Transcript Personal Selling and Direct Marketing

Copyright © 2005 Pearson Education Canada Inc.
Personal Selling and Direct Marketing
•Chapter 17
•Powerpoint slides
•Extendit! version
•Instructor name
•Course name
•School name
•Date
Principles of Marketing: 6th Canadian Edition
Learning Objectives
17.2
Copyright © 2005 Pearson Education Canada Inc.
• After studying this chapter, you should be able to:
– Discuss the role of a company’s salespeople in creating value
for customers and building customer relationships
– Identify and explain the six major
sales force management steps
Discuss the personal selling process,
distinguishing between transactionoriented marketing and relationship
marketing
– Define direct marketing and discuss
its benefits to customers and
companies
– Identify and discuss the major forms
of direct marketing
Principles of Marketing: 6th Canadian Edition
Copyright © 2005 Pearson Education Canada Inc.
Opening Vignette: Lear Corporation
17.3
• Supplier of automotive interiors; seats, instrument panels, electronics
• Sales of $18 billion per year, 300 facilities in 33 countries
• Sell to most of the leading automotive manufacturers, which are
limited in number; focus on relationship building
• Has 30% share of North American interior components market
– Strong customer orientation; company motto, “Consumer driven.
Customer focused.”
– Commitment to continuous
improvement, teamwork, and
customer value
– Sales force ranked first by Sales &
Marketing Management Magazine
• Act as account managers, rather than
salespeople
Principles of Marketing: 6th Canadian Edition
Personal Selling
17.4
Copyright © 2005 Pearson Education Canada Inc.
• Salesperson: an individual acting for a company by performing one
or more of the following activities:
– Prospecting for new business
– Communicating with prospective/existing customers
– Servicing existing customers
– Information gathering
• Characteristics of personal
selling:
–
–
–
–
Direct contact with buyer
Two-way communication
Flexible message content
Immediate feedback
Principles of Marketing: 6th Canadian Edition
Copyright © 2005 Pearson Education Canada Inc.
The Role of the Sales Force
17.5
• Personal selling is the interpersonal arm of the promotion mix:
– Represent the company to customers
– Represent the customer to the company
– Produce customer satisfaction and company profit
• Boundary position between the
company and the customer; potential for
conflict exists (rigidity of administration and
flexibility required by the customer)
• Nature of sales positions will vary:
–
–
–
–
Some focus on order taking,
Others focus on order getting,
Some require creative selling, while
Others demand relationship
management to be successful
Principles of Marketing: 6th Canadian Edition
17.6
Sales Force Management
• Sales force management: the analysis, planning, implementation,
Copyright © 2005 Pearson Education Canada Inc.
and control of sales force activities
• Sales force structure: how the sales force is organized will depend
on their role, the nature of the product and how the customer buys it
– Territorial sales force structure is the simplest form, using
geographic boundaries to assign responsibility for customers;
accountability is improved, cost-efficient, and salespeople sell all
products within their territories (pharmaceutical representatives)
Figure 17.1
Principles of Marketing: 6th Canadian Edition
17.7
Sales Force Structure (continued)
Copyright © 2005 Pearson Education Canada Inc.
– Product sales force structure: salespeople specialize in a group
of products to become experts and provide higher levels of service;
customers; useful when products are complex but not cost efficient,
customers may be receive calls from multiple sales people
– Customer sales force structure: salespeople are assigned
specific types of customers and sell all products to only that group;
useful to eliminate customer confusion and provide for relationship
management; can be more expensive to use (banking)
– Complex sales force structure: combining several different
structures to provide better service; requires managing
Figure 17.1
Principles of Marketing: 6th Canadian Edition
17.8
Copyright © 2005 Pearson Education Canada Inc.
Sales Force Structure (continued)
• Other structural issues:
– Outside sales force: salespeople who travel to meet customers
at their place of business; very expensive on a per-call basis
– Inside sales force: work from an office to contact customers
(outbound) or receive calls (inbound); can be used to support
outside sales force, provide customer service or as separate effort
– Team selling: using teams of specialists to sell/service a
complex account; more capability but expensive with
accountability issues (relationship selling)
Figure 17.1
Principles of Marketing: 6th Canadian Edition
Sales Force Management (continued)
17.9
Copyright © 2005 Pearson Education Canada Inc.
• Recruiting: finding a pool of qualified applicants from which to
make a selection decision
– Sources: internal, competitors, suppliers, educational
institutions, employment agencies, classified advertisements,
websites, walk-ins, and co-op placements
• Selection: choosing the candidate with the highest probability of
success in the position
– Methods: intelligence/personality testing, interviews, role play
exercises, references, and background checks
Figure 17.1
Principles of Marketing: 6th Canadian Edition
Sales Force Management (continued)
17.10
• Training: investing in the human capital of the company, helping
Copyright © 2005 Pearson Education Canada Inc.
sales people to become more productive employees
– Objectives of training can be to learn:
• Company history and culture
• Products and their application; need to know for
confidence and credibility with customers
• Selling skills such as prospecting, questioning, closing, and
time and territory management
Figure 17.1
Principles of Marketing: 6th Canadian Edition
17.11
Copyright © 2005 Pearson Education Canada Inc.
