© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin PERSONAL SELLING AND SALES MANAGEMENT 20 C HAPTER

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Recognize different types of personal selling. Describe the stages in the personal selling process. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Specify the functions and tasks in the sales management process. Determine whether a firm should use manufacturer’s representatives or a company salesforce and the number of people needed in a company’s salesforce. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Understand how firms recruit, select, train, motivate, compensate, and evaluate salespeople. Describe recent applications of salesforce automation and customer relationship management. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Medtronic Salespeople Visiting hospital operating rooms to discover new solutions to customer problems

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Nature of Personal Selling and Sales ManagementPersonal Selling Sales Management Pervasiveness of Selling Personal Selling in Marketing Creating Customer Value through Salespeople: Relationship and Partnership SellingRelationship Partnership Selling SCOPE AND SIGNIFICANCE OF PERSONAL SELLING AND SALES MANAGEMENT

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Why would you use personal selling? Travel Aircraft Real-estate Buyer Agent? Sellers Agent?

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What is personal selling? A: Personal selling is the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What is involved in sales management? A: Sales management involves planning the selling program as well as implementing and controlling the personal selling efforts of the firm.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Order Taking Order Getting THE MANY FORMS OF PERSONAL SELLING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Frito-Lay Salesperson Taking inventory for a straight rebuy decision

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-2 How outside order-getting salespeople spend their time each week

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Customer Sales Support Personnel  Missionary salespeople Missionary salespeople  Sales engineer Sales engineer  Team selling Team selling THE MANY FORMS OF PERSONAL SELLING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What is the principal difference between an order taker and an order getter? A: Order takes preserve an ongoing relationship with existing customers and maintain sales. Order getters identify prospective customers and create new sales.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What is team selling? A: The practice of using an entire team of professionals in selling to an servicing major customers.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Prospecting Preapproach Approach THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPSPERSONAL SELLING PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-3 Stages and objectives of the personal selling process

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Trade Show Sales Popular source for leads and prospects

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Dell and Cultural differences in China

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Presentation Stimulus-Response Format Formula Selling Format THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPSPERSONAL SELLING PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Presentation (cont) Need-Satisfaction Presentation  Adaptive selling Adaptive selling  Consultative selling Consultative selling Handling Objections Close Follow-Up THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are the six stages in the personal selling process? A: Prospecting, preapproach, approach, presentation, close, follow-up

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How do you handle sales objections How many salespeople should be employed: NS=(NC+CF+CL)/AST NS=Number of Salespeople NC=Number of Customers CF=Call Frequency CL=Length of average call AST=Average amount of selling time available per year

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What is the distinction between a lead and a qualified prospect? A: A lead is the name of a person who may be a possible customer, whereas a prospect is a person who wants or needs the product.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. Which presentation format is most consistent with the marketing concept? Why? A: The need-satisfaction presentation format is most consistent with the marketing concept because it emphasizes problem solving.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-4 The sales management process THE SALES MANAGEMENT PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Plan FormulationSales Plan Setting Objectives Organizing the Salesforce THE SALES MANAGEMENT PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-5 Break even chart for comparing independent agents and a company sales force

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-6 Organizing the Sales Force by customer, product, and geography

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-6 Organizing the sales force by customer

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-6 Organizing the sales force by product

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-6 Organizing the sales force by geography

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Organizing the Salesforce (cont)  Major account management Major account management  Workload method Workload method Developing Account Management PoliciesAccount Management Policies THE SALES MANAGEMENT PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-7 Account management policy grid

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Plan Implementation Salesforce Recruitment and Selection  Emotional intelligence Emotional intelligence THE SALES MANAGEMENT PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin FIGURE 20-8 U.S. salesforce composition and change

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Plan Implementation (cont) Salesforce Training Salesforce Motivation and Compensation THE SALES MANAGEMENT PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Mary Kay Cosmetics Top Salesperson Recognition at its annual sales meeting

