PRINCIPLES AND PRACTICES OF SELLING.
DIPLOMA IN SALES AND MARKETING
This module unit is intended to equip the trainee with the knowledge, skills and attitudes that will enable him/her to understand and apply selling skills in the process of selling products
By the end of the module unit, the trainee should be able to:
- Understand the basic principles and concepts necessary for carrying out selling activities effectively
- Understand the differences between marketing and selling
- Understand the process of selling
- Appreciate the sales responsibilities
- Understand the development of right traits of a sales person
- Understands the tasks and skills of major accounts in selling
- Appreciate the difference between internal and travelling sale person
|1||INTRODUCTION TO SELLING||Meaning of selling
Evolution of selling
Role of selling
Types of selling
Image of selling as a profession
Relationship between selling and marketing
|2||PROCESS OF SELLING||Purpose of selling
Process of selling
|3||SALES DISPLAYS AND DEMONSTRATIONS||Importance of sales displays
Importance of demonstrations
Techniques of sales displays
|4||SALES RESPONSIBILITY AND PREPARATIONS||Meaning of sales responsibility
Preparation for sales
|5||PERSONAL SELLING||Meaning of personal selling
Constituents of a sales
Qualities and personal traits required for success in personal selling
Development of the right sales personality
|6||SELLING AND MANAGING MAJOR ACCOUNTS||Meaning of major accounts
Tasks and skills of handing major accounts
Building relationships with major accounts
Selling to major accounts
|7||TRAVELLING SALES PERSONELL||Meaning of travelling sales personnel
Duties of travelling sales personnel
Distinction between internal and travelling sales personnel
Challenges of a travelling sales person
|8||SALES SETTING||Sales setting
International selling approach
Ethical and legal issues in selling
|9||EMERGING TRENDS AND ISSUES||Emerging trends and issues in selling
Challenges posed by the emerging trends and issues in selling
Ways of coping with challenges posed by emerging trends and issues in selling
INTRODUCTION TO SELLING.
Selling is the actual exchange of products and services at an agreed sum of money.
It is one of the activities in the entire marketing process.
Marketing activities/processes supports selling and this include;
Selling can also be defined as transfer of ownership and possession of goods to the purchasers or buyers.
Selling is also the large step of branch of commerce where the buyer exchanges cash for goods/services.
It can also be referred to as persuading customers that you offer products or services they are looking for.
EVOLUTION OF SELLING.
Evolution of selling has had many several distinct phases of development during in 19th to20th century.
Industrial revolution of late 19th century caused tremendous amount of exchange of goods between people and all nations all over the world. Strategic resources i.e. capital and other resources of companies were controlled. Sales success was defined by sales quotas in 1860 to 1960.from 1960,a new generation started. It was called informative age.
From 1960 till now, information has radically changed on how selling is being conducted. This has resulted in attitudes and methods towards selling change. In this age, strategic resource of a business is information and it is defined by customer relationship. There are plenty of businesses doing selling in old school way and don’t want to change to the modern methods.
Some businesses are doing it in their old way yet they are very successful e.g. Avon-direct door to door(they deal with women cosmetics)sales. Major advances in manufacturing and transporting have made processing resources and capital major aims of business. This naturally required skilled people with talents in persuading and providing goods to a broad range of buyers.
Companies such as Avon are still using same old ways of selling as their founders in the end of 19th century did and found themselves more successful. Selling in a way should be adopted in a product being sold. During the wave of innovation-FAB-Future Advantage Benefit was introduced.
Value selling is specified by Lambin 2008 as the next-step from all previous selling methods. It is considered to be more ethical compared to previous methods. Use of modern technology and communication is well spread in modern selling. Technology and communication facilitate and helps deliver a value in more precise and useful way e.g. B2-C and B-B.
DIFFERENCES BETWEEN SELLING AND MARKETING.
|1. Marketing is broader in scope as it starts long before the selling process takes place.||Selling is narrow in scope.it begins when a producer or a service becomes available for consumption or use.|
|2. Marketing usually communicate image and capability.||Selling only give characteristics of a product or service.|
|3. Marketing has an effect of satisfying customers want using the marketing mix elements||Selling is the transfer of ownership of goods to be purchased.|
|4. Marketing emphasis is on the importance of satisfaction of customer wants||Selling emphasis on the selling of the product.|
|5. Marketing takes into consideration in both internal and external factors||Selling is only concerned with internal factors regarding production and distribution of goods.|
|6. Marketing efforts are buyer oriented and emphasize the satisfaction of needs of buyers||Selling efforts are seller oriented and they emphasize on seller’s needs.|
|7. Marketing refers to mental approach to achieve long term goal||Selling refers to mental approach to achieve short term goals.|
|8. Profit is sought by ensuring customers satisfaction.||Profit is sought by ensuring high sales volume.|
|9. A comprehensive term which includes selling,advertising,distribution of goods etc.||Selling is part of marketing and thus not a comprehensive term.|
ROLE OF SELLING.
- The simplest way to think of the nature and role of selling (traditionally called salesmanship) is that its function is to make a sale. This seemingly obvious statement disguises what is often a very complex process, involving the use of a whole set of principles, techniques and substantial personal skills, and covering a wide range of different types of selling task. Later we will establish a more precise meaning for the term selling.
- The literature of selling abounds with texts, ranging from the more conceptual approaches to the simplistic ‘how it is done’ approach. Companies spend large sums of money training their sales personnel in the art of selling. The reason for this attention to personal selling is simple: in most companies the sales personnel are the single most important link with the customer. The best designed and planned marketing efforts may fail because the sales force is ineffective.
- The term selling encompasses a variety of sales situations and activities. For example, there are those sales positions where the sales representative is required primarily to deliver the product to the customer on a regular or periodic basis. The emphasis in this type of sales activity is very different from the sales position where the sales representative is dealing with sales of capital equipment to industrial purchasers.
- Some sales representatives deal only in export markets whilst others sell direct to customers in their homes. One of the most striking aspects of selling is the wide diversity of selling roles.
- Successful sales people are those who provide information and recommendations to expected problems and provide solutions.
- A long term process and provide guidance along various activities.
Below is a list of the strengths of personal selling and one weakness: compared to other communications media selling is costly. For example, a visit to a business customer is far more expensive than sending an email.
STRENGTHS AND WEAKNESS OF PERSONAL SELLING
_ Interactive: questions can be answered and objectives overcome
_ Adaptive: presentations can be changed to meet customer needs
_ Complex arguments can be developed
_ Relationships can be built because of its personal nature
_ provides the opportunity to close the sale
_ Sales calls are costly
TYPES OF SELLING.
The diverse nature of the buying situation means that there are many types of selling job: selling varies according to the nature of the selling task. The Figure below shows that there is a fundamental distinction between;
- Order-creators and
- Order getters.
Order-takers respond to already committed customers; order-creators do not directly receive orders since they talk to specifiers rather than buyers; while order getters attempt to persuade customers to place an order directly.
There are three types of order-takers:
- Inside order-takers,
- Delivery salespeople and
- Outside order-takers.
They are termed as missionary salespeople.
They are either front-line salespeople consisting of new business, organizational or consumer salespeople, or sales support salespeople who can be either technical support salespeople or merchandisers. Both types of order-getters operate in situations where a direct sale can be made.
- Inside order-takers
Here the customer has full freedom to choose products without the presence of a salesperson. The sales assistant’s task is purely transactional – receiving payment and passing over the goods. Another form of inside order-taker is the telemarketing sales team who support field sales by taking customers’ orders over the telephone.
- Delivery salespeople
The salesperson’s task is primarily concerned with delivering the product. In the UK, milk, newspapers and magazines are delivered to the door. There is little attempt to persuade the household to increase the milk order or number of newspapers taken: changes in order size are customer-driven. Winning and losing orders will be
dependent on reliability of delivery and the personality of the salesperson.
- Outside order-takers
These salespeople visit customers, but their primary function is to respond to customer requests rather than actively seek to persuade. Outside order-takers do not deliver and to a certain extent they are being replaced by more cost efficient telemarketing teams.
- Missionary salespeople
In some industries, notably the pharmaceutical industry, the sales task is not to close the sale but to persuade the customer to specify the seller’s products. For example, medical representatives calling on doctors cannot make a direct sale since the doctor does not buy drugs personally, but prescribes (specifies) them for patients. Similarly, in the building industry, architects act as specifiers rather than buyers, and so the objective of a sales call cannot be to close the sale. Instead, in these situations the selling task is to educate and build goodwill.
The final category, called order-getters, consists of those in selling jobs where a major objective is to persuade customers to make a direct purchase. These are the front-line salespeople and in many ways this type of selling represents the most challenging of the different types of selling. Order-getting demands several skills on the part of the salesperson including, for example, the ability to identify new prospects, persuading and negotiating, and ultimately building new and profitable business in the face of often fierce competition.
- Technical support salespeople
The task of this type of salesperson is to provide sales support to front-line salespeople so they are normally considered to belong in the order-getters group. Where a product is highly technical and negotiations are complex, a salesperson may be supported by product and financial specialists who can provide the detailed technical information required by customers. This may be ongoing as part of a key account team or on a temporary basis with the specialists being called into the selling situation as and when required.
- b) Merchandisers
These people provide sales support in retail and wholesale selling situations. Orders may be negotiated nationally at head office, but sales to individual outlets are supported by merchandisers who give advice on display, implement sales promotions, check stock levels and maintain contact with store managers.
IMAGE OF SELLING AS A PROFESSION.
SELLING AS A CAREER
The sub-divisions of the sales roles just outlined give an idea of the range of sales positions that are available. Generally, there is much less personal pressure involved in being an order-taker than an order-maker . However, the opportunity for higher rewards belongs to order-takers as their remuneration normally rests on some kind of commission or bonus where payment is linked to the amount of orders they take. It is an acknowledged fact that in many business situations the opportunity to earn really high incomes at a relatively young age is present in this kind of situation.
