Marketing chapter 20

  1. Discuss the nature and scope of personal selling and sales management in marketing. (LO1)
    • Personal selling involves the two-way flow of communication between a buyer and seller, often in a face-to-face encounter; designed to influence a person's or group's purchase decision
    • Sales management involves planning the selling program and implementing and controlling the personal selling effort of the firm
    • Scope of selling and sales management varies in three ways:
    • (1) Virtually every occupation that involves customer contact has an element of personal selling
    • (2) Selling plays a significant role in a company's overall marketing effort
    • (3) Salespeople occupy a boundary position between buyers and sellers; they are the company to many buyers and account for a major cost of marketing in a variety of industries; they can create value for customers
    • (4) Through relationship and partnership selling, salespeople play a central role in tailoring solutions to customer problems as a means to customer value creation
  2. Identify the different types of personal selling. (LO2)
    • Three types of personal selling exist: (a) order taking, (b) order getting, (c) customer sales support activities
    • Each type differs from the others in terms of actual selling done and amount of creativity required to perform the sales task
    • Order takers process routine orders or reorders for products that were already sold by the company; generally do little selling in a conventional sense and engage in only modest problem solving with customers
    • Order getters sell in a conventional sense and identify prospective customers, provide customers with information, persuade customers to buy, close sales, and follow up on customers' use of a product or service; involves high degree of creativity and customer empathy and is typically required for selling complex or technical products with many options
    • Customer sales support personnel augment the sales effort of order getters by performing a variety of services; prominent in cross-functional team selling, the practice of using an entire team of professionals in selling to and servicing major customers
    • - missionary salespeople: do not directly solicit orders but rather concentrate on performing promotional activities and introducing new products (ie: pharmaceutical - actual sales made through wholesalers or directly to pharmacists)
    • - sales engineer: salesperson who specializes in identifying, analyzing, and solving customer problems and bring know-how and technical expertise to the selling situation but often does no actually sell products and services (ie: chemicals and heavy equipment)
    • - team selling: practice of using an entire team of professionals in selling to and servicing major customers; used when specialized knowledge needed to satisfy different interests of individuals in customer's buying center
  3. Explain the stages in the personal selling process. (LO3)
    • Personal selling process consists of six stages: (a) prospecting, (b) preapproach, (c) approach, (d) presentation, (e) close, (f) follow-up
    • Prospecting involves the search for and qualification of potential customers
    • Preapproach involves obtaining further information on the prospect and deciding on the best method of approach
    • Approach involves the initial meeting between the salesperson and the prospect
    • Presentation involves converting a prospect into a customer by creating a desire for the product or service
    • Close: obtaining a purchase commitment from the prospect
    • Follow-up: making certain that the customer's purchase has been properly delivered and installed and difficulties experienced with the use of the item are addressed
  4. Prospecting
    • Search for and qualify prospects
    • Start of the selling process; prospects produced through advertising, referrals, and cold canvassing
    • Three types of prospects:
    • Lead: person who may be a possible customer
    • Prospect: customer who wants or needs the product
    • Qualified prospect: individual who wants the product, can afford to buy it, and is the decision maker
  5. Preapproach & Approach
    • Preapproach
    • Gather information and decide how to approach the prospect
    • Information sources include personal observation, other customers, and own salespeople
    • Approach
    • Gain a prospect's attention, stimulate interest, and make transition to the presentation
    • First impression critical; gain attention and interest through reference to common acquaintances, referral, or product demonstration
  6. Presentation
    • Begin converting a prospect into a customer by creating a desire for the product or service
    • Different presentation formats are possible; however, involving the customer in the product or service through attention to particular needs is critical
    • Important to deal professionally and ethically with prospect skepticism, indifference, or objections
    • Stimulus-response presentation: assumes that given the appropriate stimulus by a salesperson, the prospect will buy
    • Formula selling presentation: based on the view that a presentation consists of information that must be provided in an accurate, thorough, and step-by-step manner to inform the prospect (Canned sales presentation - memorized, standardized message conveyed to every prospect)
