Sales Incentive

The Duties of a Retail Salesperson
Retail salespeople work in diverse types of retail enterprises helping customers select and buy consumer
products. They may work to sell or rent products and merchandise ranging from books to automobiles in specialty
stores. They may work in specific departments of large department stores, but in the small owner-managed store,
the retail salesperson is responsible for overall supervision and sales of products to customers. The basic duties of
a retail salesperson are:
Staying up-to-date regarding product knowledge
Selling products through guidance and persuasion
Securing consumer satisfaction
In addition to these three basic duties, specific related duties in a retail sales ob may include:
!andling cash and maintaining the cash register
Sorting coupons, e"change vouchers, and other items related to sales and sales promotions
#arrying cash and depositing it at a financial institution
$epending on the type of store the retail salesperson works for, general activities may include:
%reeting customers
!elping customers identify their re&uirements
'romoting products and partaking in sales-promotion campaigns
(dvising customers on the use, utility, and maintenance of products
(nswering customers) &uestions regarding the store and its products
'rocessing financial transactions
!elping customers who want to return and e"change products
(rranging for delivery of purchased products and wrapping products in packaging when needed
*egotiating on-the-spot pricing of products to clinch deals
Supervising, maintaining, and ordering supplies
(rranging merchandise on store shelves and in display areas
The Skills of a Retail Salesperson
To be successful, retail salespeople need the following skills and &ualities:
'resentable appearance and cheerful personality
+"cellent communication skills
(wareness of current trends, fashions, and consumer tastes
'atience, tact, and courtesy
(bility to handle work pressure
(bility to negotiate and persuade
(bility to make calculations &uickly
The duties and responsibilities of a sales person are as follows:
- (ssist the customers in selecting products
- (nswer their &ueries about the products or the store in general
- ,eep a check of inventory
- Sales of goods
- Report to the Store In charge
- -a"imi.e sales and profitability of the store.
- -aintaining store standards by keeping it clean
The duties of a salesperson vary depending on the type of sales job.
Interestingly, the actual words related to the selling part of the sales ob are often found &uite far down the )list of
duties) in the ob description/ This may work in some retail-type sales positions, however, when you are talking
about big ticket items0 or volume selling0 the ob description must start and end with ob duties that relate to
actually being able to S+11 a product or service to a prospect.
To find a salesperson that can start the sales process by opening up good communication with the prospect to find
out what they actually want and need0 present well0 handle the variety of customer obections0 and then closes the
sale: is a 2+R3 valuable person to any organi.ation. Salespeople are not 4born that way4 but they do have certain
attributes that make them successful. 5eing goal oriented and persistent are two of those attributes.
6f course you can)t put that in the duties of a salesperson0 but as a manager, if you mire the sales professional in
non-sales related work, like taking inventory, or a lot of administrative duties, you may be mistaking 4make work4
for valuable work.
The real ob duties of any salesperson are to )prospect for clients), whether they walk into a store, or the
salesperson has to go out and get find prospective buyers. *e"t to get into %66$ communication with the
potential customer. The attributes you are looking for is that the salesperson is willing to communicate and can do
it with ease. (s part of this communicative process, the ne"t step is to understand what the customer is looking
for.
This can be as small a thing as finding out what color dress a woman wants to a very big issue when it comes to
selling services, such as -arketing Service #ontracts0 7ebsite $evelopment0 %roup Insurance Sales0 maor
#omputer !ardware Installations0 and so on. To not understand your customers business needs and wants can
be a fatal flaw.
It)s also important that the salesperson can )&ualify) their prospect. The potential customer that enters the Rolls
Royce showroom may love the cars, but in this type of situation, )&ualifying) is a very important step.
8ob duties for a salesperson must include the ability to )present) the product or service. ,nowing the product well
is important - or in the case of highly technical sales - bringing the appropriate technical e"pert along who knows
the product inside and out is e"tremely smart tactically. 6ne way or another, a great salesperson must be able to
)present) and if he9she has done the first steps thoroughly, then the presentation will be such that it will give the
prospect everything that he wants and needs.
If the salesperson never found out this crucial information, the presentation will miss the mark and the potential
client is sure to have little to say e"cept that he)ll 4think about it4 for now. !owever, if your client begins to ask
&uestions and for clarification throughout the presentation, you know that you have hit their interest level.
The 4art of friendly persuasion4 sounds very complicated. !owever, if someone presents to you what you
personally :or corporately; actually need and want, then it will be a lot easier to )persuade) you to be interested,
won)t it< So, one of the attributes you want in a salesperson is that they can listen actively to what the client is
saying and if the client is not forthcoming, the salesperson should be able to ask enough open-ended &uestions in
order to get the client to tell him the needed information. This is difficult to state as a ob duty of a salesperson, but
it can be listed in the skills re&uired.
5ut then we come to 4the bottom line40 closing the sale and dealing with the possibility of the 4dreaded obections4.
!ere is where a professional salesperson shines and knows what they are doing. !ere is where the attributes of
being goal oriented0 and particularly that of being persistent, play a big role. This is not to say we are talking about
the pushy, irritating sales-bore, who won)t take no for an answer, but really has nothing else to offer. *o, we)re
talking about a skill. #ourteous, tactful, and skilled handling of obections and customer concerns is an essential
part of good salesmanship. !andling obections is always part of a salespersons ob duties. This cannot be up to
the manager, although certainly others can assist the salesperson, in speciali.ed situations.
+T!I#(1 ISS=+S I* S+11I*%
I; I*TR6$=#TI6*
+thics in business is act of adhering to fair deal in the transactions, voluntarily, the mentality of adhering to fair
deal which is not because of the fear of controlling authorities but arising out of the interest of well being of
humanity as a whole
+"pectation on how 6ther parties should behave with the #ompany, in the same manner, the #ompany should
behave with the 6ther parties in business dealings, is ethics.
for e"ample, when the #ompany e"pects that the #onsumer should not cheat them in the same way it should not
cheat the #onsumer.
