CHAPTER 2.

PERSONAL SELLING PREPARATION AND PROCESS

 The Psychology in Selling.

 Deals with the major sales related knowledge and skills required by sales
people.
 Includes psychology in selling, buying decision process, buying situation,
effective communication skills, sales knowledge, and sales related
marketing policies.

Stimulus Response or the Buyer Behavior Model

Stimulus Buyer’s decision Response

(Sales presentation) making process (buy or no buy)

 Buying Decision Process

 In consumer market, individual and household consumers make buying
decisions based on five mental stages of buying process.
Five-Stage Model of the Consumer Buying Process
Problem Information Evaluation Purchase Post-purchase
need search of decision behavior
recognition collection Alternatives

Problem (or need) Recognition

 The consumer buying process starts when the prospective consumer
recognizes a problem or need. The need can be cause by internal or
external stimuli. Whatever may be cause of the need, the salesperson
must identify the buyer’s need to know what information the product
benefits should be given so as to satisfy the buyer’s need.
Information Search (or Collection)
 Involves visiting retail stores, asking family members and friends, and
talking to salespeople about the product’s price, benefits, sizes or models,
warranty service and so on.
Evaluation of Alternatives
 The consumer is trying to satisfy a need, or solve a problem.
 The consumer is looking for certain advantages or benefits from the
product or services that satisfies the need or solve his/her problem.
 The consumer knows that each alternative product or brand has a set of
characteristics, (or attributes) that try to satisfy his/her need.
 The importance and relevance of attributes vary from product to product.
Purchase Decision
 The consumer forms preferences among the brands and also an intention to buy
the most preferred brand, in the evaluation stage. The consumer’s purchase
intentions can be changed by two factors, “the attitudes of other’” and “the
unanticipated situation factors”.
For high involvement products, the purchase decisions include:
a. Which brand to purchase
b. Timing for purchase
c. How much quantity
d. From which retailer or dealer to buy
e. How much make the payment
Post-purchase Behavior
 Depend upon the satisfaction or dissatisfaction of the consumer with the product
or service.
Buying Decision process of Business Buyers
Decision Making Process includes three additional stages (steps):
 Determination of characteristics and quantity of needed product or services.
 Development of specifications of product or services, needed.
 Detaining and analyzing supplier proposals.

 Buying Situation or Types of Purchases

For Household and Individual Consumers
 The buying situations for household and industrial consumers are:
a. Routine decision-making
b. Limited decision-making
c. Extensive decision-making
Routine decision-making
 The products that are purchased repeatedly come under the category of routine
decision-making. These are low-involvement products and are typically low cost
and low-risk purchases.
Limited decision-making
 When consumers are not aware of each brand’s benefits, they seek more
information, before making a purchase decision.
Extensive decision-making
 When consumers want to buy products like a home, a car, or insurance, they are
highly involved in buying decision. The purchase may require more investment in
time and money than limited decision-making.
Buying Situation for Business Buyers
 The types of purchases or buying situation for business or industrial buyers are:
a. New purchase
b. Change in supplier
c. Repeat purchase
New purchase (or new task)
 The buyers have limited knowledge and lack of previous experience. They obtain
a variety of information about the products, suppliers, prices, and so on. In this
new task situation the risk are more, and decision may take longer time as more
people are involved in decision making.
Change ion supplier (or modified rebuy)
 Takes place when the company is not satisfied with the performance of existing
suppliers, or a need arises for cost reduction or quality improvement.
Repeat purchases (or straight rebuy)
 The buying organization requires certain products and services continuously. The
buying organization reorders or places repeat orders with the suppliers are
supplying with acceptable levels of quality and delivery.

