unit 13 personal communication channels

8/13/2019 Unit 13 Personal Communication Channels

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Unit 13Personal Communication Channels

Book Code - MB0046

Dr. Smita Choudhary

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Contents

Introduction

Personal selling

Sales management Personal selling process

Direct marketing

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Introduction Advertisement clutter (confusion or mess or mix up) and large

product range is causing new challenges.

One of the biggest challenge is how to reach the consumer.

The indirect media has an effect on consumer but itseffectiveness in producing sales has decreased with time.

Organizations are looking forward to interpersonalcommunications.

Companies are encouraging word of mouth communication.

They are trying to increase the effectiveness and efficiency oftheir sales force.

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Learning ObjectivesAfter studying this unit, you will be able to

Define personal selling

Understand the process of personal selling

Analyze the sales management techniques

Identify and discuss the major forms of direct marketing

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Personal Selling

The communication technique in which sales people build the

personal relationship with customers to create value for the

organization.

The value for sales force is sales and for customer is benefits.

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Nature of personal selling

There has been a change in pattern in personal selling.

Earlier sales jobs were perceived to be low.

The emergence of modern corporations and rise of new Indiarequires professional selling.

Now days it is not only selling. It is using professional skills tohave a long term relationship with the customers to generatethe value continuously.

Due to this there is a growth of professional sales force.

Even companies that marketed through channels entered intothe personal selling. For example, Hindustan Unilever Limited(HUL) which has retail and wholesale channels, recently enteredinto the network marketing.

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There are many types of sales jobs used to sell the product of the

organizations. They are

1. Delivering: The job of sales executive is to make the products reach to

the customers destination. For example, A sales person working fortransport or courier company makes the goods reach the customers

places. Sales

2. Inside order taker: Sales executives in the retail stores like Subhiksha

help the customer in identifying the product. The person in the hotel

takes the order and serves better.3. Outside order:These are field executives who go to the customersplace

to get the order.

4. Missionary selling: These are sales executives who provide the

information and promote the companysproducts. For example, medical

representatives.5. Sales engineer:In this position, the sales executive is a technical expert

and works with non technical sales executive to provide help on technical

information required by the customer.

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Approaches to Personal Selling

1. Stimulus response selling: In this approach, sales personprovides the stimulus (motivation or encouragement) and

expects the response from the buyer. This process continuestill the purchase decision has been made.

2. Need satisfaction selling: In this approach, sales executivefinds the need of the customer and confirms it. He providesthe various offerings (options) to the customer to choose fromand this process continues till the purchase has been made.

3. Problem solving selling: This approach is used when thecustomer faces the purchasing problem. In this approach, salesexecutive defines the problem of the customer, finds analternative solution and evaluate them. Then he works withparticular solution till the customer purchase.

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Situations That Favor Personal Selling

Personal selling is useful when:

The price of the product is high, theproduct is technical in nature and needsdemonstration.

The product is in the introductory stage

of the product life cycle. Organization does not have enough money

to carry advertisement campaigns.

Product can be customized i.e. tailoredaccording to customer needs.

Market is concentrated.

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Advantages and Disadvantages of Personal Selling

Advantages

1. It can be customized.2. It can focus on prospective customers.

3. It results in the actual sale, while most other forms of promotion are

used in moving the customer closer to the sale.

Disadvantages

1. It is costly to develop and operate a sales force.

2. It is very difficult to attract upper class people.

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Sales Management

Deciding the sales territory

Sales territory is the

geographical area in which

the sales executives have to

work.

The territory is set to avoid

conflict between two sales

executives.

This helps to set a fixedquota for sales executives

and is used for performance

evaluation.

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Sales force size

The size of the sales force is decided by work load method.

The work load method consists of

a) Identification of customers and grouping them into differentcategories.

b) List out the activities of the sales executive.

c) Find out the time required for selling and non selling activities of

sales executives.

d) Find the number of calls the sales executive has to do in a particular

period.

e) Calculate the number of sales people required.

Sales organization

Sales activities in the organization are allotted on the basis of geography(Bangalore, Mysore etc), product (personal care, water purifier etc.)

customer (steel companies, electric companies etc) or matrix type. This

helps company to have better control over the sales executives.