This concept brings harmony between all the sectors and ensures healthy growth of all the sectors. The necessity
for policing does not arise and the attitude of e"ploitation among the parties involved in business dealings also
does not arise
-ost of the companies perform the -arketing activity without sacrificing on ethics that is e"pected out of them
If companies follow ethical practices in all its business activities : which includes selling activity ; the need for
bringing stringent policies by the law enforcement authorities will get reduced considerably
5ut unscrupulous #ompanies follow unethical practices while selling their products 9 services to the consumers
.
6f course law enforcement e"ists to protect the above mentioned parties from indulging in un ethical practices. In
spite of that, some greedy companies get involved into such bad practices till they are caught by the authorities
5ut some business people argue that in business there is nothing like ethics. This may me true for short time 9 one
time business operators and they could be e&uated to cheaters. 5ut companies which want to survive and grow in
the long run with accumulation of goodwill, follows ethical practices.
In this article the author is restricting his discussion only to the e"tent of ethical issues related to the dealings
which take place during the selling function and not discussing on the dealings of other functions of business : vi. ;
'roduction , >inance, !uman Resource $evelopment, etc
The author has listed some of the un ethical practices being practiced by unscrupulous companies.
The purpose of coming out with this list by the author is to educate the altruist on un ethical practices being
followed by unscrupulous companies in their business deals which is e"pected to throw light on protection of
human beings
(lso this list may help the young budding managers to create awareness on the possible un ethical practices that
their competitors : unscrupulous companies ; may adopt to capture the market share for which they should e&uip
themselves to fight against and win in the race
6f course it is the responsibility of the -anagement professionals and business community in not allowing
companies to e"ist which are indulging in such un ethical practices in business
#onsumer >orums established protect the consumers interest. The industry associations protect the industries
interest. In spite of all these unscrupulous companies 9 customers practice un ethical ways to earn money. !ence
it is the responsibility of the individuals to take care from not getting cheated
II; =* +T!I#(1 'R(#TI#+S >61167+$ 53 =*S#R='=16=S #6-'(*I+S
?; over 9 under invoicing affecting the %overnment@s revenue
A; selling harmful products causing damage to the environment and people
B; degrading competitor@s product by misinterpreting it, affecting their sales
C; under pricing the product affecting the financial status of the company of
Stakeholders
D; selling sub standard &uality products as &uality products, affecting the sales of the company, making the unit
sick and creating a situation of closing the unit
E; selling less &uantity of the product than claimed cheating the consumer
F; making false claim with the insurance companies thus cheating the service providers
G; selling directly or indirectly the product in the Sole selling agent territory
H; using substances which affects the neighbor when the consumer uses the product
?I; motivating the 'robable customer : suspect ; who is not a 'otential #ustomer : person with capacity to buy ; is
un ethical. This may indirectly make the person to mobili.e the funds re&uired like : accepting bribe in the office,
borrowing loan more than the repaying capacity, etc ;
??; hiding the truth of information about the product to the buyer
?A; applying pressure on the customer who is not interested in the product in the name of aggressive selling
?B; selling inferior goods claiming as superior &uality goods
?C; selling the product at very high price compared to its cost : production cost and distribution cost ;
?D; making false claim on the benefits of the product e"ploiting the ignorance of the customer
?E; selling the repaired 9 reconditioned product as new and selling at the price of new product : in bearings
business ;
?F; selling the product at higher price than normal price to the ignorant customer : in computer software business ;
?G; 'ricing the product for a particular &uantity but selling less &uantity for the &uoted price
?H; Retailers not passing on the frees, offers, etc to the customers given by the company
AI; *ot providing the (fter Sales Service as promised
A?; +"ploiting the physically challenged customer to the advantage of the seller like selling particular color saree
as a different color to sell the product to the color blind customer
AA; $uplicating the brand : packing the product like popular brand packaging ;
AB; -aking the customer an addict by using ingredients which is harmful to the user
AC; Selling the product on credit to the customer by providing credit above the e"tent of his repaying capacity
AD; =nscrupulous companies with huge money power buys competitors products from the open market and stocks
it in their premise making artificial scarcity
of the brand of the product
AE; making false complaints in the court of law through their persons ust to create problem
AF; misleading the consumers by making use of the sentiments of the consumers
AG; uses third party pressure 9 recommendation to sell the product
AH; sellers sell the product by bribing, giving gifts, etc
BI; by showing forged testimonials to the customer
B?; indirectly damaging the company@s product 9 components thereby increasing the demand for replacement
BA; encouraging the mechanics 9 service stations to replace the product with new components than repairing the
old components by providing commissions which will be more than labour charges
BB; over invoicing the product and using the additional income for bribing
BC; while e"porting the product over invoicing to avail more e"port incentives like cash subsidy, replenishment
license, etc
BD; selling the product without invoicing avoiding ta"es
III; #6*#1=SI6*
It will be very difficult for any country to police the companies not allowing them to cheat the other party. 6nly the
business community should believe in business in an ethical way. (ll the other parties dealing with business
community like %overnment, people, consumers, banks, employees, suppliers and others should also follow ethics
when they deal with the company.
Importance of salesmanship
Salesmanship is an art of influencing another person for the object of persuading him to buy specific product. It may be
regarded as the process of winning the confidence of consumer. According to Whitehead. t is a method of arriving at a
common point of view with the prospect in regard to the desirability of some article, service or idea. Salesmanship may
also refer to convincing a customer by certain techniue and he is really persuaded for buying the particular product.
Importance of Salesman Ship
!. Salesmanship helps to create demand for new products or new brands. It influences to change in patronage
from one source of supply to another which results concentration of purchases of specific product.
". As it wins the buyer#s confidence so it helps to ma$e regular and permanent customers.
%. &he person who is engaged in convincing the public desirability of a specific product is called salesman. 'e
informs the customers about the usefulness of commodity with a view to including him to buy the goods.
