ch-02(personal selling and theories)

7/27/2019 Ch-02(Personal Selling and Theories)

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IntroductionSome important aspects of personal selling are:

1. It enhances customer s confidence in the seller.

2. It promotes long-term business relations through personal intimacy.

3. It provides a human touch to business transactions.4. It helps facilitate the seller to understand each customer s needs and

preferences more clearly.

5. It helps satisfy a customer by modifying the product as per the customer s choice and preference.

6. Personal selling followed by personal service helps build long-term relationsbetween the business and the customer.

7. It helps keep up with the competition in the market, based on productcustomisation as per customer s preferences.


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8. It is a powerful and effective tool for convincing the customer about theproduct.

9. Through personal selling the time lag between introducing a product through

the media and actually selling it is reduced.

10. It provides prospective customers with a better understanding of the product

and an interactive opportunity to liaise with the sales personnel.


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Objectives of Personal SellingPersonal selling objectives may be:

Short-term

Short-term personal selling objectives are more specific and of short-termduration. These objectives change very frequently as soon as there is change in

production mix. Further, they are usually quantitative objectives.

Long-term

Long-term personal selling objectives are broad and general. There is very little

scope of change in long-term objectives. They are usually quantitative objectives.


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Functions of Personal SellingPersonal selling is an oral presentation in face to face conversation with one or

more prospective customers for the purpose of making sales. The main functions

of personal selling are as follows:

1. Provide service to customers (Introduce the product, explain the right use,

Convince them etc.)

2. To sell the product

3. Maintain the sales record

4. Executive Function

5. Develop goodwill

6. Achieve sales target


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Changing Face of Personal SellingModern sales approach is based on the following parameters

1. Value Sharing : Salespeople study the changing needs and preferences oftheir customers.

2. Relat ion Bu i ld ing : A value-based relationship helps the salespeople toconstantly mobilise resources and modify the end product by catering to thespecifics of the buyer.

3. Role Play ing : The salespeople, in personal selling, go far beyond realisingsales. Sales people act as consultants to their prospective customers

constantly advising them of new products, their updates and impartknowledge to them.

4. Chang ing Approach : Personal selling comes in a package containing theinputs of the experts from different areas such as maintenance, installation,trouble shooting, delivery staff, sales personnel, etc.


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Benefits of personal selling

1. Availability of expertise

2. Early access to relevant market information

3. Availability to be flexible regarding processes, timing

4. Faster, shorter contracts

5. Economies of information sharing

6. Lower cost of selling

7. Knowledge of other uses or applications


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Efficacy of Personal SellingPersonal Selling with Respect to Product Strategy

Since salespeople are in direct liaison with prospective customers, their input isvaluable during product development.

Personal Selling and Pricing DecisionsSales personnel undergo requisite interaction with prospective customers togauge their mood with respect to different price levels.

Personal Selling and Distribution

The end result of any distribution effort is the ready availability of the product to

the customer, in the right quantity and at the right place. Personal Selling and Product Promotion

Sharing the same values that the customer does, a salesperson providesmotivation and generates interest and confidence in the customer for the product.


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Steps in Personal SellingSuccessful personal selling calls for an integrated approach devised from theexperience of the sales personnel. The approach comprises the steps as shownin the figure here. Each of these steps are further described in brief.

Steps in Personal Selling


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ProspectingProspecting is the process of identifying prospective buyers of the product. Aprospect is qualified if he has the authority, need, ability and eligibility to buy.There are different ways to identify prospects. Some of the most frequently usedmethods are described below:

Acquaintance ReferencesCold CallingCentre of Influence Method

Personal Observation Method

Direct Mail or Telephone Method

Company s Records

Newspapers

Retailers

Other Methods


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Steps in Prospecting

A) Formulating Prospect Definitions

B)Searching out potential accounts

C)Qualifying Prospects and determiningprobable requirements

D)Relating company Products to eachprospects requirements


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B) Searching out Potential Accounts:Sl. No. Prospecting Method Brief Description

1 Referrals from existingCustomers

Requesting Existing customers tosuggest names. This isconvincing for two thirds of theleads

2 Referrals from InternalCompany Sources

Company advertising, directmail, website, trade shows

3 Referrals from ExternalSources

Suppliers, Intermediaries,,bankers, trade associates,commercial dotcom vendors.