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HR PRACTICES IN SALES MANAGEMENT

Recruiting

Recruitment is the process of finding candidates and encouraging them to

apply against a vacancy in an organization.

Selection is the process of choosing some candidates out of all those who

have applied.

Selection is recruitment, but recruitment is not selection

Selecting means rejecting the unfit candidates.

After deciding the number of salesperson required, the sales manager

must select personnel. The normal sources of recruitment are:

Internal sources

External sources

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Internal Sources

Many firms feel that it is best to fill the vacancies of salesmen from the existing

employees of the organization.

It may also be called as promotion.

This can be used by analyzing the ability and potential of the staff on the basis of

seniority i.e., length of service.

Merits

1. Better co-operation can be expected.

2. They are loyal.

3. Since it is a promotion, sincere and honest performance can be expected.

4. They may not need training.

5. They may not need high salary.

Demerits

1. There is limited scope for selection.

2. Favoritism plays its role.

3. The person may not adjust himself to the new

job as the nature of work is different.

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External Sources

The external sources of recruitment are:

1. Employment Exchange

2. Competitors organization

3. Salesperson of non-competing firms

4. Educational institutions

5. Recommended cases

6. Advertisement

7. Unsolicited applications

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1. Employment Exchange: Private and public employment exchanges

are the best source of personnel. They maintain proper registers

with names and other full details of persons. The candidates may

be untrained and inexperienced and hence may requiring furthertraining.

2. Competitors Organization: The salesmen employed in other

competing firms can also be chosen. He is well trained. Such a

person may be attracted by giving more facilities and a higher

salary. In this case, his habits, sincerity and loyalty must beverified. But this method is not morally accepted.

3. Salesperson of Non-competing Firms: salesperson can also be

chosen from non-competing firms. Such persons may be

experienced but may need training to achieve the required sales

objectives.

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4. Educational Institutions: In this method of recruitment students are

directly selected from specialized institutions, where theoretical and

practical knowledge is gained by them. The head of the institution

maintains complete records of students. This method is used in advance

countries like America, England, etc. but in India it is rare. It has been

neglected with the feeling, justfrom eggi.e., inexperienced.

5. Recommended cases: The employees of the firm, managers,

superintendents, section heads etc., may recommend candidates from

their friend circles. They have a moral responsibility when such persons

are recruited. The employee who recommends personnel will be blamed,

if the person is not up to the mark.

6. Advertisement: This method is generally used for recruiting salesmen.

Advertisements are displayed in newspapers, trade journals specifying

the job and the required qualifications, experience and skill. The number

of people who apply is large because the news spreads over a widegeographical area. This gives more scope for selection.

7. Unsolicited applications: These are unrequested applications received at

the organizationsgate or through e-mail.

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1. Application Blank: In application blank the informationnecessary for appointment is collected from the candidate. Itgives a clear idea about the candidate. Generally, it consists ofinformation like name, gender, qualification, age, experience,health, social activities, references etc.

2. Screening: Screening is a process by which unsuitableapplications are rejected and not processed further. Theremaining applications are considered for appointment. Thissaves time and energy.

3. Reference: Applicants are asked mention the names of tworeferences or referees. References are used to enquire aboutthe integrity, general character and ability of the applicant. Ifthe opinions are favorable, the applications passes on to thenext stage else it is rejected at this stage.

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4. Personal Interview: The screened applications are considered for selection and

the firm sends out interview letters to such candidates. By personal interview, the

sales manager can understand the positive and negative qualities of the

applicant. A good interviewer must be unbiased, able to find facts and be a goodobserver of the interviewee.

Interviews are also of two types:

a) Patterned interviewIn patterned interview same questions are asked to all

candidates. It is easy for comparison purpose.

b) Non-patterned interview In non-patterned interview there are nostandards questions to be asked to all candidates. The applicant is allowed to

talk freely.

