Sales management midterm

Personal selling

when a company representative interacts directly with a customer or prospective customer to present information about a product or service.

personal-selling philosophy

includes three prescriptions:

– Adopt marketing concept

– Value personal selling

– Become a problem solver/partner

marketing concept

the principle that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired products.

Under the marketing concept.

• Customer focus and value are the paths to sales and profits.

• Customer satisfaction is of primary importance.

The Marketing Mix

The Marketing mix

Transactional selling

the set of skills, strategies, and sales processes that meets the needs of buyers who treat suppliers as a commodity and who are mainly or exclusively interested in price and convenience.

• the customer’s point of view, in the transactional sale there are no additional benefits the seller can bring to the party beyond price.

• Transactional selling reduces resources allocated to selling because customers don’t value or want to pay for the sales effort.

Value-added selling

defined as a series of creative improvements in the sales process that enhance the customer experience.

Salespeople can create value by:

• Developing a quality relationship focused on trust and providing

value.

• Carefully identifying customer needs.

• Configuring and presenting the best possible product solution.

value added by salespeople today is increasingly derived from intangibles such as:

• Quality of advice offered and having a greater understanding of how

  the services/products/solutions they offer can make an impact on

  their customer;

• Level of trust that underlies relationship between salesperson and

  customer, such as creating a relationship that is customer-focused

  and not sales driven.

Consultative selling

the set of skills, strategies, and processes that works most effectively with buyers who demand, and are willing to pay for, a sales effort that creates new value and provides additional benefits outside of the product itself.

• it involves a mutual investment of time and effort by both

  seller and customer

Major Features of Consultative Selling

• The customer is seen as a person to be served.

• Buyer’s needs are identified through two-way communication.

• Emphasizes need identification, problem solving, and negotiation.

• Emphasizes service at every phase of the personal-selling process

Strategic selling

based on a company’s strategic market plan, which takes into consideration the coordination of all the major functional areas of the business—production, marketing, finance, and personnel.

Evolution of Strategic Selling

• Strategic planning is the process that matches the firm’s resources to its market opportunities.

• Tactics are techniques, practices, or methods.

• Strategies are prerequisites to tactical success.

• Selling strategies are plans for accomplishing sales objectives.

• Adaptive selling means to alter sales behaviors during interactions to improve communication.

Develop a personal selling philosophy

– Adopt marketing concept

– Value personal selling

– Become a problem solver slash partner

Develop a relationship strategy

– Maintain high ethical standards

– Project professional image

– Manage the relationship process

Develop a product strategy

– Become a product expert

– Sell benefits

– Configure value-added solutions

Develop a customer strategy

– Understand the buying process

– Understand buyer behavior

– Develop prospect base

Develop a presentation strategy

– Prepare objectives

– Develop presentation plan

– Provide outstanding service.

A salesperson develops a:

• Relationship strategy

• Product strategy

• Customer strategy

• Presentation strategy

Relationship strategy

is a well-thought-out plan for establishing, building, and maintaining quality

relationships and an integral dimension of relationship selling.

Relationship selling

is a form of personal selling that focuses on securing, developing, and maintaining

relationships.

Prescriptions for relationship strategy

– Maintain high ethical standards

– Project professional image

– Manage the relationship process

Product strategy

is a plan that helps salespeople make correct decisions concerning the selection and positioning of products to meet identified customer needs.

Prescriptions of product strategy

– Become a product expert

– Sell benefits

– Configure value-added solutions

Customer strategy

is a plan that results in maximum responsiveness to the customer’s needs.

Prescriptions of customer strategy

– Understand the buying process

– Understand buyer behavior

– Develop prospect base

presentation strategy

is a well-developed plan for meeting objectives for each sales call

prescription of presentation strategy

– Prepare sales presentation objectives

– Prepare presentation plan

– Renew commitment to customer service

Partnering

is a strategically developed, long-term relationship that solves the customer’s problems.

successful long-term partnership

s achieved when the salesperson is able to skillfully apply the four major strategies and, thus, add value in various ways

uccessful partnering effort results :

in repeat sales and referrals that expand the prospect base.

strength of the partnership increases:

each time the salesperson uses value-added selling strategies.