(. 'e establishes the goods will of firm in the mar$et. So the sales volume may easily be increased.
). 'e constantly observes the fashion, taste, li$e and disli$e of customers and informs the producer about their
choice.
*. 'e helps to establish close relationship between the manufacturer and consumer.
d i s t r i b u t i o n - i n t r o d u c t i o n
Distribution (or "Place") is the fourth traditional element of the marketing mix. The other three are Product, Price and
Promotion.
The Nature of Distribution Channels
Most businesses use third parties or intermediaries to bring their products to market. They try to forge a "distribution
channel" hich can be defined as
"all the organisations through which a product must pass between its point of production and consumption"
!hy does a business gi"e the #ob of selling its products to intermediaries$ %fter all, using intermediaries means gi"ing up
some control o"er ho products are sold and ho they are sold to.
The anser lies in efficiency of distribution costs. &ntermediaries are specialists in selling. They ha"e the contacts,
experience and scale of operation hich means that greater sales can be achie"ed than if the producing business tried run
a sales operation itself.
Functions of a Distribution Channel
The main function of a distribution channel is to pro"ide a link beteen production and consumption. 'rganisations that
form any particular distribution channel perform many key functions(
Information )athering and distributing market research and intelligence * important for marketing
planning
Promotion De"eloping and spreading communications about offers
Contact +inding and communicating ith prospecti"e buyers
Matching %d#usting the offer to fit a buyer,s needs, including grading, assembling and packaging
Negotiation -eaching agreement on price and other terms of the offer
Physical distribution Transporting and storing goods
Financing %c.uiring and using funds to co"er the costs of the distribution channel
Risk taking %ssuming some commercial risks by operating the channel (e.g. holding stock)
%ll of the abo"e functions need to be undertaken in any market. The .uestion is * ho performs them and ho many le"els
there need to be in the distribution channel in order to make it cost effecti"e.
Numbers of Distribution Channel Leels
/ach layer of marketing intermediaries that performs some ork in bringing the product to its final buyer is a "channel
le"el". The figure belo shos some examples of channel le"els for consumer marketing channels(
Importance of Distribution Channels
(s noted, distribution channels often re&uire the assistance of others in order for the marketer to reach
its target market. 5ut why e"actly does a company need others to help with the distribution of their
product< 7ouldn@t a company that handles its own distribution functions be in a better position to
e"ercise control over product sales and potentially earn higher profits< (lso, doesn@t the Internet make it
much easier to distribute products thus lessening the need for others to be involved in selling a
company@s product<
7hile on the surface it may seem to make sense for a company to operate its own distribution channel
:i.e., handling all aspects of distribution; there are many factors preventing companies from doing so.
7hile companies can do without the assistance of certain channel members, for many marketers some
level of channel partnership is needed. >or e"ample, marketers who are successful without utili.ing
resellers to sell their product :e.g., $ell #omputers sells mostly through the Internet and not in retail
stores; may still need assistance with certain parts of the distribution process :e.g., $ell uses parcel post
shippers such as >ed+" and ='S;. In $ell@s case creating their own transportation system makes little
sense given how large such a system would need to be in order to service $ell@s customer base. Thus,
by using shipping companies $ell is taking advantage of the benefits these services offer to $ell and to
$ell@s customers.
7hen choosing a distribution strategy a marketer must determine what value a channel member adds to
the firm@s products. Remember, as we discussed in the 'roduct $ecisions Tutorial, customers assess a
product@s value by looking at many factors including those that surround the product :i.e., augmented
product;. Several surrounding features can be directly influenced by channel members, such as
customer service, delivery, and availability. #onse&uently, for the marketer selecting a channel partner
involves a value analysis in the same way customers make purchase decisions. That is, the marketer
must assess the benefits received from utili.ing a channel partner versus the cost incurred for using the
services.
Benefits ffered by Channel !embers
#ost Savings in Speciali.ation J -embers of the distribution channel are specialists in what they
do and can often perform tasks better and at lower cost than companies who do not have
distribution e"perience. -arketers attempting to handle too many aspects of distribution may end
up e"hausting company resources as they learn how to distribute, resulting in the company being
Ka ack of all trades but master of none.L
Reduce +"change Time J *ot only are channel members able to reduce distribution costs by
being e"perienced at what they do, they often perform their ob more rapidly resulting in faster
product delivery. >or instance, consider what would happen if a grocery store received direct
shipment from +2+R3 manufacturer that sells products in the store. This delivery system would
be chaotic as hundreds of trucks line up each day to make deliveries, many of which would
consist of only a few bo"es. 6n a busy day a truck may sit for hours waiting for space so they can
unload their products. Instead, a better distribution scheme may have the grocery store
purchasing its supplies from a grocery wholesaler that has its own warehouse for handling
simultaneous shipments from a large number of suppliers. The wholesaler will distributes to the
store in the &uantities the store needs, on a schedule that works for the store, and often in a single
truck, all of which speeds up the time it takes to get the product on the store@s shelves.
#ustomers 7ant to #onveniently Shop for 2ariety J -arketers have to understand what
customers want in their shopping e"perience. Referring back to our grocery store e"ample,
consider a world without grocery stores and instead each marketer of grocery products sells
through their own stores. (s it is now, shopping is time consuming, but consider what would
happen if customers had to visit multiple retailers each week to satisfy their grocery needs. !ence,
resellers within the channel of distribution serve two very important needs: ?; they give customers
the products they want by purchasing from many suppliers :termed accumulating and assortment
services;, and A; they make it convenient to purchase by making products available in single
location.
Resellers Sell Smaller Muantities J *ot only do resellers allow customers to purchase products
from a variety of suppliers, they also allow customers to purchase in &uantities that work for them.
