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- 1. Chapter 9 Personal Selling, Relationship Building, and Sales Management Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 14 e Personal Selling Two-way flow of communication between a potential buyer and a salesperson Designed to accomplish specific needs Identify the potential buyer’s needs Match those needs to one or more of the firm’s products or services On the basis of this match, convince the buyer to purchase the product 2 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Importance of Personal Selling Personal selling is used when goods are: New and different Technically complex Expensive and require negotiation Can be used to develop long standing relationship with
- 2. customers 3 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Process Objectives the salesperson is trying to achieve while engaged in selling activities Sequence of stages the salesperson should follow to achieve the objectives 4 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Objectives of the Sales Force Revenue and sales Helps gain competitive advantage in the marketplace Information provision Salesperson needs to: Explain all attributes of the product or service Answer questions and probe for additional questions 5
- 3. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Objectives of the Sales Force Persuasion Salesperson needs to: Distinguish firm’s products from those of competitors Maximize the number of sales as a percent of presentations Convert undecided customers into first-time buyers Convert first-time customers into repeat purchasers Sell additional or complementary items to repeat customers Tend to the needs of dissatisfied customers 6 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Objectives of the Sales Force After sales service Salesperson needs to ensure: Delivery or installation of the product or service that meets or exceeds customer expectations Immediate follow-up calls and visits to address unresolved or new concerns Reassurance of product or service superiority through demonstrable actions Relationships are built
- 4. 7 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Figure 9.1 - The Sales Relationship-Building Process 8 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Prospecting Process of locating potential customers Required because customers: Switch to other suppliers Move out of the organization’s market area Go out of business because of bankruptcy Are acquired by another firm Have only a onetime need for the product or service 9
- 5. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Prospecting Location of prospects Random lead generation - Names and addresses of prospects are randomly generated Lead: Potential prospect that may or may not have the potential to be a true prospect Selected-lead generation - Existing contacts and knowledge are used to generate new prospects 10 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 10 Prospecting Screening - Gathering information Does the lead have a want or need that can be satisfied by the purchase of the firm’s products or services? Does the lead have the ability to pay? Does the lead have the authority to pay? Can the lead be approached favorably? Is the lead eligible to buy? 11
- 6. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Planning the Sales Call Key areas of knowledge for salespeople Thorough knowledge of representative company, including past history Thorough knowledge of products and product line Good working knowledge of competitor’s products In-depth knowledge of the market for their merchandise Accurate knowledge of prospect 12 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Presenting Essentials to make a good impression Be well prepared in all the knowledge areas Develop a checklist of items for discussion Develop good interpersonal skills Adapt their style to the prospect 13
- 7. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Responding to Objections Expect objections to occur at any time Do not challenge the customer in response to an objection Make the necessary presentation in order to help the client make an intelligent decision 14 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Obtaining Commitment Not all sales end in a successful closing Salespeople should analyze the reasons and determine whether: More sales calls are necessary to obtain commitment There exists a good match between customer needs and seller offerings or not 15 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 8. Building Long-Term Relationships Important goal for salespersons Aftermarketing: Focuses the organization’s attention on providing continuing satisfaction and reinforcement to individuals or organizations that are past or current customers 16 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Aftermarketing Activities Establishing and maintaining a customer information file Monitoring order processing Ensuring initial proper use of product or service Providing customers ongoing guidance and support Analyzing customer feedback Continually conducting customer satisfaction research 17 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Relationships Can Lead to Partnerships Functional relationships - Close personal relationship between buyer and seller where they work together to solve problems Strategic partnerships: Long-term, formal relationships in which
- 9. both parties make significant commitments and investments Aim is to pursue mutual goals and to improve the profitability of each other Known as strategic alliances 18 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. People Who Support the Sales Force Focus solely on promoting existing products and introduction of new products Missionary salespeople Support the sales staff by providing training or other technical assistance Technical sales specialists Used when the product is extremely high priced and is being sold to the whole organization Cross-functional sales teams 19 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Managing the Sales and Relationship-Building Process Company’s part of the sale involves:
