1.0 INTRODUCTION
In contrast to
advertising and publicity, which use impersonal methods of communication,
personal selling makes use of direct personal communications to influence the
target customers. Personal
selling is a highly distinctive method of promotion, and makes use of oral presentation in conversation with existing and potential customers, for the purpose of making a sale.
selling is a highly distinctive method of promotion, and makes use of oral presentation in conversation with existing and potential customers, for the purpose of making a sale.
It is one of the oldest
methods of business promotion. The contributions made by personal selling in making
the promotion function more effective have earned it the distinction of being
the most reliable promotion method. Though, it is the most expensive method of promotion,
yet we see an increasing number of firms making use of it, and a good number of
them realize that they cannot, perhaps, live without it.
Increasing competition and the growing sophistication of the buyer
and his/her buying process are making personal selling more or less
indispensable. Sales promotion is the only method that makes use of incentives
to complete the push-pull promotional strategy of motivating the sales force,
the dealer and the consumer in transacting a sale.
2.0 OBJECTIVES
On completion of this note, you should be able to:
·
explain the nature and role of personal selling and sales promotion
·
list different types of sales position and sales promotion schemes
·
describe the steps involved in the selling process
·
explain the growing importance of sales promotion in Nigeria.
·
explain the process involved in planning sales promotions
·
outline the need for integration among the different methods of promotion.
3.0 MAIN CONTENT
3.1 Role of Personal Selling
Personal selling is
defined as ‘Oral presentation in a conversation with or more prospective
purchasers for the purpose of making sales’. Personal selling, as the name
implies, is an individual selling. It, therefore, carries the distinctive
advantage of flexibility in terms of tailoring the sales presentation to the
needs of the buyer. Another unique advantage comes from its two-way
communication and human interaction, thereby providing instant feedback. These
two unique advantages make personal selling the most result-oriented promotion method.
Generally speaking, the nature of goods marketed, as well as the distribution
system adopted; determine the role of personal selling in a firm. Therefore,
personal selling is used extensively in the case of industrial goods, where the
salesperson performs functions such as assisting the customer in designing the
product specifications, product installation, product commissioning, solving
technical problems through providing service after sales and helping the
customer to have optimal utilization of the product. In the case of consumer
goods, on the other hand, the role of personal selling gets usually restricted
to the dealer level.
The scope of the tasks performed include obtaining periodic orders,
ensuring supplies, offering tips to dealers on product display and attaining
desired levels of stock movement. Similarly, the role played by personal
selling is more in a firm, which uses the door-to-door selling method through
its sale force than in the firm, which sells through large stockists,
distributors or sole-selling agents. Notwithstanding the varying role of
personal selling in the strategies followed by different companies, the nature
of the selling function requires that the following tasks be performed:
·
Sales generation
·
Feedback and market information collection
·
Provision of customer service covering aspects such as delivery of
goods, warranty administration, timely availability of repair and spares, etc.
·
Performance of sales support activities such as monitoring the distribution
function, credit collection, improving manufacturer dealer relations,
implementing the promotional programmes, etc.
In practice, the complexity of the selling task actually performed
varies from company to company even under the above four categories.
3.2 Types of Selling Jobs
From the foregoing discussion, we understand that while sales as a
function has a common purpose that is to effect sales the selling situations
differ due to the interplay of various factors. These factors are nature of
goods sold, type of distribution system used, nature of demand and the type of
sales strategy followed by the firm.
These factors require the sales force to possess different traits
and abilities suitable to the selling situation with which they are associated.
To underscore the differences, Robert N. McCurry in ‘The Mystique of Super-salesmanship’
classifies individual sales positions based on the degree of creativity
required into seven categories. These seven categories are described below.
Merchandise Deliveries
This is the sales person, whose primary job is to deliver the
product usually against routine orders, popularly called sales and delivery
boys.
Inside Order-taker Working inside a store the primary job of such a salesperson is to
service the customer’s request or suggest appropriate products to meet customer
wants. Such type of salespersons are popularly called retail salesman.