Suppliers though like to ship products they produce in large &uantities since this is more cost
effective than shipping smaller amounts. >or instance, consider what it costs to drive a truck a
long distance. In terms of operational e"penses for the truck :e.g., fuel, truck driver@s cost; let@s
assume it costs :=S; N?,III to go from point ( to point 5. 3et in most cases, with the e"ception of
a little decrease in fuel efficiency, it does not cost that much more to drive the truck whether it is
filled with ?III bo"es containing the product or whether it only has ?II bo"es. 5ut when
transportation costs are considered on a per product basis :N? per bo" vs. N?I per bo"; the cost is
much less for a full truck. The ability of intermediaries to purchase large &uantities but to resell
them in smaller &uantities :referred to as bulk breaking; not only makes these products available
to those wanting smaller &uantities but the reseller is able to pass along to their customers a
significant portion of the cost savings gained by purchasing in large volume.
#reate Sales J Resellers are at the front line when it comes to creating demand for the marketer@s
product. In some cases resellers perform an active selling role using persuasive techni&ues to
encourage customers to purchase a marketer@s product. In other cases they encourage sales of
the product through their own advertising efforts and using other promotional means such as
special product displays.
6ffer >inancial Support J Resellers often provide programs that enable customers to more easily
purchase products by offering financial programs that ease payment re&uirements. These
programs include allowing customers to: purchase on credit0 purchase using a payment plan0
delay the start of payments0 and allowing trade-in or e"change options.
'rovide Information J #ompanies utili.ing resellers for selling their products depend on
distributors to provide information that can help improve the product. !igh-level intermediaries
may offer their suppliers real-time access to sales data including information showing how
products are selling by such characteristics as geographic location, type of customer, and product
location :e.g., where located within a store, where found on a website;. If high-level information is
not available, marketers can often count on resellers to provide feedback as to how customers are
responding to products. This feedback can occur either through surveys or interviews with
reseller@s employees or by re&uesting the reseller allow the marketer to survey customers.
Costs of "tili#ing Channel !embers
1oss of Revenue J Resellers are not likely to offer services to a marketer unless they see financial
gain in doing so. They obtain payment for their services as either direct payment :e.g., marketer
pays for shipping costs; or, in the case of resellers, by charging their customers more than what
they paid the marketer for ac&uiring the product :termed markup;. >or the latter, marketers have a
good idea of what the final customer will pay for their product which means the marketer must
charge less when selling the product to resellers. In these situations marketers are not reaping the
full sale price by using resellers, which they may be able to do if they sold directly to the customer.
1oss of #ommunication #ontrol J -arketers not only give up revenue when using resellers, they
may also give up control of the message being conveyed to customers. If the reseller engages in
communication activities, such as personal selling in order to get customers to purchase the
product, the marketer is no longer controlling what is being said about the product. This can lead
to miscommunication problems with customers, especially if the reseller embellishes the benefits
the product provides to the customer. 7hile marketers can influence what is being said by training
reseller@s salespeople, they lack ultimate control of the message.
1oss of 'roduct Importance J 6nce a product is out of the marketer@s hands the importance of
that product is left up to channel members. If there are pressing issues in the channel, such as
transportation problems, or if a competitor is using promotional incentives in an effort to push their
product through resellers, the marketer@s product may not get the attention the marketer feels it
should receive.
d i s t r i b u t i o n - t y ! e s o f d i s t r i b u t i o n i n t e r me d i a r y
Introduction
There is a "ariety of intermediaries that may get in"ol"ed before a product gets from the original producer to the final
user. These are described briefly belo(
Retailers
-etailers operate outlets that trade directly ith household customers. -etailers can be classified in se"eral ays(
0 Type of goods being sold( e.g. clothes, grocery, furniture)
0 Type of ser"ice (e.g. self*ser"ice, counter*ser"ice)
0 1i2e (e.g. corner shop3 superstore)
0 'nership (e.g. pri"ately*oned independent3 public*.uoted retail group
0 4ocation (e.g. rural, city*centre, out*of*ton)
0 5rand (e.g. nationide retail brands3 local one*shop name)
"holesalers
!holesalers stock a range of products from se"eral producers. The role of the holesaler is to sell onto retailers.
!holesalers usually specialise in particular products.
Distributors and dealers
Distributors or dealers ha"e a similar role to holesalers 6 that of taking products from producers and selling them on.
7oe"er, they often sell onto the end customer rather than a retailer. They also usually ha"e a much narroer product
range. Distributors and dealers are often in"ol"ed in pro"iding after*sales ser"ice.
Franchises
+ranchises are independent businesses that operate a branded product (usually a ser"ice) in exchange for a licence fee and
a share of sales.
#gents
%gents sell the products and ser"ices of producers in return for a commission (a percentage of the sales re"enues)
A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a
product and its title from production to consumption.
Bucklin - Theory of Distribution Channel Structure (!""#
Another element of $eil %.Borden&s 'arketin( 'i) is Place. *lace is also known as channel+ distribution+ or
intermediary. ,t is the mechanism throu(h which (oods and-or services are moved from the manufacturer- service
provider to the user or consumer.
There are six basic 'channel' decisions:
Do we use direct or indirect channels. (e.(. &direct& to a consumer+ &indirect& via a wholesaler#.
Sin(le or multiple channels.
Cumulative len(th of the multiple channels.
Types of intermediary (see later#.
$umber of intermediaries at each level (e.(. how many retailers in Southern Spain#.
/hich companies as intermediaries to avoid &intrachannel conflict& (i.e. infi(htin( between local
distributors#.
Selection Consideration - how do we decide upon a distributor?
'arket se(ment - the distributor must be familiar with your tar(et consumer and se(ment.
Chan(es durin( the product life cycle - different channels can be e)ploited at different points in the *0C e.(.
1oldaway scooters are now available everywhere. 2nce they were sold via a few specific stores.
*roducer - distributor fit - ,s there a match between their polices+ strate(ies+ ima(e+ and yours. 0ook for
&syner(y&.
3ualification assessment - establish the e)perience and track record of your intermediary.