- 10. Efficient and effective sales tools Efficient delivery and reorder system Equitable compensation plan to reward and motivate performance Adequate supervision and evaluation of performance for continual improvement 20 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Management Task Individual salespeople are assigned geographic territories Geographic structure Salesperson is assigned customers and prospects for a particular product or product line Product structure Assigns a salesperson or team to serve a single customer or type of customer that has large or significant needs Customer structure Company may assign a salesperson or a team to focus on major customers to foster long-term relationships Major account management 21 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written
- 11. consent of McGraw-Hill Education. Figure 9.2 - Organizing the Sales Force 22 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Controlling the Sales Force It is critical that the sales force be properly controlled because personal selling: Can be the largest marketing expense component in the final price of the product Is likely to be less efficient unless the sales force is directed, motivated, and audited on a continual basis 23 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Forecast Estimate of how much of the company’s output can be sold during a specified future period under: Proposed marketing plan Assumed set of economic conditions
- 12. 24 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Forecasting Sales: Goals Establish sales quotas Plan the personal selling efforts and other types of promotional activities Budget selling expenses Plan and coordinate production, logistics, inventories, personnel, and so forth 25 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Forecasting Methods Jury of executive opinion method Sales force composite method Customer expectations method Analyzing past sales data and the impact of factors that influence sales Time-series analysis Measuring the relationship between the dependent variable, sales, and independent variables to explain increases or
- 13. decreases in sales volume Correlation analysis Other quantitative techniques 26 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Establishing Sales Territories and Quotas Represents management’s need to match personal selling effort with sales potential Sales territories can be segmented on the bases of: Geography Product specialization 27 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Quotas Provide incentives for salespeople Provide a quantitative standard for performance measurement Evaluate and control the efforts of the sales force Activity quotas - Allow monitoring of whether salespersons are engaging in activities to the extent desired 28
- 14. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Quotas Represent specific sales goals assigned to each territory or unit over a designated time period Factors in establishing sales factors Compensation must be adjusted since all territories will not have equal potential All salespeople will not have equal ability and assignments may have to be made accordingly Sales task in each territory may differ from time period to time period 29 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Analyzing Expenses Sales expense budget should be included in sales forecast Steps Sales expense budgets are developed Developed for a period of a year and then broken down into quarters and months Estimates of expenses and forecasted sales quotas are submitted
- 15. to the sales manager fro review 30 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Motivating and Compensating Performance Important task for the sales manager Major determinants of sales force productivity Types Salary - Specific amount of monetary compensation at an agreed rate for definite time periods Commission - Monetary compensation is provided for each unit of sales and expressed as a percentage of sales 31 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Motivating and Compensating Performance Bases for computing commission Volume of sales in units of product Gross sales in dollars Net sales after returns Sales volume in excess of a quota
- 16. 32 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Figure 9.4 - Types of Sales Force Incentives and Some Possible Performance Outcomes Source: Some of the material was adapted from Gilbert A. Churchill Jr., Neil M. Ford, and Orville C. Walker, Sales Force Management, 5th ed. (Burr Ridge, IL: Irwin/McGraw-Hill, 1997), p. 490 33 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 8 Integrated Marketing Communication Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 14 e
- 17. Strategic Goals of Marketing Communication Create awareness Build positive images Identify prospects Build channel relationships Retain customers 2 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Promotion Mix Combination and types of nonpersonal and personal communication an organization puts forth during a specified period 3 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Promotion Mix Combination and types of nonpersonal and personal communication an organization puts forth during a specified period Factors to be considered when devising a promotion mix
- 18. Role of promotion in the overall marketing mix Nature of the product Nature of the market 4 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Elements of Promotion Mix Paid form of nonpersonal communications about an organization, its product, or its activities Transmitted through a mass medium to a target audience Advertising Activity or material that offers customers, sales personnel, or resellers a direct inducement for purchasing a product Sales promotion 5 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Elements of Promotion Mix Efforts are directed at influencing the attitudes, feelings, and opinions of customers, noncustomers, stockholders, suppliers, employees, and political bodies about the organization Public relations
