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Unit 13

Personal Communication Channels


Book Code - MB0046 Dr. Smita Choudhary
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Contents
Introduction Personal selling Sales management Personal selling process Direct marketing

Introduction
Advertisement clutter (confusion or mess or mix up) and large product range is causing new challenges. One of the biggest challenge is how to reach the consumer. The indirect media has an effect on consumer but its effectiveness in producing sales has decreased with time. Organizations are looking forward to interpersonal communications. Companies are encouraging word of mouth communication. They are trying to increase the effectiveness and efficiency of their sales force.

Learning Objectives
After studying this unit, you will be able to Define personal selling Understand the process of personal selling Analyze the sales management techniques Identify and discuss the major forms of direct marketing

Personal Selling
The communication technique in which sales people build the personal relationship with customers to create value for the organization. The value for sales force is sales and for customer is benefits.

Nature of personal selling


There has been a change in pattern in personal selling. Earlier sales jobs were perceived to be low. The emergence of modern corporations and rise of new India requires professional selling. Now days it is not only selling. It is using professional skills to have a long term relationship with the customers to generate the value continuously. Due to this there is a growth of professional sales force. Even companies that marketed through channels entered into the personal selling. For example, Hindustan Unilever Limited (HUL) which has retail and wholesale channels, recently entered into the network marketing.

There are many types of sales jobs used to sell the product of the organizations. They are 1. Delivering: The job of sales executive is to make the products reach to the customers destination. For example, A sales person working for transport or courier company makes the goods reach the customers places. Sales 2. Inside order taker: Sales executives in the retail stores like Subhiksha help the customer in identifying the product. The person in the hotel takes the order and serves better. 3. Outside order: These are field executives who go to the customers place to get the order. 4. Missionary selling: These are sales executives who provide the information and promote the companys products. For example, medical representatives. 5. Sales engineer: In this position, the sales executive is a technical expert and works with non technical sales executive to provide help on technical information required by the customer.
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Approaches to Personal Selling


1. Stimulus response selling: In this approach, sales person provides the stimulus (motivation or encouragement) and expects the response from the buyer. This process continues till the purchase decision has been made. 2. Need satisfaction selling: In this approach, sales executive finds the need of the customer and confirms it. He provides the various offerings (options) to the customer to choose from and this process continues till the purchase has been made. 3. Problem solving selling: This approach is used when the customer faces the purchasing problem. In this approach, sales executive defines the problem of the customer, finds an alternative solution and evaluate them. Then he works with particular solution till the customer purchase.

Situations That Favor Personal Selling


Personal selling is useful when: The price of the product is high, the product is technical in nature and needs demonstration. The product is in the introductory stage of the product life cycle. Organization does not have enough money to carry advertisement campaigns. Product can be customized i.e. tailored according to customer needs. Market is concentrated.

Advantages and Disadvantages of Personal Selling Advantages


1. 2. 3. It can be customized. It can focus on prospective customers. It results in the actual sale, while most other forms of promotion are used in moving the customer closer to the sale. It is costly to develop and operate a sales force. It is very difficult to attract upper class people.

Disadvantages
1. 2.

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Sales Management
Deciding the sales territory Sales territory is the geographical area in which the sales executives have to work. The territory is set to avoid conflict between two sales executives. This helps to set a fixed quota for sales executives and is used for performance evaluation.
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Sales force size The size of the sales force is decided by work load method. The work load method consists of a) Identification of customers and grouping them into different categories. b) List out the activities of the sales executive. c) Find out the time required for selling and non selling activities of sales executives. d) Find the number of calls the sales executive has to do in a particular period. e) Calculate the number of sales people required. Sales organization Sales activities in the organization are allotted on the basis of geography (Bangalore, Mysore etc), product (personal care, water purifier etc.) customer (steel companies, electric companies etc) or matrix type. This helps company to have better control over the sales executives.

