Chap. 2 evolution of pers. selling
Upcoming SlideShare
Loading in...5
×
 

Chap. 2 evolution of pers. selling

on

  • 802 views

 

Statistics

Views

Total Views
802
Views on SlideShare
802
Embed Views
0

Actions

Likes
0
Downloads
9
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Chap. 2 evolution of pers. selling Chap. 2 evolution of pers. selling Presentation Transcript

  • The Evolution of Personal Selling   Production Sales Marketing PartneringTime Before 1930 to 1960 to AfterPeriod 1930 1960 1990 1990 Marketing Sales Marketing Sales Satisfying Customer BuildingObjective Needs RelationshipOrientation Short – term Short – term seller Short – term seller Long-term seller needs needs needs customer and seller needRole of Salesperson Provider Persuader Problem solver Value creation Creating new Taking orders, Aggressively Marketing available alternatives,Activities of delivering goods convincing buyers offering to buyers matching buyersSalesperson to buy products needs needs with sellers capabilities
  • Sellers profit - is selling price minus cost of goods sold and selling costs.Buyers profit - is the benefit received minus the selling price and costs and hassles of buying. Buyers profit is increased due to lower costs of shopping, even if the net cost is the same as found in a store. Partnering-oriented selling is becoming more common as companies make strategic choices about the types of selling best suited to their situation, but recent research indicates that even within partnership, there are times the buyers needs to hear persuasive messages that might be scripted. Relationship marketing refers to creating the type of relationship that best suits the customer’s needs, which may or may not require a partnership.
  • Two Types of Loyalty 1. Behavioral loyalty Refers to the purchase of the same product from the same vendor over time. Buying out of habit can reduce shopping costs, increasing profit. 2. Attitudinal loyalty is an emotional attachment to a brand, company, or salesperson. Life customer value - the sum of their purchase over the entire
  • Successful relationships involve cultivating mutual benefits as thepartners learn to trust and depend on each other more and more.Buyer and salesperson are able to resolve conflicts as they arise , settledifferences and compromise when necessary.Without trust, no loyalty and unhappy customers leave.
  • Five foundational element of strategic partnership: MUTUAL TRUST,OPEN COMMUNICATION, COMMON GOALS, COMMITMENT TOMUTUAL GAIN, ORGANIZATIONAL SUPPORT1.) MUTUAL TRUST most important element in the development of successful , long- term customerrelationship. is a belief by one party that the other party will fulfill its obligation in a relationship. “ a little trust and confidence go a long way in motivating the supplier to go beyondthe single requirements of a contract” – Daniel FriesWhen salespeople and buyers trust each other, they are more willing to share relevantideas, clarify goals and problems, and communicate more efficiently.Information shared between the parties become increasingly comprehensive, accurateand timely.Trust is imporatant building block for long-term relationships.
  • 1. Market Exchanges - is a transaction between a buyer and seller in which each party is concerned only about the party’s benefit. Two Types of Market Exchanges 1.   Solo exchanges - Buyer and seller pursue their own self-interest. 2. Functional relationship - Long term market exchanges characterized by behavioral loyalty; the buyer purchases the same product out of habit or routine. The buyer that previously purchase does influence the next purchase.
  •          Factors Involve in the Solo Exchanges Functional Relationship Relational Strategic PartnershipRelationship PartnershipTime Horizon Short term Long term Long term Long termConcern for the other Party Low Low Medium HighTrust Low Low High HighInvestment in the Relationship Low Low Low HighNature of Relationship Conflict, Bargaining Cooperation Accomodation Coordination  Risk in Relationship Low Medium High High  Potential Benefits Low Medium High High
  • 2. Partnerships- In partnership both parties are concerned about each other’s welfare and in developing win-win relationships. By working together, both parties benefit because the size of the pie increases.Two Types of Partnership  1.Relationship PartnershipThe buyers and the salesperson have a close personal relationship thatallows them to communicate effectively. They create cooperative climatebetween the salesperson and the customer. Make an open and honestcommunication takes place. 2.Strategic Partnershipare long term business relationship in which the partner organizationsmake significant investment to improve the profitability of both parties.Partnerships are created for the purpose of uncovering and exploiting jointopportunities.
  • Market Exchange Selling Goal: Making a Sale Long Term Relationship Selling Goal: Building TrustMaking Contact Initiating the RelationshipFind someone to listen Engage in strategic prospecting and qualifyingMake small talk Gather and study precall informationIngratiate and build rapport Identify buying influenceClosing the Sale Plan the initial sales callDeliver a sales pitch to: Demonstrate an understanding of the customer’s needsGet the prospect attention Identify opportunities to build a relationshipCreate interest Illustrate the value of a relationship with the customer
