Chapter Sixteen Personal Selling, Databases, and Direct Marketing

Chapter Objectives Explain the different types of personal selling. Explain the different types of personal selling. Discuss the various buyer/seller relationships. Discuss the various buyer/seller relationships. Describe the steps in the selling process. Describe the steps in the selling process. Explain the concepts of data warehousing and database management. Explain the concepts of data warehousing and database management. Identify the steps in developing a customer relationship management program. Identify the steps in developing a customer relationship management program. Explain the concept and the various methods of direct marketing. Explain the concept and the various methods of direct marketing.

Personal Selling Support Personnel (e.g., Missionary salesperson): Directly assist or support in the selling functions Types of Salespeople OrderTakers: Do not take active role in seeking or persuading customers, but assist in transaction Order Getters: Actively seek new customers and work to persuade them to purchase Order Getters: Actively seek new customers and work to persuade them to purchase

Buyer/Seller Relationships Single Transaction Single Transaction Buyer and seller interact for a single transaction. Buyer and seller interact for a single transaction. Example: new-buy; Typical for expensive consumer products Example: new-buy; Typical for expensive consumer products Occasional Transactions Occasional Transactions Require infrequent buyer-seller interaction Require infrequent buyer-seller interaction Example: modified re-buy; Typical for furniture purchases Example: modified re-buy; Typical for furniture purchases Repeat Transactions Repeat Transactions Buyer and seller interact on regular basis Buyer and seller interact on regular basis Example: straight re-buy; Typical for food purchases Example: straight re-buy; Typical for food purchases Contractual agreement Contractual agreement Involves a written agreement between the buyer and seller about terms of interaction Involves a written agreement between the buyer and seller about terms of interaction Trust relationship Trust relationship The buyer-seller dyad is based on mutual respect and commitment to work together The buyer-seller dyad is based on mutual respect and commitment to work together Electronic data interchange relationship Electronic data interchange relationship Expands the trust relationship to include sharing of data between the two firms Expands the trust relationship to include sharing of data between the two firms Strategic partnership Strategic partnership The highest level of dyad interaction The highest level of dyad interaction Buyer and seller share information at the highest levels, with the goal to collaborate on plans to benefit both parties. Buyer and seller share information at the highest levels, with the goal to collaborate on plans to benefit both parties. In all three, there is little or no relationship between the two parties.

The Selling Process Steps in the Selling Process 1. Prospecting for leads 2. Approaching customers 3. Determining customers wants 4. Developing sales presentation 5. Answering questions and objections 6. Closing the sale 7. Follow-up

Sales Management* Sales Plan Formulation Sales Plan Formulation Set Objectives (e.g., Quotas) Set Objectives (e.g., Quotas) Organize Sales Force/Territories Organize Sales Force/Territories (e.g., Equalized Workload Method) Sales Plan Implementation Sales Plan Implementation Recruitment and Selection (e.g., Dyadic Relationship Recruitment and Selection (e.g., Dyadic Relationship Training (e.g., Sponsorship Method) Training (e.g., Sponsorship Method) Organization and Supervision Organization and Supervision Compensation/Motivation ($) Compensation/Motivation ($) Evaluation (Quotas, Call Reports) Evaluation (Quotas, Call Reports)

Databases Important component of the Integrated Marketing Communication program Important component of the Integrated Marketing Communication program Can be used for a variety of purposes, Can be used for a variety of purposes, from providing information to salespeople to direct marketing Customer data helps marketing personnel to understand what is being purchased and by whom. Customer data helps marketing personnel to understand what is being purchased and by whom. Essential to direct marketing, and tracking changes in purchase behavior Essential to direct marketing, and tracking changes in purchase behavior

Data Warehousing Collection of data within a single database that is accessible to internal personnel for internal purposes such as marketing, sales, and customer service. Collection of data within a single database that is accessible to internal personnel for internal purposes such as marketing, sales, and customer service. Two sources of data: Two sources of data: Internal data Internal data External data External data Internal data alone is insufficient to develop an optimal data warehouse. Internal data alone is insufficient to develop an optimal data warehouse. Data warehousing should be integrated with the other components of the IMC plan. Data warehousing should be integrated with the other components of the IMC plan.

Data Mining Involves computer analysis of customer data to predict future buying behavior Involves computer analysis of customer data to predict future buying behavior Most common use involves customer profiling to get an idea of who is purchasing and what they are purchasing. Most common use involves customer profiling to get an idea of who is purchasing and what they are purchasing. Used to develop marketing programs that meet the profile of the firm’s best customers Used to develop marketing programs that meet the profile of the firm’s best customers Also used to develop models that predict future purchase behavior based on past purchase activities and to building relationships with customers Also used to develop models that predict future purchase behavior based on past purchase activities and to building relationships with customers through database marketing

Customer Relationship Management (CRM) Steps: Steps: 1.Identify the organization’s customers. 2.Differentiate customers in terms of their needs and value to the organization. 3.Interact with customers in a cost effective and efficient manner. 4.Customize the product offering to meet individual customer needs. Based on two tenants: Based on two tenants: Lifetime value of a customer—measure of the value of a customer over the typical life span of a firm’s customers Lifetime value of a customer—measure of the value of a customer over the typical life span of a firm’s customers Share of the customer—the percentage of a customer’s business that a particular firm has Share of the customer—the percentage of a customer’s business that a particular firm has

Direct Marketing Promotion of a product from the producer directly to the consumer or business without the use of channel members Promotion of a product from the producer directly to the consumer or business without the use of channel members Typical venues include: Typical venues include: Direct mail Direct mail Catalogs Catalogs Mass media Mass media Internet Internet Telemarketing Telemarketing Types of Direct Marketing Methods Used Catalog and Internet Sales