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Mktg Chapter 17

*personal selling*
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.
*sales management*
consists of planning the selling program and implementing and evaluating the personal selling effort of the firm
Everyone lives by selling something
about 14 million people are employed in sales positions in the United States. Manufacturing sales personnel, real estate brokers, stockbrokers, and salesclerks who work in retail stores ( virtually every occupation that involves customer contact has an element of personal selling)
Salespeople
> Are the critical link between the firm and its customers.
> They match company interests with customer needs to satisfy both parties in the exchange process.
> They represent what a company is or attempts to be and are often the only personal contact a customer has with the company. (can create customer value)
*relationship selling*
is the practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time. Involves mutual respect and trust among buyers and sellers.
*order taker*
processes routine orders or reorders for products that were already sold by the company.
Outside order taker
visit customers and replenish inventory stocks of resellers, such as retailers or wholesalers
Inside order taker
(order clerks or salesclerks) answer simple questions, take orders, and complete transactions with customers. Are employed by companies that use inbound telemarketing
*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.
Involves a high degree of creativity and customer empathy.
Inside order getter
Ex: an automobile salesperson
Outside order getter
Ex: a Xerox salesperson. Expensive. The average cost of a single field sales call on a business customer is about $350.
Outbound telemarketing
is the practice of using the telephone rather than personal visits to contact current and prospective customers. A much lower cost per sales call (from $20 to $25) and little or no field expenses account for its widespread appeal.
*Personal selling process*
consists of sales activities occurring before, during, and after the sale itself, consisting of six stages: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up).
Prospecting stage
(1) the search for and qualification of potential customers
Types of prospects
> Lead– name of possible customer
> Prospect– customer who wants or needs a product
> Qualified Prospect– wants the product and can afford to buy it/ decision maker
Cold calling
This approach simply means that a salesperson may open a directory, pick a name, and contact that individual or business. Despite its high refusal rate, cold canvassing can be successful
Preapproach stage
(2) Involves obtaining further information on the prospect and deciding on the best method of approach. Knowing how the prospect prefers to be approached and what the prospect is looking for in a product or service is essential.
Approach stage
(3) Involves the initial meeting between the salesperson and the prospect, where the objectives are to gain the prospect’s attention, stimulate interest, and build the foundation for the sales presentation itself and the basis for a working relationship
Presentation stage
(4) is at the core of the order-getting selling process, and its objective is to convert a prospect into a customer by creating a desire for the product or service
Formats of presentation stage
(1) stimulus-response format, (2) formula selling format, and (3) need-satisfaction format.
Stimulus-response presentation
(suggestive selling) assumes that given the appropriate stimulus by a salesperson, the prospect will buy. ( A counter clerk at McDonald’s is using this approach when he or she asks whether you’d like an order of french fries or a dessert with your meal )
Formula selling presentation
based on the view that a presentation consists of information that must be provided in an accurate, thorough, and step-by-step manner to inform the prospect
Canned Sales presentation
a version of formula selling presentation–is a memorized, standardized message conveyed to every prospect. Used frequently by firms in telephone and door-to-door selling. It lacks flexibility and does not provide feedback.
Need-satisfaction presentation
emphasizes probing and listening by the salesperson to identify the needs and interests of prospective buyers. Once these are identified, the salesperson tailors the presentation to the prospect and highlights product benefits that may be valued by the prospect
*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.
*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.
Handling Objections
>*Acknowledge and Convert*– involves using the objection as a reason for buying
>*Postpone*– is used when the objection will be dealt with later in the presentation
>*Agree/Neutralize*– a salesperson agrees with the objection, then shows that it is unimportant
>*Acceptance*– Let the prospect express such views, probe for the reason behind it, and attempt to stimulate further discussion on the objection.
>*Denial*– When a prospect’s objection is based on misinformation and clearly untrue, it is wise to meet the objection head on with a firm denial.
>*Ignore*– is used when it appears that the objection is a stalling mechanism or is clearly not important to the prospect.
Close stage
(5) involves obtaining a purchase commitment from the prospect. This stage is the most important and the most difficult because the salesperson must determine when the prospect is ready to buy
trial close
involves asking the prospect to make a decision on some aspect of the purchase: “Would you prefer the blue or gray model?”
assumptive close
entails asking the prospect to consider choices concerning delivery, warranty, or financing terms under the assumption that a sale has been finalized
urgency close
is used to commit the prospect quickly by making reference to the timeliness of the purchase: “The low interest financing ends next week,” or “That is the last model we have in stock.”
Follow-up stage
(6) Includes making certain the customer’s purchase has been properly delivered and installed and difficulties experienced with the use of the item are addressed. Attention to this stage of the selling process solidifies the buyer-seller relationship
Sales management process
> Plan formulation
> Implementation
> Evaluation
*sales plan*
a statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed.
Setting objectives
> can be output related and focus on dollar or unit sales volume, number of new customers added, and profit.
> can be input related and emphasize the number of sales calls and selling expenses.
> can be behaviorally related, specific for each salesperson and includes his or her product knowledge, customer service satisfaction ratings, and selling and communication skills.
> * should be precise and measurable and specify the time period over which they are to be achieved*
Organizing the salesforce
on the basis of (1) geography (2) customer or (3) product/service
geographical structure
> wWhere the United States, or indeed the globe, is first divided into regions and each region is divided into districts or territories
> The main advantage of this structure is that it can minimize travel time, expenses, and duplication of selling effort
customer sales organizational structure
> used when different types of buyers have different needs. In practice this means that a different salesforce calls on each separate type of buyer or marketing channel.
> The rationale for this approach is that more effective, specialized customer support and knowledge are provided to buyers, but often leads to higher costs
*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. (a variation of customer organizational structure)
*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.