 Effective Communication
 Communication is transmission of verbal and non-verbal information and
understanding between a sales person and a buyer.
 Two-way communication is required to make a smile.
 It has been recognized that non-verbal communication is an important part of
total communication process, and essential for sales success.
Salespeople who want to be effective communication to persuade people to buy their
products and services show the following characteristics.
 Get feedback to uncover buyers need by asking relevant question.
 Empathise with the buyer’s feelings’ ideas’ and situation.
 Build a relationship based on mutual trust with customer.
 Use the selling philosophy of keep it simple, salesperson (KISS).
 Listen carefully to the prospect’s words, feelings, and thoughts and talk less.
 Enthusiasm towards the sales job and customer’s business.
 Use proof statement from objective sources to add credibility to sales message.

 Sales Knowledge and Sales Related Marketing Policies

 Salespeople require knowledge about their company, product and services sold,
customers and competitors, and sales-related marketing policies.
These are a number of important reasons why salespeople should get knowledge
of selling and sales related marketing policies. These are:
 (1) Increase in self-confidence of the salesperson due to the knowledge of the
product, its application to the customers’s needs, and competitors.
(2) Prospects and customers expect salespeople to have good product knowledge,
to give ideas to improve the customer’s operations, and to be reliable and
efficient. When a prospective customer has confidence in the salesperson’s
expertise, the sales presentation becomes more acceptable to the prospect. The
result in
(3) better service to the prospect
(4) icreased sales

Company Knowledge
 Information about the company growth and achievements, policies and
procedures (such as order processing and return goods), production and service
facilities is used in sales presentation.
Product Knowledge
 They must know how the product is produced, level of quality control, physical
characteristics and sizes, particular features, advantages and benefits of the
product, product operation and application.
Customers and Competitors Knowledge
 Knowledge about existing and prospective customers, different customer (or
market) segments and their profiles, buying behavior, and buying situation, need
assessments to help salespeople to get insight into the prospects and customers.
Competitor’s information on their strengths, weaknesses, strategies, and policies
is important and useful negotiations and while dealing with prospect’s objection.
Sales – Related Marketing Policies
 The guidelines within which the efforts have to be made to achieve sales anf
marketing objectives. The main sales-related marketing policies are:
 Pricing policies
 Distribution policies
 Promotion policies
 Product policies
Pricing policies
 Customers want to know the list price, the next price (equal to list price minus
discounts) and transportation (or freight) cost included or extra. Quality (or
volume), trade, and cash discount are offered to customers as buying incentives.
Customers will also like to know the payment terms. It is necessary for the
salesperson to know the company’s credit policies foe existing and prospective
customers to ensure timely collection of payments against the bills raised on
them
.
 Distribution policies
 The salesperson must understand the channel of distribution used by his
company to move its products and services to the final customer. Most
manufactures use more than one channel.

Table 2.2 Prospective/Lead Generating Methods

Sl. No. Prospecting Method Brief Description
1. Referrals from existing customer. Requesting existing
customers to suggest the
names of prospects. This is
a convincing source of
nearly two thirds of total
leads.

2. Referrals from internal company Company advertising, direct

sources. mail, website, trade shows,
and teleprospecting
activities.

3. Referrals from external sources Suppliers, intermediaries,

bankers, trade association
commercial dotcom
vendors.

4. Networking by salespersons Salespersons become

members of civic/social
organization like Lions Club,
Bangalore Club, and Rotary
Club to meet new people
who may be prospect or
may provide leads.
5.
Industrial directories Yellow pages published by
government and private
publishers.

