S.

SASIKALA
ASSISTANT PROFESSOR
PG AND RESEARCH DEPARTMENT OF COMMERCE
SRI SANKARA ARTS AND SCIENCE COLLEGE
ENATHUR KANCHIPURAM.

MARKETING (UNIT 4)

CHANNEL OF DISTRIBUTION

Channels of Distribution or Distribution Channel can be defined as the path taken by

the good or service when they move from manufacturer to the end consumers.
The movement of the goods implies the physical distribution of the goods or the
transfer of ownership.

It is the network of intermediaries such as wholesalers, retailers, distributors, agents,

etc., who carry out a number of interrelated and coordinated functions in the flow of
goods from its source to its destination. Additionally, it creates utility of time, place,
form, and possession to the product by the quick and efficient performance of the
function of physical distribution.

TYPES OR LEVELS OF CHANNELS OF DISTRIBUTION:

Channels of Distribution implies the means through which the good or service need to
pass to reach the intended consumer. Based on the number of intermediaries involved,
the channel of distribution can be short or long. Further, it has a great impact on the
company’s sales, as the higher the availability of the goods, the more will be its sales.

Depending on the type of the product, i.e. good or service, different marketing
channels are employed by the companies.
There are three main types of channels of distribution, discussed hereunder:

Direct Channel

Prior to reaching the hands of the consumers, goods and services pass through various
hands. However, there are certain instances when the producer sells goods directly to
their customer, then such a channel is known as a direct channel.

Hence, no middlemen exist in the case of the direct channels. And to do so, the
company can supply the product to the customer via their own online or retail store, or
salesman at the customer’s doorstep and arranging their own delivery system. It is
also called a Zero Level Channel. Example: Consultancy firms, Passenger and freight

transport services, banks, etc.

Indirect Channel
 When the producer produces goods on a large scale, it is difficult to make direct
selling of the goods to the customers. In this way, middlemen come into the picture to
ensure the availability of the goods to its customers. It may include wholesalers and
retailers. So, we can say that when there are a host of intermediaries involved in the
distribution process, it amounts to the indirect channel of distribution.

 One Level Channel: Where only one middleman (either wholesaler or retailer) is
involved.

 Two Level Channel: Where two middlemen (both wholesaler and retailer) are
involved.

 Three Level Channel: Where along with wholesalers and retailers, the mercantile
agent is also involved. Hence, the producer deals with a mercantile agent, then the
wholesaler buys goods from that agent, and sells them to retailers, who further sell
them to its ultimate consumer.

Hybrid Channels

The combination of the direct channel and indirect channel is called the hybrid
channel of distribution. When the manufacturer uses more than one channel to reach
the final consumer, it is said to be using the hybrid channel. This attracts more
consumers and facilitates more sales.
Suppose a manufacturer owning their own retail outlet and simultaneously, offering
goods to customers via e-commerce platforms or other retailers.
 FUNCTION OF CHANNEL OF DISTRIBUTION

The functions performed by the channels of distribution are divided into three main
categories:

1. Transactional Functions: Functions like buying, selling, and risk-bearing which are
relevant to a transaction are called transactional functions. Producers sell goods to
intermediaries, who further sell them to the customers. In this way, the title of goods
changes hands, and goods flow from producer to consumer. In the absence of any
buying and selling, there won’t be any transaction.

2. Logistical Functions: It involves the physical exchange of the goods such as

assembling, storage, sorting, grading, packing, and transportation. This is to make
 certain that goods must reach the marketplace at right time and sell to the consumers
conveniently.

3. Facilitating Functions: Functions like post-purchase service, maintenance, financing,

information dissemination, channel coordination, etc form part of facilitating
functions.

Objectives of Distribution channels

A distribution channel is a network of firms that are interconnected in their quest to

provide sellers a means of infusing the marketplace with goods and buyers a means of
purchasing those goods, doing all as efficiently and profitably as possible.

The channels of distribution are designed to achieve following objectives:

1. Product Availability:

The first objective is to make available the product to the consumer who wants to buy
it. The availability has two aspects – the desired level of coverage in terms of
appropriate retail outlets and secondly, the positioning of the product within the store.
Product availability is important for consumer convenience goods, where customer
does not wait to buy a particular brand. However, for unique and important products
immediate availability is less critical.