4 Networking by Sales persons Sales persons become membersof civic/social organisation likeLions Club, Bangalore club etc.

5 Industrial Directories Yellow Pages published bygovernment and privatepublishers

6 Cold canvassing Un announced calls by salespersons


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Qualifying Prospects and determiningprobable requirements

As information is assembled on eachtentative prospect, the ones withrequirements too small to generateprofitable business are removed,unless the growth possibilities arepromising. The additional information

for qualifying the prospects is receivedby the personal visits of the salespersons only.


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Relating company products tothe prospects requirements

The final step is to plan the strategyfor approaching each prospect. Fromthe information gathered it is now easyto determine each prospects probableneeds.


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Methods of Prospecting

Cold CanvassingEndless Chain customer referralsProspect pool

Centres of influenceNon Competing Sales ForceObservationFriends and Acquaintances

Lists and DirectoriesDirect MailTelemarketingTrade Shows and Demonstrations


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Pre-approachPre-approach is the second step in the selling process which emphasises that thesalesman should know, after identifying the prospect in the prospecting stage, theprospect s likes and dislikes, his needs, preferences, habits, nature, behaviour,economic and social status etc.

Significance of Pre-Approach1. Salesman concentrates only on the prospects and not the suspects.

2. Salesman gain all the possible information about the prospect beforeapproaching him. Hence any kind of loose talk or serious mistake can beavoided.

3. He is able to give a sales presentation more efficiently, effectively and withconfidence.

4. It does not waste the prospect s time and energy since the salesman isalready aware of the needs and preferences of the prospect.


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The Ferris Wheel concept, which isaimed at supplying anongoing list of prospects, is part of world sales recordholder Joe Girards customer strategy

P P

P P

P

P P

P

P

P

P

P

Referrals Relationship betweencustomer and salesperson deteriorates

Friends andacquaintances

Business failure

Directories New buyer buys from

another source

Trade publicationsand trade shows

Acquisitions and mergers

Telemarketing andadvertising

Customer moves

Death of customer

Cold calling Customer has only a

product one-time need for

Networking Customer needs changebecause of new technology


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Usage of Prospecting Time

Sales force must plan its time in such a manner that maximum time is made

available for those prospects who are likely to give a large volume of

business to the company.

To avoid this wastage of time, grading of the prospects will be an important

step.


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Approaching

In this stage the prospect and the salesman come in contact with each other

face to face.

The salesman has an opportunity to understand and interact with the

prospect in a better way.

Salesman should put forward his best efforts to make the best use of this

opportunity in getting the attention of the prospect and to convince him to buy

the product.

Getting the attention of the prospect and persuading him to buy are the two

main objectives of a salesman.


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Approach Adopted by Travelling SalesmenA salesman may directly approach the prospect without any introductionwhatsoever and then conduct an interview.

Sending an advance mailer explaining his product and its benefits vis--vis

other products available.There is no better method of securing an appointment with a prospect thanthrough a reference given by the friend, relative or business associate of theprospect.

Another effective way of securing an appointment and interview with theprospect is for salesmen to give away gifts to the prospects before asking foran appointment.

Sale letters have proved to be another kind of door opener.


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Successful Approach

The following points specify the importance of a successful approach:

i. A successful approach enhances the sale and it is thus important for the

running of a business.

ii. A failed approach will give an opportunity to the rival company. So a good

approach will go a long way in building good relations with the prospect while

a bad approach will not only result in losing business but will also make it

easy for a competitor to tap new customers.

iii. The approach helps in enlightening the prospect by providing him ample

information about the product, price, competitor s product, benefits etc. that

he can derive from the product.