Outside Order-Taker The salespersons engaged in the task of taking orders from the
resellers. They normally do not use the hard selling approach for making
orders.
Missionary Salesperson The salesperson whose primary job is to educate, give product
detailing, build goodwill or create primary demand for the product. Strictly speaking,
missionary salespersons are not permitted to take orders.
Sales Engineer The salesperson, who acts as a technical consultant to the client
and as per the need, helps to design products or production system for a
client. This type of salesperson is popularly called Technical Salesperson,
e.g. Computer salesman.
Tangible Product Seller The salesperson’ job is to sell tangible products such as
furniture, appliances, automobiles, etc. The job involves abilities to persuade
and convince the customer.
Intangible Products Seller Here the salesperson is associated with
selling intangible products or services such as advertising services, insurance,
education, etc., the common factor being difficultly in immediate demonstration
of the perceived benefits of the product. This selling job requires perhaps the
greatest degree of creativity in the salesperson.
Defining the Salesperson’s Job The foregoing classification of the
sales position into seven categories, on the basis of degree of creativity
required in the performance of each job is only general in nature.
Depending upon the organizational need, each company should
clearly define what it expects from a salesperson in terms of the tasks to be
performed by him. It should broadly specify how much of the salesperson’s time
should be spent on developing new accounts versus servicing existing accounts,
large accounts versus small accounts, bulk order versus small orders, selling
individual products versus selling products line, selling old products versus
selling new products, etc.
Lack of clear definition
regarding the selling tasks to be performed often results in disproportionate
spending of time between the tasks, as well as in imbalances in the goals
achieved. To avoid this type of loss in productivity of the sales force, it is
worth repeating that the job of a salesperson should be defined with sufficient
specificity, so that he/she can use it as a guideline to stay in the right
direction.
3.3 The Selling Process Up to this point, we have been discussing the role of personal
selling and the degree of creativity required in a salesperson to perform the
task satisfactorily. Now we will take a look at the selling process followed
for completing a sale. Though the steps in the selling process discussed below
will be applicable to most of the selling situation, what will differ will be
the degree of importance given to each steps of the process under different selling
situations. The basic step in the selling process is given in Figure 1. A
salesperson must become accomplished at performing the selling steps.
These steps are:
(a)Preparation
(b) Prospecting
(c) Pre-approach
(d) Approach
(e)Sales representation
(f)Handing objections
(g) Closing the sale
(h) Post-sale follow-up.
Fig. 1: Steps in the
Selling Process
Step 1
Preparation: Before starting the selling job, a salesperson should make a
valuable investment of time and resources to know the products to be sold, know
the customers (i.e. customer types, buying motives and buying process) to whom
he will be selling, know the competitors against whom he will be selling, and
finally know the philosophy, policies and range of products of his company. In
short, he should be well equipped with the fundamentals of selling.
Step 2
Prospecting: This step of the selling process deals with the location and preparing
a list of prospective customers. Prospects can be located through (1) identifying
the potential of buying more in the existing customers, (2) recommendations of
existing customers, (3) winning back lost customers, (4) attracting
competitors’ customers, (5) customers’ information request from advertisement,
(6) newspaper announcements, (7) public records, (8) directories likes
telephone, trade associations etc., (9) other salesmen, (10) references from
friends, neighbors and business associates, and (11) cold canvassing, that is, going
from door–to–door.
The located prospects should first be qualified broadly in terms
of (i) whether they want the product and how intense their want is, (ii) whether
they have the adequate purchasing power, and (iii) whether and who possesses
the power or authorisation to purchase and spend the required money. The
qualifying of prospects is the process of separating the prospects from the
suspects. It is worth mentioning here that the ability to prospect is the most essential
ability of a successful salesperson. A good salesperson keeps examining,
weeding out the already tapped prospects and updating his/her lists of
prospects, and remains in constant search of new prospects.