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5. Tests: Test is an additional tool, with is used to further find the

suitability of the candidate to the job. The important types of

psychological tests are:

i. Ability Test: This test is used to find the candidates capacity to grasp things

and to know how well a person performs a particular task with motivation.This can also be called a mental ability or intelligence test. Such tests verify

the suitability of a candidate for a particular job.

ii. Habitual Characteristic Test: A person may be intelligent but may hesitate to

take a decision. This test is used to know ones aptitude and interest on

normal, daily work, irrespective of the best behavior occasionally.

iii. Achievement Test: This test is designed to know what knowledge a person

has gained from his education or training.

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6. Medical Examination: Besides qualities and eligibility, a person must be

physically fit for the job. Salesmen who have diseases and are not

physically perfect will affect the business. To ensure that salesmen are fit

and free from any diseases, selected applicants have to undergo medical

examination.

7. Final Interview and Appointment: The selected applicant is probably,

called for a final interview and his suitability is measured through

different tests, physical reports etc. The job must be explained to him

along with all relevant details, which are required to perform the duties

efficiently.

If everything is in favor of the applicant, an agreement is executed by him.

Generally, the agreement contains duties and authorities, sales quota, sales

territory allotted, salary and conditions of resigning. It is followed by an

appointment order, which contains designation, jobs to be performed, salary and

other financial benefits etc.

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Training

Training is in continuation of selection.

After selecting the salesmen, there are two options

They can be directly sent to the field. They can be sent for a training programme.

Salespersons need training to call them qualified.

Through training they achieve perfection and self development.

Training means making a salesperson perfect in his work.

Training programmes are procedures or methods through whichknowledge and skills are gained.

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Significance of Training

Now a days, there is cut-throat competition in the marketing world.

The world is dynamic and not static.

Customers are more benefit-oriented. Producers produce new products, new devices, and products with multiple uses to

satisfy the ever-changing demands of the consumers.

Thus, training is essential to keep the salesmen, with up-to-date knowledge, in

respect of new or developed goods.

Training gives scope for improvement.

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Objectives of Training

The objectives are:

1. To encourage the salesmen to learn the technique and principles of salesmanship, process

of sales, canvassing (surveying) etc.2. To reduce the labor turnover rate in the sales force.

3. To encourage better sales performance.

4. To improve the relations with the customers.

5. To increase the efficiency of sales personnel.

6. To keep the salesperson informed of the knowledge of products, market, competitors etc.,

to face all situations.

7. To lower the selling expense in order to increase the profits.

8. To maintain sound relation between employer and employee.

9. To develop better knowledge, and the ways and means to resist all situations.

10. To motivate the consumers more effectively.

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Advantages of Training to Salespersons

1. A trained salesperson always wins customers by systematic approach.

2. salesperson acquires better understanding of the firm, its past history,

policies and this helps the salesperson in effective dealings.3. A trained salesperson takes less time in completing a sale.

4. A trained salesperson increases volume of sales which brings more profit

to the firm and himself.

5. A trained salesperson is able to meet consumers demand and help in

solving problems.6. Increased volume of sales helps in reducing cost of production. The cost

per unit of order or per prospect can be minimized.

7. A better relation is created among the customers through reducing

customerscomplaint, increasing brand loyalty etc.

8. The ability of the salesperson is increased by expert knowledge.

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Training Programme

A firm should prepare a programme for sales training.

The training depends on nature of the job and the products to be sold.

A good training programme should work with the following ideas orprinciples, known as ACMEE:

A: Aim of Training

C: Content of Training

M: Method of Training

E: Execution of Training

E: Evaluation

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1. Aim of Training: The aim of training is to make a recruit a good salesman.

Some of the qualities of a good salesman may be natural in him, but not

all qualities. Training makes him have all qualities required of a salesman.

2. Content of Training: The content of the training programme depends on

the subject-matter of training. A training programme differs from firm tofirm, due to differences in products, markets, policies of the company,

trainees ability etc. A good training programme helps the trainee-

salesman to learn and understand the following contents:

a) The knowledge of his job

b) The products

c) The company

d) The markets and consumers

e) The competitors

f) The sales techniquesg) The routine reports etc.

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a) The knowledge of his job

A salesperson should have solid plans about his sales planning, meeting

customers, sales talks, demonstration, presenting the goods, concluding

sales, securing order, collecting dues, handling objections and complaintsetc.