With such a large range of selling situations and positions in sales, it is not possible to provide a specific prescription of the qualities required for a successful sales career. There is no definitive test or selection procedure that can be used to distinguish between successful and less successful salespeople and apart from ‘trying it out’ there is no way of knowing if a person is suited to a career in sales. However, there are a number of key qualities that are generally recognized as being important:
- Empathy and an interest in people: such a skill will help in more accurately identifying customers’ real needs and problems in terms of thinking oneself into the other person’s mind and understanding why the customer feels as they do.
- Ability to communicate: this means an ability to get a message across to a customer and, more importantly, an ability to listen and understand. The skill of knowing when to stop talking and when to listen is essential.
- Determination: although the salesperson must be able to take no for an answer, this should not come easily to someone who wants to succeed in selling. It is a fact that customers might say no when they really mean maybe, which can ultimately lead to yes. Determined salespeople have a need and a will to succeed and success can mean closing a sale.
- Self-discipline and resilience: most salespeople spend much of their time unsupervised and, apart from seeing customers, they are alone. As part of their job they can expect setbacks, rejections and failures. A salesperson thus needs to be both self-disciplined and resilient to cope with these facets of the sales task.
IMAGE OF SELLING
Mention of the word selling will prompt a variety of responses. It will evoke a high proportion of negative, even hostile, responses, including ‘immoral’, ‘dishonest’,‘unsavoury’, ‘degrading’ and ‘wasteful’. Is such an unfavorable view justified? We suggest not. In fact the underlying attitudes to selling derive from widely held misconceptions about selling, some of which are outlined below.
- Selling is not a worthwhile career: This notion is held by many, the common attitude being that if one has talent then it will be wasted in sales. Unfortunately this attitude is often held by those in a position to advise and influence young people in their choice of careers. In some circles it is fashionable to denigrate careers in selling, with the consequence that many of our brighter graduates are not attracted to a career in selling.
- Good products will sell themselves and thus the selling process adds unnecessarily to costs:This view assumes that if you produce a superior product then there will always be buyers.
- There is something immoral about selling, and one should be suspicious about those who earn their living from this activity. The origin and reason for this most pervasive and damaging of the misconceptions about selling stems from the ‘foot in the door’ image that has been perpetuated. Such attitudes can make life difficult for the salesperson who has first to overcome the barriers which such mistrust erects in the customer/salesperson relationship.
There are a number of elements in the sales task that act as demotivators:
- Because of their perceived low status, salespeople are constantly exposed to the possibility of rejection and often have to suffer ‘ego punishment’ such as being kept waiting, appointments cancelled at short notice and ‘put downs’ from customers, to which they cannot adequately respond as buyers have the power in such circumstances.
- In B2B situations in particular, salespeople visit buyers in their offices, so they are effectively working in ‘foreign’ territory and might sometimes feel uneasy when entering the premises. The customer might keep the salesperson waiting, thus heightening discomfort.
- The salesperson tends to work alone, often staying away from home for periods.An attraction is independence, but it can be a lonely existence. Thus there is a certain amount of psychological risk attached to such situations.
Selling is therefore not an easy task, and those who are concerned to improve its image must be more vociferous, yet objective, in presenting its case and recognize that misconceptions invariably have some basis in fact. There are always unscrupulous individuals and companies ready to trade on the ignorance and gullibility of unsuspecting customers. These individuals are not salespeople: at best they are misguided traders and at worst criminals. At some times in our lives we inevitably feel that we have purchased something we did not really want or on terms we could not really afford because we were subjected to high-pressure selling.
Selling then is not entirely blameless, but salespeople are becoming more professional in their approach to customers. Some of the worst excesses in selling have been curbed – some through legal means, but increasingly voluntarily. To overcome some of these misconceptions, selling needs to sell itself and the following facts about selling should be more universally aired:
FACTS ABOUT SELLING.
- There is nothing immoral or unscrupulous about selling or about those involved in this activity. Selling provides a mechanism for exchange and through this process customers’ needs and wants are satisfied.
- Selling is a worthwhile career. Many of those who have spent a lifetime in selling have found it to be a challenging, responsible and rewarding occupation. Inevitably a career in selling means meeting people and working with them, and a selling job often offers substantial discretion in being able to plan one’s own work schedule.
- Good products do not sell themselves. An excellent product may pass unnoticed unless its benefits and features are explained to customers. What appears to be a superior product may be totally unsuited to a particular customer.
CHARACTERISTICS OF MODERN SELLING.
Today, a sales person must have a range of skills to compete successfully. Sales persons must understand the characteristics of modern selling which include.
- Customer retention and deletion:
Many companies find that 80 per cent of their sales come from 20 per cent of their customers. This means that it is vital to devote considerable resources to retaining existing high volume, high potential and highly profitable customers. Key account management has become an important form of sales organization because it means that a salesperson or sales team can focus their efforts on one or a few major customers.
At the other end of the spectrum, companies are finding that some small customers actually cost the organization money. This is because servicing and distribution of products to those customers may push costs beyond the revenue generated. Larger companies may have to change to telemarketing and/or the internet as a means of servicing these small customers or drop them altogether.
- Database and knowledge management.
The modern sales force needs to be trained in the use and creation of customer databases, and how to use the internet to aid the sales task (e.g. finding customer and competitor information). In the past salespeople recorded customer information on cards and sent in orders through the post to head office. Today, technological advances such as email, mobile phones and video conferencing have transformed the way knowledge is transferred. Laptops mean that salespeople can store customer and competitor information, make presentations and communicate with head office electronically. Furthermore, information supplied by the company, such as catalogues and price lists, can be held electronically.
- Customer relationship management:
Customer relationship management requires that the sales force focuses on the long term and not simply on closing the next sale. The emphasis should be on creating win–win situations with customers so that both parties to the interaction gain and want to continue the relationship. For major customers, relationship management may involve setting up dedicated teams to service the account and maintain all aspects of the business relationship.
This form of organizational structure, key account management, will be discussed later and is devoted to relationship selling.
- Marketing the product:
The modern salesperson is involved in a much broader range of activities than simply planning and making a sales presentation.. The role of the salesperson is expanding to participation in marketing activities such as product development, market development and the segmentation of markets, as well as other tasks that support or complement marketing activities such as database management, provision and analysis of information, and assessing market segments.
- Problem solving and system selling:
Much of modern selling, particularly in business to business situations, is based upon the salesperson acting as a consultant working with the customer to identify problems, determine needs and propose and implement effective solutions.
- Satisfying needs and adding value
The modern salesperson must have the ability to identify and satisfy customer needs. Some customers do not recognize they have a need. It is the salesperson’s job in such situations to stimulate need recognition.
For example, customers may not realize that a machine in the production process has low productivity compared to newer, more technologically advanced machines.
The salesperson’s job is to make customers aware of the problem in order to convince them that they have a need to modernize the production process. In so doing, the salesperson will have added value to the customer’s business by reducing costs and created a win–win situation for their company and the customer.
RELATIONSHIP BETWEEN SELLING AND MARKETING.
- Marketing starts before selling hence paving/opening ways for selling process to take place.
- Marketing creates consumer relevant brands of goods that satisfy the specific needs and selling makes sales of goods/products being marketed by business persons.
- Marketing identifies appropriate prospects and selling focuses on product and producers as part of the marketing.
- Marketing consists of activities like pricing, product, promotion, place of distribution and selling focuses on consumer as the guiding force behind this activity hence making sales.
- Marketing communicates image and capability of goods and services to satisfy the wants and selling gives the extent of a product hence making sales.
- Marketing advertises the product and selling goods ahead, selling makes sale of products that are being advertised.
PROCESS OF SELLING.
This can be defined as the last step in chain of commerce where a buyer exchanges cash for a sellers good/service or the activity of trying to bring this about.
Refers to give or handing over something in exchange for money.it involves persuading someone of the merits of a particular product or service.
IMPORTANCE /PURPOSE OF SELLING.
- The customer can know why they need the product-benefits
- Helps the product become more relatable to customer.
- Leads to customer loyalty.
- To make money for self and company one works for.
- Source of income.
PROCESS OF SELLING
This is the complete set of steps that must take place in order to execute a sales transaction from beginning till the end. The process involves the following steps.
- Initial contact.
- Product demonstrations.
- Trial periods.
- Bidding price.
- Signing of contracts
- Delivery of product/service being sold.
FACTORS AFFECTING THE SELLING PROCESS.
- Holidays/life events-Christmas, birthdays speeds up or slows down the selling process.
- Job market-If individuals seeking employment opportunities are more selling dwindles.
- Financing availability-shortage of funds from lenders can negatively impact small and medium sized businesses.
- Stock market and investments-When faced with alternatives, investors put their money where they expect the best combination of high return and low-risk.
- Consumer confidence.
- World events ie politics, landscape and natural disaster.
SALES DISPLAY AND DEMONSTRATIONS.
Once the problems and needs of the buyer have been identified, the presentation follows as a natural consequence. The first question to be addressed is presentation of what? The preceding section has enabled the salesperson to choose the most appropriate product(s) from their range to meet customer requirements. Second, having fully discussed what the customer wants, the salesperson knows which product benefits to stress
A given product may have a range of potential features which confer benefits to customers, but different customers place different priorities on them. In short, having identified the needs and problems of the buyer, the presentation provides the opportunity for the salesperson to convince the buyer that they can supply the solution. The key to this task is to recognize that buyers purchase benefits and are only interested in product features in as much as they provide the benefits that the customer is looking for. Examples of the relationship between certain product features and benefits.
Training programs and personal preparation of salespeople should pay particular attention to deriving the customer benefits which their products bestow. Benefits should be analyzed at two levels: those benefits that can be obtained by purchase of a particular type of product, and those that can be obtained by purchasing that product from a particular supplier. For example, automatic washing machine salespeople need to consider the benefits of an automatic washing machine compared with a twin-tub, as well as the benefits that their company’s automatic washing machines have over competitors’ models. This proffers maximum flexibility for the salesperson in meeting various sales situations. The danger of selling features rather than benefits is particularly acute in industrial selling because of the highly technical nature of many industrial products, and the tendency to employ sales engineers rather than salespeople
Perkins Diesels found this to be a problem with their sales team after commissioning market research to identify strengths and weaknesses of their sales and marketing operation, but it is by no means confined to this sector. Hi-fi salespeople who confuse and infuriate customers with tedious descriptions of the electronic wizardry behind their products are no less guilty of this sin. A simple method of relating features and benefits in a sales presentation is to link them by using the following phrases:
- ‘which means that’
- ‘which results in’
- ‘which enables you to’. For example, an estate agent might say, ‘The house is situated four miles from the company where you work (product feature) which means that you can easily be at work within fifteen minutes of leaving home’ (customer benefit).
