ADVANCE MARKETING MANAGEMENT, T.Y.

BBA SEM VI (Marketing), VNSGU SYLLABUS

CHAPTER 6

PERSONAL SELLING
OBJECTIVES / IMPORTANCE / BENEFITS OF PERSONAL SELLING
Personal selling is used to meet the five objectives of promotion in the following ways: Building Product Awareness A common task of salespeople, especially when selling in business markets, is to educate customers on new product offerings. In fact, salespeople serve a major role at industry trades shows where they discuss products with show attendees. But building awareness using personal selling is also important in consumer markets. As we will discuss, the advent of controlled word-of-mouth marketing is leading to personal selling becoming a useful mechanism for introducing consumers to new products. Creating Interest The fact that personal selling involves person-to-person communication makes it a natural method for getting customers to experience a product for the first time. In fact, creating interest goes hand-in-hand with building product awareness as sales professionals can often accomplish both objectives during the first encounter with a potential customer. Providing Information When salespeople engage customers a large part of the conversation focuses on product information. Marketing organizations provide their sales staff with large amounts of sales support including brochures, research reports, computer programs and many other forms of informational material. Stimulating Demand By far, the most important objective of personal selling is to convince customers to make a purchase. Reinforcing the Brand Most personal selling is intended to build long-term relationships with customers. A strong relationship can only be built over time and requires regular communication with a customer. Meeting with customers on a regular basis allows salespeople to repeatedly discuss their companys products and by doing so helps strengthen customers knowledge of what the company has to offer. Two way communication One key advantage personal selling has over other promotional methods is that it is a two-way form of communication. In selling situations the message sender (e.g., salesperson) can adjust the message as they gain feedback from message receivers (e.g., customer). So if a customer does not understand the initial message (e.g., doesnt fully understand how the product works) the salesperson can make adjustments to address questions or concerns. Many non-personal forms of promotion, such as a radio advertisement, are inflexible, at least in the short-term, and cannot be easily adjusted to address audience questions. Interactive The interactive nature of personal selling also makes it the most effective promotional method for building relationships with customers, particularly in the business-to-business market. This is especially important for companies that either sell expensive products or sell lower cost but high volume products (i.e., buyer must purchase in large quantities) that rely heavily on customers making repeat purchases. ZAKIR PATEL, ASST. PROF, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI 1

ADVANCE MARKETING MANAGEMENT, T.Y. BBA SEM VI (Marketing), VNSGU SYLLABUS

Because such purchases may take a considerable amount of time to complete and may involve the input of many people at the purchasing company (i.e., buying center), sales success often requires the marketer develop and maintain strong relationships with members of the purchasing company. Practical Finally, personal selling is the most practical promotional option for reaching customers who are not easily reached through other methods. The best example is in selling to the business market where, compared to the consumer market, advertising, public relations and sales promotions are often not well received. Disadvantages of Personal Selling Possibly the biggest disadvantage of selling is the degree to which this promotional method is misunderstood. Most people have had some bad experiences with salespeople who they perceived were overly aggressive or even downright annoying. While there are certainly many salespeople who fall into this category, the truth is salespeople are most successful when they focus their efforts on satisfying customers over the long term and not focusing own their own selfish interests. High cost-per-action (CPA) CPA can be an important measure of the success of promotion spending. Since personal selling involves person-to-person contact, the money spent to support a sales staff (i.e., sales force) can be very high. For instance, in some industries it costs well over (US) $300 each time a salesperson contacts a potential customer. This cost is incurred whether a sale is made or not! These costs include compensation (e.g., salary, commission, bonus), providing sales support materials, allowances for entertainment spending, office supplies, telecommunication and much more. With such high cost for maintaining a sales force, selling is often not a practical option for selling products that do not generate a large amount of revenue. Training Costs Most forms of personal selling require the sales staff be extensively trained on product knowledge, industry information and selling skills. For companies that require their salespeople attend formal training programs, the cost of training can be quite high and include such expenses as travel, hotel, meals, and training equipment while also paying the trainees salaries while they attend. A third disadvantage is that personal selling is not for everyone. Job turnover in sales is often much higher than other marketing positions. For companies that assign salespeople to handle certain customer groups (e.g., geographic territory), turnover may leave a company without representation in a customer group for an extended period of time while the company recruits and trains a replacement -----------------------------------------------------------------------------------------------------------------------------

PERSONAL SELLING PROCESS

Personal selling is the most expensive form of advertising and to be effective one should use a step by step process to gain the most benefit. The personal selling process is a consecutive series of activities conducted by the salesperson, the lead to a prospect taking the desired action of buying a product or service and finish with a follow-up contact to ensure purchase satisfaction. Prospecting & Qualifying The process of looking for and checking leads is called prospecting or determining which firms or individuals could become customers. Up to 20% of a firm's customer base can be lost for reasons such as transfer, death, retirement, takeovers, dissatisfaction with the company and competition. A steadily growing list of qualified prospects is important for reaching the sales targets.
ZAKIR PATEL, ASST. PROF, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI

ADVANCE MARKETING MANAGEMENT, T.Y. BBA SEM VI (Marketing), VNSGU SYLLABUS

Qualifying a prospect: A lead is a name on a list. It only becomes a prospect if it is determined that the person or company can benefit from the service or product offered. A qualified prospect has a need, can benefit from the product and has the authority to make the decision. The Pre-approach This stage involves the collecting of as much relevant information as possible prior to the sales presentation. The pre-approach investigation is carried out on new customers but also on regular customers. Systematic collection of information requires a decision about applicability, usefulness and how to organise the information for easy access and effective use. The Approach The salesperson should always focus on the benefits for the customer. This is done by using the product's features and advantages. This is known as the FABV technique (Features, Advantages and Benefits). Features: Refers to the physical characteristics such as size, taste etc. Advantages: Refers to the performance provided by the physical characteristics eg it does not stain. Benefits: Refers to the benefits for the prospect. Eg. Saves you 20% on replacement cost. Value: refers to monetary benefits the customer gets in return to the cost incurred. The Sales Presentation / Demonstration After the prospects interest has been grasped, the sales presentation is delivered. This involves a "persuasive vocal and visual explanation of a business proposition". It should be done in a relaxed atmosphere to encourage the prospect to share information in order to establish requirements. Some small talk may be necessary to reduce tension but the purpose always remains business. Handling Objections Objections are often indications of interest by the prospect and should not be viewed with misgiving by salespeople. The prospect is in fact requesting additional information to help him to justify a decision to buy. The prospect may not be fully convinced and the issues raised are thus very important. It also assists the salesperson to establish exactly what is on the prospect's mind. Objections can be psychological or logical in nature. Age or Brand loyalty of the buyer can act as a psychological barrier and comparative cost of products with the competitor could be logical objections of the buyer. Closing the Sale This is the last part of the presentation. Many salespeople fear the closing of a sale. Closing a sale is only the confirmation of an understanding. Fear will disappear if the salesperson truly believes that the prospect will enjoy benefits after the purchase of the product. While closing, the salesperson might ask the buyer to choose from among the alternative products or he may ask to select the best colour etc. The Follow-up The sale does not complete the selling process. Follow-up activities are very important and are useful for the establishment of long-term business relationships. It is important to check if the products have been received in good condition, to establish the customer is satisfied etc. The installation of the purchased product must be done as per the requirement of the buyer. Initial training must also be provided to the buyer about using of the product in case the product is technical in nature. ----------------------------------------------------------------------------------------------------------------------------ZAKIR PATEL, ASST. PROF, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI

ADVANCE MARKETING MANAGEMENT, T.Y. BBA SEM VI (Marketing), VNSGU SYLLABUS

NEGOTIATION
Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action etc. Negotiation is a process where each party involved in negotiating tries to gain an advantage for themselves by the end of the process. Negotiation is intended to aim at compromise. Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory. The word "negotiation" originated from the Latin expression, "negotiatus", past participle of negotiare which means "to carry on business". "Negotium" means literally "not leisure". Approaches to negotiation There are trained negotiators acting on behalf of a particular organization or position. There are two opposite types of negotiation: Integrative and Distributive. Distributive Negotiation The term distributive means; there is a giving out; or the scattering of things. By its mere nature, there is a limit or finite amount in the thing being distributed or divided amongst the people involved. Hence, this type of negotiation is often referred to as 'The Fixed Pie'. There is only so much to go around, but the proportion to be distributed is limited but also variable. A distributive negotiation usually involves people who have never had a previous interactive relationship, nor are they likely to do so again in the near future. Simple everyday examples would be buying a car or a house. Integrative negotiation The word integrative means to join several parts into a whole. Conceptually, this implies some cooperation, or a joining of forces to achieve something together. Usually involves a higher degree of trust and a forming of a relationship. Both parties want to walk away feeling they've achieved something which has value by getting what each wants. Ideally, it is a twofold process. Integrative negotiation process generally involves some form or combination of making value for value concessions, in conjunction with creative problem solving. Generally, this form of negotiation is looking down the road, to them forming a long term relationship to create mutual gain. It is often described as the win-win scenario. Negotiation styles / strategies Shell identified five styles/responses to negotiation. The style used during a negotiation depends on the context and the interests of the other party, among other factors. In addition, styles can change over time. Different types of styles are; Accommodating: Individuals who enjoy solving the other partys problems and preserving personal relationships. Accommodators are sensitive to the emotional states, body language, and verbal signals of the other parties. They can, however, feel taken advantage of in situations when the other party places little emphasis on the relationship. Avoiding: Individuals who do not like to negotiate and dont do it unless warranted. When negotiating, avoiders tend to defer and dodge the confrontational aspects of negotiating; however, they may be perceived as tactful and diplomatic. Collaborating: Individuals who enjoy negotiations that involve solving tough problems in creative ways. Collaborators are good at using negotiations to understand the concerns and interests of the other parties. They can, however, create problems by transforming simple situations into more complex ones. ZAKIR PATEL, ASST. PROF, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI 4