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HR PRACTICES IN SALES MANAGEMENT

Recruiting
Recruitment is the process of finding candidates and encouraging them to apply against a vacancy in an organization. Selection is the process of choosing some candidates out of all those who have applied. Selection is recruitment, but recruitment is not selection Selecting means rejecting the unfit candidates. After deciding the number of salesperson required, the sales manager must select personnel. The normal sources of recruitment are:
Internal sources External sources

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Internal Sources
Many firms feel that it is best to fill the vacancies of salesmen from the existing employees of the organization. It may also be called as promotion. This can be used by analyzing the ability and potential of the staff on the basis of seniority i.e., length of service. Merits 1. Better co-operation can be expected. 2. They are loyal. 3. Since it is a promotion, sincere and honest performance can be expected. 4. They may not need training. 5. They may not need high salary. Demerits 1. There is limited scope for selection. 2. Favoritism plays its role. 3. The person may not adjust himself to the new job as the nature of work is different.

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External Sources
The external sources of recruitment are: 1. 2. 3. 4. 5. 6. 7. Employment Exchange Competitors organization Salesperson of non-competing firms Educational institutions Recommended cases Advertisement Unsolicited applications

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1. Employment Exchange: Private and public employment exchanges are the best source of personnel. They maintain proper registers with names and other full details of persons. The candidates may be untrained and inexperienced and hence may requiring further training. 2. Competitors Organization: The salesmen employed in other competing firms can also be chosen. He is well trained. Such a person may be attracted by giving more facilities and a higher salary. In this case, his habits, sincerity and loyalty must be verified. But this method is not morally accepted. 3. Salesperson of Non-competing Firms: salesperson can also be chosen from non-competing firms. Such persons may be experienced but may need training to achieve the required sales objectives.

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4.

5.

6.

7.

Educational Institutions: In this method of recruitment students are directly selected from specialized institutions, where theoretical and practical knowledge is gained by them. The head of the institution maintains complete records of students. This method is used in advance countries like America, England, etc. but in India it is rare. It has been neglected with the feeling, just from egg i.e., inexperienced. Recommended cases: The employees of the firm, managers, superintendents, section heads etc., may recommend candidates from their friend circles. They have a moral responsibility when such persons are recruited. The employee who recommends personnel will be blamed, if the person is not up to the mark. Advertisement: This method is generally used for recruiting salesmen. Advertisements are displayed in newspapers, trade journals specifying the job and the required qualifications, experience and skill. The number of people who apply is large because the news spreads over a wide geographical area. This gives more scope for selection. Unsolicited applications: These are unrequested applications received at the organizations gate or through e-mail.
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Selection The process of selection is different for every organization. The general steps used for selection are 1. Application blank 2. Screening 3. Reference 4. Personal interview 5. Test 6. Medical examination 7. Final interview (appointment)

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1. Application Blank: In application blank the information necessary for appointment is collected from the candidate. It gives a clear idea about the candidate. Generally, it consists of information like name, gender, qualification, age, experience, health, social activities, references etc. 2. Screening: Screening is a process by which unsuitable applications are rejected and not processed further. The remaining applications are considered for appointment. This saves time and energy. 3. Reference: Applicants are asked mention the names of two references or referees. References are used to enquire about the integrity, general character and ability of the applicant. If the opinions are favorable, the applications passes on to the next stage else it is rejected at this stage.

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4.

Personal Interview: The screened applications are considered for selection and the firm sends out interview letters to such candidates. By personal interview, the sales manager can understand the positive and negative qualities of the applicant. A good interviewer must be unbiased, able to find facts and be a good observer of the interviewee. Interviews are also of two types: a) Patterned interview In patterned interview same questions are asked to all candidates. It is easy for comparison purpose. b) Non-patterned interview In non-patterned interview there are no standards questions to be asked to all candidates. The applicant is allowed to talk freely.

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5.

