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  • 1. Chapter 2 Personal Selling
  • 2. Mathew Lawrence  Personal selling occurs where an individual salesperson sells a product, service or solution to a client. Salespeople match the benefits of their offering to the specific needs of a client.  Definition : A form of person to person communication in which a salesperson works with prospective buyer and attempts to influence purchase in the direction of his or her company’s products or services 
  • 3.  It provides human touch to business transaction.  It promotes long term business relationship.  It enhances customer confidence  It helps in understanding the pulse of the customer.  It helps in customizing the product.  Helps in convincing the customer about the product.
  • 4. Cont…. Changing Face of Personal Selling Modern sales approach is based on the following parameters 1. Value Sharing: Salespeople study the changing needs and preferences of their customers. 2. Relation Building: A value-based relationship helps the salespeople to constantly mobilise resources and modify the end product by catering to the specifics of the buyer. 3. Role Playing: The salespeople, in personal selling, go far beyond realising sales. Sales people act as consultants to their prospective customers constantly advising them of new products, their updates and impart knowledge to them. 4. Changing Approach: Personal selling comes in a package containing the inputs of the experts from different areas such as maintenance, installation, trouble shooting, delivery staff, sales personnel, etc.
  • 5. Objectives of Personal Selling Personal selling objectives may be: Short-term Short-term personal selling objectives are more specific and of short- term duration. These objectives change very frequently as soon as there is change in production mix. Further, they are usually quantitative objectives. Long-term Long-term personal selling objectives are broad and general. There is very little scope of change in long-term objectives. They are usually quantitative objectives.
  • 6. Cont…. Some long term objectives of personal selling are: 1. enhances customer’s confidence in the seller. 2. promotes long-term business relations through personal intimacy. 3. provides a human touch to business transactions. 4. helps facilitate the seller to understand each customer’s needs and preferences more clearly. 5. helps satisfy a customer by modifying the product as per the customer’s choice and preference. 6. helps build long-term relations between the business and the customer. 7. helps keep up with the competition in the market, based on product customization as per customer’s preferences.
  • 7. 8. convincing the customer about the product. 9. the time lag between introducing a product throug the media and actually selling it is reduced.
  • 8. Functions of Personal Selling Personal selling is an oral presentation in face to face conversation with one or more prospective customers for the purpose of making sales. The main functions of personal selling are as follows: 1. Provide service to customers (Introduce the product, explain the right use, Convince them etc.) 2. To sell the product 3. Maintain the sales record 4. Develop goodwill 5. Achieve sales target
  • 9. Benefits of personal selling 1. Availability of expertise 2. Early access to relevant market information 3. Availability to be flexible regarding processes, timing 4. Faster, shorter contracts 5. Economies of information sharing 6. Lower cost of selling 7. Knowledge of other uses or applications
  • 10. Cont…. Steps in Personal Selling Successful personal selling calls for an integrated approach devised from the experience of the sales personnel. The approach comprises the steps as shown in the figure here. Each of these steps are further described in brief. Steps in Personal Selling
  • 11. Cont…. Prospecting Prospecting is the process of identifying prospective buyers of the product. A prospect is qualified if he has the authority, need, ability and eligibility to buy. There are different ways to identify prospects. Some of the most frequently used methods are described below:  Acquaintance References  Cold Calling  Personal Observation Method  Direct Mail or Telephone Method  Company’s Records  Newspapers  Retailers  Other Methods
  • 12. Cont…. Pre-approach Pre-approach is the second step in the selling process which emphasises that the salesman should know, after identifying the prospect in the prospecting stage, the prospect’s likes and dislikes, his needs, preferences, habits, nature, behaviour, economic and social status etc. Significance of Pre-Approach 1. Salesman concentrates only on the prospects and not the suspects. 2. Salesman gain all the possible information about the prospect before approaching him. Hence any kind of loose talk or serious mistake can be avoided. 3. He is able to give a sales presentation more efficiently, effectively and with confidence. 4. It does not waste the prospect’s time and energy since the salesman is already aware of the needs and preferences of the prospect.