An office salesperson might say, ‘The XYZ photocopier allows streamfeeding (product feature) which results in quicker photocopying’ (customer benefit). Finally, a car salesperson may claim, ‘This model is equipped with overdrive (product feature) which enables you to reduce petrol consumption on motorways’ (customer benefit). The term ‘presentation’ should not mislead the salesperson into believing that they alone should do all the talking. The importance of asking questions is not confined to the needs and problem identification stage. Asking questions as part of the presentation serves two functions. First, it checks that the salesperson has understood the kinds of benefits the buyer is looking for. After explaining a benefit it is sound practice to ask the buyer, ‘Is this the kind of thing you are looking for?’ Second, asking questions establishes whether the buyer has understood what the salesperson has said. A major obstacle to understanding is the use of technical jargon that is unintelligible to the buyer. Where a presentation is necessarily complicated and lengthy, the salesperson would be well advised to pause at various points and simply ask if there are any questions. This gives the buyer the opportunity to query anything that is not entirely clear. This questioning procedure allows the salesperson to tailor the speed and content of their presentation to the circumstances. Buyers have different backgrounds, technical expertise and intelligence levels. Questioning allows the salesperson to communicate more effectively because it provides the information necessary for the seller to know how to vary the presentation to different buyers. Technological advances have greatly assisted the presentation. For example, laptops allow the use of online resources such as video material and the ability to get a response from a sales office during a presentation. Access to company websites permits the carrying of masses of product information, including sound and animation. Many sales situations involve risk to the buyer. No matter what benefits the salesperson discusses, the buyer may be reluctant to change from the present supplier or present model because to do so may give rise to unforeseen problems – delivery may be unpredictable or the new model may be unreliable. Assurances from the salesperson are, of themselves, unlikely to be totally convincing – after all, they would say that, wouldn’t they! Risk is the hidden reason behind many failures to sell. The salesperson accurately identifies customer needs and relates product benefits to those needs. The buyer does not offer much resistance, but somehow does not buy; a likely reason is that the buyer plays safe, sticking to the present supplier or model in order to lessen the risk of aggravation should problems occur. How, then, can a salesperson reduce risk? There are four major ways:
(a) Reference selling;
(c) Guarantees; and
(d) Trial orders.
Reference selling involves the use of satisfied customers in order to convince the buyer of the effectiveness of the salesperson’s product. During the preparation stage Sales technique a list of satisfied customers, arranged by product type, should be drawn up. Letters from satisfied customers should also be kept and used in the sales presentation in order to build confidence. This technique can be highly effective in selling, moving a buyer from being merely interested in the product to being convinced that it is the solution to their problem.
Demonstrations Chinese proverb: Tell me and I’ll forget; show me and I may remember; involve me and I’ll understand. Demonstrations also reduce risk because they prove the benefits of the product. A major producer of sales training films organises regional demonstrations of a selection in order to prove their quality to training managers. Industrial goods manufacturers will arrange demonstrations to show their products’ capabilities in use. Car salespeople will allow customers to test drive cars. For all but the most simple of products it is advisable to divide the demonstration into two stages. The first stage involves a brief description of the features and benefits of the product and an explanation of how it works. The second stage entails the actual demonstration itself. This should be conducted by the salesperson. The reason behind this two-stage approach is that it is often very difficult for the viewers of the demonstration to understand the principles of how a product works while at the same time watching it work. This is because the viewers are receiving competing stimuli. The salesperson’s voice may be competing for the buyers’ attention with the flashing lights and noise of the equipment. Once the equipment works, the buyers can be encouraged to use it themselves under the salesperson’s supervision. If the correct equipment, to suit the buyers’ needs, has been chosen for demonstration and performs reliably, the demonstration can move the buyers very much closer to purchase. There now follows more practical advice on what must be regarded as an extremely important part of the personal selling process, for without a demonstration the salesperson is devoid of one of their principal selling tools.
- Make the process as brief as possible, but not so brief as not to be able to fulfil the sales objective of obtaining an order, or of opening the way for further negotiations. It is basically a question of balance, in that the salesperson must judge the individual circumstances and tailor the demonstration accordingly. Some potential buyers will require lengthier or more technical demonstrations than others.
- Make the process as simple as possible, bearing in mind that some potential purchasers will be less technically minded than others. Never ‘over-pitch’ such technicality, because potential buyers will generally pretend that they understand and not want to admit that they do not because of loss of face. They will see the demonstration through and probably make some excuse at the end to delay the purchase decision. The likelihood is that they will not purchase (or at least purchase from you). This point is deliberately emphasised because it is a fact that many potential sales are lost through overly technical demonstrations.
- Rehearse the approach to likely objections with colleagues (e.g. with one acting as an ‘awkward’ buyer). Work out how such objections can be addressed and overcome through the demonstration. The use of interactive video is useful here, as you can review your mistakes and rehearse a better demonstration and presentation.
- Know the product’s selling points and be prepared to advance these during the course of the demonstration. Such selling points must, however, be presented in terms of benefits to the customer. Buyer behaviour must therefore be ascertained beforehand. By so doing, it will be possible to maximise what is euphemistically called the ‘you’ or ‘u’ benefits.
- The demonstration should not go wrong if it has been adequately rehearsed beforehand. However, machines do break down and power supplies sometimes fail. Be prepared for such eventualities (e.g. rehearse an appropriate verbal ‘routine’ and have a back-up successful demonstration available on your laptop). The main point is not to be caught out unexpectedly and to be prepared to launch into a contingency routine as smoothly as possible.
CONDUCTING THE DEMONSTRATION
- Commence with a concise statement of what is to be done or proved.
- Show how potential purchasers can participate in the demonstration process.
- Make the demonstration as interesting and as satisfying as possible.
- Show the potential purchaser how the product’s features can fulfil their needs or solve their problems.
- Attempt to translate such needs into a desire to purchase.
- Do not leave the purchaser until they are completely satisfied with the demonstration. Such satisfaction will help to justify ultimate expenditure and will also reduce the severity and incidence of any complaints that might arise after purchasing.
- Summarize the main points by re-emphasizing the purchasing benefits that have been put forward during the demonstration. Note that we state purchasing benefits and not sales benefits because purchasing benefits relate to individual buying behavior.
- The objectives of a demonstration should be:
(a) To enable the salesperson to obtain a sale immediately (e.g. a car demonstration drive given to a member of the public); or
(b) To pave the way for future negotiations (e.g. a car demonstration drive given to a car fleet buyer).
- Depending on the objective above, in the case of
(a) Ask for the order now, or in the case of
(b) Arrange for further communication in the form of a meeting, telephone call, letter, an additional demonstration to other members of the decision-making unit, etc. Information technology can allow multi-media demonstrations of industrial products in the buyer’s office. No longer is it always necessary for buyers to visit the supplier’s site or to provide facilities to act as video ‘show rooms’ for salespeople wishing to demonstrate their product using video projectors.
ADVANTAGES OF DEMONSTRATIONS
- Demonstrations are a useful ancillary in the selling process. They add realism to the sales routine in that they utilize more human senses than mere verbal descriptions or visual presentation.
- When a potential customer is participating in a demonstration, it is easier for the salesperson to ask questions in order to ascertain buying behavior. This means that the salesperson will not need to emphasize inappropriate purchasing motives later in the selling process.
- Such demonstrations enable the salesperson to maximize the ‘u’ benefits to potential purchasers. In other words, the salesperson can relate product benefits to match the potential buyer’s buying behaviour and adopt a more creative approach, rather than concentrating on a pre-prepared sales routine.
- Customers’ objections can be more easily overcome if they can be persuaded to take part in the demonstration process. In fact, many potential objections may never even be aired because the demonstration process will make them invalid. It is a fact that a sale is more likely to ensue if fewer objections can be advanced initially, even if such objections can be satisfactorily overcome.
- There are advantages to customers in that it is easier for them to ask questions in a more realistic way in order to ascertain the product’s utility more clearly and quickly.
- Purchasing inhibitions are more quickly overcome and buyers declare their purchasing interest sooner than in face-to-face selling/buying situations. This makes the demonstration a very efficient sales tool.
- Once a customer has participated in a demonstration there is less likelihood of ‘customer remorse’ (i.e. the doubt that value for money is not good value after all). By taking part in the demonstration and tacitly accepting its results, the purchaser has bought the product and not been sold it.
Demonstration is the core of the selling process. The sales person actually transmits the information and attempts to persuade the prospect through product demonstration to make a customer. Two factors should be taken into consideration in preparing an effective product demonstration:
- The demonstration should be carefully rehearsed to reduce the possibility of even a minor malfunction.
- The demonstration should be designed to give customers ‘hand on’ experience with the product wherever possible. For example an industrial sales representative might arrange a demonstration before the purchaser’s technical personnel.
SALES RESPONSIBILITY AND PREPARATION.
The primary responsibility of a salesperson is to conclude a sale successfully. This task will involve the identification of customer needs, presentation and demonstration, negotiation, handling objections and closing the sale. These skills will be discussed later in details. In order to generate sales successfully, a number of secondary functions are also carried out by most salespeople. Although termed secondary, they are vital to long-term sales success. These are:
- Database and knowledge management;
- Handling complaints;
- Providing service; and
- Relationship management.
Salespeople are also responsible for implementing sales and marketing strategies. This issue will be considered later. The Figure below illustrates the key responsibilities of salespeople.
Prospecting is the searching for and calling upon customers who, hitherto, have not purchased from the company. This activity is not of uniform importance across all branches of selling. It is obviously far more important in industrial selling than retail selling; for example, a salesperson of office equipment may call upon many new potential customers, whereas a furniture salesperson is unlikely to search out new prospects – they come to the shop as a result of advertising and, perhaps, high street location.