- 19. Direct communication with customers through direct mail Direct marketing Face-to-face communication with potential buyers to inform them about and persuade them to purchase an organization’s product Personal selling 6 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Integrated Marketing Communications Coordinates and integrates all elements of the promotion mix so that the organization presents a consistent message Seeks to manage all sources of brand or company contacts with existing and potential customers 7 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Figure 8.1 - How Various Promotion Tools Might Contribute to the Purchase of a Hypothetical Product 8
- 20. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Objectives of Advertising Viewpoints on the contribution of advertising Generalist viewpoint - Concerned with sales, profits, return on investment, and so forth Specialist viewpoint - Concerned with measuring the effects of specific ads or campaigns Middle viewpoint - Understands and appreciates the generalist and specialist viewpoint Sees advertising as a competitive weapon Sales and profits - Ultimate objective 9 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Advertising Decisions Determining the size of the advertising budget Methods used Percent of sales Per-unit expenditure All you can afford Competitive parity Research approach
- 21. Task approach 10 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Advertising Decisions Allocating advertising budget Deciding on the most effective way of spending advertising dollars Successful ad campaign has two related tasks Saying the right things in the ads themselves Using the appropriate media in the right amounts at the right time to reach the target market 11 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Message Strategy Effective advertising message should: Take into account the basic principles of communication Be predicated upon a good theory of consumer motivation and behavior Basic communication process involves: Sender or source of communication
- 22. Communication or message Receiver or audience 12 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Message Strategy Encoding - Translating the product idea or marketing message into an effective ad Goal is to generate ads that the audience can decode Advertising media - Communication channels that transmit and carry advertising messages Vary in efficiency, selectivity, and cost 13 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Media Mix Cost per thousand (CPM): Dollar cost of reaching 1,000 prospects Common measure of efficiency or productivity in advertising Reach: Number of targeted audience members exposed at least once to an advertiser’s message within a predetermined time frame
- 23. 14 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Media Mix Average frequency: Number of times customers, on average, are exposed to an ad within a given time period Marketer’s dilemma is to develop a media schedule that exposes: Sufficient number of targeted customers to the firm’s product Targeted customers enough times to the product to produce the desired effect 15 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Promotion Push strategies: Promotional efforts directed at distributors, retailers, and sales personnel to gain their cooperation in ordering, stocking, and supporting the sales of a product Pull strategies: Promotional efforts directed at customers to encourage them to ask the retailer for the product
- 24. 16 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Figure 8.3 - Push Versus Pull Strategies 17 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Trade Sales Promotion Promotions aimed at distributors and retailers of products who make up the distribution channel Objectives Convince retailers to carry the manufacturer’s products Reduce manufacturer’s inventories and increase the distributor’s or retailer’s inventories Support advertising and consumer sales promotions 18
- 25. Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Trade Sales Promotion Encourage retailers either to give the product more favorable shelf space or to place more emphasis on selling the product Serve as a reward for past sales efforts 19 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Consumer Promotions Induce the customer to try the product Reward brand loyalty Encourage the consumer to trade-up or purchase larger sizes Stimulate repeat purchases Reaction to competitor efforts Reinforce other advertising or personal selling efforts 20 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Figure 8.4 - Forms of Consumer Promotions
- 26. 21 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Promotion Should not be used as the sole promotional tool due to its inability to: Generate long-term buyer commitment to a brand Change, except on a temporary basis, declining sales of a product Convince buyers to purchase an unacceptable product Make up for a lack of advertising or sales support for a product 22 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Sales Promotion Measures to reduce sales promotions without losing market share Everyday low-price strategies Frequency marketing programs: Programs designed to reward customers for purchases of a product or service over a sustained period of time
- 27. 23 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Public Relations: Common Forms Announcement regarding changes in organization or the product line Also called press release News release Meeting held for representatives of the media Announces major news events so that the organization can announce major news events News conference Providing support for and associating organization’s name with events, programs, or people Sponsorship Many nonprofit organizations rely on the media to donate time for advertising for contributions and donors Public service announcements 24 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
- 28. Direct Marketing Catalysts for growth Technology Mobile marketing: Marketing by way of handheld devices Consumer’s increased use of Internet for purchasing many types of products 25 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Direct Marketing: Benefits Consumers Saves time Saves money Gives better service Increases privacy Marketers Contributes to the sales revenues Is effective in generating sales lead Increases store traffic 26 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.