Step 3
Pre-approach: The qualifying process of separating prospects from suspects
further requires that the salesperson should posses detailed information
relating to the prospects in terms of existing products consumed, their scale
of operation, product range, their buying size, frequency, budget and the
process, etc. In short, obtain customer orientation. The sources of information
for the purpose include company annual reports, other salespersons, other
suppliers to the prospects, census of manufacturers, professional journals,
newspapers and market intelligence.
The availability of the above information in as detailed a manner
as possible will help the salesperson in ranking the prospect in classifying
the prospects in A, B, and C categories in terms of the immediacy of the
attention to be given to them.
Step 4
Approach: ‘First impression counts.’ As such, this step needs to be carefully
planned. This step has two distinct parts. One, of meeting the customer with a
positive set of mind, and the second is make an impact on him. For the former,
referrals of reliable persons known to prospects, calling after fixing an
appointment, use of door openers, help. For the latter the salesperson should
equip himself with key benefits to be emphasised, samples or new literature to
be handed over, etc.
Step 5
Sales Presentation: Through advance information relating to the prospect, every effort
should be made to match the product offered to the needs/problems faced by the
customer. The sales presentation should generally go according to the
AIDA–attention, interest, desire, and action approach. How can this be done?
Use of key benefit or a problem solver, or a unique act of the salesperson
results in gaining attention. When used attentively this part also provides an opportunity
to get the main point of the initial statements made by the prospect. T
he presentation should proceed in a straightforward manner to help
the prospect know that you understand his problem and that is the reason of your
being there. To convince the prospect as early as possible, the salesperson
should offer evidence through demonstration of the product, use of exhibits,
models, sharing of acts, citing examples of successful applications/usage,
showing testimonials, etc. The overall approach should be to build credibility
and confidence in the supplying company, its products, and also in its
competence to render specialized type of service to the complete satisfaction
of its customers.
The flexibility of the sales presentations can range from the
‘canned’ or previously prepared presentation, to those allowing the salesperson
complete freedom in the presentation. Though both extremes, and even the hybrid
of the two, have their own situational suitability, the important point to note
is that salesmanship, being a showmanship function, must arouse active
participation of the prospect in the presentation process. This can be done by
introducing some action which would keep the prospect captivated. One possible
way would be a joint review of the problem faced by the prospect. Another is
helping the prospect imagine the projected benefits of owning the product.
Step 6
Handling Objections: It is in the last phase of the sales presentation step that the
prospects start expressing doubts, or raising objections whether relating to
price, need for more time to think, satisfied the existing product/supplier or
product quality claims.
These doubts or objections should be welcome and they should be answered
with confidence. There is certainly no doubt that the prospect has to be
thoroughly convinced that the product would satisfy his need. The ability of
the salesperson in mind reading the prospect, enables him to anticipate the
prospect’s objections and reactions.
The golden rules for handling objections are:
(1) Welcome the objection and show respect to the prospect, and
(2) Do not argue with the
prospect. Even when the objections raised are half-backed or trivial in nature,
the salesperson should handle the situation tactfully. Only in extreme
necessity, should a salesperson ask the prospect to adequately explain the
problem faced. Even under these circumstances, courtesy should not be lost
sight of, and while the discussion is on, the salesperson should start
recounting the benefits of the product agreed upon, and lead the prospect to
make a favorable decision. It should be remembered that handling objections
sharpens the selling skills of the salespersons.
Step 7
Closing the Sale: Closing is that aspect of the selling process in which the
salesperson asks the prospect to buy the product. There is a critical point
during each presentation when the salesperson should ask for the order. Pending
the location of the critical point, as the objections are being met, the
salesperson should help reduce the choice of options, summarise the benefits of
buying, and the consequences of buying, and if need be, make use of the big
idea appeal of the buying ‘now’ at that moment.
The salesperson should have the ability of catching the buying
signals given by the prospect and should act on them fast. Some of such signals
are changing the sitting/standing position and moving closer to the product;
reading the instructions on the product; perusing the testimonials; showing
hesitation in being able to afford; asking for another demonstration, if
applicable; checking the warranty or asking 145 questions relating to warranty terms.
These signals show that the time is ripe to start taking the order.