    • Need-satisfaction presentation: emphasizes probing and listening by the salesperson to identify needs and interests of prospective buyers; tailor presentation to prospect and highlight product benefits that may be valued by prospect
    • - adaptive selling: adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information
    • - consultative selling: focuses o problem identification, where the salesperson serves as an expert on problem recognition and resolution; novel solutions often arise, creating unique value for the customer; prominent in business-to-business marketing
    • Objections: excuses for not making a purchase commitment or decision
    • 6 techniques to handle objection:
    • (1) Acknowledge and convert the objection (using the objection as a reason for buying)
    • (2) Postpone (used when objection will be dealt with later in the presentation)
    • (3) Agree and neutralize (agree with objection, then show that it is unimportant)
    • (4) Accept the objection (probe for reasons behind views, attempt to stimulate further discussion on objection)
    • (5) Denial (objection based on misinformation, meet objection head on with firm denial)
    • (6) Ignore the objection (if objection is stalling mechanism, or not important to prospect)
  7. Close
    • Obtain a purchase commitment from the prospect and create a customer
    • Salesperson asks for the purchase
    • Different approaches include the trial close and assumptive close
    • Trial close: involves asking the prospect to make a decision on some aspect of the purchase
    • Assumptive close: entails asking the prospect to consider choices concerning delivery, warranty, or financing terms under the assumption that a sale has been finalized
    • Urgency close: used to commit the prospect quickly by making reference to the timeliness of the purchase
  8. Follow-up
    • Ensure that the customer is satisfied with the product or service
    • Resolve any problems faced by the customer to ensure customer satisfaction and future sales possibilities
    • Solidifies buyer-seller relationship
  9. Describe the major functions of sales management. (LO4)
    • Sales management consists of three interrelated functions: (a) sales plan formulation, (b) sales plan implementation, (c) evaluation of the salesforce
    • Formulation: involves setting objectives, organizing the salesforce, and developing account management policies
    • Implementation; involves salesforce recruitment, selection, training, motivation, compensation
    • Evaluation: focuses on quantitative assessments of sales performance and behavioral measures such as customer satisfaction that are linked to selling objectives and account management policies
  10. Setting objectives
    • Output related: focus on dollar or unit sales volume, number of new customers added, profit
    • Input related: emphasize number of sales calls and selling expenses
    • Behaviorally related: specific for each sales person; includes his or her product knowledge, customer service satisfaction ratings, and selling and communication skills
  11. Organizing the sales force
    • Questions related to organization:
    • 1. Should the company use its own salesforce, or should it use independent agents such as manufacturer's representatives?
    • 2. If decision is made to employ company salespeople, then should they be organized according to geography, customer type, or product or service?
    • 3. How many company salespeople should be employed?
    • Geographical sales organization: simplest structure; country divided into regions, divided into districts or territories, salespeople assigned to each district with defined boundaries and represent all products
    • Customer sales organization: when different types of buyers have different needs; different salesforce calls on each separate type of buyer or marketing channel; specialized customer support and knowledge provided to buyers; higher administrative costs and some duplication of selling effort
    • Key account management: variation of customer organizational structure; practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships; "customer specialists" provide exceptional support
    • Produce sales organization: specific knowledge required to sell certain types of products; salespeople can develop expertise with technical characteristics, applications, and selling methods associated with particular product or family product; high administrative costs and duplication of selling effort
  12. workload method formula
    • NS = (NC x CF x CL) / AST
    • NS - number of sales people
    • NC - number of customers
    • CF - call frequency necessary to service a customer each year
    • CL - length of an average call
    • AST - average amount of selling time available per year
  13. Account management policies
    • Specifies whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out
    • May state which individuals in a buying organization should be contacted, amount of sales and service effort that different customers should receive, and kinds of info salespeople should collect before or during a sales call
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Marketing chapter 20