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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
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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
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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
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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
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Preapproach & Approach
- Preapproach
- Gather information and decide how to approach the prospect
- Information sources include personal observation, other customers, and own salespeople
- ApproachGain 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
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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)
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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
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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
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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
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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
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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
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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
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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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