  • Build desire Developing the RelationshipGet the prospect to take action Select an appropriate offeringStay alert for closing signals Customize the relationshipUse trial closes Link the solution of the customers needsOvercome objections Discuss customers concernsClose early and often Summarize the solution to confirm benefitsFollowing through Secure commitmentReestablish contact Enhancing the RelationshipResell self, company and products Assess customer satisfaction  Take actions to ensure satisfaction  Maintain open, two way communication  Expand collaborative involvement  Work to add value and enhance mutual opportunities
  • Successful relationships involve cultivating mutual benefits as thepartners learn to trust and depend on each other more and more.Buyer and salesperson are able to resolve conflicts as they arise , settledifferences and compromise when necessary.Without trust, no loyalty and unhappy customers leave.
  • MUTUAL TRUST,OPEN COMMUNICATION, COMMON GOALS, COMMITMENT TOMUTUAL GAIN, ORGANIZATIONAL SUPPORT1.) MUTUAL TRUST most important element in the development of successful , long- term customerrelationship. is a belief by one party that the other party will fulfill its obligation in a relationship. “ a little trust and confidence go a long way in motivating the supplier to gobeyond the single requirements of a contract” – Daniel FriesWhen salespeople and buyers trust each other, they are more willing to sharerelevant ideas, clarify goals and problems, and communicate more efficiently.Information shared between the parties become increasingly comprehensive,accurate and timely.Trust is imporatant building block for long-term relationships.
  • 1.1) DEPENDABILITY the buyer’s perception that the salesperson, and the product and the companyhe or she represents, will live up to promise made, is not something a salespersoncan demonstrate immediately. third- party references can be useful in proving dependability, if thesalesperson has not yet had an opportunity to prove it personally.Product demonstration, plant tours and other types of presentations can alsoillustrate dependabilty. Product demonstration can show how the product will work, even under difficult condition. Plant tours proves that the company could live up to its promises of on-time delivery.
  •  salesperson’s prior experience and training can also beused to prove dependability (length of experience).As time goes on and the relationship grows, the buyerassumes dependability.A reputation for dependability, however, can be quicklylost if the salesperson fails to continue to deliver aspromised
  •  salespeople demonstrate competence when they can show that they knowwhat they are talking about.Knowledge of the customer, the product, the industry and the competiton areall necessary to the success of the salesperson.Recent research that competence is a key component in developing loyalty.Product knowledge is the minimum; customers expect salespeople to knoweverything about their own products and their companyEach saleperson undergoes 90 days of training before going into the field.Once in the field, salespeople undergo an additonal six months of training,including two weeks at the company’s headquarters in Melville, New York
  • PHASE 1 PHASE 2 PHASE 3Classroom  Field training  Classroom  Field training  Field training training  branches  training corporate  branches  assigned to corporate  throughout  Melville,NY throughout US business group Melville, NY US(two mos.) (three mos.) (three mos.)•Introduction to • work with active • arrow sales •Work with active •Based onthe electronics accounts under system accounts under demonstrateddistribution supervision of supervision of sales expertise andindustry. field sales managers company staffing managers needs, associates are assigned a sales terittory•Customer and •Participate in • roles and • research account • associatessupplier dynamics sales calls with responsibilities potential and continue with customers and formulate account training specific to suplliers strategies their assigned business groups• technical product • work in arrow • intergroup selling • collaborate with • associates aretraining facilities of strategies suppliers on eligible for rewards customer’s strategies for and incentives for manufacturing assigned accounts meeting or facilities exceeding sales goals
  • Phase 1 Phase 2 Phase 3Classroom  Field training  Classroom  Field training  Field training training  branches  training  branches  assigned to corporate  throughout  corporate  throughout US business group Melville, NY US(two mos.) Melville,NY (three mos.) (three mos.)• introduction to inventoryarrow electronics managementinc.• feild visit; touring • professionala customer’s selling skillsfacility• exceeding •Collaborativecustomer and sellingsupplierexpectation• professional •Accountdevelopment management• business savvy – •Financialhaving impact on management-day 1 creating profitable businesses.
  • Phase 1 Phase 2 Phase 3Classroom  Field training  Classroom  Field training  Field training training  branches  training  branches  assigned to corporate  throughout  corporate  throughout US business group Melville, NY US(two mos.) Melville,NY (three mos.) (three mos.) customer service, • professionalteam building, developmentcommunicationskills • career development and personal learning •Presentation skills