Sources of prospects
- Existing customers. This is a highly effective method of generating prospects and yet tends to be under-used by many. A wealth of new prospects can be obtained simply by asking satisfied customers if they know of anyone who may have a need for the kinds of products or services being sold. This technique has been used successfully in life insurance and industrial selling, but also has applications in many other areas.
Having obtained the names of potential customers, the salesperson, if appropriate, can ask the customer if they may use the customer’s name as a reference. The use of reference selling in industrial marketing can be highly successful since it reduces the perceived risk for a potential buyer.
- Trade directories. A reliable trade directory such as Kompass or Dun and Bradstreet can prove useful in identifying potential industrial buyers. The Kompass directory,for example, is organised by industry and location and provides such potentially useful information as:
- Name, address and telephone number of companies;
- Names of board members;
- Size of firm, by turnover and number of employees;
- Type of products manufactured or distributed.
- Enquiries. Enquiries may arise as a natural consequence of conducting business. Satisfied customers may, by word-of-mouth create enquiries from ‘warm’prospects. Many companies stimulate enquiries, however, by advertising (many industrial advertisements use coupon return to stimulate leads), direct mail and exhibitions. This source of prospects is an important one and the salesperson should respond promptly. The enquirer may have an urgent need seeking a solution and may turn to the competition if faced with a delay. Even if the customer’s problem is not so urgent, slow response may foster unfavorable attitudes towards the salesperson and their company’s products.
The next priority is to screen out those enquiries that are unlikely to result in a sale. A telephone call has the advantage of giving a personalized response and yet is relatively inexpensive and not time consuming. It can be used to check how serious the enquiry is and to arrange a personal visit should the enquiry prove to have potential. This process of checking leads to establish their potential is known as qualifying. For potential business customers the internet can be useful in qualifying customers. For example, online financial ratings services can be used to check on the prospect’s financial resources. Salespeople may also inspect the prospect’s corporate website and blogs.
- The press and the internet. Advertisements and articles can provide clues to potential new sources of business. Articles may reveal diversification plans that may mean a company suddenly becomes a potential customer. Advertisements for personnel may reveal plans for expansion, again suggesting potential new business.
The internet is also a vast resource for identifying new potential customers. For example, salespeople may use electronic versions of product directories (e.g.Thomson Register) to identify companies that carry out certain types of operations and therefore may need specific products or services. Also, online databases (e.g. ABI Inform) can be used to gather detailed data on industries together with information on trends for products and industries.
- 5. Cold canvassing/cold calling. These terms are used interchangeably and as the words suggest involve calling on potential new customers ‘cold’ i.e. without prior contact or even an appointment. Although widely used in some forms of selling, such as ‘door-to-door’ or telephone selling, it can be an ineffective and thus frustrating approach to generating sales. In fact, only a relatively small number of individuals are able to cope with the stresses, strains and challenges of cold canvassing, making them very special and valuable types of salespeople. Indeed, the process of cold canvassing can be so stressful that someone once suggested that it was ‘God’s punishment’ for the salesperson.
So why is cold canvassing potentially so ineffective and stressful, and, come to that, is it always so?
The major problem in cold canvassing lies with the potential reaction, or perhaps lack of it, on the part of the customer.Cold canvassing means approaching customers who at the extreme have never heard of the company, have never heard of its products, have never met or spoken to the salesperson before and may have no conceivable interest in, or need for, the product or service in question. Imagine the difficulties of trying to sell in this situation.
Furthermore, the customer may strongly resent being approached without prior warning or permission. This is particularly the case where customers are approached in their own time and/or in their own homes as is the case with much consumer product cold canvassing.
In fact, there are major potential ethical and regulatory issues associated with some types of cold calling, especially where the approach to the potential customer is made via the internet or by telephone. Consequently, any marketer intending to use these contact methods for cold calling must be familiar with, and careful to adhere to, any legal or industry regulations and guidelines pertaining to the cold calling process.
Resentment and possible anger on the part of the customer at being cold called obviously make it much more difficult for the sales person to initiate the selling process, never mind make a sale. In addition, the lack of pre-qualification on the part of the seller with regard to the customer’s needs, wants and circumstances often means that, even if the customer does not resent being approached in this way, they may simply have no need of the product or service under any circumstances.
But if cold calling is potentially so ineffective and stressful, why do many companies continue to practise it? Is there anything to recommend it? The answer is, quite simply, yes!
Cold calling allows a company the potential to expand its customer base. If companies restricted their sales efforts to existing customers, they would find it much more difficult to grow. In addition, cold calling evidences a proactive approach by a company towards its markets. Some argue that the marketer should wait for the customer to come to the company before trying to sell to them, on the basis that if somebody wants something they will ask. However, we all know that this is not always the case – customers often want marketers to present them with solutions to their purchasing problems. Finally, for at least some salespeople cold calling represents the challenge they need to keep them motivated. Especially where they are suitably rewarded for success.
All in all, it would be a mistake to rule out cold calling as a way generating new sales. However, cold calling activity does need to be carefully planned and managed. Some of the ways in which cold calling can be made more effective include the following:
- Try to make cold calling as unintrusive as possible for the customer. For example,do not cold call at what are known to be busy or inconvenient times for the customer.
- Related to the above, in the case of domestic customers try to avoid cold calling very early or very late in the day.
- At all times respect the privacy of the customer and always respect their wish not to be bothered.
- Do not ever try to bully a customer into speaking to or seeing you.
- Use cold calling to secure a future appointment, or to gain an agreement to send further information, rather than immediately trying to secure an order.
- Find out as much as possible about the prospective customer and use this to plan the cold call approach and content. In particular, the effectiveness of cold canvassing can be improved where information is used to identify customers who are more likely to buy because of some attribute or characteristic that can be identified in advance. For example, we might select only companies over a certain size, or perhaps consumers in a certain income bracket or lifestyle group.
- Endless chain method/family tree method. Works on the principle of multiplication.
7.Centre of influence method-the selected persons are either customers,influentialfriends of customers e.g. ministers,MPS,MCAS,doctors,lawyers,bankers,professors,club officials, business leaders, social workers and community leaders.
- Personal observation method-what happens on the ground.
- Spotters method-Junior sales men are employed, many at a time to locate the prospects, in a particular territory of a specific social status.
- Direct mail and telephone method.
- Exhibitions and demonstration-Takes place from time to time at city, regional, national or international level.
- Bird-dog method-Closely related to spotters method.A nick name given to those persons who visit the houses at a definite interval e.g.
- Electric /water meter readers.
- Gas boys.
- Milk suppliers
- Newspaper boys
- Database and knowledge management
Databases and customer knowledge are not just essential for prospecting. A systematic approach to customer record-keeping is also to be recommended to all repeat call salespeople. An industrial salesperson should record the following information:
- Name and address of company;
- Name and position of contact(s);
- Nature of business;
- Date and time of interview;
- Assessment of potential;
- Buyer needs, problems and buying habits;
- Past sales with dates;
- Problems/opportunities encountered; and
- Future actions on the part of salesperson (and buyer).
This aspect of the sales job is of particular importance, since a salesperson often works alone with the minimum of personal supervision. A salesperson may have to organise their own call plan, which involves dividing territory into sections to be covered day by day and deciding the best route to follow between calls. Often it makes sense to divide a territory into segments radiating outwards, which the salesperson’s home at the centre. Each segment is designed to be small enough to be covered by the salesperson during one day’s work.
Many salespeople believe that the most efficient routing plan involves driving out to the furthest customer and then zigzagging back to home base. However, it can be shown that adopting a round-trip approach will usually result in lower mileage.
Such considerations are important with respect to efficiency, as an alarming amount of time can be spent on the road as opposed to face-to-face with buyers. A survey conducted on behalf of the Chartered Institute of Marketing into UK selling practice found that, on average, only 20–30 per cent of a salesperson’s normal working day is spent face-to-face with customers. Although this study was conducted almost 30 years ago, matters have not improved since.
- Handling complaints
Handling complaints may seem at first to be a time-consuming activity that diverts a salesperson from the primary task of generating sales. A marketing orientation for a salesforce, however, dictates that the goal of an organisation is to create customer satisfaction in order to generate profit. When dissatisfaction identifies itself in the form of a complaint, this necessary condition for long-term survival is clearly not being met.
Complaints vary in their degree of seriousness and in the authority that the salesperson holds in order to deal with them. No matter how trivial the complaint may seem, the complainant should be treated with respect and the matter dealt with seriously.
- Providing service
Salespeople are in an excellent position to provide a ‘consultancy’ service to their customers. Since they meet many customers each year, they become familiar with solutions to common problems. Thus an industrial salesperson may be able to advise customers on improving productivity or cutting costs. Indeed, the service element of industrial selling is often incorporated into the selling process itself, e.g. computer salespeople may offer to conduct an analysis of customer requirements and produce a written report in order to complete a sale. The salesperson who learns solutions to common problems and provides useful advice to their customers builds an effective barrier to competitive attacks and strengthens buyer–seller relationships.
- Relationship management.
Another key responsibility for salespeople is relationship management.. This coverage examines relationships between salespeople and customers. There is, however, another set of relationships that a salesperson must master in today’s complex selling environment: those between the salesperson and other people in their company who are vital to ensure a smooth sales process and efficient delivery and service of the product. Particularly with key accounts, selling is performed by a team of players (e.g. from engineering, production, marketing, finance and senior management). Key account managers must be able to manage these relationships both within their firms and between those players and members of the customer’s DMU.
- Implementing sales and marketing strategies.
- Sales and profit success-Will be discussed later.
The sales force is also charged with the responsibility of implementing sales and marketing strategies designed by management. Misunderstandings regarding strategy can have grave implications.
PREPARATION FOR SALES
The ability to think on one’s feet is of great benefit to salespeople, since they will be required to modify their sales presentation to suit the particular needs and problems of their various customers and to respond quickly to unusual objections and awkward questions. However, there is much to be gained by careful preparation of the selling task. Some customers will have similar problems; some questions and objections will be raised repeatedly. A salesperson can therefore usefully spend time considering how best to respond to these recurring situations.