Step 8
Post-sale Follow-up: The selling process does not come to an end by writing the
order. A few repetitions reassuring the benefits of the product keep the
customer sold. Follow-up provides an opportunity to ensure that the product is
being rightly used, and if necessary to reexplain the method of using,
handling, and storing of the product when not in use. This builds favorable
feelings and nurtures the strong buyerseller relationships. Post-sale follow-up
not only reinforces the customer’s confidence in the salesperson and his
company but also tends to keep competition out. This also helps generate repeat
business and valuable word-of-mouth publicity. The follow-up is a good source
of feedback too.
Let us conclude this
section by stating that although the eight steps of the selling process are
essential in spirit, these may not always be followed. This could be partly the
(1) the selling situation involved (e.g. in the case of insider order-taker
or retail salesperson the first three steps of the selling process are
generally not applicable as the customer walks into the store for buying a
product),
(2) the expertise of the salesperson (such that he can ignore or
assume some information), or
(3) the seller’s market of the product where customers generally
queue up for the product. Let us also look at the findings of a study by
Robertson and Chase on the subject. They point out that: The more closely matched the physical, social
and personal characteristics of the customer and salesperson, the more likely
is the sale. The more believable and trustworthy the customer perceives a salesperson
to be, the more likely is the sale. The more persuadable a customer is, the
more likely is a sale.
4)The more a salesperson can make prospective buyers view themselves
favorably, the more likely a sale is.
3.4 Sales Promotion Of all the methods of promotion that constitute the promotion mix,
sales promotion is the only method that makes use of incentives to complete the
‘push-pull promotional strategy of motivating the sales force, the dealer and
consumer in transacting a sale.
There is no single universally accepted definition of sales
promotion. One can, however, gather its essence by perusing a few definitions.
Let us look at some of the popular definitions of sales promotion:
According to the American
Marketing Association, sales promotion refers to: ‘those activities other than
personal selling, advertising and publicity, that stimulate consumer purchasing
and dealer effectiveness, such as display shows and exhibitions,
demonstrations, and various other nonrecurrent selling efforts not in ordinary
routine.’ This definition suggests that sales promotion is a catch-all for all
those promotion activities which do not fall clearly into advertising, personal
selling or publicity.
Roger A. Strang offers a simple definition ‘Sales Promotion is
short term incentives to encourage purchase or sale of product notes or
service.’ Yet another definition that seems fairly exhaustive, and hence, will
be used in this note is the one given by Stanley M. Ulanoff in his Handbook of
Sales Promotion. Stanley defines sales promotion as: ‘all the marketing and
promotion activities, other than advertising, personal selling, and publicity,
that motivate and encourage the consumer to purchase by means of such
inducements as premiums, advertising specialties, samples, cents-off coupons,
sweepstakes, contests, games, trading stamps, refunds, rebates, exhibits,
displays, and demonstrations.
It is employed as well, to motivate retailers’, wholesalers the
manufacturer’s sales forces to sell through the use of such incentives as
awards or prizes (merchandise, cash and travel), direct payments and
allowances, cooperative advertising, and trade shows’.
It offers a direct inducement to act by providing extra worth over
and above what is built into the product as its normal price. These temporary inducements
are offered usually at a time and place the buying decision is made. Summing
up, sales promotion deals with promotion of sales by the offer of incentives
which are essentially non-recurring in nature. It is also known by the names of
Extra-Purchase-Value (EPV) and Below-theline- selling. Like in other market
economies, the use of sales promotion is catching on in Nigeria in terms of
volume.
The number of sales promotion schemes offered to the consumers
alone has grown by over seven times in the first three years of the eighties as
against the average in the seventies. The schemes offered at the dealer level
also nearly doubled during the period 1978-79 and 1982-83. In terms of the
expenditure incurred, the large size companies are stated to be spending
between 40 and 50 per cent of their advertising and sales promotion budget on
this activity.
In terms of product groups,
the major users of sales promotion are: tea, coffee, and beverages, soaps,
detergents and washing soaps, toothpaste, textiles, food products and baby
foods, household remedies, and consumer durables like fans, refrigerators,
sound systems, television and other household appliances. Among the various
types of sales promotion schemes used, contests at the consumer, dealer
and sales force levels have made a significant headway.
