CHAPTER 1 Personal Selling and the Marketing Concept

Learning Objectives Define personal selling and describe the three prescriptions of a personal selling philosophy Describe contributions of personal selling to the information economy Discuss personal selling as an extension of the marketing concept Describe the evolution of consultative selling from the marketing era to the present

Learning Objectives Define strategic selling and name four broad strategic areas of the Strategic/Consultative Selling Model Describe evolution of partnering and the nature of a strategic selling alliance Explain how value-added strategies enhance personal selling

Definition of Personal Selling Person-to-person communication with a prospect Personal selling is a process of Developing relationships Discovering needs Matching products with needs Communicating benefits Viewed as a process that adds value

Philosophy of Personal Selling A strategic resource is information Salespeople are the eyes/ears of the marketplace Salespeople can collect wide range of competitive intelligence Business is defined by customer relationships Sales success depends on adding value Michael Hammer, consultant and author of The Agenda, says, “The real new economy is the customer economy.”

A Shift in Emphasis FIGURE 1.2

Personal Selling in the Information Age An evolution from the industrial economy to the information economy Began in the 1950s New emphasis is information exchange rather than producing goods Implications for personal selling

Value-Added Selling A series of creative improvements in the sales process that enhances the customer experience.

The Marketing Concept A principle that holds that achieving organizational goals depends on: Knowing the needs and wants of target markets Delivering the desired product Paths to sales and profits are: Customer focus Value

The Marketing Mix FIGURE 1.3

Important Role of Personal Selling Often the major promotional method Firms invest in personal selling Personal selling has evolved because: Products and services are more sophisticated and complex Competition has greatly increased Customer demand for quality, value, and service has risen sharply

Evolution of Consultative Selling Consultative selling era (late 1960s to early 1970s) Mass markets break into target markets Emphasis on need identification Information sharing and negotiation replace manipulation

Evolution of Consultative Selling Transactional selling Process that serves the buyer primarily interested in price and convenience Consultative selling Process that developed from the marketing concept, emphasizing need identification

Evolution of Consultative Selling Features of consultative selling include: Customer is a person to be served, not a prospect to be sold Two-way communication identifies (diagnoses) customer’s needs; no high-pressure sales presentation Emphasis on information giving, problem solving, and negotiation rather than manipulation Emphasis on service after the sale

Evolution of Strategic Selling A strategic market plan Outlines necessary methods and resources Considers areas to be coordinated Finance • Personnel Production • Marketing Influences the sale of products Serves as guide for strategic selling plan

Evolution of Strategic Selling Tactics Specific techniques, practices, and methods used in customer interaction Strategy Carefully conceived plan needed to accomplish sales objectives A prerequisite to tactical success

Evolution of Strategic Selling Strategic selling era (early 1980s) Market niches require more planning Equal emphasis on strategy and tactics Product positioning vital Partnering era (1990 to present) Customer, not product, as driving force Emphasis on strategies that create customer value

FIGURE 1.5

Develop a Relationship Strategy  Adopt a win-win philosophy  Project a professional image  Maintain high ethical standards “People don’t care how much you know until they know how much you care.” Harvey B. Mackay, founder of Mackay Envelope Corporation

Develop a Product Strategy  Become a product expert  Sell benefits, not features  Configure value-added solutions “Diagnose before you prescribe.” Stephen Covey, author of The 7 Habits of Highly Effective People

Develop a Presentation Strategy  Prepare objectives  Develop a presentation plan  Provide outstanding service

Develop a Customer Strategy  Understand the buying process  Understand buyer behavior  Develop prospect base Patricia Seyold, best-selling author of The Customer Revolution says, “We are in the midst of a profound revolution: the customer revolution.”

Interrelationship of Basic Strategies FIGURE 1.7

Evolution of Partnering Buzzword of 1990s, became business reality in 2000s “Strategically developed, long-term relationship that solves the customer’s problems” Relationship selling relies on a customized approach to each client Enhanced with high ethical standards and Customer Relationship Management

Strategic Alliances Formed by companies that have similar business interests and, thus, gain a mutual competitive advantage The goal is to achieve a marketplace advantage by teaming up with another firm Highest form of consultative selling required to build win-win alliances

Strategic Selling Alliances FIGURE 1.7

Example of Partnering: Campbell Food Service, Inc. See the Website

Example of Partnering: Cushman &Wakefield See the Website

Partnering is Enhanced with Customer Relationship Management See the Website

Value Creation Value-added selling = creative improvements that enhance customer experience The information economy rewards salespeople who add value at each step When customer is not aware of value added by salespeople, the focus may shift to price

Customer Value Model FIGURE 1.8

Value-Added Selling Example: Wisconsin Milk Marketing Board See the Website

Key Concept Discussion Questions Define personal selling and describe the three prescriptions of a personal selling philosophy Describe the contributions of personal selling to the information economy Discuss personal selling as an extension of the marketing concept Describe the evolution of consultative selling from the marketing era to the present Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-33

Key Concept Discussion Questions Define strategic selling and name the four broad strategic areas in the Strategic/Consultative Selling Model Describe the evolution of partnering and the nature of a strategic selling alliance Explain how value-added selling strategies enhance personal selling Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-34

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc.   Publishing as Prentice Hall 1-35