Sales Force Compensation
• Compensation can be used to direct activities and motivate
salespeople
• Will consist of fixed amount (salary), variable amount (bonus or
incentives), expenses, and fringe benefits
Table 17.1
Gain market
share rapidly
Strategic Goal
Solidify market
leadership
Maximize
profitability
Ideal
salesperson:
An independent self-starter
A competitive problem solver
A team player
Sales focus:
Deal making
A relationship manager
Consultative selling
Account penetration
To capture accounts
To reward new and existing
To manage the product mix
To reward high performance
account sales
To encourage team selling
Sustained high effort
Compensation
role:
To reward account management
Principles of Marketing: 6th Canadian Edition
17.12
Copyright © 2005 Pearson Education Canada Inc.
Supervising Salespeople
• Supervision is used to direct and motivate salespeople
• Companies will vary in how closely they supervise their salespeople;
will vary depending on the skill level and maturity of the sales force,
and type of selling
Figure 17.2
• Tools used:
– Call reports and plans
– Time-and-duty analysis
– Sales force automation systems
• Motivating salespeople:
– Organizational climate (very
important)
– Sales quotas (depends on product)
– Sales meetings (very important)
– Reward systems
Principles of Marketing: 6th Canadian Edition
Evaluating Salespeople
17.13
Copyright © 2005 Pearson Education Canada Inc.
• Measuring performance and providing feedback
• Information collected and used for evaluation purposes:
– Sales reports
– Expense reports
– Call reports
• Territory reviews may be
conducted to discuss
performance
• Standards of performance need
to be clearly articulated to
salespeople
Principles of Marketing: 6th Canadian Edition
17.14
Copyright © 2005 Pearson Education Canada Inc.
The Personal Selling Process
• The goal of the personal selling process is to find new customers and
sell them something
• Most salespeople spend their time maintaining existing accounts and
building long-term customer relationships
• Not all steps required in every sale
Figure 17.3
Principles of Marketing: 6th Canadian Edition
The Personal Selling Process (continued)
17.15
Copyright © 2005 Pearson Education Canada Inc.
• Prospecting/qualifying:
– Identifying customers that may have a need for the product or
service being sold
– Only a small number of prospects become customers
– Prospecting requires effort, time, and commitment
– Cold calling, networking, advertising-generated leads
– Not required for all sales positions
Figure 17.3
Principles of Marketing: 6th Canadian Edition
The Personal Selling Process (continued)
17.16
Copyright © 2005 Pearson Education Canada Inc.
• Preapproach:
– Preparation to learn as much about the prospective customer
as possible, prior to approaching them to ask for a meeting
– Major complaint about salespeople: lack of preparation
(extremely important)
– Use all resources to learn before meeting
– Setting call objectives is important to being productive and not
wasting the customer’s time
Figure 17.3
Principles of Marketing: 6th Canadian Edition
The Personal Selling Process (continued)
17.17
Copyright © 2005 Pearson Education Canada Inc.
• Approach:
– Meeting and greeting the customer for the first time
– Objective is to get in the door, not sell over the telephone
(visual contact is far better)
– Different methods to use; telephone, letter, in-person
– General benefit statements may help; need to give the
prospective customer a reason to see you
Figure 17.3
Principles of Marketing: 6th Canadian Edition
The Personal Selling Process (continued)
17.18
Copyright © 2005 Pearson Education Canada Inc.
• Presentation and demonstration:
–
–
–
–
–
What happens during the sales call
Purpose is to uncover needs and then attempt to satisfy them
Questioning and listening skills are important
Technology can help or get in the way
Customers value empathy, honesty, punctuality, reliability,
thoroughness, and follow through
Figure 17.3
Principles of Marketing: 6th Canadian Edition
The Personal Selling Process (continued)
17.19
Copyright © 2005 Pearson Education Canada Inc.
• Handling objections:
– The salesperson seeks out, clarifies, and overcomes customer
objections to buying the product or service
– Customers object for different reasons: no need, lack of
information, product limitation, or as a negotiating tactic
– Handling objections is important, but preventing them is
more effective;
Figure 17.3
Principles of Marketing: 6th Canadian Edition
The Personal Selling Process (continued)
17.20
Copyright © 2005 Pearson Education Canada Inc.
