Relationship Marketing: Where Personal Selling Fits - Chapter 2 of Fundamentals of Selling by Charles M. Futrell. Presented to the students of Tolani Institute of Adipur as a part of their Sales Management Course
1. Relationship Marketing
Sales Management
Compiled & Presented By:
Anuj Sharma
Text Book: Fundamentals of Selling – Customers
for life through services by Charles M. Futrell (12th
Edition)
Pre-Class Reading – Chapter 2
Presented to the students of Tolani Institute of
Management Studies
2. What is the Purpose of Business?
• The purpose of business is to increase the
general well-being of humankind through the
sale of goods and services
• This Requires:
▫ Making a Profit – To Operate – Provide Products
• Profit is a means to an end
2
3. Two Basic functions of Business
• Production of Goods & Services
• Marketing those Goods & Services
• The Primary Goal of Business:
▫ Transform the marketplace and workplace into an
environment where everyone is treated as
they would like to be treated.
3
4. What is Marketing?
• Definition: Marketing is the activity, set of
institutions, and processes for creating,
communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners and society at large.
4
5. Marketing Involves
• Development
• Pricing
• Promotion
• Distribution
• Of want-satisfying goods & services
• To consumers & industrial users
5
6. Marketing is not just for a Business
• Whenever you try to persuade somebody to do
something it needs marketing!
▫ Donate to your charity
▫ Fasten your seat belts
▫ Vote for your candidate
▫ Accept your date or you marriage proposal
6
7. The Production Concept
• Before the Great Depression of the 1930s
• Production oriented companies
• “WE KNOW WHAT PEOPLE WANT”
• “I LIKE THIS PRODUCT SO WILL OTHERS”
• Few firms had marketing departments
• No formal sales department
• Engineer develops the product – Production makes it –
puts it in catalogue – WAIT for people to buy it
• The price was determined by Production Department
7
8. The Selling Concept
• Post World War – Early 1940s
• Customers had many products to choose from
• Firms had to go to customers – not wait for them
• Recognized that personal selling & advertisement
was important
• Salespeople were just expected to contact customers
and take their orders
• Unsophisticated selling techniques
• Rely on natural ability for developing & giving sales
presentation
8
9. The Marketing Concept
• All company planning & operations should be
customer oriented.
• The goal of the firm should be profitable sales
volume and not just volume for the sake of volume
alone.
• All marketing activities in a firm should be
organizationally coordinated.
• Customer’s want-satisfaction is the economic and
social justification for a firm’s existence.
▫ While still making a profit!
9
10. Difference between Selling &
Marketing Concepts
Selling Concept Marketing Concept
• Emphasis is on the product. • Emphasis is on the customers’
wants.
• Company first makes the product &
then figures out how to sell it
• Company first determines
customers’ wants and deliver a
product to satisfy those wants.
• Management is sales-volume
oriented.
• Management is profit oriented.
• Planning is short-run, in terms of
today’s products and markets.
• Planning is long-run, in terms of
new products, tomorrow’s markets,
and future growth.
• Stresses needs of the seller. • Stresses wants of buyers.
10
11. Marketing’s importance in the Firm
• Four main objectives of Marketing:
1. Maximize the sales of existing products in
existing markets.
2. Develop & sell new products.
3. Develop new markets for existing or new
products.
4. Provide quality service to customers to ensure
repeat business.
11
12. Essentials of a Firm’s Marketing Effort
• Determine the needs of the customers.
• Create & maintain effective Marketing Mix
Marketing
Mix
Product Price Place Promotion
Sales
PromotionAdvertising
Personal
Selling
Public
Relations
12
The 4 P’s of Marketing
13. Product
• A product is a bundle of tangible & intangible
attributes. It includes:
▫ Packaging
▫ Color
▫ Brand
▫ Services
▫ Reputation of the Seller
13
14. Types of Products
• Consumer Products
▫ Purchased by Households or end consumers.
• Industrial Products
▫ Used in producing other products.
14
15. Creating a Product that sells
• Research what customer wants
• Develop the product
• Design the package
• Trademarks
• Warranties
• Service policies
15
16. Price
• Marketing department determines Initial Price
of the product.
▫ Includes:
Normal Price
Special Discounted Prices
• Price refers to value or worth of product that
attracts buyer to exchange money or something
of value for the product.
