Personal selling is a promotional method in which one party uses skills and techniques for building personal relationships with another party (e.g., those involved in a purchase decision) that results in both parties obtaining value. In most cases the “value” for the salesperson is realized through the financial rewards of the sale while the customer’s “value” is realized from the benefits obtained by consuming the product. However, getting a customer to purchase a product is not always the objective of personal selling. For instance, selling may be used for the purpose of simply delivering information.
Role of personal selling as a tool of direct marketing:-
There are a large number of definitions of personal selling in literature. In considerable number of definitions of the concept there is the emphasis on the fact that this is the oldest instrument of promotional mix which actualizes a face-to-face interaction of seller with one or more of potential buyers, and that the aim is presenting the offer, answering questions and, ultimately, obtaining order. “Almost all definitions of personal selling underline it as a process of informing the buyer in which the seller guides the buyer to the decision to buy a product or service.” There is an increasing attention paid to post sales-services in order to achieve long-lasting satisfaction and creating long-term relationships with customers. Unlike other elements of promotion (advertising, public relations and sales promotions), personal selling directly generates profit for economy entity
Ever growing competition from domestic and foreign sources has also increased the importance of salespersons in the marketing effort of a firm. In personal selling, company’s salespersons are often referred to as sales representative, salesman or salesgirl. They remain on the company’s payroll or work on commission basis, or both to push the product in the market by positively motivating the prospective customer, through oral presentation or demonstrating the product in question. Consumers want all sorts of goods and services but inertia may keep them from buying. Sales efforts stimulate the consumption process by reducing people’s inherent reluctance to make a purchase decision. In fact the salesperson acts as a catalyst in the market place.
In India, client profit-planning strategy is applicable mostly in the industrial product selling. The representative is put to work with client’s team to learn about profit-planning system, product, finance, marketing, research and development and future plans etc. so that the product meeting the client’s needs could be developed. The same is also true in the case of customized tour packages. The client’s needs and preferences are considered right from the choice of destination/s and hotels to the activities that are possible at the destination of choice. For example, the hotel is chosen considering the kind of services the client wants to avail as well as the price that the client is willing to shell out for the services. Also, it is not necessary for the client to choose or avail similar kind or standard of hotel at all the destinations. Profit planning is the process of developing a plan of operation that makes it possible to determine how to arrange the operational budget so that the maximum amount of profit can be generated. There are several common uses for profit planning, with many of them focusing on the wise use of available resources. Along with the many benefits of this type of planning process, there are also a few limitations.
The actual process of profit planning involves looking at several key factors relevant to operational expenses. Putting together effective profit plans or budgets requires looking closely at such expenses as labor, raw materials and facilities maintenance and upkeep, and the cost of sales and marketing efforts. By looking closely at each of these areas, it is possible to evaluate what is required to perform the tasks efficiently, generate the most units for sale, and thus increase the chances of earning decent profits during the period under consideration. Understanding the costs related to production and sales generation also makes it possible to assess current market conditions and design a price model that allows the products to be competitive in the marketplace, but still earn an equitable amount of profit on each unit sold.
Business Management :-
At this stage professional representative is responsible for managing territory as a strategic business unit-investing time and expenses in most profitable manner. Few Indian Companies are using a system of national account management in which the manager is responsible for all sales to a few key accounts. Territory representatives along with sales managers and accounts managers develop business strategies and bottom line responsibility to meet objectives of the organization.
Customer retention and deletion:-
Many companies find that 80 per cent of their sales come from 20 per cent of their customers. This means that it is vital to devote considerable resources to retaining existing high volume, high potential and highly profitable customers. Key account management has become an important form of sales organization because it means that a salesperson can focus their efforts on one or a few major customers. At the other end of the spectrum, companies are finding that some small customers actually cost the organization money. This is because servicing and distribution of products to those customers may push costs beyond the revenue generated. Larger companies may have to change to telemarketing and/or the internet as a means of servicing these small customers or drop them altogether.
Database and knowledge management:
The modern sales force needs to be trained in the use and creation of customer databases, and how to use the internet to aid the sales task (e.g. finding customer and competitor information). In the past sales people recorded customer information on cards and sent in orders through the post to head office. Today, technological advances such as email, mobile phones and video conferencing have transformed the way knowledge is transferred. Laptops mean that salespeople can store customer and competitor information, make presentations and communicate with head office electronically. Furthermore, information supplied by the company, such as catalogues and price lists, can be held electronically.
Customer relationship management:
Customer relationship management requires that the sales force focuses on the long term and not simply on closing the next sale. The emphasis should be on creating win-win situations with customers so that both parties to the interaction gain and want to continue the relationship. For major customers, relationship management may involve setting up dedicated teams to service the account and maintain all aspects of the business relationship.
Marketing the product:-
Sales people tasks not only limited to sell the products to customers but they are also obliged to market the product. Sales people need to ensure feedback from customers or prospects are transmitted to the upper level of management in facilitate the decision making process. In addition, sale people now are often participate in the marketing activities like segmentation, targeting and positioning and product and market development. Besides, sales people also will have to provide as many information needed by customers regarding a product/service by sending them e-mail, face to face presentation and others.
Problem solving and system selling:-
One of other roles played by sales person is to be a consultant. Consumers normally will state their current problem, therefore sales person must ‘consult’ them by listening and convincing them the product/service they offer will solve consumers’ problems. In addition, sales person also must know how to sell a ‘system’ of a product. As an example, by selling a computer to a company, the sales person also can promote the anti-virus software and other devices that come together with the computer.
Satisfying needs and adding value:-
Some customers might even do not know what their current needs are. Therefore, a sales person’s responsibility is to be able identify those needs and comes out with a solution to satisfy the needs and add value to make consumers delighted. For example, a machine in a factory could be out dated. A newer version is much better which brings high productivity at lower costs. Hence, a salesperson could promote this machine by emphasizing the benefits sought.
