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The Evolution of Personal Selling
Definition of Personal Selling
Person-to-person communication with a prospect for building personal relationships with another party which salesperson attempts to persuade a buyer to make a purchase, that results in both parties obtaining value. Personal selling is also a part of the Consultative Selling Model (Manning 2014).
Personal selling is a process of:
- Developing relationships
- Discovering needs
- Matching products with needs
- Communicating benefits
Involves three prescriptions:
- Adopt the marketing concept
- Value personal selling
- Assume the role of problem solver or partner
It refers to the business decision-making, organization and management of marketing activities, which is a corporate business philosophy. It is an idea, an attitude, or a corporate way of thinking. The key to achieving organizational goals is to correctly determine the target market needs and wants, and more effectively than the competition. by study how to adapt and stimulate consumer demand, and then to meet this needs and wants by transferring goods or services to consumers, and finally achieve the sale.
Reason of Personal Selling Evolved
- Increased competition
- Increased customer demand
Selling has moved from peddling to long-term relationships, consultative selling, and value-added partnering (Manning 2014). These changes have been prompted by the emergence of a marketing concept. Modern marketing concept is showing a trend of diversification objectives, not only the pursuit of quantity of goods sold, but also the pursuit of more high-quality targets, such as identifying prospects, positioning your product, handling objections, establishing commitment and building relationships that lead to future sales.
Production Orientation (early 19thcentury).
During this period, those companies organize and make use of all resources, focus on everything in its power to increase productivity and expand distribution reach, and reduce costs. Production-oriented organization will focus primarily on increased production and lower costs through mass production and in order to create economies of scale.
• The basic strategy is reducing product costs and increase profit purposes.
• Marketing myopia: Short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants (Levitt 1960).
‘If You Built It, They Will Come’
The line in the movie was "If you build it, he will come" (Field of Dreams, 1989). And it was said by a voice telling a corn farmer. He then interprets this as an instruction to builds a baseball field in the middle of his cornfield. When the field is done, Thousands of people come from miles away to see the games. This business philosophy showing that if you believe the impossible, the incredible can come true.
Obviously, the typical production concept is "what we produce, we sell what." which guiding the marketing activities. Consumers are forced to accept goods on the market, thus forming a seller's market. In a seller's market conditions, producers do not have to worry about product sales do not go out. Therefore, the main concern to the operators are not sales but production. Although the production-oriented concept formed in the early development of commodity economy, but lack of overall marketing awareness.
Selling Orientation (mid 19thcentury)
At this stage the total commodity production has exceeded market demand. Objective is to sell as many products as they could, often ignore a clear margin. Products are "sold" rather than "bought." Salesperson are committed to the promotion of products and advertising campaigns, in order to persuade, and even force the consumer to buy.
• The specific performance: "I will sell anything, just trying to get people to buy anything."
• Actively selling and heavy promotion to induce consumers to buy products.
The product life cycle shows that, as product categories mature, they reaches a commodity status. Some customers get used to the great quality and service provided and begin to view the product as a commodity. Once this happens, the salesperson’s perceived value is diminished and price became the distinguishing competitive advantage. Value-added services is used to keep customers focused on value rather than price.
Limited opportunity for salespeople of competing products to persuade consumers that they should switch model or brand by providing relevant comparative information and, perhaps, by providing risk-reducing guarantees. Salespeople are requires to demonstrate a differential advantage of one of their products over the competition.
Effect of Competition
Competition has greatly increased in most product areas, and demand for quality, value and service by customers has risen sharply. In fast moving consumer goods (FMCG) markets, it tends to be driven by competitive or retailer pressures. Pricing decision, particularly short-term tactical price changes, are often made as a direct response to the actions of competitors
To gain further market share, salesperson must use other pricing tactics such as economy or penetration. This method can have some setbacks as it could leave the product at a high price against the competition (Kent 2004).
In today’s competitive world, it is more important than ever to implement a market orientated strategy. In this digital age customers are able to research the products available on the market fairly quickly. If an organization does not offer customers what they are looking for (product and customer service), they will buy from a competitor that does. The customer defined the business (Drucker 1964).
Marketing Orientation (late 19thcentury - present)
Formed in the 1950s. The concept that the key to achieving business goals is to discovering and understanding the target market's needs and desires, and more effective than its competitors, and salesperson do everything possible to satisfy the needs and desires of target market.
• Marketing orientation refers to a business or organization based on market demand to develop a operational plans.
• The corporation’s goal should be to meet the customer's needs and desires
Difference between Production orientation and marketing orientation
Marketing orientation is the history of enterprise marketing management thinking, a huge breakthrough, compared with the traditional concept of operations, with the following differences:
- The production orientation places the production and sales center, marketing orientation places customer demand for the center;
- The production orientation strengthening sales functions, sell products to achieve profits, but marketing orientation marketing by fully meet customer demand;
- The production orientation is a short-term stimulus, to obtained large number of sales profits in short-term, marketing orientation meets customer needs through a comprehensive, long-term stability of the profits earned.