Why Rapid Growth? A perusal of the list of the product groups which emerged as the
major users of sales promotion, and form the market feel, it seems clear that a
transformation from the seller’s to the buyer’s market is taking place and marketing
has become more competitive in these product markets. In addition to increasing
competition, other reasons for rapid growth of sales promotion in Nigeria as
pointed out by some large sized cooperating companies in surveys are summarised
below:
·
sales promotion makes an immediate effect on sales.
·
measurement of the effectiveness of sales promotion is easier as against
other promotional methods.
·
channels of distribution are emerging as powerful entities and demand
greater use of incentives to get desired results.
·
products are becoming standardized and similar, and so need increased
support of non-price factors of which sales promotion is an important one.
·
impulse buying is on the increase, and so is the rise in the
number of marginal customers. With virtually no brand loyalty, offer of attractive
schemes helps manufacturers to induce such customers to choose their product.
3.5 Sales Promotion Objectives
As a powerful method of sales promotion with a capability to complement
and supplement the advertising function of marketing, sales promotion helps
marketers realize a variety of objectives. These objectives could relate to the
promotion of sales in general, or to a specific activity at a particular level,
i.e. the consumer, dealer or sales force. Some of the commonly attempted
objectives are to:
·
increase sales (in general, and focusing on new uses, increased usage,
upgrading note of purchase, winning sales of fading brands, etc.)
·
make the sale of slow-moving products faster
·
stabilise a fluctuating sales pattern
·
identify and attract new customers
·
launch a new product quickly
·
educate customers regarding product improvements
·
reduce the perception of risk associated with the purchase of a product
·
motivate dealers to stock and sell more (including complete product
lines)
·
attract dealers to participate in manufacturer’s dealer display
and sales contest
·
obtain more and better shelf space and displays
·
bring more customers to dealer stores
·
make goods move faster through dealers
·
improve manufacturer-dealer relationship
·
motivate sales forces to take the achievement higher than targets
·
attract sales force to give desired emphasis on new accounts, latent
accounts, new products, and difficult territories
·
reward sales forces for active market surveillance and for rendering
superior customer services
·
put power into the sales-presentation
·
counter competitors sales-promotion and marketing efforts
·
provide punch to the company’s advertising efforts
·
Build goodwill.
Companies may use any one or a combination of the above objectives
in varying forms to suit the product-market needs of their product. What is of
significance is that the sales promotion and marketing objectives are pursued
by the company.
3.6 Sales Promotion
Methods
Many methods of sales promotion are used by marketers. Depending upon
the creativity level of their sponsors, their variety seems very large. We
refer here to some of the most commonly used methods of sales promotion.
As noted above, the
accomplishments of the desired promotion and marketing objectives ultimately
depend on the extent of the desired response received from consumers, dealers
and members of the sales force. Hence various sales promotion methods are built
around these three target groups. Further, in terms of the impact desired, the
variety of sales promotion schemes offered are grouped into two categories:
one, aimed at producing immediate impact, and the other delayed impact i.e. carrying
on the impact over a period. Immediate impact schemes are those schemes where
the consumer, dealer or salesperson gets the incentive on first contact,
purchase or on performing a one-time act.
On the other hand, under the delayed impact schemes, the consumer,
dealer or sales force is called upon to comply with the scheme over a period of
time before receiving the full benefit of the scheme. Price discounts, free samples
of large quantity packs are the popular examples of immediate impact schemes,
whereas coupons, trading stamps, and contests are example of delayed impact
category of sales promotion schemes. Table 2 presents the variety of sales
promotion schemes directed at the consumer, dealer and sales force levels
according to their grouping under immediate impact or delayed impact
categories.
The meaning and objectives of these schemes are given in Table 3.
Table 2: Sales Promotion
Table 3:
Though ideal for consumer goods, sales
promotion is also used for promoting industrial goods. The difference in the
use lies in the types of schemes offered, and in the frequency of their offer.
