personal selling

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various aspects of personal selling

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personal selling

  1. 1. Chapter 4Personal selling
  2. 2. In this chapter we willdiscuss:• Buyer seller dyads• Types of selling jobs• Sales force objectives• Sales force strategies• Theories of personal selling• Approaches to personal selling• Personal selling process• Customer related issues in personal selling• Automation in personal selling
  3. 3. Introduction• Equipping sales force with latest gadgets• Highly interactive & suits many complexproducts & services• How it has become challenging in 21stcentury• How advanced technology facilitatedtheir functions from virtual office• Need of the 21stcentury (flexibility &adaptability
  4. 4. Buyer seller dyads• Whenever a potential buyer & sellerinteract, they constitute a dyad• Appropriate, relevant communicationbetween them increases the success of asales call• Research conducted by HL Mathews, DavidT Wilson & John F Monoky resulted,– That the relationship between the customer &the sales person is affected by the later’sprinciples, expectation and communicationskills
  5. 5. Continued…..• A glance on “The prisoner’s dilemma matrix”– What if they know that they are similar?(cooperate)– What is they know that they are dissimilar?(compete)• Conclusion: likelihood of a sales personmaking a sale to a customer is higher if heshares same characteristics with thecustomer– E.g. demographics, physical features etc. (MetLifeInsurance company – NRIs)
  6. 6. Types of selling jobs• Personal selling is still organized around salesterritories, products and customers but notbased on tasks or activities involved• This is because of the misconceptions held bytop management• They don’t recognize that sales peopleperform 2 different kinds of tasks for which 2different manpower is required• They are– Sales development (developmental)– Sales maintenance (service oriented)• What is the difference?• How sales development is being neglected?
  7. 7. Sales development• Different skill set is required(creativity, knowledge about customer,economy & market)• Perceived need to be known & play therole of change agent• Steps in developing new accounts
  8. 8. Steps in developing new accounts• Search for potential accounts• Identify key decision maker, gain access• Project as problem solver for client• Develop dissatisfaction about existingproduct• Explain the need to change for gaining• Conversion into actual replacement• Build long term relation withreassurance
  9. 9. Sales maintenance• Maintaining the account, here prioritieswill change• Main concern is increasing purchases anddefend from probable threats fromcompetitors• For this acquiring through knowledge ofthe customer’s organization, operations& human, financial resources is required• Be solver all time
  10. 10. Sales force objectives• Objectives can be qualitative /quantitative in nature• Qualitative Objectives:– Effective time management– Possessing sufficient knowledge– Maintaining efficient customer relations– Project pleasing attitude/appearance– Secure all relevant information
  11. 11. Quantitative Objectives• Increase, manage & retain market share• No. of sales calls per day / no. of days worked• Sell optimum product mix which givesmaximum profitability• Generate certain no. of new accounts permonth• Minimize sales expenses• Procure certain quantum of business fromcertain no. of clients
  12. 12. Sales force strategies• These are of 2 types– Market access strategies• These will depend upon the market potential &size of different prospective accounts• E.g. IBM initially started with 5,000 salespersons later included 18 other channels– Account relation ship strategy• Trying to establish long term relations
  13. 13. Market access strategies1. Company’s use of its own sales force2. Use of distributors3. Tele marketing4. Independent sales agents5. The internet6. Developing hybrid marketing systems7. Establishing alliances
  14. 14. Company’s use of its own salesforce• They should be geared up to meetchallenges• Should be well trained to increaseefficiency
  15. 15. Use of distributors• In industrial markets maximumproportion of products will be sold todistributors• Factors to be considered:– Understanding distributor needs– Developing a working relationship– Managing the relationship effectively
  16. 16. Tele marketing• Helps in identifying new prospects &turning them to profitable accounts• Selling product over the telephone• India is one of the emerging markets inthis field
  17. 17. Independent sales agents• These people are meant to cover agiven territory & develop salesrelationship with customers.• But, now they are handling accountsrather than territories• Economic criteria drives this approach
  18. 18. The internet• Online services worth millions of dollors• Biggest advantage is they do not requirelarger investments• No geographical boundaries
  19. 19. Developing hybrid marketingsystems• Using combination of several channels• Almost all the industries are followingthis to increase the reach• No. of channels and marketing tasks tobe performed is to be decided
  20. 20. Establishing alliances• Alliances are in the form of– Mergers– Consolidations– Take-over– Joint ventures• Examples:– IBM with 153 companies– HM - Mitsubishi
  21. 21. Account relation ship strategy• Long term relations are needed to havecontinuous transactions• Customer makes repeat purchases asseveral types of products are available• Organizational buying is complexcomparatively• So, different dimensions and authorityand power structures are to be studiedby a sales person prior to approaching
  22. 22. Theories of personal selling• IS SELLING AN ART OR SCIENCE?• Survey of 173 sales executives– Result : 46% art, 8% science & 46% artevolving into science• Various theories– AIDAS theory– Right set of circumstances theory– Buying formula– Behavior equation (buyer decision process &influence of sales person)
  23. 23. AIDAS theory• William James• Evolution as early as in 1898• Features:– Securing attention– Gaining interest– Kindling desire– Inducing action– Building satisfaction
  24. 24. Right set of circumstances theory• Situation, response theory• Set of circumstances includes externalas well as internal factors• Sales person to control the situation
  25. 25. Buying formula theory of selling• Name given by E K strong Jr.• Arrangement of buyer’s thinkingprocess1. Need/problem  solution  purchase2. Need/problem  solution  purchase satisfaction3. Need/problem  product/service & tradename  purchase  satisfaction