Sales marketing Interface
Scholars have pointed to many problem areas that may af¬‚ict this interface. For example, researchers point to interfunctional con¬‚icts, differences in goal orientation, tension regarding standardization and adaptation, and marketers’ disconnectedness from market conditions as problem areas. Similarly, scholars indicate that turf barriers and differences in culture or thought worlds pose challenges within this interface and strain the relationships between sales and marketing (Dewsnap and Jobber 2000; Homburg and Jensen 2007). Scholars also emphasize that better collaboration between sales and marketing can enhance a ¬rm's ability to provide better customer value (Guenzi and Troilo 2007)
The relationship between sales and marketing
The sales efforts influence, and are influenced by, decisions taken on the ingredients of a company’s marketing mix, which in turn affect its overall marketing efforts. It is essential, therefore, that sales and marketing be fully integrated.
In addition to changes in organizational structure, the influence of the marketing function and the increased professional approach taken to sales has meant that the nature and role of this activity has changed. Selling and sales management are now concerned with the analysis of customers needs and wants, with the provision of benefits, to satisfy these needs and wants (Kotler, Philip and Keller, L. Kevin 2012).
As with all parts of the marketing mix, the personal selling function is not a stand-alone element, but one that must be considered in the light of overall marketing strategy. At the product level, two major marketing considerations are the choice of target market and the creation of a differential advantage. Both of these decisions impact on personal selling.
Marketing Concept Yields Marketing Mix
The marketing mix is a set of controllable, tactical marketing tools that consists of everything the firm can do to influence the demand for its product (Don E. Schultz 2005). These possibilities can be organized into four groups:
PRODUCT: Branding and brand image in particular are important as these provide reassurance for a customer and facilitate relatively easy brand choice. Many products are standard building materials but adding value to the product is important to personal selling.
Methods: price levels, credit terms, price changes, discounts
PRICE: Adjusting the price has a profound impact on the marketing strategy, and depending on theprice elasticityof the product, often it will affect thedemandand sales as well. Salesperson has to set the appropriate price which is the amount of money the customer willing to pay for the products and services.
Methods: features, packaging, quality, range
PROMOTION: To allow the customer aware of the presence in market to enhance popularity of the company. Provide information to the customer such as function and feature of the product and how to get the product. To encourage the purchase or sale of a product.
Methods: advertising, publicity, sales promotion, personal selling, sponsorship
PLACE: Involve all those activities required to move goods and materials into the factory, through the factory and to the final consumer. It often take place through intermediaries. The channel can be used as a sales strategy that will be focusing on the high quality products offered and the ability to offer customer satisfaction.
Methods: inventory, channels of distribution, number of intermediaries
Important Role of Personal Selling
Every salesperson must decide how much time and money to invest in each of the four areas of the marketing mix. Since the beginning of the marketing concept, personal selling has evolved (Manning 2014).
Evolution of personal selling
Sales and Marketing Emphasis
Marketing Era Begins
Organizations determine needs and wants of target markets and adapt themselves to delivering desired satisfaction; product orientation is replaced by a customer orientation
Consultative Selling Era Emerges
(Late 1960s to early 1970s)
Salespeople are becoming diagnosticians of customers’ needs as well as consultants offering well-considered recommendations; mass markets are breaking into target markets
In, the late 1960s and early 1970s, is an extension of the marketing concept (Manning 2014). The sales person assumes the role of consultant and offers well-considered recommendations. Negotiation replaces manipulation as the salesperson sets the stage for a long-term partnership. The salespeople who have adopted consultative selling possess a keen ability to listen, define the customer’s problems, and offer one or more solutions.
Service, retail, manufacturing, and wholesale firms that embrace the marketing concept already have adopted or are currently adopting consultative-selling practices. Features of consultative selling are as follows:
- Customer is a person to be served, not a prospect to be sold.
- Two-way communication identifies customer’s needs; no high-pressure sales presentation.
- Emphasis on need identification, problem solving, and negotiation instead of manipulation.
- Emphasis on service at every phase of the personal-selling process.
The evolution of personal selling have been outlined and discussed as an extension of the marketing concept. As selling and sales management face increasing competition and shorter deadlines, salesperson must discover more effective ways to meet the needs and wants of the customer.
Sales efforts influence and are influenced by, the marketing orientation of an organization. The implications of consultative selling has emerged as a form of personal selling within the marketing orientated organization for sales activities and the role of selling in the marketing program have been demonstrated.
One of the most significant developments in modern business thinking and practice has been the development of the marketing concept. Companies have moved from being production orientated, through being sales orientated to being market orientated. (Jobber and Lancaster, 2012)