2. Meeting Customers’ Service Requirements:

To meet the service requirements and create differentiation over competitors,

channels become critical. Some of the service requirements may include – order cycle
time (how long it takes to receive, process and deliver an order), dependability
(consistency and reliability of delivery), communication between buyer and seller (to
sort out problems spontaneously), convenience ((to accommodate the special needs of
different customers), and post-sale (installation, user training, help lines, repair, and
spare parts availability).
3. Promotional Support:

It includes strong support from the channel member for the firm’s product, including
the use of local media, in-store displays, and cooperation in special promotion events.
This kind of support is especially important in case of highly competitive market
phenomenon, complex and expensive consumer durables or industrial goods, or a
differentiator defender is trying to attain a competitive advantage.

4. Market Information:

Since intermediaries are in the marketplace and near to consumers they are the best
and first hand source of getting feedback with regard to sales trends, inventory levels,
competitors’ moves and customers’ reactions.

5. Cost-Effectiveness:

Costs to be incurred to attain the firm’s channel objectives should not be too much in
relation to gains. There is often a trade off between channel costs, associated with
physical distribution activities such as transportation and inventory storage, and
achieving high levels of performance on many other objectives.

6. Flexibility:

A flexible channel is one where it is relatively easy to switch channel structures or

add new types of middlemen without generating costly economic or legal conflicts
with existing channel members.
 Factors Influencing Choice of Distribution Channels

Market Consideration:

Size of the Customer, potential volume of sales, concentration of buyers, size of the
purchase order, and so forth are some of the factors which are considered before
choosing the distribution channel.

Product Considerations:

Factors related to perishability, bulkiness, product value, etc. related to the product are
taken into consideration while making a choice between the channels of distribution.

Middlemen Considerations:

Types of intermediaries, services provided by middlemen, the attitude of middlemen,

availability of middlemen, and channel competition are the factors that influence the
choice of channel.

Company Considerations:

Cost of distribution, management’s ability, services provided by seller, long-run effect

on profit, the extent of channel control, financial resources, and experience and ability
are the company considerations.
 CHANNEL MEMBERS OR PARTICIPANTS IN CHANNEL OF
DISTRIBUTION

1. Retailers:

Retailers are the gate keepers to the market for all other members of the sales
distribution process. The distinguishing feature that sets a retailer apart from other
members of its distribution channel is that the retailer is the person who ultimately
sells the goods to its end consumers.

2. Wholesalers:

Wholesalers are intermediaries or middlemen who buy products from manufacturers

and resell them to the retailers. They take the same types of financial risks as retailers,
since they purchase the products, keep them in inventory until they are resold to
retailers, and may arrange for shipment to those retailers. Wholesalers can gather
product from around a country or region, or can buy foreign product lines by
becoming importers.

3. Agents and Brokers:

Agents (occasionally called brokers) are also intermediaries who work between
suppliers and retailers, but their agreements are different, in that they do not take
ownership of the products they sell. They are independent sales representatives who
typically work on commission based on sales volume, and they can sell to wholesalers
as well as retailers. In B2B arrangements, this means they sell to distributors and end
consumers.

4. Resident Sales Agents:

Resident sales agents are good examples in retail. They reside in the country to which
they sell products, but the products come from a variety of foreign manufacturers. The
resident sales agents represent those manufacturers, who pay the agent on commission.

A resident sales agents does not always have merchandise warehoused and ready to
sell, but he or she does have product samples for which orders can be placed and is
responsible for bringing the items through the importation process.

The concept of resident sales agents in recent decade is getting popularity because it is
not always practical for retailers to send someone abroad to check manufacturers’
offerings and place the orders. On the other side by appointing resident sales agents in
various countries, manufacturers can tap large number of small and big retailers who
otherwise are difficult to knock.

5. Buying Offices:

Buying offices are also considered a type of commission agent or broker, since they
make their money pairing up retailers with product lines from various manufacturers.

COMMUNICATION MIX

Marketing is a broad business function that includes product research and

development, merchandising and distribution processes and pricing, as well as
communication or promotion. The communication mix refers to specific methods
used to promote the company or its products to targeted customers.