  26. 26. Behavior equation theory• J A Howard• Learning process• Drives– Innate (hunger, thirst, pain)– Learned (status, recognition)• Cues– Triggering (activates decision process)– Non triggering (have an impact on decision process)– Types• Product cues• Information cues• Product & information cues• Response & reinforcement
  27. 27. Howard’s equation• B = P X D X K X V• B = response / act of purchasing• P = predisposition• D = drive level / amount of motivation• K = value of the product• V = intensity of all cues: triggering,product or informational“MULTIPLICATION EFFECT”
  28. 28. Approaches to personal selling• Three types of approaches are available– Stimulus response approach– Need satisfaction approach– Problem situation approach
  29. 29. Stimulus response approach• Makes positive statements about theproduct by using statements such as“user friendly product” or “satisfactionguaranteed” etc.• Sales will have no idea about customer’sneeds and customer’s involvement is toolow. It is suitable only for inexperiencedsales person
  30. 30. Need satisfaction approach• Focuses on customer’s needs. Salesperson identifies the need and offers aproduct which can satisfy the same• Two way communication with highinvolvement from customer’s side• Skilled and experienced salesperson isrequired
  31. 31. Problem situation approach• It’s a combination of need satisfactionapproach and scientific technique ofproblem solving• Here sales person makes the customer toidentify the problem, suggestsalternatives to face the problems bygiving pros & cons of each alternativeand finally selecting the best solution• It takes longer time and used incomputer, telecommunicationequipment etc.
  32. 32. Personal selling process•It consists of 7 different stagesProspectingPre approachApproachSales presentationHandling objections/sales resistanceClosePost sales follow up
  33. 33. Prospecting• It involves searching & identifyingpotential customers who may be willingand have ability to pay for the product• Cold calling is the first step afterobtaining information from externalsources, internal sources, personalcontacts & miscellaneous sources
  34. 34. Pre approach• More detailed information about thecustomer’s tastes and preferences is gathered• It avoids from making serious error in salespresentation• It helps is qualifying prospects• Generally interview technique is used togather additional information• Here they get the appointment with the helpof intermediaries, sending letters, telephonecontact or reference of existing customer
  35. 35. Approach• First official contact takes place and thesole purpose of sales person is to catchthe prospect’s attention• Open ended questions, sincerecompliments are used in triggeringinterest• Methods to obtain attention & generateinterest in a prospect
  36. 36. Methods• Non product related approached– The referral approach– Introductory approach– Shock approach– Premium approach– Showmanship• Peaking interest approach– Arousing curiosity• Consumer directed approaches– Question approach– Survey approach– Compliment approach• Product related approaches where product isshown with little or no explanation
  37. 37. Sales presentation• Demonstration & explanation about theproduct. It includes many techniques.– Visual display techniques• Visualizing• Demonstrating– Presentation techniques• Customized sales presentation• Partially standardized• Standardized sales presentation– Non visual clarification techniques• Questions• Comparisons• showmanship
  38. 38. Handling objections / salesresistance• Clearing negative perceptions &creating positive image by reiteratingits benefits. Techniques used are:– Create strife techniques– Offset objection techniques– Clarify objection techniques– Miscellaneous techniques
  39. 39. • Create strife techniques– Coming to that method– Comparative item method– Indirect denial methods– “it’s in your hands” method• Offset objection techniques– Yes, but method– Compensation method– Comparison or contrast method– Case history method• Clarify objection techniques– Demonstration method– Boomerang method– Purpose trail use method• Miscellaneous techniques– Like putting a question pertaining to objectionas answer
  40. 40. Close• Here sales person asks for an order &tries to close the deal after negotiations& convincing customer• Some techniques used are:– Clarification close– Psychologically oriented close– Straight forward close technique– Concession close
  41. 41. • Clarification close– Comparison close– Demonstration close– Report close– Choice close– Assumption close• Psychologically oriented close– Silence– Minor decision close– “buy-now” close– Emotional close• Straight forward close technique– Direct close– Summary close– Single obstacle close• Concession close– Concessions & price discounts are offered
  42. 42. Post sales follow up• Concentrates on reducing post purchasenegative feelings to build loyalcustomers• Techniques used for effective follow up– Customer service activities– Customer satisfaction oriented activities– Customer referral activities
  43. 43. Customer related issues inpersonal selling• Organizations need to understandcustomers effectively to improveprofitability• Time & attention are to be devoted inthis matter• Some critical issues that a companyshould confront are:
  44. 44. Critical issues1. Understanding customer types throughdifferent selling styles1. Trade / missionary / technical / new businessselling2. Finding customers3. Researching customers4. Communicating effectively5. Providing customer service6. Creating customer satisfaction (distress/justsatisfied/delighted)
  45. 45. Automation in personal selling• Innovations in telecommunications &impact on sales force• These tools have made the job of salesperson easier, at the same timechallenging• Widely used tools are pagers, cells,notebook computers, palm tops, laptopsetc. & help in using technology like e-mail, video conferencing etc.• However, as the tools are mostexpensive judicious usage is needed
  46. 46. Benefits of sales forceautomation1. Information sharing2. Handling customer alerts3. Reporting sales force activities4. Tracking the progress of leads5. Accurate routing of leads6. Internet based facilities (desktop videoconferencing)7. Customer profiling8. Comparison of historical data9. Competitive intelligence10. Sales forecasting tools

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