  • 13. Cont…. Usage of Prospecting Time  Sales force must plan its time in such a manner that maximum time is made available for those prospects who are likely to give a large volume of business to the company.  To avoid this wastage of time, grading of the prospects will be an important step.
  • 14. Cont…. Approaching  In this stage the prospect and the salesman come in contact with each other face to face.  The salesman has an opportunity to understand and interact with the prospect in a better way.  Salesman should put forward his best efforts to make the best use of this opportunity in getting the attention of the prospect and to convince him to buy the product.  Getting the attention of the prospect and persuading him to buy are the two main objectives of a salesman.
  • 15. Cont…. Successful Approach The following points specify the importance of a successful approach: i. A successful approach enhances the sale and it is thus important for the running of a business. ii. A failed approach will give an opportunity to the rival company. So a good approach will go a long way in building good relations with the prospect while a bad approach will not only result in losing business but will also make it easy for a competitor to tap new customers. iii. The approach helps in enlightening the prospect by providing him ample information about the product, price, competitor’s product, benefits etc. that he can derive from the product.
  • 16. Cont…. Key guidelines for successful approach  Prior Appointment  Timing  Command  Relaxed Atmosphere  Open Mindedness  Courtesies  Effective Presentation  Follow up
  • 17. Cont…. Presentation  Quick presentation creates a good impression.  Attractively packaged, decorated and well- organised.  Should explain the product with its features and price advantage to the customer in simple and easy terms.  Customer be shown the kind of quality that he is looking for.  Helps the salesman to prove the features of the product and emphasise its genuineness.
  • 18. Cont…. Demonstration  Demonstration is an exercise to prove the characteristics of the product.  It highlights various attributes of the product such as utility, performance, service and quality.  It is only during the demonstration that the customer gets an opportunity to verify the facts about the product.  Demonstration is imperative and essential for a prospect to make a buying decision.
  • 19. The Close  This is the last stage of any sales presentation.  The main aim of the close is to convince the prospect to sign the order form or to place an order immediately rather than in the future.  It is also important that through proper planning, prospecting, presentation and demonstration the salesman should try to capture the attention of the prospect and not let the prospect change his mind.
  • 20. Cont…. Various Selling theories “SELL” Model This is a simple model describing the various actions associated with the word itself. 1. Show features: it is the very first stage; expected to show the features of the product, demonstrating how it works, and showing the results of using the product immediately. 2. Explain advantage: Immediately, after demonstrating the product, explain the advantage possibly related with the features, showing the advantages which ate derived from it. 3. Lead into benefits: Correlate the advantages with the benefits. This is simply highlighting the materialization of those benefits in conducting the set of activities due to having/using the product. 4. Let them talk: Then at the end, let them talk further about the product, its features and those future benefits. If the previous steps are done well, they will talk themselves for the sale.
  • 21. Cont…. “SLAID” Model This is another simple model describing the various actions associated with the word itself, “Slaid” acronym for sales steps. 1. Show the product: Showing the product in full or showing specific function is also possible in the beginning, just to trigger the anxiety or curiosity in their mind. It is not a full product demonstration. Demonstration comes a bit latter state in this methods. 2. Listen: A partial demonstration flash triggers a lot of questions, or estimations or expectations, in case if the product is absolutely new concept. 3. Acknowledge: Your hearing will endorse that you have understood and are ready to fulfill their needs. You may be given elaborative further deep information about their objection.
  • 22. Cont…. 4. Identify: Identify the objections, and bring them on a squaring off situation with contents offered by your product. If possible, set up a concession clause, balancing the benefits of new product over the old objections, so that you can handle the objection and will get the sale. 5. Deliver: Ask the participants to repeat the demonstration to build the confidence about the product performance.