In many selling situations, buyers and sellers may negotiate price, timing of delivery, product extras, payment and credit terms, and trade-in values. These will be termed sales negotiations.
PREPARATION FOR PURE SELLING AND SALES NEGOTIATIONS
PREPARATION FOR PURE SELLING
A number of factors can be examined in order to improve the chances of sales success in both sales negotiations and pure selling.
- Product knowledge and benefits
Knowledge of product features is insufficient for sales success. Because people buy products for the benefits they confer, successful salespeople relate product features to consumer benefits; product features are the means by which benefits are derived. The way to do this is to look at products from the customer’s point of view
- Knowledge of competitors’ products and their benefits
Knowledge of competitors’ products offers several advantages:
- It allows a salesperson to offset the strengths of those products, which may be mentioned by potential buyers, against their weaknesses. For example, a buyer might say, ‘Competitor X’s product offers cheaper maintenance costs’, to which a salesperson might reply, ‘Yes, but these cost savings are small compared to the fuel savings you get with our machine.’
- In industrial selling, sales engineers may work with a buying organisation in order to solve a technical problem. This may result in a product specification being drawn up in which the sales engineers have an influence.
- Sales presentation planning
Although versatility, flexibility and the ability to ‘think on one’s feet’ are desirable attributes, there are considerable advantages to presentation planning:
- The salesperson is less likely to forget important consumer benefits associated with each product within the range they are selling.
- The use of visual aids and demonstrations can be planned into the presentation at the most appropriate time to reinforce the benefit the salesperson is communicating.
- It builds confidence in the salesperson, particularly the newer, less experienced, that they are well equipped to do the job efficiently and professionally.
- Possible objections and questions can be anticipated and persuasive counterarguments prepared.
- Setting sales objectives
The temptation, when setting objectives, is to determine them in terms of what the salesperson will do. The essential skill in setting call objectives is to phrase them in terms of what the salesperson wants the customer to do rather than what the salesperson will do. As with all objectives, sales objectives should, wherever possible, fulfill the SMART criteria for objectives that were discussed An important factor affecting the setting of sales objectives is the so-called sales cycle.
- Sales Cycle
The sales cycle refers to the processes/steps between first contact with a customer and the placing of the actual order and the amount of time this takes. With regard to the process/steps in the sales cycle, once again this should always be considered from the point of view of what processes/steps the customer undertakes rather than from the perspective of the steps involved in selling, though clearly the former should determine the latter.
- Understanding buyer behavior
Many organizational buying decisions are complex, involving many people whose evaluative criteria may differ, and that the purchasing officer may play a minor role in deciding which supplier to choose,particularly with very expensive items.
The internet can provide a wealth of information on the buying organisation. The buyer’s website, online product catalogues and blogs are useful sources of information.
Customer relationship management (CRM) systems allow salespeople to access customer information held by their company via the internet. For example, Orange,the telecommunications company, enables their field salespeople to access their CRM databases using personal digital assistants (PDAs) equipped with wireless modems.
PREPARATION FOR SALES NEGOTIATIONS
In addition to the factors outlined in the previous section, a sales negotiator will benefit by paying attention to the following additional factors during preparation.
- Assessment of the balance of power
In the sales negotiation, seller and buyer will each be expecting to conclude a deal favorable to themselves. This balance will be determined by four key factors:
- The number of options available to each party. If a buyer has only one option – to buy from the seller in question – then that seller is in a powerful position. If the seller, in turn, is not dependent on the buyer but has many attractive potential customers for the products, then again they are in a strong position. Conversely, when a buyer has many potential sources of supply and a seller has few potential customers, the buyer should be able to extract a good deal. Many buyers will deliberately contact a number of potential suppliers to strengthen their bargaining position.
- The quantity and quality of information held by each party. (‘Knowledge is power’,Machiavelli.) If a buyer has access to a seller’s cost structure then they are in a powerful position to negotiate a cheaper price, or at least to avoid paying too high a price. If a seller knows how much a buyer is willing to pay, then their power position is improved.
- Need recognition and satisfaction. The greater the salesperson’s understanding of the needs of the buyer and the more able they are to satisfy those needs, the stronger their bargaining position
- The pressures on the parties. Where a technical problem is of great importance to a buying organization, its visibility high and solution difficult, any supplier who can solve it will gain immense bargaining power. If, on the other hand, there are pressures on the salesperson, perhaps because of low sales returns, then a buyer should be able to extract extremely favorable terms during negotiations in return for purchasing from them.
- Determination of negotiating objectives-It is prudent for negotiators to set objectives during the preparation stage. This reduces the likelihood of being swayed by the heat of the negotiating battle and of accepting a deal which, with the benefit of hindsight, should have been rejected
It is useful to consider two types of objective:
- ‘Must have’ objectives. The ‘must have’ objectives define a bargainer’s minimum requirements; for example, the minimum price at which a seller is willing to trade. This determines the negotiating breakpoint.
- ‘Would like’ objectives. These are the maximum a negotiator can reasonably expect to get; for example, the highest price a seller feels they can realistically obtain. This determines the opening positions of buyers and sellers.
- 2. Concession analysis
Since negotiation implies movement in order to achieve agreement, it is likely that concessions will be made by at least one party during the bargaining process. Preparation can aid negotiators by analyzing the kinds of concession that might be offered to the other side.
The kinds of issue that may be examined during concession analysis include the following:
- Timing of delivery;
- The product – its specification, optional extras;
- The price – ex works price, price at the buyer’s factory gate, installation price,in-service price;
- Payment – on dispatch, on receipt, in working order, credit terms;
- Trade-in terms, e.g. cars.
The aim of concession analysis is to ensure that nothing that has value to the buyer is given away freely during negotiations. A skillful negotiator will attempt to trade concession for concession so that ultimately an agreement that satisfies both parties is reached.
- Proposal analysis
A further sensible activity during the preparation stage is to estimate the proposals and demands the buyer is likely to make during the course of negotiation, and the seller’s reaction to them. This is analogous to the anticipation of objections in pure selling – it helps when quick decisions have to be made in the heat of the negotiation.
Meaning and Definition of Personal Selling
Personal selling refers to the use of speech and personal conviction to bring about some action on the part of another. Salesperson is a man who actually performs the personal selling.
A salesperson in personal selling tries to persuade the prospect so that he can take a decision to buy product. It is a major factor in creating sales volume. It is a direct presentation of a product to a prospective customer by a salesman. It takes place face to face or over the telephone. It may be directed to a middleman or a final consumer
Personal selling is a face – to – face interaction with one or more prospective purchasers for the purpose of making presentations answering questions, and procuring orders.”
Personal selling involves two – way communication with prospects that allows the sales massage to be adapted to the special needs of the customer.
Characteristics of Personal Selling
- Part of Promotional Mix:
Personal selling is a part of promotional mix, or the communication mix, in the company’s marketing program. The major elements in the promotional mix are the company’s advertising, sales promotion, and personal selling efforts.
- Individual, Personal Communication:
Personal selling is the individual and personal communication of information, in contrast to the mass, impersonal communication of advertising, sales promotion, and other promotional tools.
- Flexible Tool:
Personal selling is more flexible than these other tools. Salespeople can tailor their presentations to fit the needs and behavior of individual customers. Salespeople can see their customer’s reaction to a particular sales approach and make adjustments on the spot.
- Focused on Customers:
Personal selling is usually focused or pinpointed on prospective customers. It considers the needs, desires and buying problems of the customers.
- Alive Interaction:
Personal selling involves an alive, immediate, and interactive relationship between two or more persons. Each party observes the other’s needs at close hand and makes immediate adjustments.
- Long-run Relationship:
Personal selling permits all kinds of relationship to spring up. It establishes a selling relationship and also a deep personal friendship. It keeps customer’s best interests at heart. It maintains long run relationships.
Personal selling is based on buyer’s reactions and response. It makes the buyer feel that he is listened to, and his needs are considered.
It is concerned with persuasive communication. A salesperson in personal selling tries to persuade the prospect so that he can take a decision to acquire the product which the salesperson is talking about.
Human Element into Marketing:
It is a major factor in creating sales volume. It brings human element into marketing transactions and increases the customer’s confidence in the supplier.
Personal selling is a broader concept than salesmanship. Personal selling, along with other marketing elements, is a means for implementing marketing program’s. Salesmanship is one aspect of personal selling it is never all of it. Personal selling makes use of salesmanship techniques.
: Personal selling is creative by nature. The salespeople try to create needs, make the customers aware of these needs and try to persuade them to buy the product. Salesperson does not sell, but they create in the other man the urge to buy.
It is necessarily an act of assisting the customers to buy wisely. Today, it has become a symbol for honesty and dependability. In fact, it is a service that is serving the customer for the good cause of humanity.
Types of Personal Selling
There are two kinds of personal selling:
- Across –the -Counter Selling: In this kind of selling Customers come to the salespeople. It involves retail store selling. It also includes the salespeople at catalogue retailers who take telephone orders. Most salespeople fall into this category.
- Field Selling: It is the selling where the salespeople go to the customers. These people sell in person at a customer’s place of business or home. Outside sales-force usually represent producers or wholesaling middlemen, selling to business users. Today, some companies have a sales-force that goes to the customers in person. Some outside selling is becoming electronic.
Objectives of Personal Selling
- To do the entire selling job
- To “service” existing accounts
- To search out and obtain new customers
- To secure and maintain customers cooperation in stocking and promoting the product line
- To keep customers informed on changes in the product line and other aspects of marketing strategy
- To assist customers in selling the product line
- To capture and retain a certain market share
- To obtain sales volume in ways that contributes to profitability
- To obtain some number of new accounts of given types
- To keep personal -selling expenses within set limits
- To secure targeted percentages of certain accounts’ business
Need and Importance of Personal Selling
- Need of Today: The need of personal selling has increased in present age due to the flood of products in the market and keen competition.
- Basis of Economic Fortunes: If the personal selling effort in an organization falters/falls, then the economic fortunes of that organization will likely decline. It largely determines the firm’s financial future.
- To Carry Promotional Load: Personal selling is a major ingredient of promotion mix of a company. It has a big role in implementing promotional programme. Personal selling carries the bulk of the promotional load when:
- The market is concentrated either geographically, or in a few industries, or a few large customers.
- The product has a high unit value, is quite technical in nature, or requires a demonstration.
- The product must be fitted to an individual customer’s need; as in the case of securities or insurance.
- The sale involves a trade – in.
- The product is in the introductory stage of its life cycle.
- The organization does not have enough money for an adequate advertising campaign.
- Minimum Wasted Effort: Personal selling is focused on prospective customers. Thus, it minimizes wasted effort. In contract, much of the cost of advertising is spent on sending messages to people who in no way are real prospects.
- Increase in Profitable Sales: The goal of marketing activities is to increase profitable sales by satisfying the want of consumers over the long run. Personal selling is by far the major promotional method used to realize this goal. The number of people employed in personal selling is a big one than advertising.
- Largest Single Operating Expense: In many companies, personal selling is the largest single operating expense. It often equals 8 to 15% of sales, whereas advertising costs average 1 to 3 % of sales.
- Mirror of the Market: Personal selling is a mirror of market. It supplies market information back to the firm. It keeps eye on market nerve, fashion trends and consumer profile. It regularly assesses the competitive forces of the market.
- Broader Roles: Salesmen persuade prospective customers, expedite orders, coordinate deliveries, set-up displays, service their accounts, gather market information, and have solve customers’ problems. Thus, today’s salesman performs a wide variety of sales roles.
- Cost-Effective Tool: Personal selling is the most cost-effective tool at later stages of the buying process. It builds up buyers’ preference, conviction, and action. Personal selling is an alive and interactive relationship, it considers the other’s needs and it develops all kinds of relationship, even a deep personal friendship. It makes the buyer feel obliged, attended and responded.
- Exerting Influence: Salesmen can accomplish difficult things through advertising, sales promotion publicity and public relations. They can tailor their messages to the characteristics and desires of particular prospects; modify ongoing presentations in accordance with the feedback from prospects: they are in a position to ask for an order at a strategic time and if turned down, they can communicate further, in an effort to recoup and obtain an order.
- Convincing and Creating Customers: Salespersons locate and identify the customers who are interested in the company products. They transform prospects into buyers by understanding their needs. Personal selling provides “repeat purchases ‘ to the company.
- Creation of International Markets: Personal selling has created not only national but international markets. This has been the basis of global trade and culture.
Limitations and Demerits of Personal Selling
High Cost: The cost of developing and operating a sales force is high. More money is spent on personal selling than on any other form of promotion. A sales force represents a greater long – term commitment than advertising.
Unable to Attract High Calibre People: A company often is unable to attract the quality of people needed to do the job. At the retail level, many firms have abandoned their sales forces and shifted to self-service for this very reason.
Difficult to Curtail: Advertising can be turned on and off, but the size of a sales-force is more difficult to alter.
The Personal Selling Process
The personal selling process is a logical sequence of eight steps. These steps are taken to deal with the prospective buyers.
- Presale preparation
- Pre approach before interview
- Approaches to the customer
- Sales presentation
- Handling customer objectives
- Closing the sale
- Follow up action
Pre sale preparation – In this stage, the salesperson prepare himself with adequate knowledge about the product he will sell, the company he will represent, the market in which he will sell, the competitors products and prices the category of customers or segments he will target.
Prospecting and Qualifying – The next step in personal selling is to identify prospects. Prospecting is the process of identifying potential buyers who have a need for the products and services offered by the company, the ability to pay for it and the adequate authority to buy it.
The salesman first identifies potential customers and then qualifies them. Qualifying consists of determining whether the customers have the necessary purchasing power, authority, and willingness to buy. It could be done through Cold canvassing, Prospect pool, Center of influence, Observation, Trade shows demonstration, Telemarketing, Friends & Acquaintances
Pre approach to Individual Prospects – After qualifying the prospects, before the sales person approaches the customers for a sale, it is necessary to develop a sales strategy by collecting customer data and combining them with the product attributes as a fit for satisfying the individual and organizational needs. A Pre approach selling strategy for each prospect requires a clear understanding of his personal characteristics need. Salespeople should learn all they can about the customers to whom they hope to sell. This step consists of finding out what products the prospective customers are now using and their reactions to these products. Salesmen also should try find out the personal habits and preferences of a prospect. This will help to adjust their presentations to individual buyers. The salesmen should set objectives. They should decide on best approach, which might be a personal visit, a phone call, or a letter. The best timing should also be considered and plan an overall sales strategy for the prospective customers.
Approach to the customers – This next step is to approach to the customer when the prospect is classified and the selling strategy is developed to satisfy the customer needs. The salesperson comes in contact with the potential customer and makes efforts to influence them for a favorable decision. The salesman should know how to greet the buyer, show courtesy and attention to the buyer and avoid bad mannerisms such as staring at the customer. The opening remark should be positive and might be followed by key questions and active listening to understand the buyer and his needs better.
Sales Presentation – On the basis of information collected from pre approach, a salesperson can design a sales presentation. This will attract the prospect’s attention, hold interest, arouse desire and stimulate action by closing the sale
Making the Presentation
- Stimulus Response Format – This is where salesperson keeps suggesting an item until the buyer responds, like the McDonalds order taker.
- Formula Selling Format – more formal and planned, like a telemarketer
III. Canned Selling Presentation – This is a memorized, standardized message conveyed to every prospect. It works best when seller is a nervous or does not know the buyer well.
Demonstrating the Sales Message: Here the salesperson presents his products & services before the prospect and makes effort to create and modify their interest into sales realization for the company. While giving sales presentation, the sales person should always try to think about the features and attributes of the product with customer’s needs.
Handling customer objections – Customers make objections after or during the presentation. These objections are many time excuses for not buying. Objections normally pause the sale process because the customer either has not fully understood the product & its benefits or is not fully in agreement with the salesperson objections may take form of doubts minor objections and major objections.
Closing the sale – Closing the sale is the goal in any selling process for a sales person. This comes after the objections are effectively handled and the customer is satisfied with the presentation & is ready to place an order.
Collecting feedback and Post (sale Services) – An effective selling job does not end with getting the order. Post-sale activities are essential to build customer goodwill. These services also prepare the groundwork for future business. A good salesman ensures that no problems occur in delivery, financing, installation, employee training and other areas. These services are the important source of customer satisfaction. They reduce the customer’s post –purchase anxiety that may occur after a person makes a buying decision.
A salesperson can minimize the customer’s dissatisfaction by
(a) Stating the product’s benefits,
(b) Emphasizing why the product is better than its alternatives,
(c) Explaining how happy the customer will be with the product purchased.
Qualities of a good sales person
Some of the qualities of a good salesperson are as follows:
- Physical Quality: A salesperson should have a good appearance and an impressive personality.
- Mental Quality: A good salesperson should possess certain mental qualities like imagination, initiative, self confidence, sharp memory; alertness, etc. He should be able to understand the need and preferences of the customer.
- Integrity of Character: He should possess the qualities of honesty and integrity. He is to gain the confidence of the customer. He should be loyal to the employer as well as to the customer.
- Knowledge of the product and the company: Should be able to explain each and every aspect of the product i.e. its qualities, how to use it, what precautions to be taken, etc and the company he is representing.
- Good behavior: A salesman should be cooperative and courteous. Good behavior enables one to win the confidence of the customers.
- Ability to Persuade: A good salesperson should be good in conversation so that he can engage the person he is attending. He should be able to convince him and create the desire in mind to possess the commodity.
- Flexibility of approach: He should interact with the customer with a flexible approach i.e. try to persuade different type of customers with different reasons.
- Risk Taker: A salesperson should take a calculative risk while selling the product or service.
- Clearly defined goals and purposes
- Ability to estimate customer’s needs and desires: He or she is alert and quickly determines what the customer wants and the best way to sell.
- Ambition: He or she likes to do a good job and is interested in getting ahead with the company.
- Business Sense: Should understands that a is in business to make a profit and quickly learns the ins – and – outs of the organisation.
- Courtesy: Should be in a position to reveals a sincere desire to help customers and treats them as guests even when he or she visits their places of business.
- Creativeness: Imagination, vision and the ability to create ideas make a salesperson dynamic.
- Curiosity: He or she wants to learn all he or she can about his or her products and customers.
- Enthusiasm: There is nothing that can drain away a prospect’s buying interest more than a half – dead salesperson. Dullness should be left at home. A salesperson must radiate enthusiasm during and after the sales call.
- Figure Sense: He or she should have the mathematical ability to figure and fill up order form correctly and to make the necessary reports.
- Flexibility: A good salesperson is able to adapt himself or herself to a variety of customers. Each contact may require adapting the sales talk, speech habits and even appearance.
- Friendliness : A salesperson should be able to make people like him or her and he or she must like to meet people
- Handwriting: He or she must write legibly so that his or her paper work can be readily understood by his or her office people and by his or her customers.
- Health: Good health generates energy and energy is needed to sell. Poor health prevents many salespersons from fulfilling their potentials.
- Interest in job: He or she likes selling and working for the company. .
- Motivation: He or she must have more than just an interest is selling. Psychologists have found certain predominant patterns in people who have become really successful salesperson. They live in the present and not in the future. They do want power over others and prefer not to work under close supervision.
- Originality: He or she is constantly searching for new ideas to be used in selling the products and suggests better ways of doing things.
- Persuasiveness: Very few products of any type actually sell themselves. They must be sold. Your salesperson must have the ability to get people to agree. There are situations when persuasiveness may vary keeping in view the consumer’s response.
- Positive: His or her maturity is reflected in his or her behavior. He or she should be positive, confident, and energetic and business like. He or she should be able to demonstrate to the customers that he or she knows what he or she is talking about.
- Self – control: He or she can handle difficult people and situations calmly.
- Self – starter: A perfect salesperson works well without constant supervision and is able to make decisions on his or her own.
- Speech: Should be able to speak clearly and maturely in a natural tone. He or she can emphasize sales points with sincerity and friendliness
Characteristics of a successful salesperson
There are a few natural skills that are of great benefit if they already exist within those that want to be successful in sales. Without these, success will take a longer time but it can still be achieved.