COMPONENTS OF COMMUNICATION MIX

The Advertising Element

Advertising is often the most prominent element of the communication mix. In fact,
marketing and advertising are often misconstrued as the same thing. Advertising
includes all messages a business pays to deliver through a medium to reach a
targeted audience. Since it involves the majority of paid messages, companies often
allocate significant amounts of the marketing budget to the advertising function.
While it can be costly, the advertiser has ultimate control over the message
delivered, since it pays the television or radio station, print publication or website
for placement.

Personal Selling and Direct Marketing

Personal selling is sometimes integrated with the direct marketing element.

However, many companies make such extensive use of a sales force that it is
important to consider this component distinctly. Distribution channel suppliers use
salespeople to promote products for resale to trade buyers. Retail salespeople
promote the value of goods and services to consumers in retail businesses.

Selling is more emphasized by companies that sell higher-end products and services
that require more assertive efforts to persuade customers to buy.

Discounts and Promotions

Sales promotions or discounts are similar to advertising in that they are often
promoted through paid communication. However, sales promotions actually involve
offering a discounted price to a buyer. This may include coupons, percent-off deals
and rebates. Along with ads to promote deals and coupon mailers, companies use
exterior signs and in-store signage to call customer attention to the discounts.

Goals of this communication tool include increasing revenue and cash flow,
attracting new customers and clearing out extra inventory.

Public Relations and Messaging

Public relations is sometimes somewhat similar to advertising in that much of it

involves messages communicated through mass media. The major difference is you
don't pay for the time or space for the message. A television or newspaper feature
story mentioning a business, for instance, isn't paid for and can provide brand
exposure.
The downside of PR is that you don't always control the messages. You can try to
influence them through press releases and invites for media coverage, but the media
could put a negative spin on the story.

Direct Marketing to Targeted Customers

Direct marketing includes some aspects of both sales promotions and personal
selling. It is interactive communication with customers where the company's
message seeks or implores a response from targeted customers. E-mail and direct
mail are common formats. These messages are sent to customers with special offers
or calls to action, often promoting limited-time deals or new product launches.

Mail-order clubs, online or print surveys and infomercials are other examples of
direct marketing communication.

PROMOTION MIX

The Promotion Mix refers to the blend of several promotional tools used by the
business to create, maintain and increase the demand for goods and services.

The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on
creating the awareness and persuading the customers to initiate the purchase. The
several tools that facilitate the promotion objective of a firm are collectively known as
the Promotion Mix.

The Promotion Mix is the integration of Advertising, Personal Selling, Sales

Promotion, Public Relations and Direct Marketing.

Elements or components of Promotion Mix

1. Advertising: The advertising is any paid form of non-personal presentation and
promotion of goods and services by the identified sponsor in the exchange of a fee.
Through advertising, the marketer tries to build a pull strategy; wherein the customer
is instigated to try the product at least once.The complete information along with the
attractive graphics of the product or service can be shown to the customers that grab
their attention and influences the purchase decision.

2. Personal Selling: This is one of the traditional forms of promotional tool wherein the
salesman interacts with the customer directly by visiting them. It is a face to face
interaction between the company representative and the customer with the objective
to influence the customer to purchase the product or services.

3. Sales Promotion: The sales promotion is the short term incentives given to the
customers to have an increased sale for a given period.Generally, the sales promotion
schemes are floated in the market at the time of festivals or the end of the season.
Discounts, Coupons, Payback offers, Freebies, etc. are some of the sales promotion
schemes.With the sales promotion, the company focuses on the increased short-term
profits, by attracting both the existing and the new customers.

4. Public Relations: The marketers try to build a favourable image in the market by
creating relations with the general public. The companies carry out several public
relations campaigns with the objective to have a support of all the people associated
with it either directly or indirectly.The public comprises of the customers, employees,
suppliers, distributors, shareholders, government and the society as a whole. The
 publicity is one of the form of public relations that the company may use with the
intention to bring newsworthy information to the public.

E.g. Large Corporates such as Dabur, L&T, Tata Consultancy, Bharti Enterprises,
Services, Unitech and PSU’s such as Indian Oil, GAIL, and NTPC have joined hands
with Government to clean up their surroundings, build toilets and support the swachh
Bharat Mission.