  • 23. Cont…. Theories of Personal Selling There are three main theories of personal selling, which are as follows:  AIDAS Theory  Right Set of Circumstances Theory  Buying Formula Theory
  • 24. Cont…. AIDAS Theory this theory is based on the premise that during a sales presentation, the prospect consciously goes through five different stages: Attention, Interest, Desire, Action and Satisfaction.  Attention: The salesperson should attract the prospect to his presentation before he actually goes into the details of the same.  Interest: He/she should maintain the interest of the prospects throughout the presentation.  Desire: The next step in the sales process, as per the AIDAS theory, is to create a strong desire in the prospect’s mind to purchase his product.  Action: Once the salesperson has been successful in taking his prospect through the three stages, as discussed above, he should induce the prospects into actually buying the product.
  • 25. Cont…. Right Set of Circumstances Theory The advocates of this theory opine that all the circumstances, which led to the sales, were appropriate or “right” for the sales to have taken place. In other words, if the salesperson is successful in securing the prospect’s attention, maintaining his interest and inducing his desire to buy the product, sales will result. Moreover, if the salesperson is highly skilled, he will take control of the presentation, which would lead to sales.
  • 26. Buying Formula Theory The buying formula theory is based on the analysis of the sequence of events that goes on in the buyer’s mind during the sales presentation. Thus, the theory emphasises on the factors internal to the prospect and the factors which are external, i.e., influence of the salesperson on his prospect’s decision to buy his product. The theory is based on the presumption that the salesperson will take care of the external factors. The sequence of events in a prospect’s mind can be represented as There are all the chances that a continuous relationship will develop between the prospect and the salesperson. As a result of sales, the satisfaction will also come in the sequence. This sequence can be presented as Need Solution Purchase SatisfactionPurchaseNeed Solution
  • 27. FORMULATING PERSONAL-SELLING STRATEGY
  • 28.  Competitive Settings --Pure, Monopolistic, Oligopolistic, No Direct Competition  Personal Selling Objectives -- Qualitative & Quantitative  Determining the kind of sales personnel --Product Market Analysis, Salesperson’s role in securing orders, choice of basic selling style  Determining the size of the sales force --Workload, Sales Potential, Incremental  Individualizing selling strategies
  • 29. Pure Large number of buyers and sellers No one powerful enough to control or influence market prices No buyer or seller is so big which can impact the product’s total demand and supply All products are identical, no differentiation All buyers are aware of all sellers’ prices Not a real world situation and hence no company concerns itself with a particular personal selling strategy for Pure Competition
  • 30. Monopolistic  Many competing producers sell products that are differentiated from one another (ie. the products are substitutes, but are not exactly alike)  Easy for additional competitors to enter the market  Advertising differentiates the brand in the minds of final buyers and stimulates selective demand Key element in marketing strategy is the ability to differentiate the product ( by both Advertising and Personal Selling) Personal Selling’s role is that of servicing the distribution network and stimulating promotional efforts by the middlemen
  • 31. Oligopolistic  Number of competitors are small enough that they are individually identified and known to each other  Difficult for new competitor to enter the market  Successful organizations keep on growing and less successful disappears  Oligopoly produces most aggressive competition  Strategies of one player has deep impact on the strategies of other players Personal Selling Strategy plays important role in building and maintaining dealer cooperation, in servicing distribution network and in gathering information on competitor’s activities
  • 32.  No Direct Competition  Both monopoly or oligopoly have indirect competition  They vie sellers in other industries for the same prospects’ interest and buying decisions  Even in case of no direct competition, personal selling and advertising plays an important role Both require the effective implementation of personal selling strategy in terms of both kind and number of sales personnel even in case of indirect competition Choosing pricing strategy calls for effective implementation of personal selling strategy
  • 33. Qualitative  Vary with competitive setting  Long Term  Carried from one operating period to another  When qualitative objectives change, there are changes in nature of sales jobs and size of the sales force Quantitative  Vary with competitive setting  Short Term  Adjusted from operating period to operating period  Since short term, they impact more upon the size of the sales force than upon the nature of the sales job