- Effective Communicator: Communication covers a lot of territory. Sales is all about talking to people and getting them to understand what you are trying to communicate.
- Ability to Listen: Along with speaking, a great salesperson knows when to stop talking and listen. They never cut someone off while they are talking, because in doing so they would fail to hear a key element in identifying what that person’s needs might be.
- Asks Great Questions: Salespeople are naturally inquisitive and know that in order to isolate what the real need or desire is in the buyer, they need to ask questions that will lead them to the answer. They naturally ask questions because they have a desire to help solve their problem.
- Problem Solver: Another natural skill is the desire and ability to solve problems. Great salespeople are always solving problems. The ability to know what the buyer’s problem is and offering suggestions that will effectively solve the problem with respect to what products or services you sell, generally results with a sale.
- Well Organized: Sales people have a keen ability to break things down into smaller steps and organize a plan of action. They know how to analyze what their goal is and in what order the steps need to be in order to reach that goal.
- Self – Starter and Self – Finisher: A successful sales person moves forward on their own. They never need anyone to tell them when it is time to go to work because they know that if they do not work they will not earn. They are also very persistent to finish what they start. They achieve their goals, even if they are small ones.
- Positive Self Image: Having the attitude that they can do just about anything that they put their mind to is usually very common among sales people. They do not cower from meeting or talking to people or trying something new. They rarely allow negatives that are either spoken to them or about them to effect what they are trying to accomplish because they know who they are and what they are capable of doing.
- Well Mannered and Courteous: The best sales people are very well mannered. You may not realize it, but good manners are a way of showing respect for others. People are attracted to those that respect them and mutual respect is fundamental in building lasting relationships with people, including buyers.
- Naturally Persuasive: Another very common inherent skill with great salespeople is that they are very persuasive or know how to get what they want. They focus on what they want and they are persistent to keep chipping away until they get what they want. They almost never give up or give in.
- Person of Integrity: A salesperson without integrity will have many struggles which will often include hopping from job to job. Honesty in sales is so important and it is almost impossible for this skill to be taught.
SELLING AND MANAGING KEY/ MAJOR ACCOUNTS
MAJOR/KEY ACCOUNT MANAGEMENT
Key account management is a strategy used by suppliers to target and serve high-potential customers with complex needs by providing them with special treatment in the areas of marketing, administration and service. In order to receive key account status, a customer must have high sales potential. A second characteristic is that of complex buying behavior; for example, large decision making units with many choice criteria are often found in dispersed geographical locations. The decision-making unit may be located in different functional areas and varying operating units. Third, key account status is more likely to be given to customers willing to enter into a long-term alliance or partnership.
Such relationships offer buyers many benefits including reliability of supply, risk reduction, easier problem-solving, better communications and high levels of service. Key accounts that are geographically widespread are often called national accounts.
Key account management has three features. First, key account management involves special treatment of major customers that is not offered to other accounts.
This may involve preferential treatment in the areas of pricing, products, services, distribution and information sharing. This may take the form of special pricing, customization of products, provision of special services, customization of services, joint co-ordination of distribution and workflow, information sharing and joint development of business processes and new products. Second, it is associated with dedicated key account managers who typically serve several key accounts.
They may be placed in the suppliers’ headquarters, in the local sales organization of the key account’s country, or sometimes on the premises of the key account.
Third, key account management requires a multifunctional effort involving, in addition to sales, such groups as engineering, marketing, finance, information technology, research and development and logistics.
The six most critical conditions needed to ensure the success of key account management are as follows:
- Integration of the key account programme into the company’s overall sales effort;
- Senior management understands of, and support for, the key account unit’s role;
- Clear and practical lines of communication between outlying sales and service units;
- Establishment of objectives and missions;
- Compatible working relationships between sales management and field salespeople;
- Clear definition and identification of customers to be designated for key account status.
THE TASKS AND SKILLS OF KEY ACCOUNT MANAGEMENT
|1. Develop long-term relationships||Relationship building|
|2. Engage in direct contact with key customers||Co-ordination|
|3. Maintain key account records and background information||Negotiation|
|4.Identify selling opportunities and sales potential of existing key accounts||Human relations|
|5. Monitor competitive developments affecting key accounts||Focus on specific objectives|
|6. Report results to upper management||Diagnosing customer problems|
|7. Monitor and/or control key account contracts||Presentation skills|
|8. Make high-level presentations to key accounts||Generating visibility, reputation|
|9. Co-ordinate and expedite service to key accounts||Communication|
|10. Co-ordinate communications among company units servicing key accounts||Working in a team|
BUILDING RELATIONSHIPS WITH KEY ACCOUNTS
Five ways of building strong customer relationships will now be described.
- Personal trust
The objective is build confidence and reassurance.
- Ensure promises are kept;
- Reply swiftly to queries, problems and complaints;
- Establish high (but not intrusive) frequency of contact with key account;
- Arrange factory/site visits;
- Engage in social activities with customer;
- Give advance warning of problems.
- Technical support
The objective is to provide know-how and improve the productivity of the key account.
- Research and development co-operation;
- Before- and after-sales service;
- Provide training;
- Dual selling (supplier helps key account to sell).
- Resource support
The objective is to reduce the key account’s financial burden.
- Provide credit facilities;
- Create low interest loans;
- Engage in co-operative promotions to share costs;
- Engage in counter-trade (accept payment by means of goods or services rather than cash).
- Service levels
The objective is to improve the quality of service provision.
- Reliable delivery;
- Fast/just-in-time delivery;
- Install computerized reorder systems;
- Give fast accurate quotes;
- Defect reduction (right first time).
- Risk reduction
The objective is to lower uncertainty in the customer’s mind regarding the supplier and the products/services provided.
- Free demonstrations;
- Free/low-cost trial period;
- Product guarantees;
- Delivery guarantees;
- Preventative maintenance contracts;
- Proactive follow-ups;
- Reference selling.
CRITERIA FOR SELECTING KEY ACCOUNTS.
Traditionally the key criterion for designating particular customers as ‘key accounts’ was on the basis of the large quantity of output sold to a customer on the basis that an organization bought a considerable amount of product from a supplier, it deserved special treatment because of the high profit contribution it made, the supplier was motivated to provide the extra resources because the loss of that customer would have a significant impact on its own sales and profits. As experience with key accounts has grown, the range of criteria used to select key accounts has grown, based on the strategic or long-term importance of specific customers to a supplier. These include:
- Accounts that have growth prospects through their ability to build sales and market share in their existing markets.
- Accounts with growth prospects through their position as major players in small or medium-sized but expanding markets.
- Customers that are willing to be partners in innovation by allowing joint new product development with a supplier and/or will allow a supplier to test new products in their production processes.
- Customers that are early adopters of new products and so aid the diffusion of such products in the marketplace.
- Highly prestigious accounts that improve the image and reputation of the supplier and can be used in reference selling by the sales force.
- Accounts that are important to and currently served by competitors that the supplier has decided to attack.
- Accounts that provide a high contribution to the supplier’s profits.
TRAVELLING SALES PERSONNEL.
A travelling personnel is an individual moving door to door selling goods. Refers to an individual whose job is to travel to different places in a particular area and sell products or get orders from customers.
DUTIES OF TRAVELLING SALES PERSONNEL.
- Assisting customers in selecting products.
- Answering questions about products.
- Keeping check on the inventory/stock.
- Generating/closing sales.
- Travelling and visiting prospective buyers and current clients.
- Overcome all objections from customers and make sales.
- Build lasting relationships with customers
- Get new orders.
DISTINCTION BETWEEN INTERNAL AND EXTERNAL TRAVELLING SALES PERSONNEL.
- Hours of working
- Internal-Individual customers.external-Oraganizational and individual buyers.
- Customer assistance level-limited to internal.
- Level of professionalism-courteous, vocabulary etc.
CHALLENGES OF TRAVELLING SALES PEOPLE
- Repeated rejections-sales people may suffer repeated rejections when trying to close sales. This may result to low confidence and lack of motivation.
- Absence of permanent address-they have to move from place to place looking for prospects with no specific location.
- Heavy work load-moving from place to place and performing every duty on their own is tiresome and can result to health issues or disturbed family life.
- No time for self-due to movement from one place to another.
- Health issues e.g. backaches, disturbed stomach, depression, fatigue etc.
- Inadequate resources for transport and moving the family from place to place.
- Future of such a job is uncertain because it is usually temporary due to absence of prospects or low sales can result to dismissal at any time.
INTERNATIONAL SELLING APPROACH
Companies contemplating entering overseas markets will need to develop specialist knowledge and expertise in these areas. Some sales managers feel that selling abroad is impossibly difficult, but most who try it see that, although it is ‘different’, it is no more demanding than selling in the home market.
Success depends largely on the attitude and approach of the firm and the personal qualities of the salespeople – not every salesperson is suited to such a task from the point of view of understanding and empathy with the foreign market concerned. While it is hoped that this text will contribute to the development of the personal qualities necessary for successful salesmanship, the chapter concentrates specifically on those aspects of international selling with which a firm either exporting or contemplating it should be familiar.
One study found evidence to support the hypothesis that there are four identifiable stages in a firm’s internationalization. The four stages are:
- Non exporters,
- Export intenders,
- Exporters, and
- Regular exporters.
KEY ENVIRONMENTAL FACTORS TO CONSIDER IN INTERNATIONAL SELLING
- Concept of balance of payment.
- International trade.
- General Agreement on Tariffs and Trade (GATT).
INTERNATIONAL SELLING AT COMPANY LEVEL
The fact that national economic prosperity depends on selling overseas is not without relevance to individual companies. There are, however, a number of more pressing reasons why companies benefit from selling overseas:
- Trade due to non-availability of a particular product:
- Trade due to international differences in competitive costs:
- Trade due to product differentiation
We have looked at three broad reasons why individual firms become involved in selling overseas, but there are other more situation specific reasons:
(a) To become less vulnerable to the effects of economic recession, particularly in the home market, and to counter market fluctuations.
(b) Loss of domestic market share due to increased competition.