5. Direct Marketing: With the intent of technology, companies reach customers

directly without any intermediaries or any paid medium.The e-mails, text messages,
Fax, are some of the tools of direct marketing. The companies can send emails and
messages to the customers if they need to be informed about the new offerings or the
sales promotion schemes.

E.g. The Shopperstop send SMS to its members informing about the season end sales
and extra benefits to the golden card holders.

Thus, the companies can use any tool of the promotion mix depending on the nature
of a product as well as the overall objective of the firm.

ADVERTISING

Advertising is a form of communication that is sponsored and has a message

promoting or selling or trying to sell a product or service or an idea. It is classified as
a form of marketing communication.
 TYPES OF ADVERTISING

1) Online Advertising

Online advertisings or digital advertisings as a form in which the message is

conveyed via the internet. For every website ads are a major source of
revenue. Advertising online has become very popular in the last decade and has
surpassed the expectations of most of the advertising experts. 60% revenue
of Google is generated from ads and the same goes for Facebook.

Online advertising has become so effective that a particular ad can be targeted to a

specific person of specific age of a specific location on a specific time. In terms
of pricing advertising online is very cheap compared to all other forms of advertising.

2) Television Ads

About a decade ago television was the most popular form of advertising. Events like
the super bowl, international cricket games, Olympics where the top attractions for
advertisers to advertise about their products. To some extent, it still is effective for
most advertisers but with the advent of online streaming of television on mobiles,
marketers have now moved from television to online as their preferred advertising
medium.

Another form of television and infomercial. An infomercial is a specially designed

advertisement for information and awareness of the public.
3) Ads in Theatres

The advertisements in movie theatres before all the movies start or during the
intimation are called movie ads. These are one of the costliest forms of advertising
since people cannot skip it change the channel or move away. Many of the companies
have started opting for movie ads since it ensures that the entire message reaches the
audience and unlike online advertising, the audience cannot interfere till the
advertisement is over. Movie ads are different from placement ads.

4) Product Placement

Product placement is called covert advertising wherein a product is quietly embedded

in the entertainment media. Most of the times there is no mention of the product
although the audience sees the product. Movies are the major places where product
placement is done.

They could be a few TV shows where product placement has been used but
the effectiveness is observed more in movies than TV shows.

5) Radio

Radio advertisements are the ones that are broadcast it through radio waves and heard
on radios all over the place. These mostly consist of audible advertisements or jingles.
While some consider this to be an ineffective form of advertising there are still many
followers listen to the radio every morning.
Advertisement for almost every product can be found on the radio. Every single
feature and benefit of the product have to be explained on the radio, unlike other
sources where the customer can see the product for inside.

6) Print

Printing is the slowly decreasing form of advertising. There were days before the
evolution of television when printing was a major source of advertising and
considered to be one of the most effective media. But since the explosion of television
usage, print advertisements have taken a backseat.

The main disadvantage of print advertising is the shelf life of the ads is short .
However, because its reach is solid, Print advertising is one of the most expensive and
most effective types of advertising. Following are the few Print Types of Advertising:

7) Outdoor

Outdoor adv. consists of displaying large posters banners or hoardings with the
advertisement. These are displayed on the side of the road, on the glass of large
buildings, or on specifically targeted places that have huge inflow from the public.
While earlier printed ads were used for outdoor advertising recently, they have been
replaced by digital boards. These boards display the advertising without the hassle of
getting ads printed.
 Objectives or advantages of Advertising

1) Introduce a product

The most common reason Advertising is used is to introduce a new product in

the market. This can be done by existing brands as well as new brands. Have a look at
the latest IPhone in the market or a Samsung smartphone and you will find a lot of
advertisement for these new products. The objective of advertising here is to tell
customers – “Here is the new product we have launched”

2) Introduce a brand

There are many startups in the market today and many of them are services. Services
are generally marketed as a brand rather than marketing their individual service
product. Thus, Uber will market its own brand and introduce that Uber has started
servicing customers in a new market. Same goes for Oracle or Accenture –
Companies which market their brand and their presence in the market rather than
marketing an individual product.

3) Awareness creation

According to the AIDA model, the most important job of advertising is to get
attention which is nothing but Awareness creation. Advertising needs to capture the
attention of people and make them aware of the products or their features in the
market.
Example – Most of the Bank ads that you see are awareness campaigns. The ads that
advertise the benefits of savings / mutual funds or benefits on credit and debit cards
are all awareness creation ads.

4) Acquiring customers or Brand switching

One of the major objectives of advertising and the first objective of many advertising
campaigns is to acquire more customers. This is also known as making the customers
switch brands. This can happen by passing on a strong message so that the potential
customer leaves the brand which he is tied up with and comes to your brand.

5) Differentiation and value creation

A most important aspect of Advertising is to differentiate the product or the service

from those of the competitor. A customer can only differentiate between services
based on the value the firms provides over that of competitors.

If a competitor is just advertising the features, whereas your firm advertises the
promises and commitments that it will keep, naturally more customers will “trust”
your brand over others. This is the reason that advertising is used commonly to create
value and to differentiate one brand from another.

Coca cola, Toyota, Amazon are some of the most trusted brands in the market. It is no
doubt that these brands are also amongst the top advertisers in their respective
segments. These brands target value creation as well as differentiation via their
advertising campaigns.

6) Brand building

When a brand regularly advertises and delivers quality products and fulfills the
promises it makes, automatically the value of the brand is built. However, there are
many other aspects of brand building. One of the first ones is to advertise
via ATL and BTL campaigns etc.

7) Increase sales

Naturally, with so many steps being taken to advertise the product, it is no doubt that
one of the objectives of advertising is to increase sales. Many a times this objective is
achieved via advertising. However, if the campaign is improper or the audience is not
targeted properly, then advertising can fail in its objective.

Nonetheless, there are many seasonal products wherein an immediate increase in sale
is observed due to advertising. The best example is Ice cream brands which advertise
heavily during the summer months because they know that advertising will
immediately influence the sales figures. They do not waste money in advertising
during the winter season at all.
 SALES PROMOTION

Sales promotion is a marketing strategy where the product is promoted using short-
term attractive initiatives to stimulate its demand and increase its sales.

This strategy is usually brought to use in the following cases –

 To introduce new products,

 To sell out existing inventories,
 To attract more customers, and
 To lift sales temporarily.

American Marketing Association defines sales promotion as –

Media and nonmedia marketing pressure applied for a predetermined,

limited period of time in order to stimulate trial, increase consumer
demand, or improve product availability.

Importance Of Sales Promotion

Sales promotion is a handy technique to fulfil the short term sales goals by persuading
potential customers to buy the product. It is an important promotional strategy to –

 Spread information about the brand to new customers or new market

 Stabilize sales volume and fulfil short-term sales goals
 Stimulate demand for a short term by making the product look like a great
deal.

Objectives Of Sales Promotion

The answer to the question what is sales promotion? also gives a hint to sales
promotion objectives, the main objective being lifting the sales temporarily.

Other objectives include but are not limited to –

  Create market for new products: It is sometimes hard to establish demand
for a new product in a market of similar products. In such cases, the company
opt for increasing some sales by using sales promotion strategies
like penetration pricing, offers, discounts, and scarcity principle.
 Remain competitive: Companies use temporary sales promotion techniques to
compete with competitor’s short term marketing strategies.
 Gain dealers’ trust: Sales promotion techniques increase the sales of the
products. This increases dealers’ income and results in them preferring the
brand more.
 Take products to new markets: New markets are often hard to enter. Sales
promotion increases traction and makes more customers try the new product.
 Increase brand awareness: It includes attractive incentives which help
increase brand awareness, which eventually leads to more sales.
 Woo existing customers: Sales promotion is also used to tackle the poaching
strategies of competitors and keep existing customers with the brand.