Tests: Test is an additional tool, with is used to further find the suitability of the candidate to the job. The important types of psychological tests are:
i. Ability Test: This test is used to find the candidates capacity to grasp things and to know how well a person performs a particular task with motivation. This can also be called a mental ability or intelligence test. Such tests verify the suitability of a candidate for a particular job. Habitual Characteristic Test: A person may be intelligent but may hesitate to take a decision. This test is used to know ones aptitude and interest on normal, daily work, irrespective of the best behavior occasionally. Achievement Test: This test is designed to know what knowledge a person has gained from his education or training.

ii.

iii.

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6.

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Medical Examination: Besides qualities and eligibility, a person must be physically fit for the job. Salesmen who have diseases and are not physically perfect will affect the business. To ensure that salesmen are fit and free from any diseases, selected applicants have to undergo medical examination. Final Interview and Appointment: The selected applicant is probably, called for a final interview and his suitability is measured through different tests, physical reports etc. The job must be explained to him along with all relevant details, which are required to perform the duties efficiently.
If everything is in favor of the applicant, an agreement is executed by him. Generally, the agreement contains duties and authorities, sales quota, sales territory allotted, salary and conditions of resigning. It is followed by an appointment order, which contains designation, jobs to be performed, salary and other financial benefits etc.
Congrats!! You have been selected
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Training
Training is in continuation of selection. After selecting the salesmen, there are two options They can be directly sent to the field. They can be sent for a training programme. Salespersons need training to call them qualified. Through training they achieve perfection and self development. Training means making a salesperson perfect in his work. Training programmes are procedures or methods through which knowledge and skills are gained.

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Significance of Training
Now a days, there is cut-throat competition in the marketing world. The world is dynamic and not static. Customers are more benefit-oriented. Producers produce new products, new devices, and products with multiple uses to satisfy the ever-changing demands of the consumers. Thus, training is essential to keep the salesmen, with up-to-date knowledge, in respect of new or developed goods. Training gives scope for improvement.

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Objectives of Training The objectives are:


1. To encourage the salesmen to learn the technique and principles of salesmanship, process of sales, canvassing (surveying) etc. 2. To reduce the labor turnover rate in the sales force. 3. To encourage better sales performance. 4. To improve the relations with the customers. 5. To increase the efficiency of sales personnel. 6. To keep the salesperson informed of the knowledge of products, market, competitors etc., to face all situations. 7. To lower the selling expense in order to increase the profits. 8. To maintain sound relation between employer and employee. 9. To develop better knowledge, and the ways and means to resist all situations. 10. To motivate the consumers more effectively.

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Advantages of Training to Salespersons 1. A trained salesperson always wins customers by systematic approach. 2. salesperson acquires better understanding of the firm, its past history, policies and this helps the salesperson in effective dealings. 3. A trained salesperson takes less time in completing a sale. 4. A trained salesperson increases volume of sales which brings more profit to the firm and himself. 5. A trained salesperson is able to meet consumers demand and help in solving problems. 6. Increased volume of sales helps in reducing cost of production. The cost per unit of order or per prospect can be minimized. 7. A better relation is created among the customers through reducing customers complaint, increasing brand loyalty etc. 8. The ability of the salesperson is increased by expert knowledge.

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Training Programme
A firm should prepare a programme for sales training. The training depends on nature of the job and the products to be sold. A good training programme should work with the following ideas or principles, known as ACMEE: A: Aim of Training C: Content of Training M: Method of Training E: Execution of Training E: Evaluation

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1.

2.

Aim of Training: The aim of training is to make a recruit a good salesman. Some of the qualities of a good salesman may be natural in him, but not all qualities. Training makes him have all qualities required of a salesman. Content of Training: The content of the training programme depends on the subject-matter of training. A training programme differs from firm to firm, due to differences in products, markets, policies of the company, trainees ability etc. A good training programme helps the traineesalesman to learn and understand the following contents: a) The knowledge of his job b) The products c) The company d) The markets and consumers e) The competitors f) The sales techniques g) The routine reports etc.

