct or indirect
channels
5. Three types of distribution strategies
〮 Selecting a Distribution Channel

Direct DC Indirect DC
• Industrial users
• Consumer users
Market Factors • Technical knowledge &
• No technical advice required
service required
• Non-durable • Durable
Product Factors • Complex • Standardized
• Expensive • Inexpensive
〮 Types of Marketing Channels
〮 What kinds of products flow through different types of channels?
Type #1: Manufacturer → Wholesaler → Retailer → Customer
Type #2: Manufacturer → Customer

1. Commodities, like salt and sugar would use Type # ___

2. A new Cat Scan for a hospital would use Type #___
3. Heinz ketchup would use Type # ____
〮 Key Concepts
1. The concept of distribution (i.e., place) and how it can help the firm
serve its target customers
2. The three functions of distribution channels
3. Different types of channels–direct, indirect channels, and multi-channels
4. Factors that can help a firm select distribution channels–direct or indirect
channels
5. Three types of distribution strategies
〮 1. Intensive Distribution
〮 Distributors are everywhere. The objective is to saturate the market with
product.
〮 Uses an undifferentiated marketing strategy (or mass marketing) to reach customers
〮 Image of being sold everywhere is consistent with the nature of the product
〮 Often used by convenience goods and commodity manufacturers

e.g., toothpaste and candy are sold in millions of outlets to

provide maximum brand exposure and consumer convenience.
〮 2. Selective Distribution
〮 A limited number of retailers or dealers are used to reach target market.
〮 Strategy should be consistent with the image of the product as a good that can be
bought in only certain stores
〮 Goods like cosmetics, home appliances, apparel, and furniture commonly employ
this strategy

Source: https://www.lancome.co.kr/kr/stores
〮 3. Exclusive Distribution
〮 Only one, or a limited number of retailers, market the product in a
particular geographic area.
〮 Strategy should be consistent with the high quality image of the product
〮 Many specialty goods employ this strategy

Source: https://www.maserati.com/kr/ko/shopping-tools/dealer-locator
〮 Match the segmentation strategy to the distribution strategy.

Strategy #1: Undifferentiated Marketing

Strategy #2: Differentiated Marketing
Strategy #3: Niche Marketing
Strategy #4: Customized Marketing

Intensive Distribution Strategy

Selective Distribution Strategy
Exclusive Distribution Strategy