Personal selling - the oldest form of selling - is a vital cog in many companies’ promotional efforts. It provides the personal link between seller & buyer. It adds to a firm’s creditability because it provides buyers with someone to interact with & to answer their questions.
Because it involves personal interaction, however, personal selling requires a level of trust between the buyer & the seller. When a buyer fells cheated by the seller, that
trust has been broken & negative attitude towards salespeople in general develops. To counteract this reputation, many companies are emphasizing customer satisfaction & generally striving to improve the effectiveness of whatever personal selling they undertake.
Personal selling is also most expensive form of promotion per contact because presentations are generally made to one or two individuals at time. Personal selling expenses include salespeople’s compensation & their overhead, usually travel, food & lodging. The average cost of sales call has been estimated an approximately $240 & has been increasing rapidly in recent years.
The high cost of personal sales have prompted many companies to set up Telemarketing departments. Telemarketing is the use of the telephone to carry out many of the activities involved in marketing a company’s products. Telemarketing can be used to handle any stage of the personal selling process or to set up appointments for outside sales people.
Types of Personal Selling Situations
Managers of both telemarketing & traditional personal sales people must always consider how personal service are affected by the difference between consumer products & industrial products. Retail selling involves selling a consumer product for the buyer’s own personal or household use. Industrial selling deals with selling products to other businesses, either for manufacturing other products or for resale.
Each of this selling groups situations has its own distinct characteristics. In retail selling the buyer usually comes to the seller. The industrial salesperson almost always goes to the prospect’s place of business. The industrial decision process also may take longer than a retail decision because more money, decision makers, & weighting of alternatives are involved. And industrial buyers are professional purchasing agents who are accustomed to dealing with salespeople. Consumers in retail stores, on the other hand, may be intimidated by salespeople.
Personal Selling Tasks
Improving sales efficiency also requires marketers to consider salespeople’s tasks. Three basic tasks are generally associated with selling: Order processing, creative selling, & missionary selling. Sales jobs usually require salespeople to perform all three tasks to some degree, depending on the product & the company. As you will see, this tasks differ in the skills required, the methods used, & the reasons for using them.
Order Processing. At the most basic level, Order Processing, a salesperson receives an order & sees to the handling & delivery of that order. Route salespeople are often order processors. They call on regular customers to check the customer’s supply of bread, milk, snack foods, or soft drinks. Then, with a customer’s consent, they determine the size of the reorder, fill the order form their trucks, & stack the customer’s shelves.
Creative Selling. When the benefits of the product are not clear, creative selling may persuade buyers. Most industrial products involves creative selling because the buyer has not used the product before or may not be familiar with the features & uses of
a specific brand. Personal selling is also crucial for high priced consumer products, such as homes, where buyers comparison shop. Any new product can benefit from creative selling that differentiates it from other products. Finally, creative selling can help to create a need.
Missionary Selling. A company may also use missionary selling to promote itself & its products. The goal of missionary selling is to promote the company’s long-term image than to make a quick sale.
The Personal Selling Process
Although all three sales tasks are important to an organization using personal selling, perhaps the most complicated is creative selling. It is the creative salesperson who is responsible for most of the steps in the personal selling process described here.
Prospecting & Qualifying. In order to sell, a sales person must first have a potential customer, or prospect. Prospecting is the process of identifying this potential customers. Salespeople find prospects through past company records, customers , friends, relatives, company personnel, & business associates. Prospects must then be qualified to determine whether or not they have the authority to buy & the ability to pay.
Approaching. The first few minutes that a salesperson has contact with a qualified prospect are called the approach. The success of later stages depends on the prospect’s first impression of the salesperson, since this impression affects the salesperson’s creditability. Thus, salespeople need to present a neat, professional appearance & to greet prospects in a strong, confident manner.
Presenting & Demonstrating. Next, the salesperson must present the
promotional message to the prospect. A presentation is the full explanation of the
product, its features, & its uses. It links the product’s benefits to the prospect’s needs. A presentation may or may not include a demonstration of the product.