(c) To take advantage of faster rates of growth in demand in other markets.
(d) To dispose of surplus or to take up excess capacity in production.
(e) Loss of domestic market share due to product obsolescence.
(f) To achieve the benefits of long production runs and to gain economies of scale
(g) The firm has special expertise or knowledge of producing a product that is not available in a foreign market.
(h) Simply the existence of potential demand backed by purchasing power, which is probably the strongest incentive of all.
ORGANISATION FOR INTERNATIONAL SELLING
Organisation to implement international sales operations can be complex. Decisions must be made on arranging the interface between manufacturing and sales and in delegating responsibility for international operations. Each problem can have alternative solutions and an optimal decision must be tailored for each firm.
Some companies are so deeply involved in international trade that it forms the majority of sales turnover, while others are simply content to supply export orders. A distinction is made between multinational marketing, international marketing and exporting and each is now considered:
- Multinational marketing
Relates to companies whose business interests, manufacturing plants and offices are spread throughout the world. Although their strategic headquarters might be in an original country, multinationals operate independently at national levels. Multinationals produce and market goods within the countries they have chosen to develop. Examples of multinationals are Shell, Ford, Coca-Cola, Microsoft and McDonald’s. To be successful multinationals need to understand their competences and weaknesses. The Microsoft case history examines this company’s bright and dark side.
- International marketing covers companies that have made a strategic decision to enter foreign markets, have made appropriate organizational changes and marketing mix adaptations.
- Exporting is at the simple end of the scale and the term is applied to companies that regard exporting as a peripheral activity, whose turnover from exporting is less than 20 per cent.
ETHICAL AND LEGAL ISSUES IN SELLING
LEGAL ISSUES IN SELLING
Consumer protection by the law is very much a twentieth-century phenomenon. Before that the prevailing attitude can be described by the phrase caveat emptor – let the buyer beware. Much of the legislation has been drawn up since 1970 when there was recognition that sellers may have an unfair advantage compared with consumers when entering into a contract of sale. The major laws controlling selling activity in Britain include the following:
- Weights and Measures Acts 1878, 1963, 1979
- Sale of Goods Acts 1893, 1979
- Resale Prices Acts 1964, 1976
- Restrictive Trade Practices Acts 1956, 1968, 1976
- Misrepresentation Act 1967
- Trade Descriptions Acts 1968, 1972
- Unsolicited Goods and Services Acts 1971, 1975
- Supply of Goods (Implied Terms) Acts 1973, 1982
- Fair Trading Act 1973
- Hire Purchase Act 1973
- Consumer Credit Act 1974
- Unfair Contract Terms Act 1977
- Consumer Safety Act 1978
- Consumer Protection Act 1987.
All this activity is centered upon the contract entered into when a seller agrees to part with a good or provide a service in exchange for monetary payment. A contract is made when a deal is agreed. This can be accomplished verbally or in writing. Once an offer has been accepted a contract is formed and is legally binding.
TERMS AND CONDITIONS
As the name suggests, terms and conditions state the circumstances under which the buyer is prepared to purchase and the seller is prepared to sell. They define the limit of responsibility for both buyer and seller. Thus both buyer and seller are at liberty to state their terms and conditions. Usually the buyer will state them on the back of the order form and the seller will do so on the reverse of the quotation form. Often a note is typed on the front of the form in red ink: ‘Your attention is drawn to our standard terms and conditions on the reverse of this order.’ Typical clauses incorporated into the conditions of a purchase order include the following:
- Only orders issued on the company’s printed order form and signed on behalf of the company will be respected.
- Alterations to orders must be confirmed by official amendment and signed.
- Delivery must be within the specified time period. The right to cancel is reserved for late delivery.
- Faulty goods will be returned and expenses charged to the supplier.
- All insurance of goods in transit shall be paid for by the supplier.
- This order is subject to a cash discount of 2.5 per cent, unless otherwise arranged, for payment within 28 days of receipt. Any payment made is without prejudice to our rights if the goods supplied prove to be unsatisfactory or not in accordance with our agreed specification or sample.
- Tools supplied by us for the execution of this order must not be used in the service of any other firm without permission.
Unscrupulous salespeople may be tempted to mislead potential buyers through inaccurate statements about the product or service they are selling. In Britain a consumer is protected from such practice by the Trade Descriptions Act 1968. The Act covers descriptions of products, prices and services and includes both oral and written descriptions.
The principal protection for the buyer against the sale of faulty goods is to be found within the Sale of Goods Act 1979. This Act states that a product must correspond to its description and must be of merchantable quality, i.e. ‘fit for the purpose for which goods of that kind are commonly bought as it is reasonable to expect’. An example is a second-hand car that is found to be unroadworthy after purchase;
Inertia selling involves the sending of unsolicited goods or the provision of unsolicited services to people who, having received them, may feel an obligation to buy. For example, a book might be sent to people who would be told that they had been specially chosen to receive it. They would be asked to send money in payment or return the book within a given period, after which they would become liable for payment.
Non-payment and failure to return the good would result in letters demanding payment,sometimes in quite threatening terms.
Another practice that some sellers have employed in order to limit their liability is the use of an exclusion clause. For example, a restaurant or discotheque might display a sign stating that coats are left at the owner’s risk, or a dry cleaners might display a sign excluding themselves from blame should clothes be damaged
BUYING BY CREDIT
Collusion between sellers In certain circumstances it may be in the sellers’ interests to collude with one another
in order to restrict supply, agree upon prices (price fixing) or share out the market in some mutually beneficial way
- Bribery-This is the act of giving payments, gifts or other inducements to secure a sale. Such actions are thought to be unethical because they violate the principle of fairness in commercial negotiations.
- Deception-A problem faced by many salespeople is the temptation to mislead the customer in order to secure an order. The deception may take the form of exaggeration, lying or withholding important information.
- The hard sell-A criticism that is sometimes made of personal selling behavior is the use of high pressure (hard sell) sales tactics to secure a sale. Some car dealerships have been accused of such tactics to pressure customers into making hasty decisions on a complicated purchase that may involve expensive credit facilities.
- Reciprocal buying-Reciprocal buying occurs when a customer agrees to buy from a supplier only if that supplier agrees to purchase something from the customer. This may be considered unethical if the action is unfair to other competing suppliers who may not agree to such an arrangement or not be in a position to buy from the customer.
- Promotional inducements to the trade.
- Slotting allowances-A slotting allowance is a fee paid by a manufacturer to a retailer in exchange for an agreement to place a product on the retailer’s shelves.
- Pyramid selling-The primary purpose of pyramid selling schemes is to earn money through recruiting other individuals
EMERGING ISSUES IN SELLING
This refers to new issues that are coming up as far as selling is concerned.
- Use of advanced technology-computers which have come up with new changes ranging from less paper work and many people are unemployed.
- E-Government-Application of advanced ICT to deliver government services
NB Outsourcing- It is management strategy by which an organization outsources major non-core functions to specialized, efficient service providers. The basic objective is normally cost reduction and concentration on core activities.
Benefit of outsourcing
- a) Time management
- b) Reduced staff costs
- c) Increased flexibility
- d) Cost certainty
- e) Reduction in staff management problems
- f) Improved consistency of service
- g) Reduced capital requirements
- h) Reduced risk
Problems of outsourcing
- a) Redundancy costs
- b) Quality of service maintenance problems
- c) Long term commitment absent
- d) Over dependence on suppliers
- e) Lack of suppliers flexibility
- f) Lack of management skills to control suppliers
- g) Possible loss of competitive advantage particularly in the loss of skills and expertise of staff
- h) Insufficient internal investment and the passing of knowledge and expertise to the supplier who may sieve the initiative.
- Emergence of automatic teller machines.
- Emergence of mobile banks.
- Emergence of customer care services department to handle financial matters only.
- Emergence of m banking
- Globalization-This is interaction and integration among people, companies and governments of different nations.
It is a process whereby different systems and parts of a related trade, function as a closely-knit system at the international level. Communication and transport have vastly improved and affects many aspects of economics from competition policy to monetary policy and agricultural policy.
- Mergers and joint ventures of institutions so as to increase the institutions capital base.
- Drug abuse menace.
- Pollution-air, water, noise and solid waste due to drastic economic changes.
- Environmental Corruption.
- Depletion of natural resources.
- Rogue economics-recent credit crisis shows how financial deregulation and globalization has contributed to many new problems which leave economies vulnerable to financial speculation.
- Pressure on commodities-the world is used to dealing with a situation of abundant supply of raw materials, but diminishing supply and growing demand threatens to change that. Oil prices are rising due to speculation and due to fact demand is simply rising faster than supply.
- Shifting balance of global economy-in post war period, US economy was dominant. The old phrase when America sneezes, the rest of the world catches a cold was very much appropriate. Sleeping giants have risen.
- Dealing with commodity shortages there is the introduction of government quotas, tariffs, protectionism etc.
- Growth of china economies.
- HIV aids menace.
- Emergence of consumerism movements-this is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers
- Destruction of environment e.g. lumbering, desertification etc.
- Emergence of fraudsters who produce counter fake products.
- Emergence of environmentalism movement-this is an organized movement of concerned citizens and government agencies to protect and improve people’s current and future living environment.
- Liberalization-this is removal of trade barriers-i.e. free trade.
- Regional economic integration- e.g. EAC, COMESA, PTA boundaries become irrelevant.
- Emergence of export processing zones-this are areas set aside by government where industries can set up firms to process goods for export at little or no charge.
- Enactment of new government policies ranging from quotas, rules, regulations and law enactment e.g. media bill, mututho law,traffic law and tobacco bill.
- Establishment of National Employment Authority(NEA) to address the issue of unemployment in Kenya
- Infrastructural advancement-Red lines in Thika super highway to usher in Bus Rapid Transit System, Direct flights to US( A major milestone)
- Crafting of National Addressing System to assist in dissemination of information.
- Emergence of drones in Rwanda to supply drugs in interior areas.
- . Business Ethics 1. Ethics: this is a set of moral principal that govern the action of an individual or group
- Social Responsibility Refers to the roles undertaken by business organization on the surrounding environment