Also, he must be a keen observer of market conditions, competition,

consumerslikes and dislikes etc. He should co-operate with his seniors.

Thus, he is trained with a purpose, he should know what the firm expects

from him.

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b) Products

A salesman must have good knowledge about the product.

The salesman must have the following knowledge about the product:

1. Raw materials used in the product.2. Manufacturing methods in brief.

3. Research and development undertaken.

4. Improvement brought out.

5. Its suitability to the consumers.

6. Its trade mark, brand, characteristics.

7. Its color, weight, packaging, quality control etc.

8. Selling points of the products.

9. Product merits and uses to consumers.

10. Limitation of the product performance.

11. Its price and discounts offered.

12. Service after sales and guarantee period.13. Demonstration of its actual working.

14. Availability of the products.

15. Cost of operation and maintenance.

16. Comparative study of similar products.

17. Strength and weakness of competitors products.

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c) The Company

A salesperson must have the following information about the company:

1. Brief history of the firm.

2. Its marketing policies.

3. Objectives and purposes of the firm.

4. Economic and social objectives.

5. Its position in the market field.

6. Credit policies, sales policies, personnel policies.

7. Capacity of the plant.

8. Personnel of the firm-directors, stock-holders.

9. Execution and handling of orders, sales accounting and collection methods.

10. Salary, commission computation, traveling and daily allowances etc. and their

payment procedures.

11. Method of exercising control over the salesman.

12. Allocation of quotas and territories.

13. Marketing policies, pricing policies.

14. Handling of complaints and their adjustment.

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d) The Markets and Consumers

The salesman must have a good knowledge of the size of the market, demand for

the products and the area under the competitorsside.

Also, the salesman should know about the type of customers, buying motives, likes

and dislikes of the customers.

The salesman should pursue customers according to their gender, age, place, etc.

The salesman must adjust himself according to the nature of the customers.

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e) The Competition

Salesman must have good knowledge or comparative study of the selling

activities of rivals.

A salesman must know the merits and demerits of his product as well as

rivalsproduct to make a comparison.

The salesman should know the rival firmspolicies, method of approaching

the customers, how they are paid, the customers opinion, how their

product is, how they fulfill their duties, the area they like or dislike, their

selling-points etc.

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f) The Sales Technique

The sales techniques are the essential part in sales training.

After training, the salesman is sent to the field, where he has to sell the companys

product.

He must be given complete training in SalesProcess.

Training must be provided on the following items:

a) Selling process.

b) Method of gaining interview from consumers.

c) Method of approach to consumers.

d) Demonstration and presentation.

e) Method of handling objections of consumers.

f) Why salesman fails in the field?

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Routine Reports

Salesperson should be trained to know his routine work and

submit his report to the firm.The report may include:

a) Amount of sales made.

b) List of new customers.

c) Credit outstanding of customers.

d) Collection of outstanding dues.

e) Competitorsposition in the market.

f) Maintenance of accounts of expenses.g) Demonstration and display of products.

h) Action taken on complaints, grievances etc.

i) The attitude of market in respect of competitors.

j) Consumerssuggestion if any.The reports may be sent to the firm daily, weekly or monthly, etc.

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Training Needs of Salesmen at Different Times

New Salesmen Need

1. Facts about the companyhistory, policies

etc.

2. Product details

3. Companys systems and procedures

4. Fundamentals of selling their specific products

5. Moral training

Regular Salesmen need

1. The above five items

2. Changes in policies and procedures

3. Facts about new products

4. Future plans of the company5. Knowledge to supervise others

6. Know-how to fulfill responsibility

7. Attitude or moral training

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Training Methods

Different methods are used for providing training to

salesperson. They are divided into two broad categories:

1. Group traininga) Lecture Method

b) Audio-visual method

c) Discussion method

d) Conference methode) Role playing method

f) Panel method

g) Round table method

h) Brain storming method

2. Individual training

a) On-the-job training

b) Sales manual

c) Initial or break-in training

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1. Group Training

a) Lecture Method: An expert or a lecturer speaks to trainee-

salesmen about the various aspects of selling. It involves

verbal talk in a classroom. This system is widely used. Tomake the lecture more interesting, visual aids,

demonstration, suitable examples may be added. This

method is economical, and easy and quick in providing

theoretical training to a group of salesman. But it is difficult

to evaluate the effectiveness of lecture method.

b) Audio-Visual Method: In addition to the lecturing (telling)

method, training programs include the use of visual aids,

such as films, slides, posters etc., and are capable of making

the lectures more interesting.

