1. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-1 PERSONAL SELLING AND SALES MANAGEMENT C HAPTER

2. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1.Discuss the nature and scope of personal selling and sales management in marketing. 2.Identify the different types of personal selling.

3. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 4.Describe the major functions of sales management. 3.Explain the stages in the personal selling process.

4. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-4 SELLING THE WAY CUSTOMERS WANT TO BUY

5. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-5 SCOPE AND SIGNIFICANCE OF PERSONAL SELLING AND SALES MANAGEMENT Nature of Personal Selling and Sales Management Selling Happens Almost Everywhere  Personal Selling Personal Selling  Sales Management Sales Management

6. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-6 SCOPE AND SIGNIFICANCE OF PERSONAL SELLING AND SALES MANAGEMENT Creating Customer Value Through Salespeople: Relationship SellingCreating Customer Value Through Salespeople: Relationship Selling Personal Selling in Marketing

7. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-7 FIGURE 17-A FIGURE 17-A How salespeople create value for customers

8. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-8 Salesperson in the Operating Room Why does Medtronic do this?

9. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-9 Concept Check 1. What is personal selling? A: Personal selling involves 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.

10. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-10 Concept Check 2. What is involved in sales management? A: Sales management involves planning the selling program and implementing and controlling the personal selling effort of the firm.

11. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-11 THE MANY FORMS OF PERSONAL SELLING Order Taking  Outside Order Takers  Inside Order Takers, Order Clerks, or Salesclerks  Inbound Telemarketing Order Getting  Outbound Telemarketing

12. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-12 FIGURE 17-B FIGURE 17-B Comparing order takers with order getters

13. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-13 Frito-Lay Salesperson An order taker or an order getter?

14. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-14 FIGURE 17-1 FIGURE 17-1 How outside order-getting salespeople spend their time each week

15. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-15 Concept Check 1. What is the main difference between an order taker and an order getter? A: An order taker processes routine orders or reorders for products that were already sold by the company. An order getter sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on their use of a product or service.

16. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-16 Concept Check A: About 53% (21.7% selling over the phone and 31.5% selling face-to- face). 2. What percentage of an order-getting salesperson’s time is spent selling?

17. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-17 THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS Personal Selling Process Prospecting  Lead  Qualified Prospect  Cold Canvassing  Prospect

18. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-18 FIGURE 17-2 FIGURE 17-2 Stages and objectives of the personal selling process

19. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-19 Trade Show Exhibition What stage in the personal selling process and what is its purpose?

20. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-20 THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS Preapproach Approach

21. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-21 An American Salesperson and Japanese Customer In the approach stage, what issues to address?

22. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-22 THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS Presentation  Stimulus-Response Format  Formula Selling Format Stimulus-Response Presentation Suggestive Selling Formula Selling Presentation Canned Sales Presentation

23. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-23 Presentation  Need-Satisfaction Format Need-Satisfaction Presentation Adaptive Selling Adaptive Selling Consultative Selling Consultative Selling THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS

24. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-24 Presentation  Handling Objections Acknowledge and Convert the Objection Postpone Agree and Neutralize Accept the Objection Denial Ignore the Objection THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS

25. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-25 FIGURE 17-C FIGURE 17-C Techniques for handling objections

26. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-26 Close  Trial Close  Assumptive Close  Urgency Close Follow-Up  Final Close THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS

27. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-27 A Reebok Salesperson and Customer What type of presentation format and why use it?

28. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-28 Concept Check 1. What are the six stages in the personal selling process? A: The six stages are: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up.

29. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-29 Concept Check 2. Which presentation format is most consistent with the marketing concept? Why? A: The need-satisfaction presentation format probing and listening by the salesperson to identify needs and interests of prospective buyers and then tailors the presentation to the prospect and highlights product benefits, consistent with the marketing concept.

30. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-30 THE SALES MANAGEMENT PROCESS  Sales Plan Sales Plan  Setting Objectives Sales Plan Formulation: Setting Direction

31. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-31 FIGURE 17-3 FIGURE 17-3 The sales management process

32. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-32 THE SALES MANAGEMENT PROCESS Sales Plan Formulation: Setting Direction  Organizing the Sales Force Geography Customer Product  Major (Key) Account Management Major (Key) Account Management  Developing Account Management Policies Developing Account Management Policies

33. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-33 FIGURE 17-D FIGURE 17-D Organizing the salesforce by customer, product, and geography

34. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-34 FIGURE 17-D1 FIGURE 17-D1 Organizing the salesforce by geography

35. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-35 FIGURE 17-D2 FIGURE 17-D2 Organizing the salesforce by customer

36. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-36 FIGURE 17-D3 FIGURE 17-D3 Organizing the salesforce by product

37. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-37 FIGURE 17-4 FIGURE 17-4 Account management policy grid

38. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-38 THE SALES MANAGEMENT PROCESS Sales Plan Implementation: Putting the Plan into Action  Salesforce Recruitment and Selection Job Analysis Job Description  Salesforce Training

39. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-39 FIGURE 17-5 FIGURE 17-5 U.S. sales force composition and change

40. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-40 FIGURE 17-5A FIGURE 17-5A U.S. sales force composition and change

41. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-41 FIGURE 17-5B FIGURE 17-5B U.S. sales force composition and change

42. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-42 FIGURE 17-5C FIGURE 17-5C U.S. sales force composition and change

43. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-43 THE SALES MANAGEMENT PROCESS Sales Plan Implementation: Putting the Plan into Action  Salesforce Motivation and Compensation Straight Salary Compensation Plan Straight Commission Compensation Plan Combination Compensation Plan

44. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-44 Mary Kay Cosmetics Annual Sales Meeting Why use nonmonetary compensation?

45. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-45 THE SALES MANAGEMENT PROCESS Salesforce Evaluation and Control: Measuring Results  Quantitative Assessments Sales Quota Sales Quota  Behavioral Evaluation

46. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-46 THE SALES MANAGEMENT PROCESS Salesforce Automation and Customer Relationship Management  Salesforce Automation (SFA) Salesforce Automation (SFA)  Salesforce Computerization  Salesforce Communication

47. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-47 Toshiba America Medical System Why use salesforce automation technologies?

48. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-48 Hewlett-Packard Salesperson Why use home offices?

49. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-49 Concept Check 1. What are the three types of selling objectives? A: (1) output-related (dollars or unit sales, new customers, profit); (2) input-related (sales calls, selling expenses); and (3) behavioral-related (product knowledge, customer service, selling, and communication skills).

50. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-50 Concept Check 2. What three factors are used to structure sales organizations? A: geography, customer, and product or service

51. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-51 GETTING THE SCOOP ON SELLING GOING ONLINE

52. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-52 1. Visit the SMN site and do the following: Select a chapter topic, and update the statistics for, say, sales training costs or the popularity of different salesforce incentives. Going Online

53. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-53 2. Select a topic covered in the chapter such as telemarketing, and summarize the critical issues identified for this practice. Going Online

54. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-54 REEBOK: RELATIONSHIP SELLING AND CUSTOMER VALUE VIDEO CASE 17

55. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-55 VIDEO CASE 17 Reebok

56. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-56 1. How does Reebok create customer value for its major accounts through relationship selling? VIDEO CASE 17 Reebok

57. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-57 2. How does Reebok utilize team selling to provide the highest level of customer value possible to its major accounts? VIDEO CASE 17 Reebok

58. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-58 3. Is Reebok’s salesforce organized based on geography, customer, or product? VIDEO CASE 17 Reebok

59. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-59 4. What are some ways Reebok’s selling processes are changing due to technical advancements? VIDEO CASE 17 Reebok

60. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-60 USING COMPANY SALESPEOPLE OR INDEPENDENT AGENTS SUPPLEMENTAL LECTURE NOTE 17-1

61. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-61 FIGURE 17-E FIGURE 17-E Break-even chart for comparing independent agents and a company salesforce

62. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-62 Q. Would you recommend the company switch to its own sales force? Why or why not? SLN 17-1 Company Salespeople vs. Independent Agents

63. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-63 DETERMINING THE SIZE OF A COMPANY SALESFORCE SUPPLEMENTAL LECTURE NOTE 17-2

64. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-64 Q. How many salespeople does TDK need? SLN 17-2 Company Salesforce Size: Workload Method

65. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-65 IQ VS. E-IQ AND SMART SALESPEOPLE SUPPLEMENTAL LECTURE NOTE 17-3

66. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-66 PERSONAL SELLING PROCESS: NEWS AMERICA MARKETING IN-CLASS ACTIVITY 17-1

67. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-67 SmartSource At-Shelf Sampling (Prospecting)

68. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-68 SmartSource AudioInk (Preapproach)

69. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-69 SmartSource Carts (Approach)

70. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-70 SmartSource Coupon Machine (Presentation)

71. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-71 SmartSource Electronic Shelftalk (Close)

72. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-72 SmartSource Floortalk (Follow-up)

73. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-73

74. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-74 Personal Selling Personal selling involves the two-way flow of communication between a buyer and seller, often in face-to-face encounter, designed to influence a person’s or group’s purchase decision.

75. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-75 Sales Management Sales management involves planning the selling program and implementing and controlling the personal selling effort of the firm.

76. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-76 Relationship Selling Relationship selling is the practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time.

77. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-77 Order Taker An order taker processes routine orders or reorders for products that were already sold by the company.

78. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-78 Order Getter An order getter 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.

79. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-79 Personal Selling Process The personal selling process consists of sales activities occurring before and after the sale itself, consisting of six stages: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up.

80. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-80 Adaptive Selling Adaptive selling is a need-satisfaction presentation format that involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information.

81. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-81 Consultative Selling Consultative selling is a need- satisfaction presentation format that focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution.

82. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-82 Sales Plan A sales plan is a statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed.

83. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-83 Major Account Management Major account management is the practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships. Also called key account management.

84. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-84 Account Management Polices Account management policies specify whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out.

85. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-85 Sales Quota A sales quota contains specific goals assigned to a salesperson, sales team, branch sales office, or sales district for a stated time period.

86. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 17-86 Salesforce Automation Salesforce automation (SFA) is the use of computer, information, communication, and Internet technologies to make the sales function more effective and efficient.