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a) The knowledge of his job


A salesperson should have solid plans about his sales planning, meeting customers, sales talks, demonstration, presenting the goods, concluding sales, securing order, collecting dues, handling objections and complaints etc. Also, he must be a keen observer of market conditions, competition, consumers likes and dislikes etc. He should co-operate with his seniors. Thus, he is trained with a purpose, he should know what the firm expects from him.

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b) Products A salesman must have good knowledge about the product. The salesman must have the following knowledge about the product:
1. Raw materials used in the product. 2. Manufacturing methods in brief. 3. Research and development undertaken. 4. Improvement brought out. 5. Its suitability to the consumers. 6. Its trade mark, brand, characteristics. 7. Its color, weight, packaging, quality control etc. 8. Selling points of the products. 9. Product merits and uses to consumers. 10. Limitation of the product performance. 11. Its price and discounts offered. 12. Service after sales and guarantee period. 13. Demonstration of its actual working. 14. Availability of the products. 15. Cost of operation and maintenance. 16. Comparative study of similar products. 17. Strength and weakness of competitors products. 18. The position of the product in the product line.

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c) The Company A salesperson must have the following information about the company:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Brief history of the firm. Its marketing policies. Objectives and purposes of the firm. Economic and social objectives. Its position in the market field. Credit policies, sales policies, personnel policies. Capacity of the plant. Personnel of the firm-directors, stock-holders. Execution and handling of orders, sales accounting and collection methods. Salary, commission computation, traveling and daily allowances etc. and their payment procedures. Method of exercising control over the salesman. Allocation of quotas and territories. Marketing policies, pricing policies. Handling of complaints and their adjustment.

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d) The Markets and Consumers


The salesman must have a good knowledge of the size of the market, demand for the products and the area under the competitors side. Also, the salesman should know about the type of customers, buying motives, likes and dislikes of the customers. The salesman should pursue customers according to their gender, age, place, etc. The salesman must adjust himself according to the nature of the customers.

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e) The Competition
Salesman must have good knowledge or comparative study of the selling activities of rivals. A salesman must know the merits and demerits of his product as well as rivals product to make a comparison. The salesman should know the rival firms policies, method of approaching the customers, how they are paid, the customers opinion, how their product is, how they fulfill their duties, the area they like or dislike, their selling-points etc.

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f) The Sales Technique



The sales techniques are the essential part in sales training. After training, the salesman is sent to the field, where he has to sell the companys product. He must be given complete training in Sales Process. Training must be provided on the following items:
a) b) c) d) e) Selling process. Method of gaining interview from consumers. Method of approach to consumers. Demonstration and presentation. Method of handling objections of consumers.

f)

Why salesman fails in the field?

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Routine Reports

Salesperson should be trained to know his routine work and submit his report to the firm.
The a) b) c) d) e) f) g) h) i) j) report may include: Amount of sales made. List of new customers. Credit outstanding of customers. Collection of outstanding dues. Competitors position in the market. Maintenance of accounts of expenses. Demonstration and display of products. Action taken on complaints, grievances etc. The attitude of market in respect of competitors. Consumers suggestion if any.

The reports may be sent to the firm daily, weekly or monthly, etc.

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Training Needs of Salesmen at Different Times New Salesmen Need 1. Facts about the company history, policies etc. 2. Product details 3. Companys systems and procedures 4. Fundamentals of selling their specific products 5. Moral training Regular Salesmen need 1. The above five items 2. Changes in policies and procedures 3. Facts about new products 4. Future plans of the company 5. Knowledge to supervise others 6. Know-how to fulfill responsibility 7. Attitude or moral training
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Supervisors need 1. Skills needed by others in performing duties 2. Ability to train others 3. Ability to organize 4. Ability to analyze and plan 5. Ability to evaluate and follow up

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Training Methods Different methods are used for providing training to salesperson. They are divided into two broad categories: 1. Group training
a) b) c) d) e) f) g) h) Lecture Method Audio-visual method Discussion method Conference method Role playing method Panel method Round table method Brain storming method

2. Individual training
a) On-the-job training b) Sales manual c) Initial or break-in training
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1. Group Training a) Lecture Method: An expert or a lecturer speaks to traineesalesmen about the various aspects of selling. It involves verbal talk in a classroom. This system is widely used. To make the lecture more interesting, visual aids, demonstration, suitable examples may be added. This method is economical, and easy and quick in providing theoretical training to a group of salesman. But it is difficult to evaluate the effectiveness of lecture method. b) Audio-Visual Method: In addition to the lecturing (telling) method, training programs include the use of visual aids, such as films, slides, posters etc., and are capable of making the lectures more interesting.

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c)

Discussion Method: In this method, an actual case or an imaginary case is given as a problem to be solved, to the different groups. Each group has to understand the problem and find a solution. The different conclusions or suggestions are analyzed collectively. This type of training helps the salesmen in correcting their own views. It is suitable for a small group. It is slow and costly. d) Conference Method: Sales conferences and sales meeting are a kind of get together of staff, weekly, fortnightly or monthly. In a conference, the opinions of various persons are shared. Meetings or conferences provide good motivation as the participants get a chance for creative thinking and to express their views. To make the conference more interesting, dramas, demonstrations etc., are added. Topics like, sales policies, facing competition, publicity ideas, dealings with complaints etc., are handled. e) Role Playing Method: It is a new method. The sales trainees have to perform roles in artificial problems. The trainer explains the situation or the problem and assigns the role of salesman and customers of different characters to the sales trainees. Each one has to act according to the assigned role. The trainer watches the role played by each person and discusses their weaknesses and strong points.
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f)

Panel Method: In this method, the panel members are experts. They discuss the problems and pass the solutions to the salestrainee groups, who may have further discussion. This system is ineffective. g) Round Table method: It is similar to the discussion method. It consists of few members. The salesmen sit around a table along with a good discussion leader. They deal with the problems of actual cases. Every participant takes part freely in discussing the problems and solutions. Exchanges of new ideas take place advantageously. h) Brain Storming Method: Under this method, more or less, similar to round table conference, persons sit around the table. The leader presents the problems for discussion. The sales trainees have to understand the problems and find the solutions. The solutions are analyzed by the leader or tested by the panel of experts. This method practically fetches no value.
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2. Individual Training
a) On-the-job Training: Under this method, a new salesman works under an experienced or senior salesman who trains him. The doubts of trainee are clarified. The sales trainee is allowed to deal with the customer and the coach observes the performance. If there is any weak point, it is discussed. b) Sales Manual: It is a textbook. It contains details of the firm and products, job description, sales policies, opinions or reports required for reference purposes etc. A copy of this book is given to a salesman to go through it and understand the ideas. It works as a ready-reckoner. c) Initial or Break-in Training: New recruits are provided an orientation training to give them knowledge about the company and its products. He works in the firm for some time to gain good knowledge about the products. After that he is sent to the field.

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Evaluation of Training After training the salesmen, the marketing manager must evaluate the effectiveness of training on the basis of the performance of the sales personnel. Training requires money, effort and time. Therefore an organization expects returns also. Evaluation is made on the basis of performance of sales executive in terms of sales volume, sales profitability, order-size, expenses etc., before and after training. Aims of Training: 1. To prepare the salesman to perform his job efficiently. 2. To tell him what to do. 3. To guide him how to demonstrate. 4. To allow him to practice or perform it. 5. To check him in his performance.
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Motivating
The organization finds the attributes that motivates the sales executive to perform well. Some executives are motivated by money and some are motivated by status or control. Hence the incentives given to salesperson are of two types - financial incentives and non financial incentives. In financial incentives salary package, flexible expenses and fringe benefits act as motivators. In non financial incentives promotion, recognition and awards act as motivators for salesperson.

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Evaluating
Companies want to know whether sales executives are achieving their targets or not. For this purpose, they ask sales executives to send the different sales reports. The sales reports may be in the form of call reports, expense reports, loss order report, travel plan and expenditure, etc. The information in these reports are compared with the set standards. The incentives are announced on the basis of evaluation reports.