16
17. Place
• A great product is useless if it doesn’t reaches the right
consumer at the right time at the right place.
• Marketing helps to determine best method of
distributing the product.
• Channel structure used to transfer products from an
organization to its customers.
• Product should be available to customers in a convenient
& accessible location when they want it.
• Use Resellers wherever needed.
17
18. Promotion
• Inform people about product’s existence.
• Educate customers about the product’s features.
• Advantages & benefits of the product.
• Tell them where to buy it.
• Make them aware of its price versus value.
18
19. Promotion Includes (PAPS)
1. Personal Selling
2. Advertising
3. Public Relations
4. Sales Promotions
Marketing determines budget and type of
promotion required for each product.
19
20. The Goal of a Marketing Mix
• The right Product
• At the right Price
• At the right Place & Time
• With the right Promotional effort
20
21. Relationship Marketing
• Shift from Selling customers Today to Creating
customers for Tomorrow.
• Relationship Marketing is creation of Customer
Loyalty.
• Important customers need continuous attention.
• Not just a simple sale or transaction.
• Targets a major customer that it wants to sell to
now and in the future.
21
22. Relationship Marketing & Sales Force
• How much selling effort is needed to gain & hold customers?
• Is the sales force best marketing tool, compared to advertising
& other sales promotion methods, in terms of costs and
results?
• What type of sales activities – for example, technical
assistance, frequent or infrequent sales calls – will be
necessary?
• Can the firm gain strength relative to its competition with its
sales force?
Remember, Personal Selling builds relationships.
22
23. Salespeople Generate Revenue
• They can customize presentations to individual
needs.
• They can see a customer’s reaction to sales
approach and make immediate adjustment.
• Advertising attracts the customer’s attention and
arouses desire but ads don’t close the sale.
23
24. Salespeople Implement Relationship
Marketing
• Sales personnel implement customer contact
programs.
• Salespeople sell the product to customers.
• When customers are unhappy, the salespeople
take care of the problems.
• Sales & Service are inseparable today.
24
25. Levels of Relationship Marketing
• Transaction Selling
▫ Customers are sold to and not contacted again.
Example: McDonalds
Low Priced – Low Profit Products
Large Number of Customers
Geographically dispersed
• Relationship Selling
▫ The seller contacts customers after purchase to determine if they are
satisfied and have future needs.
Example: Toyota
• Partnering
▫ The seller works continually to improve the customer’s operations, sales
and profits.
Works on 80/20 principle
25
26. Partnering with Customers
• Work continuously to help the customer.
• If the customer prospers, so do you!
• Buyer & Seller share information such as market
research findings and production cost data.
• Goal is to share risks and profits together.
• No longer opponents, but two companies working
toward an objective.
• Each uses its own resources so both get help of
doubled resources!
• Enrich the other and not get rich at the other’s
expense.
26
27. Consultative Selling
• The process of helping the customer to achieve
strategic short and long term goals through the
use of seller’s goods and services.
▫ A highly interactive dialogue between a
salesperson and a customer.
▫ A balanced exchange of information.
27
28. Today’s Customer Needs...
• Salespeople who are committed to help them to
succeed.
• Help them achieve short and long term
objectives.
• Salespeople who will stay involved with them
over the time - Even if there is not an immediate
sales opportunity.
• They Need:
▫ A team leader – A business consultant – A long
term ally
28
30. Team Leader Role
• Coordinates all of the information, resources
and activities needed to support customers
before, during and after the sale.
• Primary contact between the buyer’s and seller’s
organisation.
• Create a unique solution for the customer.
30
31. Business Consultant Role
• Salesperson gives advice and service.
• Use internal & external resources to gain an
understanding of the customer’s business &
marketplace.
• Customers have many suppliers who want to sell to
them.
• They want knowledgeable business professionals
and not just persuasive peddlers.
• Know about your customer’s business at the start.
• Be prepared when you walk in the prospective
customer’s door.
31
32. Long-Term Ally Role
• Be interested in your customer even after you
close the sale.
• The customer’s interest in you increases rapidly
after the purchase.
• Difference between salesperson’s pre and post
sale concern for the customer is called
Relationship Gap.
32
33. The Key To Success...
• Is to use all the 4 Ps of Marketing to your
advantage and to your customer’s advantage.
Deal in relationships –
Not just transactions!
33