ADVANCE MARKETING MANAGEMENT, T.Y. BBA SEM VI (Marketing), VNSGU SYLLABUS

Competing: Individuals who enjoy negotiations because they present an opportunity to win something. Competitive negotiators have strong instincts for all aspects of negotiating and are often strategic. Because their style can dominate the bargaining process, competitive negotiators often neglect the importance of relationships. Compromising: Individuals who are eager to close the deal by doing what is fair and equal for all parties involved in the negotiation. Compromisers can be useful when there is limited time to complete the deal; however, compromisers often unnecessarily rush the negotiation process and make concessions too quickly. Barriers to Negotiations Die hard bargainers(strong bargainers) Lack of trust. Lack of information. Cultural and gender differences. Communication problems -----------------------------------------------------------------------------------------------------------------------------

RELATIONSHIP MARKETING
MEANING Relationship Marketing -The process of creating , maintaining and enhancing strong ,value-laden relationships with Customers and other stakeholders. Relationship marketing is based on the premise that important accounts need focused and continuous attention. Let us look at a relationship focused definition of marketing; Relationship focused definition of marketing The purpose of marketing is to establish, maintain, enhance and commercialize customer relationships (often, but not necessarily always, long term relationships) so that the objectives of the parties involved are met. This is done by the mutual exchange and fulfilment of promises. Gronroos, C (1990) Marketing activities that are aimed at developing and managing trusting and long-term relationships with larger customers is known as RELATIONSHIP MARKETING. In relationship marketing, customer profile, buying patterns, and history of contacts are maintained in a sales database, and an account executive is assigned to one or more major customers to fulfill their needs and maintain the relationship. GROWING IMPORTANCE OF RELATIONSHIP MARKETING You would agree that todays customers face a growing range of choices in the products and services they can buy . . They are making their choice on the basis of their perceptions of quality, service, and value. Companies need to understand the determinants of customer value and satisfaction. Here lies the role of relationship marketing. A major challenge for high-performance companies is that of building and maintaining viable businesses in a rapidly changing marketplace. They must recognize the core elements of the business and how to maintain a viable fit between their stakeholders, processes, resources, and organization capabilities and culture To create customer satisfaction, companies must manage their value chain as well as the whole value delivery system in a customer-centered way. The companys goal is not only to get customers, but even more importantly to retain customers. Customer relationship marketing provides the key to retaining customers and involves providing financial and social benefits as well as structural ties to the customers. ZAKIR PATEL, ASST. PROF, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI 5

ADVANCE MARKETING MANAGEMENT, T.Y. BBA SEM VI (Marketing), VNSGU SYLLABUS

Companies must decide how much relationship marketing to invest in different market segments and individual customers, from such levels as basic, reactive, accountable, proactive, and full partnership. Much depends on estimating customer lifetime value against the cost required to attract and retain these customers. Here are 5 important advantages building relationships offers to any internet entrepreneur willing to invest the time and why it is such an effective marketing strategy! People Do Not Feel Pressured Without the feeling of being pressured folks are more incline to stick around and hear what you got to say! This is the key to effective marketing on the internet, having the opportunity to deliver your message to the reader. In most cases when people sense a sales pitch is coming they tend to leave immediately. On the other hand if you are more intent on building relationships with others, they are more inclined to stay around. People Feel Important Everybody wants to feel important and besides in most cases people simply do not care about you or your products and services. Their only focus is their personal interests and any problems they may have to solve. By placing more of a focus of the readers wants and/or needs they naturally feel more catered to and tend to be more appreciative of your attention. Loyalty Is Built The longer you maintain a 'reader first' attitude and supply their needs, the deeper their loyalty will be towards you. It is ultimately this loyalty that you will be able to use to increase sales since buyers will be more inclined to make purchases with you provided you offer something of interest to them. Strong Viral Effect The deeper a persons loyalty and satisfaction is towards you the more likely they will be to refer you to their friends and colleagues! It is human nature that folks always want to share a good thing! Being able to network through others using their efforts is a very efficient, powerful and effective marketing strategy. Reputation And Credibility Grow If you demonstrate a willingness to be helpful while also providing good quality information you can help boost your reputation and credibility online. Being known as both reliable and knowledgeable will help you increase sales since people will have more trust in what you say and promote! These are very valuable assets for anybody who has aspirations of successfully marketing on the internet! -----------------------------------------------------------------------------------------------------------------------------

ZAKIR PATEL, ASST. PROF, NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI