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Personal Selling, Sales Management, and Direct Marketing. Chapter Objectives. Understand the important role of personal selling within the context of the promotion mix List the steps in the personal selling process Explain the role of the sales manager Understand direct marketing.
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Chapter Objectives • Understand the important role of personal selling within the context of the promotion mix • List the steps in the personal selling process • Explain the role of the sales manager • Understand direct marketing
Real People, Real Choices • IBM (Esther Ferre) • IBM must prioritize investment of resources to achieve revenue and profit targets. • Option 1: reduce sales and support resources for a specific customer or business segment. • Option 2: maintain current level • of resources. • Option 3: evaluate lower-cost • ways to provide sales and • support resources.
Personal Selling • Occurs when a company representative interacts directly with a (prospective) customer to communicate about a good or service • “Personal touch” is more effective than mass-media appeal. • Selling/sales management • jobs provide high mobility, • especially for college grads • with marketing background.
The Role of Personal Selling • Personal selling is more important: • --when firm uses push strategy. • --in B2B contexts. • --with inexperienced consumers who need hands-on assistance. • --for products bought infrequently (houses, cars, computers). • Cost per contact is very high.
SALESFORCE.COM Technology and Personal Selling • Customer relationship management (CRM) software and partner relationship management (PRM) • Teleconferencing, videoconferencing, and improved corporate Web sites • Voice-over Internet protocol • Assorted wireless technologies
Types of Sales Jobs • Order taker • Technical specialist • Missionary salesperson (stimulate clients to buy) • New-business salesperson and order getter • Team selling and cross-functional team
Approaches to Personal Selling • Transactional selling: Putting on the hard sell High-pressure process that focuses on making an immediate sale with no concern for developing long-term customer relationship
Discussion • Professional selling has evolved from hard-sell to relationship selling. --Is hard-sell still used? If so, in what types of organizations? --Can hard-sell still succeed –is transactional selling still appropriate? --If so, when?
Approaches to Personal Selling (cont’d) • Relationship selling • Process of building long-term customers by developing mutually satisfying, win-win relationships with customers
LINKEDIN.COM The Creative Selling Process • Step 1: Prospecting and qualifying • --Prospecting: developing a list of potential customers • --Qualifying: determining how likely potential customers are to become customers
The Creative Selling Process (cont’d) • Step 2: Preapproach • Compiling background information about prospective customers and planning the sales interview • --Purchase history, current needs, customer’s interests • --From informal sources, CRM system, customers’ Web sites, and/or business publications
The Creative Selling Process (cont’d) • Step 3: Approach • Contacting the prospect • Learning even more about prospect’s needs, create a good impression, and build rapport • --“You never get a second • chance to make a good • first impression.”
The Creative Selling Process (cont’d) • Step 4: Sales presentation • Laying out benefits and added value of product/firm and its advantages over the competition • Inviting customer involvement in conversation
Group Activity • Your group are field salespeople for a firm that markets university textbooks. • As part of your training, your sales manager asks you to outline what you’ll say in a typical sales presentation. --Write that outline.
Step 5: Handling Objections • Anticipating why prospect is reluctant to make a commitment • Welcoming objections • Handling objections successfully to move prospect to decision stage
Step 6: Closing the Sale • Gaining the customer’s commitment in the decision stage --Last-objection close --Assumptive or minor-points close --Standing-room-only or buy-now close
Step 7: Follow-Up • Arranging for delivery, payment, and purchase terms • Making sure customer received delivery and is satisfied • Bridging to next purchase
Individual Activity • What are the pros and cons of personal selling as a career choice for you? • --List them in two columns, and be as specific as you can in explaining each.
Sales Management • Setting sales force objectives What sales force is expected to accomplish and when Customer satisfaction, loyalty, retention/turnover, new-customer development, new-product suggestions, training, reporting on competitive activity, community involvement
Creating a Sales Force Strategy • Establishing structure and size of a firm’s sales force • Sales territory: a set group of customers • Geographic sales force structure • Product-class sales territories • Industry specialization and • key/major accounts
Recruiting, Training, and Rewarding the Sales Force • Recruiting the right people • Good listening and follow-up skills • Ability to adapt style from situation to situation • Tenacity • High level of personal organization • Sales training: teaches salespeople about firm, its products, how to develop skills, knowledge, and attitudes to succeed
Discussion • Will sales training and development needs vary based on how long salespeople have been in the business? Why or why not? • Is it possible (and feasible) to offer different training programs for salespeople at different career stages? Why or why not?
Recruiting, Training, and Rewarding the Sales Force (cont’d) • Paying salespeople well to motivate them • Straight commission plan • Commission-with-draw plan • Straight salary plan • Running sales contests for short-term sales boost • Call reports: which customers were called on and how call went
Discussion • Based on the compensation figures in the chapter, do you think professional salespeople are appropriately paid? Why or why not? • What do salespeople do that warrants the compensation indicated?
Discussion • What is a sales manager’s best approach for determining the appropriate rewards program? • What issues are important in developing the program?
Evaluating the Sales Force • Is sales force meeting its objectives? • What are possible causes of failure? Measuring individual salesperson performance Monitoring salesperson’s expense account for travel and entertainment
DIRECT MARKETING ASSOCIATION Direct Marketing • Any direct communication to a consumer or business recipient designed to generate a response in the form of an order, a request for further information, and/or a visit to a store or other place of business for purchase of a product
Direct Marketing (cont’d) • Mail order • Catalogs: collection of products offered for sale and described in book form, usually consisting of product descriptions and photos • Direct mail: a brochure/pamphlet offering a specific good/service at one point in time
LANDSEND.COM Discussion • Some experts think consumer catalog shopping has increased because of poor service in retail stores. • Evaluate the quality of most retail salespeople you meet. • How can retailers can improve the quality of their sales associates?
FEDERAL DO NOT CALL REGISTRY Direct Marketing (cont’d) • Telemarketing: direct marketing conducted over the telephone • More profitable for business than consumer markets • In 2003, FTC established National Do Not Call registry
Direct Marketing (cont’d) • Direct-response advertising: allows consumer to respond by contacting the provider with questions or an order • Direct-response TV (DRTV): short commercials, 30-minute-plus infomercials, and home shopping networks
Direct Marketing (cont’d) • M-Commerce: promotional and other e-commerce activities transmitted over mobile phones/devices • Short-messaging system marketing (SMS) • Spim: instant-messaging version of spam • Adware: software that tracks Web habits/interests, presenting pop-up ads and resetting home page
Discussion • M-commerce allows marketers to pinpoint where consumers are and send them messages about a local store. • --Do you think consumers will respond positively to m-commerce? • --What benefits do you think it offers them?
IBM.COM Real People, Real Choices • IBM (Esther Ferre) • Esther chose option 3: evaluate lower-cost ways to provide sales and support resources. • Minimized impact to customer and improved cost structure of sales team. • Maintained customer satisfaction with lower cost. • Resulted in increased revenue over time.
Marketing Plan Exercise • In developing her marketing plan, Esther Ferre at IBM must use marketing communication mix elements (1) in an integrated way that (2) best invests her promotional dollars. • --Should personal selling be a high priority in Esther’s marketing plan? Why or why not? • --Is there a role for direct marketing in her plan? If so, what is it?
Marketing in Action Case:You Make the Call • What is the decision facing Eli Lilly? • What factors are important in understanding this decision situation? • What are the alternatives? • What decision(s) do you recommend? • What are some ways to implement your recommendation?
Keeping It Real: Fast-Forward to Next Class, Decision Time at Darden Restaurants • Meet Jim Lawrence, Vice President, Supply Management & Purchasing. • Volatility in the supply chain threatened food supplies to restaurants. • The decision: A new model for supply chain management?