Sales promotion schemes offered to industrial customers, besides the usual
gifts, price-off coupons and contests, include product demonstration, training
to customer staff, offer of interest-free installment payment plan, ready and regular
availability of repairs and spares, and posting of trained staff to assist/supervise
in the working of the equipment in the client’s premises, at the manufacturer’s
cost.
The sales promotion schemes offered at the level of industrial
distributors are: provision of extended credit and provision of specialized
sales/technical staff at the manufacturer’s cost, besides the usual cooperative
advertising and sales promotion, gifts, and organization of distributors’
contests. The sales promotion schemes popularly used to motivate the industrial
sales force are: prizes and awards on special achievements, sales contests, new
accounts contests and prompt service awards.
3.6 Towards a Promotional Strategy
After gaining an understanding of the concepts, issues and
decision areas relating to four methods of promotion – advertising, publicity, personal
selling and sales promotion, let us recall the need for determining the
promotion mix (discussed earlier and make few observations concerning the
formulation of a promotional strategy. You would recall that promotion
constitutes one of the important elements of the marketing mix of a firm. Each
firm has a need to perform its promotion (marketing communication) function
effectively. Further, each of the four promotion methods has its own unique
place in the marketing communications mix of a firm.
The question facing marketers, therefore, is not which promotion
method to use to meet today’s complex marketing tasks. Rather, the real
question is which promotion method should be emphasised, how intensively it
should be used, and how it can be integrated with the other promotional
methods. Decisions on determination of the promotion mix take us back to the promotion
objectives which must emanate from marketing objectives of the firm.
A promotional strategy aims at accomplishing the promotion objectives
in the allocated funds and within a scheduled period of time. Promotional
objectives, generally speaking, relate to sales and the marketing communication
tasks required to be performed as per the needs of the product market scenario.
Expressed in specific measurable terms, these can be put as: increasing sales,
improving market share, creating product awareness and comprehension,
developing a positive attitude of the public towards the product, building a
favorable image of the product, or gaining competitive advantage. In this
contest, Leonard M. Lodish suggests ‘vaguely right’ criteria, the relevant part
of which is as follows:
The extent of
emphasis to be placed on the different promotion methods is determined by several
variables. First, it is dependent on the promotional objectives, and next, on
the characteristics of the target public, their psychology, and the allocated
funds. For example, a marketer of consumer durables in a metropolitan city like
Lagos may use different means like advertising to create awareness and build comprehension.
It would also require publicity which could be through press release on the
contest technology backing his product.
Sales promotion through demonstration, P.O.P. and offer of introductory
price to encourage intentions would also be used and, definitely, personal selling
to overcome objections, offer conviction and precipitate purchase action would
complete the promotion picture. Further, as revealed by Kenouth G. Nardy, for
achieving the objectives of, for example, loading the consumer with larger
supplies, it can see that it is required that all the methods of promotion be
approached simultaneously in terms of objectives to be achieved. Attaining synergistic
advantage arising out of the use of different promotional methods is the
hallmark of an effective promotional strategy.
4.0 CONCLUSION
Promotion is an
important marketing function of each firm. And rare will be a firm which makes
use of only one promotional method. The commonality in the ultimate goal of all
the promotional methods apart, their limited suitability in influencing only a
specific part of the consumer adoption process calls for the need to use the
promotional mix in an integrative manner.
Given the complexities in the management of the promotion function
and its vulnerability to failure, it is desired that the function be managed
professionally. In this note, we discussed the nature, role, types and the
planning process involved in the personal selling and sales promotion methods
as promotional tools.
5.0 SUMMARY In this note,
we discussed the nature, role, types and the planning process involved in
personal selling and sales promotion methods of promotion. Personal selling is
a direct person-to-person selling and promotion method. The specific role and
goals of personal selling vary from firm to firm depending upon the nature of
goods marketed, distribution system used, and the sales strategy adopted by a
firm. The changing market environment calls upon the sales force to transform
itself in order to perform a more creative role.
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