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Methods of ApproachThere are different methods of approaching a prospect and some of the mostimportant ones are given below.

Cashing in on Brand Name or the Company s Reputation

Customer Benefit Approach

Innovative Product Opens the Door to the Salesman

The Premium Approach (Small Gifts or Novelties)

The Stock Approach

The Approach of Making the Prospect Feel Important

The Survey Approach

Interactive Approach


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Presentation

Quick presentation creates a good impression.

Attractively packaged, decorated and well- organised.

Should explain the product with its features and price advantage to thecustomer in simple and easy terms.

Customer be shown the kind of quality that he is looking for.

Helps the salesman to prove the features of the product and emphasise itsgenuineness.


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Demonstration

Demonstration is an exercise to prove the characteristics of the product.

It highlights various attributes of the product such as utility, performance,

service and quality.

It is only during the demonstration that the customer gets an opportunity to

verify the facts about the product.

Demonstration is imperative and essential for a prospect to make a buying

decision.


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The Close

This is the last stage of any sales presentation.

The main aim of the close is to convince the prospect to sign the order form

or to place an order immediately rather than in the future.

It is also important that through proper planning, prospecting, presentation

and demonstration the salesman should try to capture the attention of the

prospect and not let the prospect change his mind.


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Relationship of Salesmanship with Sales Managementand personal Selling

Salesmanship & Personal Selling

1. The ability to quickly develop rapport with their prospective customers.

2. A desire to truly help their customers.

3. The habit of asking questions to gather information before making a pitch.

4. Sticking to a consistent, proven sales process.5. A never ending desire to learn more about how to sell more effectively.


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Myths about selling

Myths o f s e ll ing : There are various myths about selling process which needs to

be cleared for a sales person.

1. Buyers are liars

2. Anyone can be persuaded to buy

3. In buying decision, price is the primary reasons

4. A technique that works well for one person will work for everyone

5. Close the sales as soon as possible

6. The deal can be closed at any price


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SELL ModelThis is a simple model describing the various actions associated with the worditself.1. Show features : it is the very first stage; expected to show the features of the

product, demonstrating how it works, and showing the results of using the

product immediately.2. Explain adv antage: Immediately, after demonstrating the product, explainthe advantage possibly related with the features, showing the advantageswhich ate derived from it.

3. Lead in to b enef its : Correlate the advantages with the benefits. This issimply highlighting the materialization of those benefits in conducting the setof activities due to having/using the product.

4. Let them ta lk : Then at the end, let them talk further about the product, itsfeatures and those future benefits. If the previous steps are done well, theywill talk themselves for the sale.


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SLAID Model

This is another simple model describing the various actions associated with the

word itself, Slaid acronym for sales steps.

1. Show the p roduc t : Showing the product in full or showing specific function

is also possible in the beginning, just to trigger the anxiety or curiosity in theirmind. It is not a full product demonstration. Demonstration comes a bit latter

state in this methods.

2. Lis ten : A partial demonstration flash triggers a lot of questions, or

estimations or expectations, in case if the product is absolutely new concept.3. Acknowledge : Your hearing will endorse that you have understood and are

ready to fulfill their needs. You may be given elaborative further deep

information about their objection.


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4. Ident i fy : Identify the objections, and bring them on a squaring off situationwith contents offered by your product. If possible, set up a concession

clause, balancing the benefits of new product over the old objections, so that

you can handle the objection and will get the sale.

5. Deliver: Ask the participants to repeat the demonstration to build theconfidence about the product performance.


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Difference between advertising and Personal sellingBoth personal selling as well as advertising are the means to communicatewith the target customers for the product or service of an organisation. To beeffective, i.e., to produce results, in terms of sales or orders, both should beunderstandable, interesting, believable and persuasive.

i. However, there are some notable differences between these two means ofcommunication.

ii. The customer comes in direct contact with the salesperson. In advertising,on the other hand, the customer does not come in direct contact with anyrepresentative of the organisation.

iii. Advertising has a major role during the pre-purchase phase as the massdemand for the product has to be generated. Advertising also plays animportant role in post-purchase phase as it gives sound reassurance to thepurchaser. Personal selling, on the other hand, has an important role to playin all the three phases. It plays a major role in the purchase phase.


