You are on page 1of 30

Sales and Distribution Management

MBAM 562
UNIT TWO: PERSONAL SELLING
MARKET STRATEGY

12/10/2018 1
2.1 Introduction to personal selling

Personal selling means personal communication between


buyer and seller or through the representative of seller.
Personal selling is controlled by the company .
This implies that for long-term survival it is in the best
interest of the salesperson and their company to identify
customer needs and aid customer decision-making by
selecting from the product range, those products that
best fit the customer’s requirements.
In personal selling, any misunderstanding or any doubts
will be clarified by the sales person.
Personal selling is a direct method of selling the product.

12/10/2018 2
Saxe and Weitz has identified SIX customer orientated
selling as:
1. The desire to help customers make satisfactory
purchase decisions.
2. Helping customers assess their needs.
3. Offering products that will satisfy those needs.
4. Describing products accurately.
5. Avoiding deceptive or manipulative influence tactics.
6. Avoiding the use of high pressure sales techniques.

Personal selling is concerned with individuals come in as


contact. The purpose of advertising is to influence and
appeal groups of persons where as sales man talks to
person before him.
12/10/2018 3
In the personal selling, the sales man says pros and cons
of the product..
In order to make sales as effective through sales man,
where as it is a costly affair.
According to American Marketing Association has
defined as “ The oral presentation in a conversation with
one or more prospective purchasers for the purpose of
making sales”.
William .J. Stanton “Personal selling consists in
individual personal communication in contrast with the
mass relatively impersonal communication and advertising,
sales promotion and other tools”.
Richard Buskirk “Personal selling consists of
contacting prospective buyers of the product
personally”.
12/10/2018 4
Characteristics:-
1. Seller and buyer come in direct contact with one another.
2. Personal selling involves conversation between seller and
prospective buyer regarding quality, price, use, characters of
the product.
3. In personal selling, seller wants to convince the buyers
about the goods and services which he wants to sell.
4. Personal selling involves the sale of goods and services
personally.
5. It is the most effective tool of increasing sales.
6. It helps in providing important information to the
enterprise regarding market.
7. Personal selling is the best means of two-way
communication continuously between the enterprise and its
customers.
12/10/2018 5
2.2 Qualities and process of personal selling
Following are qualities of salesman to become successful in
personal selling
A. Salesmanship: - Salesmanship is the positive effort at
persuading people to buy and which benefit, both the seller
and the buyer.
B. Hard work:-It is not routine work. It requires proper
planning and hard work.
C. Persuasive power and initiative: - Requires initiative at
persuasion which is unique to suit each type of
buyer/customer.
D. Product knowledge: - Complete knowledge including
technical details of design, operation and maintenance must
be known to the salesman. Knowledge is in his strength. It
includes
12/10/2018
knowledge of competitors. 6
E. Sales technique: - Sales management is a specialized
field. It has it’s own techniques. Salesman must master
them.
The following are the process of personal selling
1.Pre-sales preparation: - In this process, salesman must
identify the market segment, customer’s wants and needs.
He must know the product details, and limitations,
competition and price. This is a sort of customer research.
2.Prospecting: - Potential buyers are prospects. Finding and
identifying them is called prospecting. Prospects must
have characteristics; like unsatisfied needs, ability
(Disposable income) and willingness to buy the product.
Identifying the right prospects assist the salesman’s
efficiency in the sales vey much.
3.Pre-approach:- This is the efforts in finding needs,
problems, preference, alternatives, interest, weakness if
any, of prospect.
12/10/2018 7
4.Approach:- Each prospect is unique. Here
separate/unique strategy (approach) is planned for each
prospect based on knowledge gained in pre-approach
stage. Types of approaches are
Preference approach: - getting reference/ introduction by
known friend of buyer.
Benefit Approach: - This indicates sharing benefit of
product.
Sample approach: - By giving sample to influence
prospect.
Mutual approach: - Here prospect is considered supreme.
5. Sales presentation:-There are certain modern
approaches like
12/10/2018 8
AIDAS theories are influencing the prospects and in
addition to that the following other approaches are also
there.
Canned approach (Window shopping):-Memorized sales
talk convincing the buyer. This is also known as stimuli-
reaction approach.
Formulated approach: - Identify buyers need and style
and meet both.
Need satisfaction:- Here the salesman holds discussion
and debate with buyer and convinces him.

12/10/2018 9
6. Handling objections: - Buyers may have objection-
psychological or rational. Psychological objection may be
subjective or attitudinal. Rational objection is on quality,
Price and utility. Salesman must convince the prospect
by cogent argument.
7. Closing: - He should look for the right moment to clinch
the deal. This is called closing. Proper gestures/
gesticulation or body language must be read carefully.
Unnecessary prolonging presentation may be counter
productive.
8.Follow up: - Begins when prospect signs order. He
dispatches the item, arranges delivery, arranges grant of
credit, assures about his wisdom of buying and ensures after
sales service. Proper follow up assists second purchase and
recommendation
12/10/2018 to friends. 10
2.3 Personal selling strategies
The following strategies are given below.
1.Selling strategy:-
Selling strategies are short-term and long term. Short-
term focuses on promotional steps and current sales.
Long-term focus on continuous sales, growth and goodwill.
Customer service, co-operation, assistance and technical
services assist long-term customer goodwill. This gives the
customer loyalty. Selling strategy is considered better than
negotiation.