Sales Promotion Strategies

Sales promotion strategies can be divided into three broad types. These are –

 Pull Strategy – The pull strategy attempts to get the customers to ‘pull’ the
products from the company. It involves making use of marketing
communication and initiatives like seasonal discounts, financial schemes, etc.
 Push Strategy – The push strategy attempts to push the product away from the
company to the customers. It involves convincing the intermediary channels to
push the product from the distribution channels to the final consumers using
promotional and personal selling efforts. This strategy involves making use of
tactics developed especially for resellers, merchants, dealers, distributors, and
agents.
 Hybrid Strategy – A hybrid sales promotion strategy makes use of both the
pull and push strategy to sell the product with the least resistance possible. It
involves attracting the customers using special coupons and also providing
incentives to the merchants to sell the brand’s products.
 Types Of Sales Promotions

Sales promotion can be broadly divided into two types according to whom the
promotion is targeted to. These are –

Consumer Sales Promotion

When the sales promotion strategies are targeted to the end consumers, it is referred to
as consumer sales promotion. An example would be offering 20% off on certain
products to the customers. The main motive of consumer-oriented promotion is to
increase sales directly by attracting new customers and wooing existing ones.

Sales Promotion Techniques Targeted To Consumers

Sales promotion tools used for consumer-oriented promotion are –

 Free Samples: Distributing free samples increases brand awareness and

triggers the psychology of ownership where the person chooses the promoted
product if he liked the sample.
 Free Gifts – Offering free gifts attract customers as they get more while paying
for less.
 Discounts/Discount Coupons – Discount coupons are a great method of
increasing sales for the short term. People go for discount coupons as they let
them buy the products they couldn’t afford otherwise.
 Exchange Schemes – Exchange schemes attract many customers as they get
some value even for their old product.
 Finance Schemes – Finance schemes like no-cost EMI, low-interest EMI, etc.
makes it easier for customers to purchase expensive products.
 Shipping Schemes – Sometimes huge shipping costs discourage the customers
from buying products. Such short term shipping schemes remove friction.
 Bundle Discounts – These deals are a great way to reduce unsold inventory. It
includes selling bundled products at a price lesser than when those number of
products are bought separately.
 Bulk Purchase Deals – This is a great sales promotion tactic to reduce unsold
inventory. It includes providing discount to customers who buy in bulk.
Trade Sales Promotion

When the promotion activities are strategized keeping in mind the dealers, distributors,
or agents, it is called trade sales promotion. In this type of sales promotion, offers are
provided within the trade channels with an aim to woo retailers, wholesalers, agents,
or distributors. This is done to get more shelf space as compared to competitors,
motivate the dealers to sell more of the brand’s products and to increase the sales
indirectly.

Sales Promotion Techniques Targeted To Traders

 Point Of Purchase Displays – This includes providing free point of purchase

(POP) display units to the retailers to increase their sales.
 Trade Shows – Trade shows are a great sales promotion strategy where the
business promotes its product to thousands of traders in the trade show. Trade
shows also witness huge discounts as compared to when bought usually.
 Push Money – Also known as spiffs, this technique includes extra payments to
traders to motivate them to meet specified goals. For example, giving them a
$50 bonus per unit for selling product A and $30 for selling product B for a
specified time period.
 Deal Loaders – These are the gifts provided to the traders (wholesalers and
retailers) for ordering a certain quantity of product.
 Trade Deals – These are special concessions provided to the merchants to
encourage them to promote a specific product and increase its sales for a
limited time period.
 Buying Allowances – Special discounts provided to the sellers when they order
a specified number of products.
 PERSONAL SELLING

Meaning of Personal Selling:

Personal selling is an act of convincing the prospects to buy a given product or service.
It is the most effective and costly promotional method. It is effective because there is
face to face conversation between the buyer and seller and seller can change its
promotional techniques according to the needs of situation.

According to American Marketing Association, “Personal selling is the oral

presentation in a conversation with one or more prospective purchasers for the
purpose of making sale; it is the ability to persuade the people to buy goods and
services at a profit to the seller and benefit to the buyer”.

In the word of Professor William J. Stanton, “Personal selling consists in individual;

personal communication, in contrast to mass relatively impersonal communication of
advertising; sales promotion and other promotional tools”.

Features of Personal Selling:

The main features of personal selling are:

i. It is a face to face communication between buyer and seller.

ii. It is a two way communication.

iii. It is an oral communication.

iv. It persuades the customers instead of pressurizing him.

v. It provides immediate feedback.

vi. It develops a deep personal relationship apart from the selling relationship with the
buyers and customers.