6. Cold canvassing Unannounced calls by

salespeople on firms that
may need the
product/service the
salesperson sells. Costly
and time consuming. Using
for widely needed products
like office supplies.
Qualifying
 It is important that the lead, or the probable prospect is qualified (to meet the
necessary standards or conditions to receive further attention). The necessary
conditions for the probable prospect or the lead to get qualified to the prospect or
potential customer are:
 The probable prospect has a need for the product/services being
sold.
 The probable prospect (could be an individual, a family, or an
organization) can afford (or has an ability) to buy the product or
services.
The prospects, after qualifying, are placed in three groups:
a. Hot prospects
b. Warm prospects
c. Cool prospects
Hot prospect
 These prospects have good requirements of the company’s product/services and
are financially sound. Such prospects are handed over to the company’s
salespersons to convert them to the company’s customers.
Warm prospects
 This group of prospects have medium or average requirements of the company’s
products/services and are financially sound, these prospect are given to the
company’s telemarketing team for follow-ups.
Cool prospects
 These prospects have low requirements and their financial capacity may pr may
not be good. Such prospect are either over to the company’s intermediaries like
dealers/distributors, or their names are kept in pending list for future follow-ups.
Preapproach
 The preapproach step generally includes two task:
 Information gathering in greater depth about the prospect
 Planning the sales call on the prospect
Information gathering
 The prospect’s business, its product and services, purchasing practices, location
of plants, names and background of people who make buying decisions.
Purchasing orientation and practices, the major problems or issues faced by the
prospects and the industry in which it is operating and so on.
Planning the sales call
 This consists of setting objectives for the sales calls, and planning the sales
strategy.
Setting call objectives
 This includes gathering information about needs from the prospect.
Understanding buying orientation and practices, checking merchandise and
making a reorder from the existing distribution, or making a sales presentation.
Planning the sales strategy
 It consists of finding out when (date and time) and whom (purchases executive or
administration officer) to approach by phone call, followed by personal visit. It
includes a tentative judgment about which of the company’s products best meet
the customer’s needs, and also a tentative plan for presenting the specific
product features and benefits.
Approach
 Make an appointment to see the prospect.
Presentation and demonstration
 It is necessary for a salesperson to understand customer needs first before
considering the methods of sales presentation and developing an effective
presentation. The sequence of our discussion will be:
a. Understanding the buyer’s need
b. Knowing sales presentation methods (or strategies)
c. Developing an effective presentation
 Understanding the buyer’s need
- The best way to understand the prospect’s needs is by asking question.
 Situational question
- These questions are about the prospect’s current the situation ar any
facts the salesperson needs.
 Problem identification question
- Salespeople ask these questions to identify or uncover the customer’s
problems, difficulties, or needs.
 Problem impact questions
- Salespeople ask these questions to make a buyer realize the impact or
consequences of the problem and the need to solve problem. The most
important questions and the salesperson should ask as many as needed.
 Solution value question
- Salespeople ask these questions to help a buyer assess the value or
usefulness of a solution.
 Confirmations question
- Salespeople ask these questions to get confirmation from prospects to
hear about products or services.
  Knowing sales presentation methods
- Salespeople must know the various methods (or strategy) used for
making a sales presentation. These are:
a. Stimulus response method
b. Formula method
c. Need- satisfaction method
d. Team selling method, and
e. Consultative selling method
 Stimulus response method
- It is also called as canned approach, a memorized sales presentation or
a prepared sales presentation. This method assumes that if a
salesperson makes the right stimuli, he can get a favorable response
from the prospect.
 Formula method
- This method is also based on stimuli response thinking and also known
as formulated approach or mental states or selling.
- The salesperson assumes that the most buyers can be led through
mental states or steps in buying process and hence uses a well-know
formula. It has four strategies: attention, interest, desire, and action.
(AIDA).
a. Attention - the sales representative plans the sales talk by first getting the
attention of the prospects by making favorable comments about the prospects or
the prospect’s business. Favorable first impression is also created by proper
dress, neatness, a genuine smile, and cheerful expression of genuine admiration
or arousal of customer’s curiosity.
b. Interest –the salesperson finds out which aspect(s) or factors(s) of the product or
service appeals or attracts the prospects.
c. Desire –the objective in this stage is to arouse a strong feeling in the prospect of
wanting to have the product or the service.
d. Action-means buying action, or closing the sale. Some salespeople use trial
close to test whether the prospect is ready to buy.
 Need-satisfaction method
- This method is most challenging and creative form of selling. It is an
interactive sales presentation, which is different from the stimulus-
response and the formula methods discussed earlier. The salesperson
typically starts with understanding the buyer’s (or the prospect’s) needs by
asking situational, problem identification, problem impact, solution value,
and confirmation question, as described earlier. This is done in three
ways: features, advantages, and benefits as described below:
 a. Features- the salesperson describes the features or characteristics of the
product, services, or market offering.
b. Advantages- the salesperson describes how the feature can help or give
advantage to the prospect.
c. Benefits- the salesman then describe how much the feature or advantage
meets a clear and detailed need expressed by the prospect.
 Team selling method
- One of the latest developments in personal selling and growing number of
organizations are using multi-person sales teams to deal with multi-person
buying center (or buying committees) of their customers.

Sales team Buying Centre

 Major accounts Purchase/ materials
Executive executive

 Technical support Operations

Engineer manufacturing
executive
 Logistics executive Exchange Logistics/supply
relationship chain executive
 Information system process Material manager
Executive

 Finance executive Finance executive

Strategic issues
 Team selling should not be used for low sales and profit customers, who could
be served by the salespersons with transaction selling approach.
 The emphasis in team selling is on building a long term relationship between
selling and buying firms by focusing on the whole company and its capabilities,
rather than just selling a product or a service.
Group presentation
 Sales team or a salesperson makes the sales presentation to a group of
decision-makers from the buying organization. Some of the guidelines for an
effective group presentation are allows:
 Need- analysis. Before the group presentation, the salesperson should talk with
all or most members of buying centre (or purchase committee) to understand
their needs or problems and what benefits they are looking for. Also use yhe
opportunity to build a rapport or a good relationship.
 Introduction. First part of the group presentation should include the company
name, members of selling firm and their designations, and a brief statement of
the purpose or objectives of the presentation.
 Convincing. Mention, during presentation, the company’s experience, names of
renowned customers, third- party celebration of satisfaction, and quality
assurance.
 Specific-benefits if need-analysis was not done before the presentation, ask
each person the benefits they look for in the product or service they intend to
buy. Then go through the presentation and show hoe the product or the service
offered meets with each person’s specific benefits.
 Well Prepared At the end of the presentation, the selling team should answer
question from the buying team. The selling team should make each team
member responsible to his/her area of specialisation such as technical,
commercial, and so on.
 Consultative selling method (or problem – solution presentation) is
increasingly used as professional method or problem- solving approach.
 For successful consultative selling, the requirements are as follows:
 Salespeople should have an in- depth knowledge of the customer’s
company and the customer industry, and carry out of detailed analysis of
the problems or needs.
 Salespeople should be aware of key members of the customer’s buying
center (or purchase committee) and get their acceptance of the needs /
problems.
 Salespeople should prepare the proposal for solving the buyer’s problems
and make the sales presentations.
 Salespeople should use the selling firm’s cross- functional expertise to
provide solutions to custom ers business and technology related
problems. If needed, external sources should be used by the sales team
to become an expert on the customer’s business and to solve the
problems.
 This is also sometimes referred to as problems- solution method or
problem-solving approach.
 Salespeople should build long-term partnership with the customer.

 Developing an effective Presentation

 For developing an effective presentation, the ff. guidelines would be
helpful:
 Planning
 Use Technology
  Adapt Presentation
 Benefit Plan
 Don’t Overload
 Prospect”s Language
 Convincing
 Demonstration- one of the important selling tools of a salesperson.
 Sales presentation can be improved by demonstration
 Demonstrations prove the benefits of the product and reduce the risk of
wrong purchase to the buyer.
 Some of the Benefits of Using the demonstration as a tool for selling are as
follows:
 Buyer’s doubts or objections are cleared and their questions are
answered. This improves a buyers purchasing interest
 It provides a good support in the selling process.
 It helps the salesperson to find out the specific benefits of the prospective
customer. The salesperson can then show his/her products or services
can meet those benefits better than the competitors.
 Planning and Conducting Demonstration:
The salesperson should necessary planning by rehearsing the
demonstration with colleagues, who act as buyers, to ask questions or raise
objections. There should be planned in two parts.
 The salesperson should explain briefly the product features, advantages
and benefits of the product or actual working of the product works.
 The salesperson should show demonstration or actual working of the
product.
The salesperson should also understand the purpose of demonstration to
obtain a sale or to lead for further discussions or negotiations.