Any two products for which you would prefer to follow the production concept?
Explain which concept would work well in selling a cell phone to a CEO of the company and to a small farmer?
I would like to prefer to following production for production concept which is as under
There are different type of concept of marketing which may adopt in different situation and scenario. The effectiveness of marketing concept is depends upon nature and current market condition of the product, consumer, and its process that play major role in adoption of the marketing concept.
I would like to recommend The Marketing Concept for a cell phone to a CEO. I think the marketing concept is effective and suitable and would work well in selling a cell phone to a CEO to the company. Let discuss the marketing concept in detail.
The marketing concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors1. Under marketing concept, the emphasis is on selling satisfaction and not merely on the selling a product. The objective of marketing is not the maximization of profitable sales volume, but profits through the satisfaction of customers. The consumer is the pivot point and all marketing activities operate around this central point. It is, therefore, essential that the entrepreneurs identify the customers, establish a rapport with them, identify their needs and deliver the goods and services that would meet their requirements.
The components of marketing concept are as under:
This concept was evolved in the 1950s, and for the first time the attention was shifted to Customers. Instead of concentrating on the Products / Production / Selling, the business became “Customer Oriented”. The “Make & Sell” philosophy gave way to the “Sense & Respond” philosophy. Instead of finding the right customer for the product, the marketer now has to find the right product for the customer. This concept holds the secret of the company being more effective than its competitors in creating, delivering & communicating superior value to the targeted customers.
This is the next step of evolution of marketing concepts. It depicts that customers will go for those products which offer quality, utility, features, performance, value, benefits, etc. So the marketers must improve the products in an innovative way & continuously. This is more often accompanied by a suitable pricing, distribution, promotion (all the 4Ps of marketing).
On the other hand, innovating too soon becomes a problem. Several innovative products are marked as experimental in the market instead of being adopted as a result of which these products have less shelf life and might have to be taken off the market.
The product concept is when the main focus of the company is on the products being improving it, adding features to it, making the product superior each time. Customers will buy the products because they have greater quality. Sometimes they overlook what the customer really needs. This approach is seldom successful the selling concept is when the company will do a lot of promotions to make their products
Q3:-Write a short note on Evolution of Personal Selling Strategies from persuasion to partnership strategies?
Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale”
Person-to-person communication with a prospect
Personal selling is a process of
Matching products with needs
Viewed as a process that adds value
The evolution of personal selling 1950 to present is describe as under
Personal Selling in the Information Age:-
An evolution from the industrial economy to the information economy.
Began in the 1950s.
New emphasis is information exchange rather than producing goods
Implications for personal selling
Evolution of Consultative Selling:-
Consultative selling era (late 1960s to early 1970s)
Mass markets break into target markets.
Emphasis on need identification.
Information sharing and negotiation replace manipulation.
The problem-solving approach to selling, known as consultative selling, is somewhat analogous to the work of a physician. Prescribing a cure without first asking questions to diagnose the patient’s problem makes for medical malpractice. Similarly, offering products or services in sales to “cure” business problems without first asking in-depth questions about the needs and concerns of the company makes for poor selling. Like a good physician, the problem-solving salesperson probes for information and conducts a thorough exam about current problems before prescribing a remedy. In the traditional, product-oriented sales approach, popular in the 40s, 50s, and 60s and continued well into the 70s, the salesperson was a presenter of information. The product was more important than the client. Let’s apply the concepts here to one industry. For example, a short-sighted real-estate agent using this method focuses on what he is selling and tries to convince a potential buyer to purchase one of his available properties, with little regard for the buyer’s original goals. He first pitches the biggest or most expensive property available, then shows less costly properties if he sees he is above the buyer’s income level. In the 1960s and 1970s, the concept of needs-benefit selling developed. Salespeople worked to find client needs, then showed how their products or services filled those needs. A real-estate agent using that method might ask if, as a young couple, the prospective buyers plan to have children. Receiving an affirmative answer, the agent may begin enthusiastically to talk up the benefits of a home with more bedrooms, and to direct them toward his largest homes. By contrast, consultative selling, which evolved in the 1970s, is buyer-oriented. The salesperson conducts a needs analysis, investing time to listen to the potential buyer and asking questions to uncover financial ability to buy as well as primary needs and wants, attitudes and concerns.
There are some features of consultative selling which is as under:-
Customer is a person to be served, not a prospect to be sold
Two-way communication identifies (diagnoses) customer’s needs; no high-pressure sales presentation
Process that serves the buyer primarily interested in price and convenience.
Transactional selling is a common method of sales in which a sales representative seeks out prospects, develops a relationship and then tries to close a sale. The sales rep finds out what the customer needs and then tries to provide it for that specific sale. According to the Wiglaf Journal, “Revenues are increased by making more sales calls and taking more orders.” With this approach, the sales representative is not necessarily concerned with the long-term relationship with the customer.
Process that developed from the marketing concept, emphasizing need
A consultative salesperson is one who can resist the temptation to “pitch” their product or solution until they have laid a solid foundation for their further selling:
· They’ve built a high trust and high credibility relationship with the prospect.
· They’ve had sufficient dialogue with the prospect to understand their business environment, critical business drivers, and existing high priority business initiatives.
· They’ve thoroughly validated that their value proposition holds water in the prospect’s specific business environment.
· They’ve discovered that a compelling business case can be built for their solution.
Evolution of Strategic Selling:-
Strategic selling era (early 1980s)
Partnering era (1990 to present)
A strategic market plan
Carefully conceived plan needed to accomplish sales objectives.
A prerequisite to tactical success.
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