  •  degree to which the salesperson puts the customer’s needs firstSalespeople who think only of making sales are sales oriented ratherthan customer oriented.Stating pros and cons can also be perceived as being customeroriented because understanding the cons also indicates that thesalesperson understands the buyer’s needsSalesperson’s availability and desire to provide service also indicates acustomer orientation. For example “ call me anytime for anything thatyou need” indicates availability and can serve as proof of a customerorientation.
  •  both truthfulness and sincerityHighly related to dependability (“ we can count on you and yourword because you are honest”)Is also realted to competence.Salespeople must be willing to admit that they do not knowsomething rather than trying to fake it; buyers consider salespeoplewho bluff to be dishonest
  •  likability may be the least important component of trust beacause most peoplecan be nice.Likability refers to behaving in a friendly manner and finding common groundbetween buyer and seller.Common ground or interest with all buyersLikability can also be influenced with personal communication such as birthdaycards, handwritten notes, and so forthMany businesses send holiday cards and gifts to all customers but personaltouches make these gestures meaningful.Honesty affects customer orientation which influences dependabilityFor example: professional salespeople must also be competent, dependable,honest and customer oriented
  •  open and honest communication is a key building block for developingsuccessful relationship.Driving each other’s business, their roles in the relationship, each firm’sstrategies and any problems that arise over the course of the relationship.Open communication should lead to stronger relationshipConflict can occur even in the strongest of the partnerships and how it ishandled says more about the relationship than it ir when it happens.One difference between a relational partnership and a strategic partnership isthe lines of communication. Relational partnership- most communication between the buyer and the selling organization goes through the salesperson. Strategic relationship – more direct communication ties between the buying organization and the selling organization.
  •  cultural difference in communication style can be easilymisunderstood and thus hinder open and honestcommunication.Japan to say no indirectly are “ it’s very difficult, we’ll thinkabout it and i’m not sure.”
  •  salespeople and customers must have common goals for a successfulrelationship to be develop.Shared goals give both members of the relaionship a strong incentives to pooltheir strengths and abilities.Partners can focus on exploiting opportunities rather than arguing about whowill benefit the most from the relationshipShared goals also help to sustain the partnership when the expected benefitflows are not realized.Measurable goals are also very important.Two organization set joint goals such as sales revenue, on-time delivery,service response time and othersTwo organizations can work together to rectify any problems quickly
  •  successful partnership actively work to create win- winrealtionship by making commitment to the relationship. McDonalds is clearly the more powerful of the two companies; but in a partnership , commitment to mutual gainmeans that McDonalds does not take advantage of BamaOne party is always more powerful than the other party; but ina partnership, it does not exercise that the power over the otherMutual dependence creates a cooperative spirit.
  •  parties make investment in the relationship.Mutual investment are tangible investments in the relationship by bothparties.Making the hollow statement “ I want to be a partner”.Involve spending money to improve the products and services sold tothe other party.These investments signal the partner’s commitment to the relationshipin the long run.These actions make the commitment believable. Mutual investmentsare also called Relationship-Specific assets in other words, these areresources specific to the relationship and cannot be easily transferred toanother relationship.
  •  foster good relationshipBoundary spanning employees - employees who cross the organizationalboundary and interact with customers or vendors the necessary support support are training, rewards that support partnering behavior and structureand culture. A.)Structure and culture – organizational structure provide the necessary support for the salespeople and buyers in a partnering relationship  partnership created at headquarters should be recognized and treated as such by local offices and vice versa Without the support of the respective companies, the partnership is destined to fail. The entire firm must have an orientation to building partnership.  strategic partnership are characterized by direct, open communication between multiple members of both firms.
  •  B.) training- special training is required to sell effectively in a reletionship-building environment. salepeople taught how to identify customer needs and work with thecustomer to achieve better performance.Constantly trains his salespeople in relationship skills, need identificationskills and other sales skills.These opportunities are used to train the rep on how to respond in waysthat improve, not damage the relationship.Training is critical in helping salespeople identify ways to make it easier forthe customer to do business with them.Training can also support the customer- oriented culture for all boundary-spanning employees. many companies now offer service- oriented training to all customer-facing employees.
