DEFINING PERSONAL SELLING

Personal selling is also known as face-to-face selling in which one person who is the salesman tries to
convince the customer in buying a product. Personal selling is a broader concept than salesmanship.
Personal selling, along with other marketing elements such as pricing, advertising, product
development and research, marketing channels, and physical distribution, is a means for
implementing marketing programs. Salesmanship is one of the skills used in personal selling: it is the
art of successfully persuading prospects or customers to buy products or services from which they
can derive suitable benefits, thereby increasing their total satisfactions. A unique attribute of
personal selling is that sales personnel identify differences among buyers and pattern presentations
according to individual peculiarities.

The Personal Selling Process

The personal selling process is a consecutive series of activities conducted by the salesperson, the
lead to a prospect taking the desired action of buying a product or service and finish with a follow-up
contact to ensure purchase satisfaction. There are many steps involved in the process of personal
selling: prospecting, pre-approach, approach, sales presentation, handling objectives, and follow up.

PROSPECTING

The first step of the personal selling process is called ‘prospecting’. Prospecting refers to locating
potential customers. There are many sources from which potential customers can be found:
observation, social contacts, trade shows, commercially-available databases, commercially-available
mail list and cold calling.

PRE-APPROACH

The nest step in the personal selling process is called the ‘pre-approach’. The pre-approach involves
preparation for the sales presentation. This preparation involves research about the potential
customers, such as market research. Research is useful in planning the right sales presentation.
During the pre-approach the salesperson may also plan and practice their sales presentation.

THE APPROACH

The next step in the personal selling process is called the ‘approach’. The approach refers to the
initial contact between the salesperson and the prospective customer. During this stage the sales
person takes a few minutes for “small talk" and get to know the potential customer. The goal of the
approach is to determine the specific needs and wants of the individual customer, as well as
allowing the potential customer to relax and open up.

SALES PRESENTATION

The next step in the personal selling process is called the ‘sales presentation’. The sales presentation
involves the salesperson presenting the product or service, describing its qualities and possibly
demonstrating features of the product. Ideally the sales presentation will be individualized to match
the needs and desires of the potential customer.

HANDLING OBJECTIVES

In some cases, after receiving the sales presentation, the potential customer will have some
questions or concerns. In order to secure a sale, the salesperson must address these questions or
concerns; this step is referred to as ‘handling objectives.’

CLOSING THE SALE

The next step in the personal selling process is referred to as ‘closing the sale’. ‘Closing the sale’
refers to finalizing the sale and persuading the potential customer to make the purchase. During the
‘closing the sale’ step, prices and payment options may be negotiated.

FOLLOW UP

The final step in the personal selling process is referred to as the ‘follow up.’ The follow up involves
the salesperson contacting the customer after the sale to ensure that the customer is satisfied. If the
customer has any existing issues with the product, the salesperson will address them. A successful
follow up stage of personal selling can be very effective in ensuring repeat sales, evaluating the
effectiveness of the salesperson, and obtaining additional referrals from the satisfied customer.

Note on Territory management and briefly describe the procedure used for designing sales
territories

Territory management is a customer group or geographic area over which either an individual
salesperson or a sales team has responsibility. These territories are usually defined based on
geography, sales potential, its history or a combination of these factors. The ultimate aim of this
division of areas is to maximise sales and profits, and to allocate resources efficiently.

It is very important to create sales territories that are balanced. When a sales territory is out of
balance, there are two things that can happen. If a territory is being under-serviced, the sales team
or salesperson is spread too thinly and it leads to sub-optimal levels of activity. Those responsible for
the territories will seek out too few leads, identify too little prospects and spend too little time with
customers because they are overworked. This leads to customers going to competitors and you
losing sales.

PROCEDURE USED FOR DESIGNING SALES TERRITORIES

The process of designing sales territories consists of four steps, i.e., firstly selecting a basic
geographical control unit; second, determining sales potentials in control units; third, combining
control units into tentative territories; and lastly adjusting for coverage difficulty and redistricting
tentative territories.

1. Selecting a basic geographical control unit

The first step in the process is the selection of a basic geographical control unit and the most
common control units are counties, cities, zip code, standard metropolitan statistical areas, trading
areas, districts, and states. Once the control unit is selected, the sales territories are grouped
together on the basis of the control unit.