%ow much trainin( and support will your distributor re4uire.
Types of Channel Intermediaries.
There are many types of intermediaries such as wholesalers+ a(ents+ retailers+ the ,nternet+ overseas distributors+
direct marketin( (from manufacturer to user without an intermediary#+ and many others. The main modes of
distribution will be looked at in more detail.
. Channel Intermediaries - !holesalers
They break down &bulk& into smaller packa(es for resale by a retailer.
They buy from producers and resell to retailers. They take ownership or &title& to (oods whereas a(ents do
not (see below#.
They provide stora(e facilities. 1or e)ample+ cheese manufacturers seldom wait for their product to mature.
They sell on to a wholesaler that will store it and eventually resell to a retailer.
/holesalers offer reduce the physical contact cost between the producer and consumer e.(. customer service
costs+ or sales force costs.
A wholesaler will often take on the some of the marketin( responsibilities. 'any produce their own
brochures and use their own telesales operations.
". Channel Intermediaries - #$ents
A(ents are mainly used in international markets.
An a(ent will typically secure an order for a producer and will take a commission. They do not tend to take
title to the (oods. This means that capital is not tied up in (oods. %owever+ a &stockist a(ent& will hold
consi(nment stock (i.e. will store the stock+ but the title will remain with the producer. This approach is used
where (oods need to (et into a market soon after the order is placed e.(. foodstuffs#.
A(ents can be very e)pensive to train. They are difficult to keep control of due to the physical distances
involved. They are difficult to motivate.
%. Channel Intermediaries - &etailers
5etailers will have a much stron(er personal relationship with the consumer.
The retailer will hold several other brands and products. A consumer will e)pect to be e)posed to many
products.
5etailers will often offer credit to the customer e.(. electrical wholesalers+ or travel a(ents.
*roducts and services are promoted and merchandised by the retailer.
The retailer will (ive the final sellin( price to the product.
5etailers often have a stron( &brand& themselves e.(. 5oss and /all-'art in the 6SA+ and Alisuper+ 'odelo+
and 7umbo in *ortu(al.
'. Channel Intermediaries - Internet
The ,nternet has a (eo(raphically disperse market.
The main benefit of the ,nternet is that niche products reach a wider audience e.(. Scottish Salmon direct
from an ,nverness fishery.
There are low barriers low barriers to entry as set up costs are low.
6se e-commerce technolo(y (for payment+ shoppin( software+ etc#
There is a paradi(m shift in commerce and consumption which benefits distribution via the ,nternet
Types of Retail outlets
Department Stores
A department store is a set+up which offers wide range of products to the end+users under one roof. In a department store, the
consumers can get almost all the products they aspire to shop at one place only. ,epartment stores provide a wide range of
options to the consumers and thus fulfill all their shopping needs.
Merchandise:
-lectronic Appliances
Apparels
.ewellery
&oiletries
/osmetics
0ootwear
Sportswear
&oys
1oo$s
/,s, ,2,s
-3amples 4 Shoppers Stop, 5antaloon
Discount Stores
,iscount stores also offer a huge range of products to the end+users but at a discounted rate. &he discount stores generally offer a
limited range and the uality in certain cases might be a little inferior as compared to the department stores.
Wal+6art currently operates more than !%77 discount stores in 8nited States. In India 2ishal 6ega 6art comes under discount
store.
Merchandise:
Almost same as department store but at a cheaper price.
Supermarket
A retail store which generally sells food products and household items, properly placed and arranged in specific departments is
called a supermar$et. A supermar$et is an advanced form of the small grocery stores and caters to the household needs of the
consumer. &he various food products 9meat, vegetables, dairy products, juices etc: are all properly displayed at their respective
departments to catch the attention of the customers and for them to pic$ any merchandise depending on their choice and need.
Merchandise:
1a$ery products
/ereals
6eat 5roducts, 0ish products
1reads
6edicines
2egetables
0ruits
Soft drin$s
0ro;en 0ood
/anned .uices
Warehouse Stores
A retail format which sells limited stoc$ in bul$ at a discounted rate is called as warehouse store. Warehouse stores do not bother
much about the interiors of the store and the products are not properly displayed.
Mom and Pop Store (also called Kirana Store in India)
6om and 5op stores are the small stores run by individuals in the nearby locality to cater to daily needs of the consumers staying
in the vicinity. &hey offer selected items and are not at all organi;ed. &he si;e of the store would not be very big and depends on
the land available to the owner. &hey wouldn<t offer high+end products.
Merchandise:
-ggs
1read
Stationery
&oys
/igarettes
/ereals
5ulses
6edicines
Speciality Stores
As the name suggests, Speciality store would speciali;e in a particular product and would not sell anything else apart from the
specific range.Speciality stores sell only selective items of one particular brand to the consumers and primarily focus on high
customer satisfaction.
-3ample 4=ou will find only >eebo$ merchandise at >eebo$ store and nothing else, thus ma$ing it a speciality store. =ou can
never find Adidas shoes at a >eebo$ outlet.
Malls
6any retail stores operating at one place form a mall. A mall would consist of several retail outlets each selling their own
merchandise but at a common platform.
Tailers
?ow a days the customers have the option of shopping while sitting at their homes. &hey can place their order through internet,
pay with the help of debit or credit cards and the products are delivered at their homes only. 'owever, there are chances that the
products ordered might not reach in the same condition as they were ordered. &his $ind of shopping is convenient for those who
have a hectic schedule and are reluctant to go to retail outlets. In this $ind of shopping@ the transportation charges are borne by the
consumer itself.
-3ample 4 -1A=, >ediff Shopping, Ama;on
Dollar Stores
,ollar stores offer selected products at e3tremely low rates but here the prices are fi3ed.
-3ample 4 AA Store would offer all its merchandise at >s AA only. ?o further bargaining is entertained. 'owever the uality of the
product is always in doubt at the discount stores.