• Closing the sale:
–
–
–
–
–
Asking the customer to buy (order) the product
The only step that produces revenue; most important
Fear of rejection makes this step the most difficult
If all the previous steps done properly, should be seamless
Keep it simple, honest, and direct (‘so we can sign the
agreement now’)
Figure 17.3
Principles of Marketing: 6th Canadian Edition
The Personal Selling Process (continued)
17.21
Copyright © 2005 Pearson Education Canada Inc.
• Follow-up:
– What takes place after the sale
– Salespeople want to follow up:
• To keep the deal closed
• To ensure customer satisfaction (especially if there are
some other departments involved)
• To keep the door open for repeat business
• Ask for referrals (very useful)
Figure 17.3
Principles of Marketing: 6th Canadian Edition
Copyright © 2005 Pearson Education Canada Inc.
Customer Relationship Management
17.22
• Most personal selling is transaction-oriented
• Companies want to encourage repeat purchasing because it is
more efficient than trying to replace lost customers
• It takes different skills to build relationships with customers
• Mutually profitable relationships are built on creating value,
offering packaged solutions to problems, and improving products
and processes
• Never let your competitor to establish a relationship with your
customer
Figure 17.3
Principles of Marketing: 6th Canadian Edition
Direct Marketing
17.23
Copyright © 2005 Pearson Education Canada Inc.
• Direct marketing: direct communications with carefully
targeted individual consumers to obtain an immediate response
– Can be a primary approach or as a supplement to other
approaches
• Benefits to consumers:
• Benefits to sellers:
– Convenient, easy to use,
and private
– Personalized offers
– Ready access to wealth of
products
– Immediate and interactive
– Powerful tool to build
customer relationships
– One-to-one marketing
– Low-cost, efficient
alternative for reaching
target markets
Principles of Marketing: 6th Canadian Edition
Direct Marketing (continued)
17.24
Copyright © 2005 Pearson Education Canada Inc.
• Customer database: organized collection of comprehensive data
about individual customers or prospects, including geographic,
demographic, psychographic, and behavioral data
– Datamining and infomatics are the
new buzzwords in marketing; what
can be done with the customer
information captured/collected
– Used to identify prospects and
generate sales leads
– Profile customers based on previous
purchasing or response to offers
– Build customer loyalty by tailoring
new offers to their specific interests
Principles of Marketing: 6th Canadian Edition
How Dell Changed an Industry
17.25
Copyright © 2005 Pearson Education Canada Inc.
• Dell computers revolutionized an industry
• Previously, companies built computers for inventory, sold through
retail distribution network
• Biggest challenge: fast pace of technological change in computer
components created obsolete inventory
• Dell’s big idea: only build computers to order, sell direct to customers,
use just in time inventory management to eliminate obsolescence
• Selling direct lowers costs and prices
• The challenge: providing the levels of
customer sales assistance and service
that were previously given by retailers
• Result: Dell market share of PC market
is now 31%; dominates the industry
Principles of Marketing: 6th Canadian Edition
Forms of Direct Marketing
17.26
• Telephone marketing: outbound and inbound, suffers from
Copyright © 2005 Pearson Education Canada Inc.
consumer burnout, technology to block calls
• Direct mail marketing: flexible, personalized, but suffers from
junk mail image
• Catalogue marketing: the big
winners in the rise of the Internet; huge
cost efficiencies by moving catalogue
offering online
• Direct-response television
marketing: infomercials work,
despite a poor reputation
• Kiosk marketing: going where the
customers are
Principles of Marketing: 6th Canadian Edition
17.27
Integrated Direct Marketing
Paid ad with a
response channel
Copyright © 2005 Pearson Education Canada Inc.
• Integrated direct marketing:
– Direct marketing campaigns that use
coordinated, multiple promotional
vehicles and multiple stages to improve
response rates and profits
– Avoids confusing the customer
– Generates leverage of monies spent
– Suits today’s media-obsessed consumer
Direct
mail
Outbound
telemarketing
Face-to-face
sales call
Figure 17.5
Continuing
communication
Principles of Marketing: 6th Canadian Edition
Copyright © 2005 Pearson Education Canada Inc.
Public Policy and Ethical Issues
17.28
• Irritation, unfairness, deception, and fraud
• Invasion of privacy
• Personal Information Protection and Electronic
Documents Act (2001):
–
–
–
–
Consumer consent
Limitations
Accuracy
Right to access
Principles of Marketing: 6th Canadian Edition
In Conclusion…
17.29
Copyright © 2005 Pearson Education Canada Inc.
• The learning objectives for this chapter were:
– Discuss the role of a company’s salespeople in creating value for
customers and building customer relationships
– Identify and explain the six major sales force management steps
– Discuss the personal selling
process, distinguishing between
transaction-oriented marketing
and relationship marketing
– Define direct marketing and
discuss its benefits to customers
and companies
– Identify and discuss the major
forms of direct marketing
Principles of Marketing: 6th Canadian Edition