Building a strategic account relationship:

1. Learn about proposed partner.

2. Meet with proposed partner and explore benefits of the alliance.

3. Focus on profit impact and strategic alliance benefits.

4. Partnering Is Enhanced with High Ethical Standards

5. Partnering Is Enhanced with Customer Relationship

Management

Inside salespeople

perform selling activities at the employer’s location, typically using the telephone

and e-mail.

• “customer service representatives”

Outside salespeople

travel to meet prospects and customers in their places of business or residence.

Services Channel

• Hotel, motel, and convention center services.

  • Salespeople sell room space, food, beverages, and

    services related to hosting seminars, conferences, and

    meetings.

• Telecommunication services

• Financial services

• Media sales

  • Social media has transformed how companies reach

    consumers today, where companies pay to get access to

    data on users to then create campaigns based on

    followers.

• real estate

Business Goods Channel

Industrial salespeople

Sales engineer or applications engineer

Industrial salespeople

include both technical salespeople (sales engineers or application engineers) and nontechnical salespeople

Sales engineer or applications engineer

must have detailed and precise technical knowledge.

Consumer Goods Channel

• retail selling

• direct selling

Retail selling

Retail selling is an excellent area for gaining initial sales experience, and there are multiple areas in this kind of sales.

Direct selling:

Independent contractors who represent manufacturers.

Strategic Account Management Roles

• Regional Account Manager (RAM)

• Key Account Manager (KAM)

• National Account Manager (NAM)

• Global Account Manager (GAM)

Global Account Manager (GAM)

key account manager specialized on a specific product portfolio, not on a given customer or geography.

National Account Manager (NAM):

esponsible for recruiting and negotiating various business transactions and sign on new regional and national retailers.

Key Account Manager (KAM):

responsible for the coordination and management of a company’s prioritized accounts.

Regional Account Manager (RAM):

part of a larger sales team and acts as the direct client contact and manager of a number of business accounts.

Develop a relationship strategy with three key prescriptions:

– Maintain high ethical standards

– Project professional image

– Manage the relationship process

Emotional intelligence

refers to the capacity for monitoring our own feelings and those of others, for motivating ourselves, and for managing emotions.

Qualities associated with high emotional intelligence:

– Self-awareness

– Self-confidence

– Trustworthiness

– Adaptability

– Initiative

– Optimism

– Empathy

– Well-developed social skills

Information-Age Selling: Relationship Challenges

• Building new relationships

• Transforming relationships

• Management of relationships

Issues Challenging the Ethics of Salespeople

• the temptation to maximize short-term gains by some type of unethical conduct is always present and occurs more often than in most other careers

• Salespeople are especially vulnerable to unethical

• Large number of trusted salespersons can be counted on by the

  various stakeholders in a sale to form highly ethical win-win

  relationships.

Doing Business in China

• Be patient and avoid taking the

initiative until knowing the rules

• Be prepared for negotiations

around meals (typically banquet

style)

• Harmonious relationships matter

• Introduce the oldest first

• Give gifts after transactions

• Be careful of the meaning of gifts

Factors Influencing the Ethical-Decision

Making: Influences: Gifts

is a nonfinancial present.

• Guidelines for the giving of gifts

  • do not give gifts before doing business with a customer.

  • Never give the impression you are “buying” the customer’s business with gifts

  • Customers should have a clear understanding that gifts are given as a token of appreciation

  • Be sure the gift does not violate the policies of your firm or the customers firm

Factors Influencing the Ethical-Decision

Making: Influences: Bribe

is a financial present given to a buyer to manipulate the

purchase decision.

legal issues

• Doing business in the global marketplace continues to be

an ethical and legal minefield.

• Foreign Corrupt Practices Act prohibits U.S. companies

from using bribes or kickbacks to influence foreign

officials.

• U.K. Anti-Bribery Act prohibits any form of commercial

bribery.

Factors Influencing the Ethical-Decision

Making: Influences: entertainment

■ The dividing line between gifts, bribes, and entertainment is

often arbitrary.

■ In a few industries, entertainment is seen as the key to obtaining

new accounts.

■ Entertainment is a highly individualized process and should be

planned with the personal preferences of the prospect in mind

Factors Influencing the Ethical-Decision

Making: Influences: Confidentiality Leaks

○ Salespeople learn critical facts about their customers all the time. At a minimum they know how much, at what price, and when shipments of their own products will be purchased by their customer.