The folloing table describes the factors that influence the choice of distribution channel by a business(
Influence Comments
Market factors %n important market factor is $buyer behaiour$3 ho do buyer,s ant to purchase the product$ Do they
prefer to buy from retailers, locally, "ia mail order or perhaps o"er the &nternet$ %nother important
factor is buyer needs for product information, installation and ser"icing. !hich channels are best ser"ed
to pro"ide the customer ith the information they need before buying$ Does the product need specific
technical assistance either to install or ser"ice a product$ &ntermediaries are often best placed to pro"ide
ser"icing rather than the original producer * for example in the case of motor cars.
The illingness of channel intermediaries to market product is also a factor. -etailers in particular in"est
hea"ily in properties, shop fitting etc. They may decide not to support a particular product if it re.uires
too much in"estment (e.g. training, display e.uipment, arehousing).
%nother important factor is intermediary cost. &ntermediaries typically charge a $mark-u!$ or
$commission$ for participating in the channel. This might be deemed unacceptably high for the ultimate
producer business.

Producer factors % key .uestion is hether the producer ha"e the resources to perform the functions of the channel$ +or
example a producer may not ha"e the resources to recruit, train and e.uip a sales team. &f so, the only
option may be to use agents and8or other distributors.
Producers may also feel that they do not possess the customer*based skills to distribute their products.
Many channel intermediaries focus hea"ily on the customer interface as a ay of creating competiti"e
ad"antage and cementing the relationship ith their supplying producers.
%nother factor is the extent to hich producers ant to maintain control o"er ho, to hom and at hat
price a product is sold. &f a manufacturer sells "ia a retailer, they effecti"e lose control o"er the final
consumer price, since the retailer sets the price and any rele"ant discounts or promotional offers.
1imilarly, there is no guarantee for a producer that their product8(s) are actually been stocked by the
retailer. Direct distribution gi"es a producer much more control o"er these issues.

Product factors 4arge complex products are often supplied direct to customers (e.g. complex medical e.uipment sold to
hospitals). 5y contrast perishable products (such as fro2en food, meat, bread) re.uire relati"ely short
distribution channels * ideally suited to using intermediaries such as retailers.
Distribution Intensity
There are three broad options * intensi"e, selecti"e and exclusi"e distribution(
Intensive distribution aims to pro"ide saturation co"erage of the market by using all a"ailable outlets. +or many products,
total sales are directly linked to the number of outlets used (e.g. cigarettes, beer). &ntensi"e distribution is usually
re.uired here customers ha"e a range of acceptable brands to chose from. &n other ords, if one brand is not a"ailable, a
customer ill simply choose another.
Selective distribution in"ol"es a producer using a limited number of outlets in a geographical area to sell products. %n
ad"antage of this approach is that the producer can choose the most appropriate or best*performing outlets and focus
effort (e.g. training) on them. 1electi"e distribution orks best hen consumers are prepared to "shop around" * in other
ords * they ha"e a preference for a particular brand or price and ill search out the outlets that supply.
(actors #ffectin$ Choice of )istribution Channel- Part %
%. Product (actor
a# Si*es + wei$ht of the product , ,f the si8e+ wei(ht 9 price of the product is very lar(e+ then direct supply
should be there as it will lead to convenience 9 low transportation cost 9 there will be less chances of dama(e
durin( transportation. 1or e(. Bi( industrial products like boilers+ (rinders etc.
2n the other hand+ if si8e 9 wei(ht of product is not so bi(+ a lon( chain can be as in case of 1ast 'ovin(
Consumers :oods (1'C:#
b# -nit .alue , ,f the per unit value of product is less+ say for e(. salt+ su(ar+ wheat+ rice etc. then the
distribution channel may be lar(e as consumption of it is comparatively more. But+ if the unit price is very hi(h+ for
e(. (old+ silver+ then a smaller distribution channel is re4uired.
c# Stability of the product , ,f the product is of perishable in nature+ i.e. it becomes useless after a specific
period of time+ like milk+ butter+ cheese+ fish+ etc. then a small distribution channel is re4uired to ensure prompt
delivery+ but if the product is stable in nature like soaps+ shampoo etc+ then the distribution channel can be lon(.
d# Standard /0s Specific products , Some distributors only want to sell standard 9 famous products+ so if the
product is standard in nature+ manufacturer has to use these types of distributors or middlemen.
But+ if the product is specific one+ say ; en(ineerin( 9 medical books+ which are not kept by all book-sellers+ so in
that case+ these specific dealers on middlemen have to be chosen.
e# Technical nature of product , ,f the product is of technical nature then an effective after sales service is also
to be provided. So+ in this case+ either direct marketin( or marketin( throu(h authori8ed dealer should be used+ on
only then company can use the services of its services- en(ineers more effectively. 1or e(.+ in case of electronic
item T<=s and 5efri(erators+ outlet is authori8ed dealers+ so if after sales service is re4uired customers may contact
the dealer+ which passes it to the company for final service.
f# 1xpert of product line , The manufacturer has to decide that he should take the services of a wholesaler or
retailers or both and then accordin(ly decide to increase or decrease the product line. 1or e(.+ if the manufacturer is
manufacturin( soaps+ then he can increase the product line by incorporatin( shampoos also+ as the distribution
channel will be the same
?. #osts
A. %eographic dispersion of the market
B. Type of product e.g. 7hether it is comple", simple, new, perishable, heavy
C. #ompetition0 the choice of channel by rivals
D. 'rice elasticity of demand
E. 1egal restrictions e.g. 'rescription drugs
F. The company 0 si.e and services
G. Muantity to be delivered
H. 5udget available
?o. The market coverage re&uired: %eographical concentration of customers would re&uire shorter channels
(nonymous
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO..------------------------
-----------------
There are plenty of objections that a prospect can throw at you over the course of the sales cycle. Every time you think
youve heard them all and have the perfect responses prepared, your latest prospect will suddenly serve up a brand new
objection and youll be left stuttering over your answer... only to think of the perfect response ten minutes after you
leave.