 Matching Presentation Methods with Situations

Table 2.5 Matching sales presentations methods with sales situations

Sales Presentation Methods
Stimulus – response method, canned
approach, or memorized sales
presentation
Suitable Sales Situations
Suitable when selling time is short and
products are simple or non-technical.
The method is used by sales people
with less experience, as it gives them
more confidence used for door –to door
or telephone selling.

Formula method, formulated approach, In straight rebuy or repeat purchase

or mental states selling. situation, when the customer is familiar
 with the product or services of
salesperson’s company or when
salesperson’s is aware of the buyer’s
needs, this method is appropriate.

Need- Satisfaction method It is creative form of selling, suitable for

selling industrial products, or consumer
durable products, where the
salesperson has to understand the
prospect need first.

Consultative selling or problem- For selling high-cost technical products

solution method or services like computer hardware and
software. power transformer and
furnance, this presentation method is
used to present to a grouped of
individuals , using team selling
approach
 Overcoming Objections
Two types of objections or resistance happen:
 Psychological (or hidden) - include predetermined ideas or beliefs,
preference for established brands, dislikes of making decisions, anxiety or
resistance to spend money.
 Logical or real objection- is tangible such as quicker delivery schedules,
high price product quality, or product availability.
 Methods for Handling and Overcoming Objections
 Ask question
 Turn an objection into a benefit
 Deny objections tactfully
 Third- party certificate, and
 Compensation
 Trial Close/ Closing Sale
 Trial close- Is one of the selling techniques. It checks the attitude, the
opinions of the prospects.
 Closing the sale means asking for the order.
 Closing – is the process of helping the buyers to malke a decisions that
will benefit him/her.
 Buying Signals are follows:
 Examines the products
 Ask another person’s opinion
 Asks question
  Become Friendly
 Closing Techniques
There are many closing techniques some of closing techniques are:
 Alternative- choice close- in the the technique the prospect is given a
choice between two or more items or models, and not between buying or
not buying.
 Minor point’s close- this technique is similar to the alternative – choice
close.
 Assumption close this technique is effective when the salesperson
connect the customer trust to such an extent that the sales person
prepares the orders and hands it over to customer for his signature.
 Summary of Benefits close- this technique is very popular. It is simple
and straight forward.

 Steps Involved are:

 Find out the important benefits of your product or service that appeal to
prospects, during presentations
 Summaries these benefits by using FAB ( features, advantages, and
benefits) statement and SELL sequence ( Show feature, Explain
advantage, Lead in to benefit, Let customer talk)
 T- Account (or modified T- account) or balance sheet close – this technique
is used by the salesperson, when he takes a piece of paper and draws a large T
on it.
 Special Offer close
 Probability close- this technique is used when the prospects says, “ I will
think it over, or “I will let you know”.
 Negotiation close- most salesperson close the sale after successful
negotiations with buyers.
 Closing Techniques and Sales situation
 Copy table 2.7
 Follow up and Service- salespeople must understand that their job is not over
after the order.
 Check Customer Order
 Plan Follow up visit at the time Delivery
The Salesperson should plan a follow up call when the equipment or item is to be
delivered
 Account Penetration – Successful salespeople know that there is still a lot of
work to be done after making a sale. By contacting the customer after the sale,
the salesperson lays the foundation of a positive businessrelationship. Account
 Penetration means working and contacting people throughout the account and
discussing about the selling firm’s products and services.
 Relationship Market – Today’s salespeople work to build and maintain long-
term, mutually beneficial partnerships with their key customers. Effective follow-
up and customer service will help build loyal customers.
 Negotiation – Salesperson should have certain skills and qualities to be effective
in negotiations. Salesperson talk to one person or a group of people, there is a
possibility of negotiation.
 When to Negotiate – Negotiation is a proper procedure to be followed for
making the sale when the following conditions or circumstances are present:
 The buyer puts certain conditions for buying to the seller. For instance, “If
you will reduce the price of your product by 8 percent, I will buy”.
 When the arrangement between the buyer and the seller will have to take
place on several factors, such as price, delivery, quality, and payment
terms.
 When the product or service to be exchanged is customized to the
requirement of the buyer and may take long-time to execute the order
 When there is a zone of agreement between the two parties and the final
price is to be decided throughout bargaining
 Preparing for negotiation with customers – Successful salespeople prepare
well for negotiations with customers by following the steps described below:
 Planning – Gathering information about the competitor’s prices, quality,
service, share of business and so on.
 Building Relationship – Much before the final negotiation, salespeople
should use the available time to build an environment of trust,
understanding, and relationship with the customer. A good relationship
between the two parties eases the tension during the negotiation process.
 Purpose
 Styles of Negotiation – There are four different styles of negotiation. These are:
(a) I win, you lose, (b) Both of us win, (c) you win, I lose, and (d) Both of us lose.
Out of the four styles of negotiation, the style that is typically used for the
customers, suppliers, employees, and relatives is both of us win of win - win. This
is achieved by the following guidelines:
 Much before the final negotiation, build and environment of trust and
confidence.
 During the negotiation, be polite and humble, which would help the
customer to communicate in easy manner.
 In the initial stage of communication, the focus should be on identifying
and agreeing to the problems rather than the solutions.
 Both sides should then work together, pooling their resources,, ideas, and
sharing information to solve the problems stated earlier
 Both sides should make concessions at regular frequency
 Defensive posture, legalistic, or contractual approach should be avoided.
 Salesperson should recognize, based on the following tips, if the prospect
or buyer uses “I win, you lose” style:
 The buyer starts with tough demand or ridiculous offer
 The buyer raises voices or make emotional outbursts
 The buyer does not reciprocate or is stingy to the concession made by
the seller
 The buyer ignores the time deadline
 Once the salesperson recognizes that the customer or prospect is using
this style against him, he should defend his position in the following
manner:
 He should take equally strong position by presenting a clear but
unemotional opposition to the prospect’s demand
 He must explain why he holds his position and seek the reason from
the customer for holding the position
 He should stress the consequences of a failure to resolve the issue.
The purpose here is to move the other party from ‘win – lose style’ to
win – win style.
 Transaction and Relationship Selling

Parameters Transaction Selling Relationship Selling

Objective Get the order of sales Become sole or preferred
supplier

Focus Sales presentation, Building trust and superior

overcoming objections, and customer service
closing

Customer Type and Many customers with lower Few high-profit potential
numbers profit potential customers

Length of Short days Long (Months / Years)

Relationship

Sales Team One or two junior level sales Team selling with three to five
people junior and senior level people

Selling Efforts Low to medium, involving the High, involving many functions
few functions
Pricing Strategy Competitive or lowest prices to Mutually acceptable prices for
get sales profits and mutual benefits

 Transaction Selling (or Exchanges) – These are mostly one-time-only exchanges

with an objective of getting sales or orders from customer whose profit potentials
are low. The selling efforts are minimum, with low or competitive prices and/ or
availability as main criteria for getting sales.
 Relationship Selling – The objective of relationship selling is to become the sole,
or preferred supplier. This objective is achieved by building strong social,
economic, service, and technical ties over a long period of time. The foundation
of this relationship is trust and commitment.