Transcript Chapter 16

Chapter Sixteen
Personal Selling,
Databases, and Direct
Marketing
Chapter Objectives
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Explain the different types of personal selling.
Discuss the various buyer/seller relationships.
Describe the steps in the selling process.
Explain the concepts of data warehousing and
database management.
Identify the steps in developing a customer
relationship management program.
Explain the concept and the various methods
of direct marketing.
Personal Selling
Types of
Salespeople
OrderTakers:
Do not take
active role in
seeking or
persuading
customers, but
assist in
transaction
Order Getters:
Actively seek
new customers
and work to
persuade them
to purchase
Support Personnel (e.g., Missionary salesperson):
Directly assist or support in the selling functions
Buyer/Seller Relationships
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Single Transaction
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Occasional Transactions
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The buyer-seller dyad is based on mutual respect and commitment to work together
Electronic data interchange relationship
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Involves a written agreement between the buyer and seller about terms of interaction
Trust relationship
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Buyer and seller interact on regular basis
Example: straight re-buy; Typical for food purchases
In all three,
there is little
or no
relationship
between the
two parties.
Contractual agreement
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Require infrequent buyer-seller interaction
Example: modified re-buy; Typical for furniture purchases
Repeat Transactions
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Buyer and seller interact for a single transaction.
Example: new-buy; Typical for expensive consumer products
Expands the trust relationship to include sharing of data between the two firms
Strategic partnership

The highest level of dyad interaction
 Buyer and seller share information at the highest levels, with the goal to collaborate on
plans to benefit both parties.
The Selling Process
Steps in the Selling Process
1.
2.
3.
4.
5.
6.
7.
Prospecting for leads
Approaching customers
Determining customers wants
Developing sales presentation
Answering questions and objections
Closing the sale
Follow-up
Sales Management*
• Sales Plan Formulation
• Set Objectives (e.g., Quotas)
• Organize Sales Force/Territories
(e.g., Equalized Workload Method)
• Sales Plan Implementation
• Recruitment and Selection (e.g., Dyadic Relationship
• Training (e.g., Sponsorship Method)
• Organization and Supervision
• Compensation/Motivation ($)
• Evaluation (Quotas, Call Reports)
Databases

Important component of the Integrated
Marketing Communication program
 Can be used for a variety of purposes,
from providing information to
salespeople to direct marketing
 Customer data helps marketing personnel to
understand what is being purchased and by
whom.
 Essential to direct marketing, and tracking
changes in purchase behavior
Data Warehousing
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Collection of data within a single database
that is accessible to internal personnel for
internal purposes such as marketing, sales,
and customer service.
 Two sources of data:
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Internal data
External data
Internal data alone is insufficient to develop
an optimal data warehouse.
 Data warehousing should be integrated with
the other components of the IMC plan.
Data Mining
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Involves computer analysis of customer
data to predict future buying behavior
 Most common use involves customer
profiling to get an idea of who is purchasing
and what they are purchasing.
 Used to develop marketing programs that
meet the profile of the firm’s best customers
 Also used to develop models that predict
future purchase behavior based on past
purchase activities and to building
relationships with customers
through database marketing
Customer Relationship Management
(CRM)
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Steps:
1. Identify the organization’s customers.
2. Differentiate customers in terms of their needs and
value to the organization.
3. Interact with customers in a cost
effective and efficient manner.
4. Customize the product offering to
meet individual customer needs.
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Based on two tenants:
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Lifetime value of a customer—measure of the
value of a customer over the typical life span of a
firm’s customers
Share of the customer—the percentage of a
customer’s business that a particular firm has
Direct Marketing
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Promotion of a product from the producer directly
to the consumer or business without the use of
channel members
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Typical venues include:
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Mass media
 Internet
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Direct mail
 Catalogs
Direct mail to customers
E-mail
 Telemarketing
77%
73%
Direct mail to prospects
16%
Statement stuffers
Catalogs
24%
21%
Direct response-promotions
10%
Direct response-radio
8%
Direct response-TV
Catalog and Internet Sales
29%
Direct response-Internet
Search engine marketing
22%
17%
Search engine optimization
140
55%
E-mail to customers
E-mail to prospects
126
46%
24%
0%
10%
20%
30%
40%
50%
60%
70%
% of Companies Using DM Using Particular Methodology
Types of Direct Marketing
Methods Used
80%
90%
Sales in Billions of Dollars
16%
Inbound telemarketing
Outbound telemarketing
118
120
110
100
87
85
77
80
60
58
62
64
70
40
28
30
2000
2001
34
13.8
20
0.006
0.04
0.17
0.75
2.2
6.2
0
1993
1994
1995
1996
1997
Catalogs
1998
Internet
1999
2002