○ They may learn about the development and introduction of new products.

○ They can also learn a great deal about the pricing structure and strategy of existing products.

○ This information would be useful to the customer’s competitors, some of whom could be the salesperson’s customers already

Confidentiality:

the Sharing of sensitive information

Collusion:

When competing companies get together and fix prices,

divide up customers or territories, or act in a way to harm a third party

(often another competitor or customer)

Restraint of trade:

forcing a dealer or other channel member to stop

carrying its competitors’ products as part of its arrangement with the

dealer.

reciprocity

The practice of suppliers buying from one another

• not illegal per se

• A company buys from a supplier and then turns around and sells it

  another product or service.

• However, if the arrangement effectively shuts out other competitors, it is

  illegal and must be stopped.

Competitor obstruction:

he practice of impeding competitor access to

a customer.

• steer clear of your competitors’ products when you encounter them with a customer.

Competitor defamation

It is illegal to harm a competitor by making unfair or untrue statements about the company, its products, or the people who work for it.

Unfair statements

statements that are difficult to prove (or disprove) and put the competitor at a disadvantage in the marketplace while untrue statements are deliberate falsehoods.

slander

unfair or untrue oral statements that materially harm the

reputation of the competitor or the personal reputation of anyone working

for the company.

• Ex: salesperson making false statements during a presentation

libel

is unfair or untrue written statements that materially harm the

reputation of the competitor or the personal reputation of anyone working

for the company

■ Ex: a salesperson writing unfair statements in a letter or sales proposal

Price discrimination

the practice of giving different prices or discounts to different customers who purchase the same quality and quantity of products and services.

• It is illegal to discriminate based on price.

• it is perfectly legal to charge a lower price to a customer who buys more

  (quantity discount) or has received a better price from a competitor

quantity discount

legal to charge a lower price to a customer who buys more

Influence of Senior Managemen

• Ethical standards tend to filter down from the top of an organization. Employees look to company leaders for guidance.

• The organization’s moral tone, as established by management personnel, is the most important single determinant of employee ethics

Influence of Company Policies

Company policies and practices can have a major impact on the ethical conduct of salespeople.

• These policies cover

  • Distributor relations

  • Customer service

  • Pricing

  • Product development

Code of ethics:

sense of wrong and right

Corporate codes of ethics are important for three reasons

• The framework for the company’s approach to doing business

• By defining the company’s values, corporate ethical codes can

serve as a point of reference for individual employee behavior

• A strong corporate code of ethics can have a positive effect on

customers and other organizations that interact with the company.

Business ethics

comprises principles and standards that guide behavior in the world of business.

Individual Code of Ethics

● A personal code of sales ethics can be a valuable tool for everyone in

selling.

● It provides a framework for evaluating situations and helps individuals

coordinate their own personal values system with their corporate ethics

code and established guidelines for ethical sales behavior.

● The process begins with your own definition of what is right and wrong.

● Research suggests salespeople are generally more successful when their

personal code of ethics is consistent with those of the company and

management.

influence of Character in Ethical Decision Making

Character and integrity

Character

is composed of personal standards, including honesty, integrity, and moral strength

integrity

is the basic ingredient of character that is exhibited when you achieve congruence between what you know, what you say, and what you do

Influence of salesperson’s personal values

Values represent the ultimate reasons people have for acting as they do.

Values serve as a foundation for our attitudes, and our attitudes serve as a

foundation for our behavior.

Destructive values can result in unethical behaviors

Values can serve as a deterrent to unethical behavior in a selling situation.

Influence of salesperson’s personal values

● When salespeople discover a conflict between their value system and

that of their employer, they have four choices:

○ Ignore the influence of their values and engage in unethical

behavior.

○ Voice strong opposition to the practice that is in conflict with their

value system.

○ Refuse to compromise their values and be prepared to deal with the

consequences.

○ Ethical salespersons make decisions on the basis of the values they

hold

Honesty-

to be forthright in dealings with customers and stakeholders.

To this end, we w

• Strive to be truthful in all situations and at all times.

• Offer products of value that do what we claim in our communications.

• Stand behind our products if they fail to deliver their claimed benefits.

• Honor our explicit and implicit commitments and promises.

Responsibility

to accept the consequences of our marketing

decisions and strategies.