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c) Discussion Method: In this method, an actual case or an imaginary case

is given as a problem to be solved, to the different groups. Each group

has to understand the problem and find a solution. The different

conclusions or suggestions are analyzed collectively. This type of training

helps the salesmen in correcting their own views. It is suitable for a smallgroup. It is slow and costly.

d) Conference Method: Sales conferences and sales meeting are a kind of

gettogetherof staff, weekly, fortnightly or monthly. In a conference, the

opinions of various persons are shared. Meetings or conferences provide

good motivation as the participants get a chance for creative thinkingand to express their views. To make the conference more interesting,

dramas, demonstrations etc., are added. Topics like, sales policies, facing

competition, publicity ideas, dealings with complaints etc., are handled.

e) Role Playing Method: It is a new method. The sales trainees have to

perform roles in artificial problems. The trainer explains the situation orthe problem and assigns the role of salesman and customers of different

characters to the sales trainees. Each one has to act according to the

assigned role. The trainer watches the role played by each person and

discusses their weaknesses and strong points.

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f) Panel Method: In this method, the panel members are experts.

They discuss the problems and pass the solutions to the sales-

trainee groups, who may have further discussion. This system is

ineffective.

g) Round Table method: It is similar to the discussion method. It

consists of few members. The salesmen sit around a table along

with a good discussion leader. They deal with the problems of

actual cases. Every participant takes part freely in discussing the

problems and solutions. Exchanges of new ideas take placeadvantageously.

h) Brain Storming Method: Under this method, more or less, similar

to round table conference, persons sit around the table. The

leader presents the problems for discussion. The sales trainees

have to understand the problems and find the solutions. The

solutions are analyzed by the leader or tested by the panel of

experts. This method practically fetches no value.

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2. Individual Training

a) On-the-job Training: Under this method, a new salesman works

under an experienced or senior salesman who trains him. The

doubts of trainee are clarified. The sales trainee is allowed to dealwith the customer and the coach observes the performance. If

there is any weak point, it is discussed.

b) Sales Manual: It is a textbook. It contains details of the firm and

products, job description, sales policies, opinions or reports

required for reference purposes etc. A copy of this book is given toa salesman to go through it and understand the ideas. It works as a

ready-reckoner.

c) Initial or Break-in Training: New recruits are provided an

orientation training to give them knowledge about the company

and its products. He works in the firm for some time to gain good

knowledge about the products. After that he is sent to the field.

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Evaluation of Training

After training the salesmen, the marketing manager must evaluate

the effectiveness of training on the basis of the performance of the

sales personnel. Training requires money, effort and time. Therefore an organization

expects returns also.

Evaluation is made on the basis of performance of sales executive in

terms of sales volume, sales profitability, order-size, expenses etc.,

before and after training.

Aims of Training:

1. To prepare the salesman to perform his job efficiently.

2. To tell him what to do.

3. To guide him how to demonstrate.

4. To allow him to practice or perform it.

5. To check him in his performance.

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Motivating

The organization finds the attributes that motivates the sales executive to perform

well.

Some executives are motivated by money and some are motivated by status or

control.

Hence the incentives given to salesperson are of two types - financial incentives

and non financial incentives.

In financial incentives salary package, flexible expenses and fringe benefits act as

motivators.

In non financial incentives promotion, recognition and awards act as motivators forsalesperson.

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Evaluating

Companies want to know whether sales executives are achieving their

targets or not.

For this purpose, they ask sales executives to send the different sales

reports.

The sales reports may be in the form of call reports, expense reports, loss

order report, travel plan and expenditure, etc.

The information in these reports are compared with the set standards.