Personal Selling Process:

The process of personal selling includes prospecting and evaluating, preparing,
approach and presentation, overcoming objections, closing the sale and a follow up
service.

1. Prospecting and evaluating:

The effort to develop a list of potential customers is known as prospecting. Sales

people can find potential buyers, names in company records, customer information
requests from advertisements, telephone and trade association directories, current and
previous customers, friends, and newspapers. Prospective buyers predetermined, by
evaluating (1) their potential interest in the sales person’s products and (2) their
purchase power.

2. Preparing:

Before approaching the potential buyer, the sales person should know as much as
possible about the person or company.

3. Approach and presentation:

During the approach, which constitutes the actual beginning of the communication
process, the sales person explains to the potential customer the reason for the sales,
possibly mentions how the potential buyer’s name was obtained, and gives a
preliminary explanation of what he or she is offering. The sales presentation is a
detailed effort to bring the buyer’s needs together with the product or service the sales
person represents.

4. Overcoming objections:

The primary value of personal selling lies in the sales person’s ability to receive and
deal with potential customers’ objections to purchasing the product. In a sales
presentation many objections can be dealt with immediately. These may take more
time, but still may be overcome.

5. Closing the sale:

Many sales people lose sales simply because they never asked the buyer to buy. At
several times in a presentation the sales person may to gauge how near the buyer is to
closing.

6. Follow up:

To maintain customer satisfaction, the sales person should follow up after a sale to be
certain that the product is delivered properly and the customer is satisfied with the
result.

Objectives or advantages of Personal Selling:

The major objectives of salesmanship are as follows:

(i) Attracting the Prospective Customers:

The first and foremost objective of a salesperson is to attract the attention of people
who might be interested to buy the product he is selling.

(ii) Educating the Prospective Customers:

The salesman provides information about the features, price and uses of the product to
the people. He handles their queries and removes their doubts about the product. He
educates them as to how their needs could be satisfied by using the product.

(iii) Creating Desire to Buy:

The salesman creates a desire among the prospective customers to buy the product to
satisfy specific needs.

(iv) Concluding Sales:

The ultimate objective of personal selling is to win the confidence of customers and
make them buy the product. Creation of customers is the index of effectiveness of any
salesperson.

(v) Getting Repeat Orders:

A good salesperson aims to create permanent customers by helping them satisfy their
needs and providing them product support services, if required. He tries for repeat
orders from the customers.

Role and Importance of Personal Selling:

Personal selling consists of individual and personal communication with the

customers in contrast to the mass and impersonal communication through advertising.
Because of this characteristic, personal selling has the advantage of being more
flexible in operation.

A salesperson can tailor his sales presentation to fit the needs, motives, and behaviour
of individual customers. He can observe the customer’s reaction to a particular sales
approach and then make necessary adjustment on the spot. Thus, personal selling
involves a minimum of wasteful efforts. The salesperson can select and concentrate
on the prospective customers.

Personal selling helps in sales promotion. It is very important to manufacturers and

traders because it helps them to sell their products. It also helps them in knowing the
tastes, habits, attitudes and reactions of the people.

The manufacturer can concentrate on producing those goods which are required by
the customers. This will further promote the sales. Moreover, a good salesman is able
to establish personal support with customers. This way, the business gains permanent
customers.

Functions of Personal Selling:

The important functions of a salesperson are as follows:

1. Personal selling is an important method of demonstrating the product to the

prospective customers and giving them full information about the product. It is easier
to persuade a person to buy a product through face-to-face explanation.
2. In most of the situations, there is a need of explaining the quality, uses and price of
the product to the buyer to help him purchase the want satisfying product. Thus,
salesmanship is also very important from the point of the buyers.

3. A good salesperson educates and guides the customers about the features and utility
of the product.

4. If a product cannot fully satisfy the needs of the customers, the information is
transmitted to the manufacturer who will take appropriate steps.

5. Salespersons can also handle the objections of the customers. Creative salesman are
always ready to help the customers to arrive at correct decisions while buying certain
products.

6. There is direct fact-to-face interaction between the seller and the buyer. The
salesperson can receive feedback directly from the customer on a continuous basis.
This would help him in modifying his presentation and taking other steps to sell
satisfaction to the buyer.