Dr. Shilpa Sindhu

 AMA’s definition Planning, direction and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as the tasks apply to the personal sales force  Modern sales managers have considerably broader responsibilities  They are responsible for: - ◦ Organizing sales effort within and outside organization ◦ Soliciting & preparing marketing information ◦ Participating in marketing decisions

1. Before Industrial Revolution ◦ Small scale enterprises dominated markets…dealt with nearby customers only…orders procured before goods were produced…single individual supervised manufacturing and selling…Sales considered as PART TIME function 2. Beginning of Industrial Revolution ◦ Newly built factories produced large quantities…need to expand market…selling still remained secondary; more important business problems  finding labor, acquiring resources…separate functional departments owing to large scale production…sales department were set up only after activation of manufacturing & financial departments ◦ Communicating with customers was still required ◦ Wholesalers and retailers identified…separated company from customers ◦ Marketing activities of sales department gained importance ◦ New departments organized for carrying out specialized marketing functions

 Toward Top Management ◦ Obtaining sales volume ◦ Providing profit contributions ◦ Continuing business growth  Toward Customers ◦ Easy supply products ◦ Support activities ◦ Assurance that products are wise investments  Toward Society ◦ Assured supply of products to buyers at prices that they are ready to pay ◦ Products having minimal potential to damage environment

 Sales Volume  Profits  Growth

Sales – Cost of Sales = Gross Margin Gross Margin – Expenses = Net Profit

 Coordinating with the following functions: - ◦ Organization ◦ Planning ◦ Elements of Marketing Program ◦ Distributive Network  Gaining product distribution  Obtaining dealer identification  Reconciling business goals  Sharing promotional risks

 Sizing up the situation  Setting quantitative performance standards  Gathering and processing data on actual performance  Evaluating performance  Action to correct controllable variation  Adjusting for uncontrollable variation

 Inter-related  Salesmanship – a skill used in personal selling ◦ The art of successfully persuading prospects or customers to buy products or services from which they can derive suitable benefits, thereby increasing their total satisfaction  Emphasis of selling has been changed to ‘CONSULTATIVE SELLING’

 Service Selling Inside order taker Delivery Salesperson Route/Merchandising Salesperson Missionary Technical Salesperson  Developmental Selling Creative Salesperson – Tangibles Creative Salesperson - Intangibles  Developmental Selling Unusual Creativity Political/Indirect/Back-Door Salespersons Salesperson Engaged in Multiple Sales

 AIDAS Theory  Right set of circumstances Theory  Buying Formula Theory  Behavioral Equation Theory

 Notion – A prospect goes through five mental states consciously and hence the sales presentation must lead the prospect through them in the right sequence if the sale is to result 5 states: - 1.Securing Attention 2.Gaining Interest 3.Kindling Desire 4.Inducing Actions 5.Building Satisfaction

 Situation – Response Theory  ‘Everything was right for the sale’  Desired outcome of sale is a result of circumstances created and/or managed right by the salesperson  Set of circumstances includes factors external and internal to the prospect.

 Salesperson’s role is to help buyers find solutions to their needs and problems Need  Solution  Purchase Need  Solution  Purchase  Satisfaction Need  Product & Brand Name  Purchase  Satisfaction

 Explains buying behavior in terms of purchasing decision process, viewed as phases of the learning process  Learning process elements: - 1.Drive (Innate & Learned) 2.Cue (Weak stimuli –Triggering & Non-triggering (product & information) + Specific product and information cues) 3.Response – what buyer does 4.Reinforcement – any event that strengthens buyer’s tendency to make a particular response B = P x D x K x V ◦ Where: - B = Response / Internal response Tendency (act of buying a brand or patronizing a supplier) P = force of habit (predisposition or inward response tendency) D = Drive level (amount of motivation) K = ‘Incentive potential’ i.e., value of the product or its potential satisfaction to the buyer V = Cues’ intensity (triggering, product or informational)

As a part of selling activities, if salespeople follow the steps or phases shown above, their chances of success are far better. Prospecting & Qualifying Preapproach / Precall planning Approach Presentation & Demonstration Follow-up & Service Trail close / Closing the sale Overcoming Objections

 Prospecting It is identifying or finding prospects i.e. prospective or potential customers. Methods of prospecting or sales lead generation are: (1) referrals from existing customers, (2) company sources (website, ads., tradeshow, teleprospecting), (3) external sources (suppliers, intermediaries, trade associations), (4) salespersons’ networking, (5) industrial directories, (6) cold canvassing  Qualifying Companies qualify sales leads by contacting them by mail or phone to find their interests (or needs) and financial capacity. Leads are categorized as: Hot, Warm, and Cool

 Information gathering about the prospect. Sources of information: the Internet, industrial directories, government publications, intermediaries, etc.  Precall planning Setting call objectives Tentative planning of sales strategy: which products, features and benefits may meet the customer needs

Make an appointment to meet the prospect Make favourable first impression Select an approach technique: Introductory Customer benefit – Insurance policy conversion Product – new & unique product Question Praise The approach takes a few minutes of a call, but it can make or break a sale

There are four components: a. Understanding the buyer’s needs b. Knowing sales presentation methods / strategies c. Developing an effective presentation d. Using demonstration as a tool for selling

 Firms and consumers buy products/services to satisfy needs  To understand buyer’s needs, ask questions and listen  In business situations, problem identification and impact questions are important Example:  Have you experienced any problems on quality and delivery from the existing supplies?  What impact the quality and delivery problems will have on your costs and customer satisfaction?

Firms have developed different methods / styles / strategies of sales presentation  Stimulus response method / canned approach. It is a memorised sales talk or a prepared sales presentation. The sales person talks without knowing the prospect’s needs. Ex: Used by tele-marketing people  Formula method / formulated approach. It is also based on stimulus response thinking that all prospects are similar. The salesperson uses a standard formula – AIDA (attention, interest, desire, and action). It is used if time is short and prospects are similar. Shortcomings are: prospects’ needs are not uncovered and uses same standard formula for different prospects.

 Need – satisfaction method Interactive sales presentation Most challenging & creative form of selling First find prospect’s needs, by asking questions and listening Use FAB approach: Features, Advantages, Benefits Effective method, as it focuses on customers  Consultative selling method / Problem- solving approach Salespeople use cross-functional expertise Firms adopt team selling approach It is used by software / consulting firms

 Plan the sales call Some of the guidelines are:  Adopt presentation to the situation and person  Communicate the benefits of the purchase  Present relevant and limited information at a time  Use the prospect’s language  Make the presentation convincing – give evidence  Use technology like multi-media presentation

 Sales presentation can be improved by demonstration  Demonstration is one of the important selling tools Ex: Test drive of cars; demonstration of industrial products in use  Benefits of using demonstration for selling are: Buyers’ objections are cleared Improves the buyer’s purchasing interest Helps to find specific benefits of the prospect The prospect can experience the benefit

 Objections take place during presentations / when the order is asked  Two types of sales objections: Psychological / hidden Logical (real or practical)  Methods for handling and overcoming objections: (a) ask questions, (b) turn an objection into a benefit, (c) deny objections tactfully, (d) third-party certificate, (e) compensation

 Trial close checks the attitude or opinion of the prospect, before closing the sale (or asking for the order)  If the response to trial close question is favorable, then the salesperson should close the sale  Some of the techniques used for closing the sale are: (a) alternative-choice, (b) minor points, (c) assumptive, (d) summary-of- benefits, (e) T-account, (f) special-offer, (g) probability, and (h) negotiation

 Necessary for customer satisfaction  Successful salespeople follow-up in different ways: For example, Check order details Follow through delivery schedule Visit when the product is delivered Build long-term relationship Arrange warranty service

 Qualitative ◦ Selling job ◦ Service existing accounts ◦ Obtain new accounts ◦ Secure and maintain customers’ cooperation in stocking and promoting product ◦ Inform customers about changes ◦ Advise ◦ Training middleman’s salesperson ◦ Solicit and manage marketing information

 Quantitative ◦ Market share ◦ Sales volume ◦ New accounts ◦ Manage selling expenses ◦ Secure targeted percentages

 Figure below shows how sales strategy is developed from marketing strategy Marketing Strategy * IMC: Integrated Marketing Communication Target market strategy (Long- term) Marketing mix strategy (Short- term) Product / service strategy Promotion / IMC* strategy Price strategy Distribution strategy Sales promotion strategy Advertising strategy Personal selling / sales strategy Public relations & Publicity strategy Direct marketing strategy

 Influence sales executive’s job and effectiveness  Provide guidance in drafting plans for achieving organization’s personal selling objectives  Salespersons influence policies  Salespersons bear ultimate responsibilities for policy implementation

 Product Policies – What to Sell ◦ Relation to Product Objectives ◦ Product Line Policy  Changes in product offerings  Reappraising product line for line simplification/diversification  Ideas for new products  Appraisal of proposed new products ◦ Product Design Policy ◦ Product Quality and Service Policy

 Distribution Policies – Who to Sell ◦ Policies on marketing channels  Take into consideration: -  Sales Volume Potential  Comparative Distribution Costs  Net Profit Possibilities ◦ Policies on distribution intensity  Mass distribution  Selective distribution  Exclusive agency distribution

 Pricing Policies ◦ Relative to Competition  Meeting competition  Above competition  Below competition ◦ Relative to Costs  Full cost pricing  Promotion pricing – consumer non durables ◦ Policy on uniformity of price ◦ Policy on discounts