Handling Objections. No matter what the products, prospects will have some objections. At the very least, prospects will object to a product’s price, hoping to get a discount. Objections show the salesperson that the buyer is interested in the presentation & which parts of the presentation the buyer is insure of or has a problem with. They tell the salesperson what customers feel is important &, essentially, how to sell them.
Closing. The most critical part of the selling process is the close, in which the
sales person asks the prospective customer to buy the product. Successful salespeople, recognize the signs that a customer is ready to buy. Salespeople can ask directly for the sale or they can indirectly imply a close. Questions such as « Could you take delivery Tuesday?» & « Why don’t we start you off with an initial order of ten cases?» are implied closes. Such indirect closes place the burden of rejecting the sale on the prospect, who often will find it hard to say no.
Following Up. The sales process doesn’t end with the close of the sale. Most companies wants customers to come back again. Sales follow-up activities include fast processing of the customer’s orders & on-time delivery. Training in the proper care & usage of the product & speedy service if repairs are needed may also be part of the fallow-up.
Sales Promotions
Sales promotions ( motivators) are a very important factor in the promotional mix because they increase the chances that consumers will try a product. They also enhance recognition for the products. And they can increase the purchase size & amount.
Did you ever here a promotional slogan « buy three & get one free.»
To succeed, however, sales promotions must be convenient & accessible when the decision to purchase occurs.
Types of Sales Promotions
Sales promotions can take a variety of forms. The best known are coupons, point of purchase displays, free samples, trading stamps, premiums, trade shows, trade promotions, & contests & sweepstakes.
Coupons. Any certificate that entitles the bearer to a stated savings off aproduct’s regular price is a coupon. Coupons may be used to encourage customers to try new products, to attract customers away from competitors or to include current customers to buy more of a product. They appear in newspapers & magazines & are often sent through direct mail.
Point-of-Purchase Displays. To grab customer’s attention as they walk through the store, some companies use Point of Purchase Displays. Displays located at the end of the aisles or near the checkout in supermarkets are POP displays. POP displays are always coincide with a sale or the item being displayed. They also make it easier for customers to find a product & easier for manufacturers to eliminate competitors from
consideration. The cost of shelf & display space, however, is becoming more & more expensive.
Free Samples, Trading Stamps, & Premiums. Purchasing incentives such as free samples, trading stamps, & Premiums are used by many manufacturers & retailers. Premiums are gifts, such as pens, pencils, calendars, & coffee mugs, that are given away to consumers in return for buying a specified product. Retailers & wholesalers also receive premiums for carrying some products.
Trade Shows. Periodically, industries sponsor Trade Shows for their members & customers. Trade shows allow companies to rent booths to display & demonstrate their products to customers who have a special interest in the products or who are ready to buy. Trade shows are relatively inexpensive & are very effective, since the buyer comes to the seller already interested in a given type of product.
Contests & Sweepstakes. Customers, distributors, & sales representatives may all be persuaded to increase sales of a product through the use of contest. For example, distributors & sales agents may win a trip to Hawaii for selling the most pillows in the month of March. Although sweepstakes can’t require consumers to buy a product to enter, they may increase sales by stimulating buyers’ interest in a product.
Publicity & Public Relations Promotions
Much to the delight of marketing managers with tight budgets, Publicity Is FREE. Moreover, consumers see publicity as objective & highly believable. Thus, it is a very important part of the promotional mix. However marketers often have a little control over publicity.
Public relations is company-influenced publicity. It attempts to establish a sense of goodwill between the company & its customers through public service announcements that enhance the company’s image. From this topic, so far, you may think that only large companies can afford to seriously promote their goods & services. Although small businesses have fewer resources, cost-effective promotions can improve sales & enable small firms to complete with a much larger firms.
Small Business Advertising
The type of advertising chosen by a small business depends on the market the
firm is trying to reach: Local, National, International.