12/10/2018 11
2.Negotiation: - Negotiation on sales on price and
other terms are use to iron out differences and finally
enter into agreement. The negotiations are more use
full all the prospects and sellers, in this concept both
are discussed thoroughly about the product and
finalize the product, in case of any buyer buy the
product, where as not satisfied about product. He/she
cannot recommend the others. In this, the salesman
must to satisfy the prospective buyer.
3.AIDAS model( already covered in the previous
chapter).
12/10/2018 12
2.4 Direct Marketing
• Some companies use direct marketing to inform and
educate customers about product/ service in anticipation
that it may precipitate future actions, reminding
about offers, image building, maintain customer
satisfaction, strengthen relationship, and reassure
customers about purchases .
• Direct marketing is an interactive system of marketing
and uses a set of all major direct- response media
including print, TV, Internet and cellular phones as the
tools to implement communications and accomplish its
objectives.

12/10/2018 13
• Direct marketing attempts to acquire and retain
customers by contacting them without the use of an
intermediary.
• Depending upon the changes that took place in the
fast growing consumer movement, the companies
today adopt so many strategies in order to meet the
changing demands of the society. In this regard, the
importance of direct marketing is very high.
• Direct marketing is a kind of directly meeting the
consumer. Under this method, the housewives carry
the message about the product and its details along
with the product through the circle of friends,
relatives and neighbors of them.
12/10/2018 14
• In direct marketing, the dealers are called consultants, for
successful direct marketing, the consultants have to be
more talented, hardworking, pursuing, convincing the
customers. Under this method, the products are not sold
through or displayed in shops. Direct marketing is indeed
a marketing of house-hold items by the housewives
through house.
• The objective is to achieve a direct response which may
take one of the following forms:
 A purchase over the telephone or by post;
 A request for a catalogue or sales literature;
 An agreement to visit a location/event (e.g. an exhibition);
 A request for a demonstration of a product;
 A request for a salesperson’s visit.
12/10/2018 15
Direct marketing is an interactive system of marketing
which uses one or more advertising media to affect a
measurable response and/or transaction at any location.
In Marketing Management a number of factors are
promoting the attractiveness of direct marketing. The main
factors are:
1. Availability of consumer credit cards.
2. Availability of professional agencies.
3. Competitive Pressures, Rising Media Costs, and Market
Fragmentation.
4. Increasing family incomes, including dual-income
families.
5. Technological advances.
12/10/2018 16
• According to Peter Hoko “ The total of activities by
which the seller in effecting the transfer of goods and
services to the buyer, directs his efforts to a qualified
audience using one or more media for the purpose of
soliciting response by phone, mail or personal visit
from a prospect or customer”.

• According to Robert. F. Delay “ Direct marketing


traces its origins to direct mail or mail order –time
tested ways to sell to a wide variety of products and
services and which has been applied particularly in
such fields as catalogue , magazine circulation, book
and record clubs”.
12/10/2018 17
Scope and Functions:-
Direct marketing is the constituent subsequent of the larger
marketing function where the initial communication is
through mail.
• A traffic builder: - Direct mail asks the prospect to
come to the store either for buying a product or to pick
up a gift.
• Assist personal sales: - Direct mail helps prospect to
reply. This will establish communication and subsequent
personal call/ personal selling.
Advantages of direct marketing:
1. Direct marketing offers the advantage of reaching
large number of well-defined.
2. Target customers and almost eliminates waste
coverage.
12/10/2018 18
3. Good quality databases are available from independent
suppliers and the marketer can segment customer
groups with considerable precision.
4. Direct marketer can personalize the message's. Direct
marketing can deliver almost perfect offers to customers.
5. Marketer can build desired frequency level based on
media.
6. Direct marketing offers creative flexibility in different
media.
7. Direct marketer can quickly develop a list of specific
profiles for direct mail.
8. Direct marketing is more effective in building customer
relationship.
9. It is very cost effective considering the sale generated per
contact.
10. The results can be measured most accurately.
12/10/2018 19
According to Edward L. Nash, there are five important
decision areas: Product, offer, medium, distribution
method, and creative strategy. The marketer has to
decide on each of these issues and develop the appropriate
message to be conveyed. Direct marketers use all the
available major media such as direct mail, telemarketing,
direct-response broadcasting, print, the Internet, E-
mail, and others. Edward .L . Nash is identified two
approaches
1. One-Step Approach: The marketer uses the medium to
obtain an order. For example, exercise equipment and
household items are presented through TV commercials, or
many magazines insert subscription forms in their
issues.
12/10/2018 20
The viewer or the reader places the order by calling a toll-
free number. Magazine subscription forms can be filled and
posted in postage-paid envelops.