2. Determining sales potentials in control units

In this step the territorial planner will measure the sales potentials i.e., the maximum sales
opportunities during a period of time to a specific market segment. Each control units can be seen as
a geographical market segment and like all other market segments even these consist of present and
prospective customers and it is the responsibility of the territorial planner to identify these
customers of the product as precisely as possible.
3. Combining control units into tentative territories

The next step for the territory planner is to combine control units into tentative sales territories. This
step helps in getting the “first approximation” of sales territories, by combining contiguous control
units into tentative territories, each containing approximately the same sales potential.

4. Adjusting for coverage difficulty and redistricting tentative territories

The last step is to redistrict the territories by adjusting for coverage difficulty. The sales potential of
“tentative territories” is similar to that of “almost certainly territories” but require very different
selling effort and also selling expenses. Here we remove the unrealistic assumption that no
differences in the characteristics of geographical Control units exist.

Question 5)

2. Areas of concerns which are apparent are-

ANSWER 3-

Assumption- Company name- LG

Product- LG’s Smart washing Machines

Before establishing the Promotional budget for the product launch, we need to understand some
major factors that will determine the formulation of an efficient promotional mix.

1. Determining Target Market

 Our primary target segment is high-income group consumers in metro cities.
 Well educated consumers with annual household income of around Rs. 10,00,000
per annum
 Women are still the dominant users of washing machines
 Single men or women leading busy lives and living alone in metropolitan cities
 The other segment targeted are Industrial houses and commercial establishments in
clothing and laundry business.

2. Determining Promotional Objectives

 To introduce a new range of Smart Washing machines in the market
 Create greater brand awareness of the product among target segments
 Differentiate my product from that of the competitors
 Persuade retailers to stock my product or make large orders

3. Selection of Promotional channels/ Promotional mix

Promotional mix consists of a specific blend of advertising, public relations, personal selling and
direct marketing and sales promotion tools that a company uses to persuade and communicate
value to customers and build relationships.

The channels we can use are-

Advertising- Tv ads featured during prime time is one of the major sources to generate product
awareness as it is viewed by working housewives at large. Print ads on local newspapers and an
online campaign highlight its distinguishing features will start conversations about the product.

Sales Promotions- Incentivising distributors, salesmen and consumers play a huge role in sales of
washing machines. As most consumers buy washing machines from Big retail outlets, tie-ups with
them can be fruitful.

Direct Marketing- As the product is high on features and expensive this form of marketing will create
more credibility by communicating with them in a more personalized manner via emails,
telemarketing etc.

Public Relations- Since LG is a big brand, press releases and big events sponsorships can help attract
attention towards a new product.

Note- Personal selling will not create a substantial output in LG’s case.

4. Forming a budget-
A Budget of Rs. 50 Crores should be allocated for all advertising and marketing purposes.
Budget Breakup-
Importance of channels and their corresponding allocation of budget for our product launch
in decreasing order

1. Advertising- 35%
2. Sales Promotion- 30%
3. Public Relations- 25%
4. Direct Marketing- 10%

Promotional Mix Budget

Advertising
5; 10%
Sales Promotion
17.5; 35%
12.5; 25% Public Relations

Direct Marketing

15; 30%
Sales promotional tools are used to incentivise the purchase or sale of a product. They are if three
types-

1. Consumer Promotions- Targets consumers or end users

2. Trade Promotions- Targets wholesalers retailers etc
3. Sales force Promotions- Targets company salesforce

Consumer Promotion tools we can use are-

1. Coupons- We can distribute discount coupons to early buyers of the washing machine.
2. Point of Purchase Displays- encourages consumers to buy a product immediately. These
displays draw attention to the product by giving it special placement and signage. 
3. Demonstrations- Free demonstrations in showrooms of the product
4. Contests and sweepstakes- Collaborate with events to offer washing machine as prize to
winners
5. Loyalty Programs- Shopping cards can be given in which certain points can be allocated
by LG to the buyer’s card which can be redeemed later.