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Salesforce Evaluation and Control Quantitative Assessments Behavioral Evaluation Salesforce Automation and Customer Relationship ManagementSalesforce Automation Salesforce Computerization Salesforce Communication THE SALES MANAGEMENT PROCESS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Compaq Salesperson Working at home due to computerized communications techniques

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Toshiba America Medical Systems Computer technology as a sales and training device

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Toshiba America Medical Systems Computer technology as a sales and training device

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are the three types of selling objectives? A: Selling objectives can be output- related, input-related, or behaviorally- related.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What three factors are used to structure sales organizations? A: Typically, sales organizational structures are based on geography, customer, or product.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. How does emotional intelligence tie to adaptive selling? A: The ability to understand one’s own and others’ emotions allows quick adaptation to various situations.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Group 2 Devise a compensation plan for travel agents inbound call centre What are some of the economic variables you would want to measure? What are some of the costs you want to control? What other variables would you like to track to ensure good customer service How do you deal with customers handled by more than one agent? Who gets the commission How will you calculate commission to address revenue and costs. What formula would you use

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Group 1 Develop a sales presentation for the product in the black box Two audiences: 1 people who do crafts 2 people who do home improvements How much is the product? What could it be used for? Remember to cover all elements of the sales process.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Reebok: Relationship Selling and Customer Value The importance of personal selling

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin VIDEO CASE 20-1 Reebok: Relationship Selling and Customer Value 1 How does Reebok create customer value for its major accounts through relationship selling?

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin VIDEO CASE 20-1 Reebok: Relationship Selling and Customer Value 2 How does Reebok utilize team selling to provide the highest level of customer value possible to its major accounts?

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin VIDEO CASE 20-1 Reebok: Relationship Selling and Customer Value 3 Is Reebok’s salesforce organized based on geography, customer, or product?

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin VIDEO CASE 20-1 Reebok: Relationship Selling and Customer Value 4 What are some ways Reebok’s selling processes are changing due to technical advancements?

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision. Personal Selling

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Planning the personal selling program and implementing and controlling the personal selling effort of the firm. Sales Management

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time. Relationship Selling

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Partnership Selling The practice whereby buyers and sellers combine their expertise and resources to crate customized solutions; commit to joint planning; and share customer, competitive, and company information for their mutual benefit, and ultimately the customer.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Processes routine orders or reorders for products that were already sold by the company. Order Taker

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Order Getter A salesperson who sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers’ use of a product or service.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales support personnel who do not directly solicit orders but rather concentrate on performing promotional activities and introducing new products. Missionary Salespeople

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Engineer A salesperson who specializes in identifying, analyzing, and solving customer problems and who brings know-how and technical expertise to the selling situations, but does not actually sell goods and services.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Using an entire team of professionals in selling to and servicing major customers. Team Selling

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales activities occurring before and after the sales itself, consisting of six stages: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up. Personal Selling Process

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A selling format that assumes the prospect will buy if given the appropriate stimulus by a salesperson. Stimulus-Response Presentation

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Providing information in an accurate, thorough, and step-by-step manner to inform the prospect. Formula Selling Presentation

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A selling format that emphasizes probing and listening by the salesperson to identify needs and interests of prospective buyers. Need-Satisfaction Presentation

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A need-satisfaction sales presentation that involves adjusting the presentation to fit the selling situation. Adaptive Selling

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Focuses on problem definition, where the salesperson serves as an expert on problem recognition and resolution. Consultative Selling

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed. Sales Plan

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships. Major Account Management

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A formula-based method for determining the size of a salesforce that integrates the number of customers served, call frequency, call length, and available selling time to arrive at a sales force. Workload Method

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Policies that specify whom salespeople should contact, what kinds of selling an customer service activities should be engaged in, and how these activities should be carried out. Account Management Policies

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The ability to understand one’s own emotions and the emotions of people with whom one interacts on a daily basis. Emotional Intelligence

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The use of technology to make the sales function more effective and efficient. Salesforce Automation