To this end, we will:

• Strive to serve the needs of customers.

• Avoid using coercion with all stakeholders.

• Acknowledge the social obligations to stakeholders that come with

increased marketing and economic power.

• Recognize our special commitments to vulnerable market segments such

as children, seniors, individuals with low socioeconomic status, individuals

not familiar with marketing, and others who may be historically

disadvantaged.

• Consider environmental stewardship in our decision making.

Fairness

to balance justly the needs of the buyer with the interests of

the seller.

to this end we will

• Represent products in a clear way in selling, advertising and other forms of

communication; this includes the avoidance of false, misleading, and

deceptive promotion.

• Reject manipulations and sales tactics that harm customer trust. Refuse to

engage in price fixing, predatory pricing, price gouging or “bait-and-switch”

tactics.

• Avoid knowing participation in conflicts of interest. Seek to protect the

private information of customers, employees, and partners.

Respect

to acknowledge the basic human dignity of all stakeholders. To

this end

to the end we will

• Value individual differences and avoid stereotyping customers or depicting

demographic groups (e.g., gender, race, sexual orientation) in a negative or

• dehumanizing way.

• Listen to the needs of customers and make all reasonable efforts to monitor

and improve their satisfaction on an ongoing basis.

• Make every effort to understand and respectfully treat buyers, suppliers,

intermediaries and distributors from all cultures.

• Acknowledge the contributions of others, such as consultants, employees

and coworkers, to marketing endeavors.

• Treat everyone, including our competitors, as we would wish to be treated.

Transparency

to create a spirit of openness in marketing operations.

To this end, we will

• Strive to communicate clearly with all constituencies.

• Accept constructive criticism from customers and other stakeholders.

• Explain and take appropriate action regarding significant product or service

risks, component substitutions or other foreseeable eventualities that could

affect customers or their perception of the purchase decision.

• Disclose list prices and terms of financing as well as available price deals

and adjustments.

Citizenship

to fulfill the economic, legal, philanthropic and societal

responsibilities that serve stakeholders.

To this end, we will:

• Strive to protect the ecological environment in the execution of marketing

campaigns.

• Give back to the community through volunteerism and charitable donations.

Contribute to the overall betterment of marketing and its reputation.

• Urge supply chain members to ensure that trade is fair for all participants,

including producers in developing countries

Value-added selling

is defined as a series of creative improvements in the sales process that enhance the

customer experience.

Empathizers

imagine themselves in someone else’s position and

understand what that person is feeling. They understand the subtleties

of human interaction.

Self-concept

is the bundle of facts, opinions, beliefs, and perceptions about yourself that are present in your life every moment of every day.

How can you develop a more positive self-concept?

• Focus on the future and stop being overly concerned

with past mistakes or failures.

• Develop expertise in selected areas.

• Learn to develop a positive mental attitude.

Utility

is the want-satisfying power of a good or service

Form utility

is created when the firm converts raw materials into

finished products that are desired by the market.

Place, time, and ownership utilities

are created by marketing when products are available to customers at a convenient location, when they want to purchase them, and facilities of exchange allow for transfer of the product ownership from seller to buyer.

The seller can increase the value of the customer offering in several

ways:

• Raise benefits

• Reduce costs

• Raise benefits and reduce costs

• Raise benefits by more than the increase in costs

• Lower benefits by less than the reduction in costs.

Customer satisfaction:

how much the customer likes the product,

service, and relationship.

customer loyalty

relationship-driven selling, your value proposition must be strong

enough to move customers past mere satisfaction and into a commitment

to you and your products for the long run—that is, a high level of

win-win philosophy

• is the first step in developing a relationship strategy.

• both the buyer and seller come out of the sale understanding that their respective best interests have been served, so both “win.”

• 
  

Win-Lose People

• See a problem in every

solution

• Fix the blame

• Let life happen to them

• Live in the past

• Make promises they never

keep

Win-Win People

• Help others solve their problems

• Fix what caused the problem

• Make life a joyous happening for

others and themselves

• Learn from the past, live in the

present, and set goals for the future

• Make commitments to themselves

and to others and keep them both

Empathy

is the ability to imagine yourself in someone

else’s position and to understand what that person is

feeling.

Empathy and ego drive reinforce one another.