Trade Promotional Tools-

1. Trade shows- It attracts a lot of buyers as manufacture can introduce the new
product
2. Trade allowance- Can be given to wholesellers retailers etc. Eg- advertising
allowance to print ad on newspaper etc. Will benefit both the parties
3. Free Goods- We can offer a machine to the manager of a retail store if he manages
to meet a set sales target.

Salesforce Promotional Tools-

Promotions- Salesforce of the company can be promoted if they meet their sales
target.
INTEGRATION OF DIFFERENT COMMUNICATION MIX ELEMENTS

Communication Mix elements have to be blended judiouscly to make the marketing efforts produce
desired results. Thus I am dividing the Plan into quarters to suit the changing sales and Brand
awareness dynamics among the customers. By micro division of the Plan, we will be able to execute
it effectively.

Quarter I:

First we should use the Public Relations channel and do a press release of the product to initiate
product awareness. A promotional campaign can be launched to increase the spread of awareness
about the product’s differentiating features. In addition to that we can launch TV advertisements
during prime time targeted at metro cities till the end of this quarter. We can also participate in
trade shows to educate dealers and generate channel support for our new launch. We can make
appearances in TV talk shows which speacializes inElectronic products and promote our product. Out
training staff will work with retail sales personnel to explain features and benefits. Direct Marketing
channel like emails can be sent out to our customer database with discounts and attractive offeres
enclosed for the early birds.

Quarter II:

An Integrated Print and internet campaign can be launched to start conversations about our
product. The campaign will highlight our differentiation and value for money in the changing
times.The campaign will focus on point-of-sale signage and online videos and ads. We can tie up with
major retail stores like Reliance etc. to increase our Market presence and sales.

Quarter III:

Our focus is to reach pan-India distribution and a national advertising campaign will help us get the
views and spotlight. Celebrity endorsements will help immensely in building trust among the
customers. Radio advertising can also be impactful as a lot of working professionals still tune into the
FM while commuting. Discounts and cashbacks can be given across stores to attract customers.
Telemarketing can be a useful channel to directly demonstrate and sell our product to the
customers.

Quarter IV:

In this stage will try to analyse our performance in terms of sales and retailer na ddistributor
performance. Surveys an feedback will be taken up seriously. Any changes or upgradations in our
Marketing plan will be brough about in this stage.

ANSWER 5-

1. The positive aspects of the firm’s performance from the above table are:
a) They have grown their sales by $2M, from $25M to $27M. A growing sales is a positive sign.
However, to probe further additional data will be required.

b) They have expanded their distribution network from 4 resellers last year to 6 resellers this year.
( 3 new additions and 1 reseller omitted) This shows that they have fairly decent relations with the
retailers in the market.

c) Overall increase in $2M in sales shows that the company is growing in terms of Market Demand of
their products, thus they are expanding their distribution channel by including more retailers in their
umbrella.

d) The Retailers are efficient in selling the products to consumers which has led the company to send
them more of their goods. Thus, they are reaching out to the right retailers suitable for selling their
product.

2. Some apparent areas of concern are-

a) Reseller C, which sold $12M worth of goods for the company i.e; 48% of the sales through
retailers, has received no goods from the company this year. This shows that we may have lost our
key account retailer which can impact our sales.

b) The key account retailer C must have had some loyal customers who purchased from the store. As
the store is not selling any product of the company it may cause inconvience to those consumers.
This might result in a product switch to competitor products by the consumers.

C) It might take some time to build good relations with the new retailers.

3. Some of the possible reasons for change in sales results with Reseller C could be:-

a) The Reseller was unhappy with the margins, incentives etc he was getting from the company
despite being a key account.

b) Misbehaviour by salesforce of the company with the retailer

d) A competitor approached him offering better margins and discounts on its products

c) Decided to shut down operations due to unforeseen circumstances

d) The retailer was involved in malpractices such as overpricing the products to the consumers,
hoarding goods to sell at higher prices etc.

e) The retailer was defaulting in his payments and demanding unreasonable credit periods

D) The firm’s focus last year was mainly on a few retailers and one big key account i.e; Reseller C. to
make its sales to the consumers. They were dependent on middlemen.

This year the company should focus on:-

a) Expanding their Retailer network and maintaining good relations with them
b) Not be acutely dependent on any one retailer unless they have established a goodwill with
the company