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Compensation There are three methods of compensation for sales executives. They are direct salary, direct commission and combined plans. In direct salary method, sales executives are given fixed salary per month. In direct commission method sales executives work on commission basis only. For example, agents of Life Insurance Corporation of India (LIC) get direct commission. The combined method is mixture of direct salary and direct commission method. In this method sales executives are paid fixed salary and also commission on the sales they make. For example, BMTC (Bangalore Metropolitan Transport Corporation) pays its conductors fixed salary and also 2% of commission on total tickets sold in a day.
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Quota Quota is the target set for the sales executive for a fixed period Quotas are of following five types: 1. Sales quota: The sales executives have to sell a particular volume. For example, organization may ask sales executives to sell Rs 50,000 of goods in a year or 5000 units in a year. 2. Expense quota: Sales executives quotas are set on the basis of sales generated and percentage of it is used for the sales expenses. For example, If sales executive X achieves Rs 1, 00,000 of sales and his expense ratio is 5% then he can spend Rs 5000 for his expenses. 3. Profit quotas: The company focuses on the profit margin and not on the volume. Hence it always asks its sales executives to get better margin from the sales.
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4.

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Activity Quota: In this method sales executive performs multiple tasks. For example, Medical representatives meet the doctors in the morning and explain the product. They also meet the retailers where they try to push the product and takes promotional activities. In the afternoon they meet distributors and in the evening they sends all the report to company and checks the order status from the head office. Combination quota: In this type of quota, any of the above five quotas can be mixed and quotas shall be set for a certain period.

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Personal Selling Process


1. Lead generation: Identification of prospects is first step in personal selling process. Prospects are identified through customer references, trade association, customer directories or through cold calling. 2. Lead evaluation: The leads should be reliable. Marketer should find out whether the lead generated has willingness, purchasing power and authority to buy. 3. Buyer analysis: Before approaching the customer, the sales force should understand what products prospects bought in the past, what products he is using now and his attitude and buying habits towards the products.
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4. Approaching the customer: The sales person should know how to meet the prospect and how to build good understanding with him. For example, In Japan business meetings start in the evening. Any company selling its product in china should not use number 8 in their presentation. 5. Presentation and demonstration: The sales personnel give a briefing of the product, understand the needs of the customer and then change the mode of presentation according to the need of customer. The presentation should be clear, simple and attracting. 6. Providing solutions to customer: The sales executive should handle the queries of the customer. He should handle the questions properly with lot of attentiveness and should solve the problems of customer.
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7.

8.

Order generation: This is the most important step of the selling process. Sometimes customers collect all the information from the sales executive but hesitate to place the order. Sales executive should know order closing techniques i.e. how to get the order. Follow up: Sales executives should follow up after taking the order. It will help the company to know whether the customer is satisfied with the product. It also helps them to encourage the buyer for repeat purchase.

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Direct Marketing
1. Telephone marketing
It is used to sell the product directly to consumer. The growth of BPOs in India led to the development of telephone marketing. In case BPOs there are two types of verticals. They are inbound call center and outbound call center. In case of inbound call center, customer is given a toll free number for enquiry and executives try to sell the product to such customers. In out bound call center employees call the customers and sell the products.

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2.

Catalog marketing: According to Philip


Kotler catalogue marketing is direct marketing through print, video or electronic catalogs that are mailed to select customers, made available in stores or presented online. Catalogue marketing is in growing stages in India. The famous example of this type of marketing worldwide is J.C. Penny. Kiosk marketing: Organizations spread the information and keep ordering machines called kiosks in the shopping malls and other places. For example, Ambi pur a perfume company recently organized a kiosk related marketing campaign in the Nirmal life style Mumbai. Company used hot air balloon to attract small boys. Online marketing: In this type of marketing the organizations products are marketed on the virtual medium. In this format buyers and sellers exchanges the products on the internet.
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