  •  Rewards- reward system on both sides of the relationship should be coordinated to ancourage supportive behaviors. buyers are rewarded for wringing out concessions from thesalespeopleSalespeople are rewarded on the basis of sales volume.Research indicates that compensation strategies can influencesalespeople’s customer orientation. he added that as the plan developed, it became clear that how theplan was structured would impact how customers were treated.One challenge is how to reward nonselling employees.The employees are doing what they are being rewarded for, so theproblem isn’t necessarily theirs.Creating appropriate reward structures, though, can be difficult.
  •  not all relationship should become partnership. strategic partnerships tend to go through several phases. these phases are:e) awarenessf)Explorationg)Expansionh)Commitment and sometimesi)DissolutionMiddle three stages are most important:
  •  In awareness stage; no transaction has taken place.Awareness phase salespeople locate and qualify prospects.Buyers identify various sources of supply. one important trend is toward supplier relationship management. Supplier relationship management (SRM)- use of technology andstatistics to identify important suppliers and opportunities for costreduction, greater efficiency and other benefits.Customers may actively seek partnership for keys areas of the firm’spurchases, which may mean working to develop a strategic partnership witha new vendor.
  •  exploration stage- search and trial phase for both buyer and seller.Explore the potential benefits and costs of a partnership.Buyer may make purchases but these are likely in the form of marketexchanges because neither side has commited to the relationship.
  •  supplier has passed enough tests to be considered for additional business.Expansion stage involves efforts by both parties to investigate the benefits of along-term relationship.Relationship can still devolve into a functional relationship rather than astrategic partnershipIntention of both parties is to develop the appropriate type of relationshipBoth sides begin to probe regarding interest in a partnership; such probing isboth internal and external.Strategic partnership requires credible commitments, so many in the sellingorganization may need to review the opportunity
  • Commitment stage- customer and seller have implicity or explicitypledge to continue the relationship for a period of time.Sharing proprietary information, plans, goals, and the like.Commitment stage in the relationship involves a promise by bothbuyer and seller to work together over many transaction, not just theone decision.
  •  occur any time in the relationship process, though it doesn’tnecessarily have to occur at all.Dissolution is the process of terminating the relationship and canoccure because of poor performance, clash in culture, change in needsand other factors..Loss of investments made in the relationship can be significant andhave an impact throughout both organizations.
  •  appropriate types of relationship with each customer,strategic partnership may be called for.Salesperson must determine which relationship type isappropriate for optimizing the customer’s lifetime value.
  •  what makes for a strategic relationship.At least one factor that influences a salesperson’s choice ofrelationship is the type of relationship is the type of relationshipthe customer desiresCustomer isn’t willing to make that investment, then anothertype of relationship is called for.Some of the factors to considered are: a. size of the account b. access and images in the market c. access to technology
  •  JC Penney has a strategic partnership with Levi Strauss.The thought is that by partnering with large accounts, the accounts invest inthe supplier and become locked in.Economies of scale can often justify lower prices and higher investment.Size of the accounts, then, is one aspect to consider.Some cases larger accounts are not necessarily the most profitable.When the seller’s investment are factored in, smaller accounts provideimporatnt benefits that larger accounts cannot, as we will discuss.
  •  account can provide access to a specific, desired market or can enhancethe image of the seller. Ex. Heineken was shocked to discover that Albert Heijin, the largest supermarket chain in the Netherlands, placed Heinken beer on stores “mega- losers” list.Heineken believed it was important to partner with Albert Heijin becauseworking with the leader in the market was critical to Heineken’s image.
  •  lead users because they face and resolve needs months or years ahead of therest of the market place.Companies often develop innovation, either in the way they use a product orby altering a product, that the supplier can copy. “ Exclusivity makes customers feel special and that leads to loyalty”Ability to listen to customers and deliver that knowledge back to the companyso that better products can be developed.What leads users provide is more than information; they provide theopportunity to co-create innovations that can then be converted into productssuch as logistics, that supplier can copy
  •  partnering relationship are built on effective communicationImprove communication with customers salespeople are using technology more efficiently; creating direct links withcustomers via technology.Computer use ranges from providing information during a sales callanalyzing a customer’s problemAccording to Thomas Bird, president of Gould Inc.’s test and measurementdivision. “ one of the problems in technical sales is that some salespeople donot exactly convey what the inventor or manufacturer had in mind when theproduct was designed.”