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Three Phase of a Products/Brands Market

1. Pre-purchase phase

2. Purchase phase

3. Post-purchase phase

The pre-purchase phase is characterised by the phase where the organisation istrying to convince the targeted customers of the benefits of the product/brand.The purchase phase is the time/duration when the customer is making up hismind to actually buy the product. The post-purchase phase is one when thecustomer has bought the product and is evaluating the decision.

Pre-purchase Purchase Post-purchase

Personal

Selling

Advertising


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Theories of Personal Selling

There are three main theories of personal selling, which are as follows:

AIDAS Theory

Right Set of Circumstances Theory

Buying Formula Theory

Behavioral Equation Theory


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AIDAS Theorythis theory is based on the premise that during a sales presentation, the prospectconsciously goes through five different stages: Attention, Interest, Desire, Actionand Satisfaction.

Attention: The salesperson should attract the prospect to his presentationbefore he actually goes into the details of the same.

Interest: He/she should maintain the interest of the prospects throughout thepresentation.

Desire: The next step in the sales process, as per the AIDAS theory, is tocreate a strong desire in the prospect s mind to purchase his product.

Action: Once the salesperson has been successful in taking his prospectthrough the three stages, as discussed above, he should induce theprospects into actually buying the product.


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Right Set of Circumstances Theory/ Situation Response Theory

The advocates of this theory opine that all the circumstances, which led to the

sales, were appropriate or right for the sales to have taken place. In other

words, if the salesperson is successful in securing the prospect s attention,

maintaining his interest and inducing his desire to buy the product, sales willresult. Moreover, if the salesperson is highly skilled, he will take control of the

situation/circumstances, which would lead to sales.

This theory lays more emphasis on the external factors. All sales personnel

applying this theory find it difficult to tracing internal factors in many situations.


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Buying Formula TheoryThe buying formula theory is based on the analysis of the sequence of eventsthat goes on in the buyer s mind during the sales presentation. Thus, the theoryemphasises on the factors internal to the prospect and the factors which areexternal, i.e., influence of the salesperson on his prospect s decision to buy his

product. The theory is based on the presumption that the salesperson will takecare of the external factors.

The sequence of events in a prospect s mind can be represented as

There are all the chances that a continuous relationship will develop between theprospect and the salesperson. As a result of sales, the satisfaction will also comein the sequence. This sequence can be presented as

Need Solution Purchase

SatisfactionPurchaseNeed Solution


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In Purchasing the element solution

involves two parts.Product( and /or service) and tradename.

In the buying process the purchaserfollows the following sequence

Need orProblem

Product/t

radename purchase

Satisfaction/ Dis

satisfaction


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To ensure purchase, the product service and thetrade name must be considered: AdequateAnd the buyer must experience A pleasant feeling or a sense of anticipated

satisfaction

When a buying habit is bring established, the buyermust know why the product or service is adequatesolution to the need or problem and the reason the

trade name is the best to buy. The buyer must alsohave a pleasant feeling toward the product orservice and the trade name.


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Drives : They are strong internalstimuli that impel the buyers

response. They are two kinds:a) Innate Drivesb) Learned Drives Cues : They are weak stimuli which

determine when the buyer willrespond.

a) Product Cuesb) Informational Cuesc) Specific Product and Informational

Cues


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Response: Response is what the buyer does. Reinforcement : it is an that strengthens the

buyers tendency to make a specific response. These Four Elements are incorporated in a

equation: B = P X D X K X V B= response or internal response tendency P = predisposition or inward response tendency,

that is , force of habit D= present drive level ( amount of motivation) K= incentive potential that is value of the

product or its potential satisfaction to the buyer V= intensity of all cues

ch-02(personal selling and theories)

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