2. Two-Step Approach: This may involve the use of more


than one medium. This may be done to first screen, or
qualify prospects and then in the second step the marketer
makes the effort to elicit a behavioral response. For
example, many organizations like technical products,
transport products, computers etc. first use telemarketing
to determine the potential based on interest, employment,
and income and then follow-up by sending an agent with
more information to close the sale.

12/10/2018 21
Direct marketing consists of the following activities
A. Direct sales:- Assist direct sale by getting an order in
response to the mail.
B. Direct mail:- This is nothing but courier services
A. Direct Sales
In direct selling, the manufacturer choose to use the door-to-
door direct selling method. Alternatively the manufacturer
decides to open its own retail outlets. By direct selling, firm
has taken additional responsibility of marketing functions
like distribution. Additional expenses of distribution involve
the following:
• Transportation
• Storage
• Financing
• Risk taking
• Door-to-door selling
12/10/2018 22
In case of setting up its own retail-outlets, it
involved the following costs
• Setting up more street locations
• Cost of building and stores
• Cost of retail salesman
• Retail advertisement.
Direct selling is more common in industrial
products(plant and machinery) compared to
consumer products. However, costs are high even
industrial products field. In this field direct sales
person need better training which is expensive.
They are to be paid more in selling directly to the
industrial users.
12/10/2018 23
The main advantages of this method are:
• High profit per unit of product sold
• Shifts wide range of problems to middle man
• Better utilization of specialized skill of salesmanship.
• One drawback is there i.e. no control and identification
of customers is very difficult.
B. Direct Mail: Direct mail is unsolicited mail, most of us
are familiar with. For some of us it is fairly irritating
and we call it “Junk mail” and throw it or ignore
without reading. Companies of all sizes and shape use
direct mail. This mail is generally based on mailing lists
the companies buy from independent sources, or in
some cases is confined to customers who have made
purchases earlier.
12/10/2018 24
Google, Yahoo, Hotmail, AOL, Amazon, Fabmart, India
times, and many others have vast lists of home and e-
mail addresses. Direct mails generally generate lower
response rates from potential customers. The cost of
direct mail as e-mail is practically nothing.
• Direct mail is an amazing medium. This is used by more
advertisers than any other advertising medium. This is
also known as electronic mail service(EMS)
Features:-
• Select subject, prospect and message.
• It gives personal touch.
• Considerable flexibility in producing message/ letter in
time and space.
12/10/2018 25
• Mail order business requires a small capital.
• Even small entrepreneurs also start this business.
• Sending mail to right person in the right list in
right time.
• Easy economical to test and evaluate.
• This business is not possible in all type of goods.
The goods which can be considered suitable for
mail order business should generally carry the
goods. Like books, drugs, sport articles etc.
several banks have effectively used direct mail
for their credit cards.
12/10/2018 26
Classification of direct mail: Some of them are following
1.Catalogues: Both, consumer and B2B companies may
send catalogues of their entire product lines, mostly in
print form, sometimes also online, as CDs, or even
videos. Considering the global scenario, many
companies use catalogue to sell variety of merchandise
including clothing, and cosmetics. Some companies
started as catalogue companies and subsequently also
branched into retail outlets, such as First and second
bookseller initially had a website that presented its
catalogue but now also has a retail outlets. For example
in New Delhi.

12/10/2018 27
2. Broadcast Media: Direct marketer can use television and
radio. Almost entire advertising with respect to direct
marketing occurs on television. This type of advertising is
either in the form of direct-response advertising, or support
advertising. Direct-response advertising encourages
customers to place orders by using a toll-free telephone
number. Support advertising informs customers generally
to take part in sweepstakes or expect something in mail.
Widespread use of credit cards and availability of toll-free
telephone numbers in more developed countries has
promoted teleshopping. Some TV channels exclusively
sell products and services 24 hours a day, such as Home
Shopping Network. The programme host offers low prices
on a variety of items including jewelry, kitchenware,
fitness products, insurance, and CDs, etc. Customers
sitting in their homes make their purchases by calling a
toll-free number and the ordered item is delivered within
48 hours.
12/10/2018 28
3. Print Media: Newspapers and magazines are not
considered to be ‘sound choice’ for direct marketing.
There are too many ads competing for attention. Specific
interest newspapers focused on financial matters, or sports
and hobby magazines are sometimes used.
CONCLUSION:
Sales executives must understand the jobs of those
reporting to them. Sales executives understand the tasks
assigned to sales personnel, and have insight into how
these tasks affect the though processes and behavior
pattern of sales personnel, they are ready to manage
sales personnel. They have necessary background to
training sales personnel, to direct the sales force’s efforts,
and to evaluate individual salesperson’s achievements.
12/10/2018 29
• This chapter has explored the growth of direct marketing
as a means of selling products and services. Direct
marketing activity has helped companies such as Direct Line,
First Direct and Dell Computers to sell directly to
customers without the need for traditional salespeople or
distributors. The use of direct mail and telemarketing is
reducing the need for a field sales force, particularly for
smaller customers.
• Direct marketing activity needs to be carefully planned in
order to produce integrated campaigns that make the best use
of the tools available. Key media include direct mail,
telemarketing, direct response advertising, catalogue
marketing and internet marketing.

12/10/2018
THANK YOU 30