Salesforce Recruitment and selection
It entails finding people who match the type of sales position required by a firm. Practices will differ greatly between order-taking and order-getting sales positions
job analysis
a study of a particular sales position, including how the job is to be performed and the tasks that make up the job
job description
> It explains (1) to whom a salesperson reports, (2) how a salesperson interacts with other company personnel, (3) the customers to be called on, (4) the specific activities to be carried out, (5) the physical and mental demands of the job, and (6) the types of products and services to be sold.
> is then translated into a statement of job qualifications, including the aptitudes, knowledge, skills, and a variety of behavioral characteristics considered necessary to perform the job successfully
Salesforce training
An ongoing process that affects both new and seasoned salespeople. Take at least two weeks of in-class and Internet-based training on both consultative selling and the technical aspects of business
Salesforce Motivation & compensation
Research on salesperson motivation suggests that (1) a clear job description, (2) effective sales management practices, (3) a personal need for achievement, and (4) proper compensation, incentives, or rewards will produce a motivated salesperson
straight salary compensation plan
a salesperson is paid a fixed fee per week, month, or year.
straight commission compensation plan
a salesperson’s earnings are directly tied to the sales or profit generated. For example, an insurance agent might receive a 2 percent commission of $2,000 for selling a $100,000 life insurance policy
combination compensation plan
contains a specified salary plus a commission on sales or profit generated.
Quantitative Assessments
are based on input- and output-related objectives set forth in the sales plan
*sales quota*
consists of specific goals assigned to a salesperson, sales team, branch sales office, or sales district for a stated time period.
Behavioral Evaluation
are also used to evaluate salespeople. These include assessments of a salesperson’s attitude, attention to customers, product knowledge, selling and communication skills, appearance, and professional demeanor
*salesforce automation (SFA)*
is the use of computer, information, communication, and Internet technologies to make the sales function more effective and efficient.
Salesforce technology
> the convergence of computer, information, communication, and Internet technologies has transformed the sales function in many companies and made the promise of customer relationship management a reality
> The computer technology allows the customer to see elaborate three-dimensional animations, high-resolution scans, and video clips of the company’s products in operation
Salesforce communication
> Technology has changed the way salespeople communicate with customers, other salespeople and sales support personnel, and management.
> Mobile phone and tablet device technologies now allow salespeople to exchange data, text, and voice transmissions
> salespeople are using their company’s intranet for a variety of purposes. At HP Enterprise Services, a professional services firm, salespeople access its intranet to download client material, marketing content, account information, technical papers, and competitive profiles.
What is involved in sales management?
involves planning the selling program and implementing and evaluating the personal selling effort of the firm.
What is the principal difference between an order taker and an order getter?
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 customers’ use of a product or service.
What percentage of an order-getting salesperson’s time is spent selling?
41 percent
Which presentation format is most consistent with the marketing concept? Why?
The need-satisfaction presentation format emphasizes probing and listening by the salesperson to identify the needs and interests of prospective buyers and then tailors the presentation to the prospect and highlights product benefits, which is consistent with the marketing concept and its focus on relationship building.
What are the three types of selling objectives?
(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).
What three factors are used to structure sales organizations?
geography; customer; product/service
Which of the following statements is an example of personal selling?
A Tupperware consultant demonstrates the firm’s products to you and your friends in the comfort of your home.
The tasks involved in managing personal selling include setting objectives; organizing the salesforce; __________; and evaluating the performance of individual salespeople.
recruiting, selecting, training, and compensating salespeople
A(n) __________ is a salesperson who processes routine orders or reorders for products that were already sold by the company.
order taker
In the personal selling process, a telemarketer who calls and asks the head of the household, “Are you happy with your current mobile phone service provider?” is engaged in __________.
prospecting
Which type of personal selling presentation format is the most consistent with the marketing concept?
need-satisfaction presentation format
Asking the prospect to make choices concerning delivery, warranty, or financing terms is part of a(n) __________ close.
assumptive
Sales management consists of three interrelated functions: (1) sales plan formulation; (2) sales plan implementation; and (3) __________.
salesforce evaluation
What does major account management refer to?
It is the practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships.
A disadvantage of the straight salary compensation plan is that
it provides little incentive to expand sales volume.
Salespeople at Medtronic, Inc., the world leader in the heart pacemaker market, are in the operating room for more than 90 percent of the procedures performed with their product. Medtronic sales people participate in
relationship selling.
A salesperson who sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on a customer’s use of a product or service is referred to as a(n) __________.
order getter
The personal selling process encompasses __________distinct selling stages.
6
During the prospecting stage of the personal selling process, salespeople will deal with
leads, prospects, and qualified prospects.
For business product companies, identifying the buying role of the prospect would be typically done at the __________stage of the personal selling process.
preapproach
Three major presentation formats exist: (1) __________, (2) formula selling format, and (3) need- satisfaction format.
stimulus-response format
There are six commonly used techniques to deal with objections: (1) acknowledge and convert the objection, (2) postpone, (3) agree and neutralize, (4) accept the objection, (5) __________, and (6) ignore the objections.
denial
Which of the following statements should the salesperson use if she wished to acknowledge and convert an objection (such as “the price is too high”)?
“Yes, the price is high because we use the finest…”
Three closing techniques are used when a salesperson believes a buyer is about ready to make a purchase. They are __________closes.
trial, assumptive, and urgency
Formulating the sales plan involves three tasks: (1) setting objectives, (2) organizing the salesforce, and (3) __________.
developing account management policies
The best organizational structure to use when different buying organizations have different needs is a __________sales organization.
customer
A study of a particular sales position, including how the job is to be performed and the tasks that make up the job is referred to as a(n) _____.
job analysis

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