The incentives are announced on the basis of evaluation reports.

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Compensation

There are three methods of compensation for sales

executives.

They are direct salary, direct commission and combined plans.

In direct salary method, sales executives are given fixed salary

per month.

In direct commission method sales executives work on

commission basis only. For example, agents of Life Insurance

Corporation of India (LIC) get direct commission.

The combined method is mixture of direct salary and direct

commission method. In this method sales executives are paid

fixed salary and also commission on the sales they make. Forexample, BMTC (Bangalore Metropolitan Transport

Corporation) pays its conductors fixed salary and also 2% of

commission on total tickets sold in a day.

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Quota

Quota is the target set for the sales executive for a fixed

period

Quotas are of following five types:

1. Sales quota: The sales executives have to sell a particular

volume. For example, organization may ask sales executives

to sell Rs 50,000 of goods in a year or 5000 units in a year.

2. Expense quota: Sales executivesquotas are set on the basisof sales generated and percentage of it is used for the sales

expenses. For example, If sales executive X achieves Rs 1,

00,000 of sales and his expense ratio is 5% then he can spend

Rs 5000 for his expenses.3. Profit quotas: The company focuses on the profit margin and

not on the volume. Hence it always asks its sales executives

to get better margin from the sales.

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4. Activity Quota: In this method sales executive performs multiple tasks. For

example, Medical representatives meet the doctors in the morning and explain

the product. They also meet the retailers where they try to push the product and

takes promotional activities. In the afternoon they meet distributors and in theevening they sends all the report to company and checks the order status from

the head office.

5. Combination quota: In this type of quota, any of the above five quotas can be

mixed and quotas shall be set for a certain period.

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Personal Selling Process

1. Lead generation: Identification of prospects is first step in

personal selling process. Prospects are identified through

customer references, trade association, customer directories

or through cold calling.

2. Lead evaluation: The leads should be reliable. Marketershould find out whether the lead generated has willingness,

purchasing power and authority to buy.

3. Buyer analysis: Before approaching the customer, the sales

force should understand what products prospects bought inthe past, what products he is using now and his attitude and

buying habits towards the products.

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4. Approaching the customer: The sales person should know

how to meet the prospect and how to build good

understanding with him. For example, In Japan business

meetings start in the evening. Any company selling itsproduct in china should not use number 8 in their

presentation.

5. Presentation and demonstration: The sales personnel give a

briefing of the product, understand the needs of thecustomer and then change the mode of presentation

according to the need of customer. The presentation should

be clear, simple and attracting.

6. Providing solutions to customer: The sales executive shouldhandle the queries of the customer. He should handle the

questions properly with lot of attentiveness and should solve

the problems of customer.

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7. Order generation: This is the most important step of the selling process.

Sometimes customers collect all the information from the sales executive

but hesitate to place the order. Sales executive should know order closing

techniques i.e. how to get the order.

8. Follow up: Sales executives should follow up after taking the order. It will

help the company to know whether the customer is satisfied with the

product. It also helps them to encourage the buyer for repeat purchase.

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Direct Marketing1. Telephone marketing

It is used to sell the product directly to consumer.

The growth of BPOs in India led to the development of telephone marketing. In

case BPOs there are two types of verticals.

They are inbound call center and outbound call center. In case of inbound call

center, customer is given a toll free number for enquiry and executives try to sell

the product to such customers.

In out bound call center employees call the customers and sell the products.

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2. Catalog marketing: According to Philip

Kotler catalogue marketing is direct

marketing through print, video or electronic

catalogs that are mailed to select customers,

made available in stores or presented online.Catalogue marketing is in growing stages in

India. The famous example of this type of

marketing worldwide is J.C. Penny.

3. Kiosk marketing: Organizations spread the

information and keep ordering machines

called kiosks in the shopping malls and other

places. For example,

Ambi pur a perfume company recently

organized a kiosk related marketing campaign

in the Nirmal life style Mumbai. Company

used hot air balloon to attract small boys.4. Online marketing: In this type of marketing

the organizations products are marketed on

the virtual medium. In this format buyers and

sellers exchanges the products on the

internet.

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unit 13 personal communication channels

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