Local Markets. Advertising is non prime-time slots on local television offers great impact at a cost many small firms can afford. More commonly though, small businesses with a local market use newspaper & radio advertising &, increasingly, direct mail.
National Markets. Many businesses have grown from small to large operations by using direct mail & particularly catalogues. By purchasing mailing lists of other companies’ customers, a small firm can target its mailing, reducing costs. The ability to target an audience also makes specialized magazines attractive to small businesses.
International Markets. Television, radio, & newspapers are seldom viable promotional options in reaching international markets because of both their costs and their limited availability. Most small firms find direct mail & magazine advertising the most effective promotional tools.
Small Business Personal Selling
Like advertising, personal selling strategies used by small businesses depend on their intended market.
Local Markets. Some small firms maintain a sales force to promote & sell their products locally. Other contract with a sales agency - a company that handles the products of several companies - to act on their behalf. Insurance agents who sell insurance for several different companies are sales agencies.
National Markets. Because of a high costs of operating a national sales force,
many companies have established telemarketing staffs. By combining telemarketing with a catalog or other educational product literature, small companies can sell their products nationally & compete against much larger companies.
International Markets. Small companies can’t afford to establish international offices in order to conduct businesses. Even sending sales representatives overseas is expensive. Thus, many small companies have combined telemarketing with direct mail in order to expand internationally. Small businesses often depend on an interesting or unusual sign to attract new customers.
Small Business Sales Promotions
Small companies use the same sales promotion incentives that larger companies use. The difference is that larger firms tend to use more coupons, POP displays, & sales contests. Smaller firms rely on premiums & special sales, since coupons & sales contests are more expensive & difficult to manage.
Small Business Publicity
Publicity is very important to small businesses with local markets. Small firms often have an easier time getting local publicity than do national firms. Readers of local papers like to read about local companies, so local papers like to write about such businesses. But fierce competition for coverage in national & international publications limits the access small businesses have to those markets.
Distributing Goods & Services
In selecting a distribution mix for getting its products to customers, a firm may use any or all of six distribution channels. The first four are aimed at consumers & the last two at industrial customers. Channel 1 involves a direct sale to the consumer. Channel 2 includes a retailer. Channel 3 also includes one wholesaler, while Channel 4 includes an agent or broker before the wholesaler. Distribution strategies include intensive, exclusive, & selective distribution.
Wholesalers act as distribution intermediaries, extending credit & storing, repackaging, & delivering the product to other members of the distribution channel. Full-service, & limited-service, merchant wholesalers differ in the number of distribution functions they offer. Agents & brokers never take legal possession of the product.
Retailing involves direct interaction with the final consumer. The major types of retail stores are department, specialty, bargain, convenience, supermarkets, & hypermarkets. (Like in Moscow.) They differ in terms of size, services, & product type they offer, & product pricing. Some retailing also takes place without stores, through the use of catalogs, vending machines, & video marketing. According to the wheel of retailing, conventional retailers are periodically Displaced by low-priced innovative retailers, who then become more conventional & subject to displacement.
Distribution ultimately depends on physically getting the product to the buyer. Physical distribution includes customer-service operations such as order processing. It also includes warehousing & transportation of products. Warehouses may be public or private & may be used for long-term storage or serve as distribution centers. Costs of warehousing include inventory control & materials handling.
Truck, plane, railroad, water, & pipeline transportation differ in cost, availability, reliability of delivery, & speed. Air is the fastest but most expensive. Water carriers are the slowest, but least expensive. Most products are moved by truck at some point. Transportation in any form may be supplied by common carriers, freight forwarders, contract carriers, or private carriers.
Developing & Pricing Products
Products are a firm’s reason for being, their features offer benefits to buyers, whose purchases are the source of business profits. In developing products, marketers must take into account whether their market is individual consumers or other firms. Marketers must also recognize that buyers will pay less for & worry less about the exact nature of convenience goods than about shopping & specialty goods. In industrial markets, expensive items are generally less expensive & more rapidly consumed than are capital items.