Memorizing responses to specific objections is important, especially if you hear them all the time. ut coming up with a
few general responses can save you from a few unfortunate moments. !ou can easily prepare a general response for each
type of objection.
Money
These objections have something to do with the cost of your product or service. "t might be #" can get this cheaper
somewhere else,$ or #" dont want to spend money on non%essentials right now,$ or #&hy does it cost so much'$
Risk
(isk objections show that your prospect is worried about the future. They will sound like, #" dont want to have to deal
with maintenance,$ or #" dont know if it will work as well as what we already have,$ or #&hat if it breaks down at a critical
moment'$
Trust
"f you havent built sufficient rapport, the prospect might hesitate to buy from you. !oull hear things like #" dont know
anything about your company,$ or #My brother%in%law bought from you and had all kinds of problems,$ or #)ow do " know
youll deliver on time'$
Inertia
*ales trainer and e+pert *tephan *chiffman says that a salespersons biggest opposition is the status ,uo. "f youre up
against prospect inertia, youll hear objections like #" have one of those and it works -.,$ or #"m happy with my current
supplier,$ or #&hy should " buy one when "ve never needed one before'$
Time
These objections are usually delaying tactics. The prospect is interested, but not convinced enough to want to buy right
now. )e might say, #" want to think it over,$ or #" need to talk to my boss / wife / friend first,$ or #&hy dont you call me
in a month and well talk more'$
The ob2ections
. 0ack of perceived /alue in the product or service
>. 0ack of perceived ur$ency in purchasin( the offerin(
?. *erception of inferiority to a competitor or in-house offerin(
@. Internal political issue between parties- departments
A. 0ack of funds to purchase the offerin(
". Personal issue with the decision maker(s#
B. Initiati/e with an e)ternal party
C. *erception that Dit=s safer to do nothin(E
6bection-handling proces
This is an overall process to handle obections. See the obection-handling page for a list of methods for the detail
of handling obections.
$. %isten
Stop/ $o not try to ump in at the beginning - this may cause further obection. 7hen you interrupt them, you are
obecting to their obection. If you refuse to listen, then their ne"t steps may well be towards the door.
=se active listening methods, nodding and physically showing interest.
They are trying to tell you something that will help you sell to them, which is a gift from them to you. If you do not
listen, then their ne"t step may well be towards the door.
&. 'uestion
(s appropriate, ask some &uestions. This not only shows you are interested in them, but it also gives you more
information with which to make the sale. (s you &uestion them, watch carefully for body language that gives you
more information about what they are thinking and feeling.
Remember that this is not an interrogation, and that giving them the )third degree) will turn them off. So keep your
&uestions light and relevant.3ou might also tip the bucket at this time, asking them if there are any more concerns
:Pobections; that they have, and which, if you can resolve them, you might gain a close.
It is not always necessary to ask &uestions. 5e deliberate about what you are doing if you do.
(. Think
*ow before you dive into obection-handling, think/ 7hat methods will work best with them< Should you take a
direct and confrontational approach or should you use the soft-soap to finesse the situation< 6r maybe you should
put it off to another day :but only if you can be sure that you can return to the selling situation;.
Thinking is a good thing where you are adding a little pause into the proceedings, thus demonstrating how you are
taking their obection seriously.
). *andle
This stage may sometimes only be a few seconds after they obect or it may re&uire more time in the previous
three steps. *ow, when you are ready, use the obection-handling method that you believe will work best. 6r make
up your own. 3ou are under no obligation to try and force-fit a method where it is unlikely to work.
+. Check
>inally, check to find out whether your obection-handling worked/ (sk if you have answered their &uestion. (sk if
there are any more concerns. (s necessary, handle outstanding obections.
Then go for the close.
There are many types of obection. !ere are a few of the main ones. If you can classify how they obect then you
are on the first step to handling the obection.
,eed
They say that they do not need your product or service for some reason or another, or perhaps have a need that
you cannot satisfy.
+"amples
I have one of those already.
-y car works ust fine thank you.
I have no space for any more.
Sorry, I ust don)t want it.
-rice
The obections here are about the price of the product.
+"amples
!ow much<<
I have already spent my budget for the month.
3our competitors sell a better product for less money.
I could get it cheaper on the web.
I didn)t reali.e that service was not included.
.eatures
They obect to some element of what you are selling, whether it is aspects of a service or details of a
product.+"amples
I don)t like that style. It looks rather modern for me. It does not have the latest gadgets.
The guarantee is only si" months. It is far too big.
It is not good enough &uality.
Time
In this, the obection is around time, such as the person not being ready to buy.
+"amples
I don)t know. I need to think about it.
I won)t have the money until ne"t month.
I am moving ne"t year, maybe then.
I need to talk to my manager first.
Source
They &uestion the source of the product, often its credibility. This may include &uestions about you, too.
+"amples
I do not know you from (dam. I prefer to buy from people I know.
I saw a report about how badly your company treated its workers
!ow will I know if you are around to service this in five years<
7hen a sales person demonstrates a feature, talks about a benefit or uses a sales closing techni&ue, their
customer may well respond in the negative sense, giving e"cuses or otherwise heading away from the sale. The
response to this is to handle these obections. This is )obection-handling).
bjection/handling process0 The overall process for handling objections
Tip the bucket: (sk for all remaining obections.
Types of obection: #ommon categories of obection.
6bection-handling techni&ues and methods
5oomerang: 5ouncing back what they give you.
6bection #hunking: Taking a higher or lower viewpoint.
#onditional #lose: -ake closure a condition for resolving their obection.
#uriosity: $on)t be sad, be curious.
$eflection: (void responding to obection, ust letting it pass.
>eel, felt, found: ( classic way of moving them.
!umor: Respond with humor rather than frustration.
8ustification: Say how reasonable the obection is.
1((R#: 1isten, (cknowledge, (ssess, Respond, #onfirm.
1(IR: 1isten, (cknowledge, Identify obection, Reverse it.
6bection 7riting: 7rite down and cross out obections.
're-empting: !andle them before they happen.
'ushback: 6bect to their obection.
Reframing: #hange their cognitive frame.
Renaming: #hange the words to change the meaning.
Reprioriti.e: So ones you can)t handle are lower.
7riting: 7rite down obections then cross them off as you handle them.
Negotiation and the Relationship Sales Cycle

o Trying to reach an agreement based on mutual interest
o Use a win-win approach
o Negotiation takes place throughout each step or stage of the selling process
ATTITU! T"#AR "$%!CTI"NS
"b&ection An ob&ection is anything the prospect says or does that is an obstacle to smooth closing'
#!(C")!
"$%!CTI"NS*
o (earn to Accept "b&ections as a Challenge #hich+ #hen ,andled Correctly+ #ill benefit you and -our .rospect'
o If -ou /ear "b&ections -ou #ill /umble -our Response "ften Causing -ou to /ail'
o .rospects that buy ha0e 123 more ob&ections'
#,- .R"S.!CTS "$%!CT
.sychological
reasons
o islike decision making
o .refer old habits
o Reluctance to gi0e up something old for something new
o Unpleasant past associations with you or your company
o Resistance to domination
o .ercei0ed threat to self image
(ogical
Reasons
o All or part of the presentation was misunderstood
o .rospect is not con0inced
o ,idden reason 4stall5
6uestion7 #,!N " .R"S.!CTS "$%!CT8
Answer7 Any Time uring -our Sales Call - /rom introduction to close'
T-.!S "/ "$%!CTI"NS
Stopper "b&ection - no solution can be found
No
Need
o This is widely used because it gets rid of the salesperson'
o It is tricky because it also includes a hidden ob&ection and9or a stall'
No
)oney
o !ncompasses se0eral forms of economic e:cuses
o It is simple for the buyer to say'
#hen buyer asks for the price
Say that it is risky to discuss the product;s price until it can be compared to the
product;s benefits'
----"R----
6uote the price and go right on selling'
"nce you con0ey the benefits+ price becomes a secondary factor which usually can be dealt with successfully'
The
.rice 9 <alue
/ormula'
o Used to determine if a prospect is or is not con0inced the
price is too high'
o .rice90alue = cost
Cost comparison of what is recei0ed to money paid'
<alue
what the prospect sees the product doing for
them'
No
Authority
o Usually a stall
o Screen for decision making authority early
o -ou must determine if the
statement is truth or it is a smoke
screen designed to get rid of you'
o "ne of the toughest stalls to
o0ercome arises when selling a new
consumer product'
Searcher "b&ection - A <alid Re>uest for Information
?I am not interested?
?I don;t ha0e any money for this?
?#e are satisfied with what we ha0e now?
?I really like the competitor;s product?
Searcher "b&ection - A <alid Condition of Sale
Sometimes prospects may raise an ob&ection that turns into a condition of the sale'
?I don;t like the color+ si@e+ etc?
?I need it by a ne:t week?
In0alid "b&ections
,idden ob&ection
o .rospect who asks tri0ial+ unimportant >uestions
o .rospect conceals feelings beneath a 0eil of silence'
o The salesperson must ask >uestions and carefully listen in order to smoke out the prospect;s real ob&ection'
Stall
?.ut "ff?
o ?I;ll think it o0er'''?A
o ?I;ll be ready to buy on your ne:t 0isit?
2 "b&ections from &ustsell'com
B lack of percei0ed 0alue in the product or ser0ice
C lack of percei0ed urgency in purchasing the offering
D perception of an inferiority to a competiti0e offering
E internal political issue between parties9 departments
1 lack of funds to purchase the offering
F personal issue with the decision maker4s5
G corporate initiati0e with an e:ternal party
2 ?it;s safer to do nothing? perception
Classify the "b&ection

Si: $asic
Categories
of "b&ections
"ther
Classifications
Some Heneral Tips for ,andling "b&ections
o Ieep the buyers attitude toward your product positi0e'
o (et buyers know you are on their side
o ,elp with ob&ections'
o If you get no response+ gi0e a multiple choice >uestion to display an attitude of genuine caring'
o -our goal is to help your prospect realistically e:amine reasons for and against buying now'
o The main thing is not to be satisfied with a false ob&ection or stall'
o $ring out any or all of your main selling benefits now and keep on selling*
Strategies for eciding when to Answer "b&ections
Anticipate
and
/orestall "b&ections
o incorporate ob&ections and the answers in the presentation
o -ou should be certain that the ob&ection will arise
o .re0ents a confrontation and communicates ob&ecti0ity
.ostpone
the
Answer
o Hi0es you time to present more benefits
o Allows you to maintain control
o Hi0es you time to think about the response
o Acknowledge the ob&ection
o !mploy empathy
o .romise to get back to the >uestion
o #rite it down
Answer Immediately
.ostponement of
ob&ections
may result in7
o The prospect not listening'
o The prospect feeling that you are hiding something'
o The appearance that you also feel it;s a problem'
o The appearance that you;re not able to answer because you do not know the answer'
o The appearance that you are not interested in the prospects opinion'
o The appearance that you are not sympathetic
o Not
Answer
an !:cuse
o Serious ob&ection will be repeated
o Not answering suggests that the e:cuse is not truly rele0ant
isagree
#ithout
$eing
isagreeable
o Selling should be win-win
o on;t try to show up the prospect
o Challenge ideas without offending
Remo0e blame by prefacing answer' ?I ha0e not made myself clear''''''?
)ake a concession before taking e:ception7 ?-ou raise an e:cellent pointJ''?
o Add all new ob&ections to your database
o Share them with your cohorts
A Negotiating Strategy for ,andling $uyersK Concerns
4A Si:-Step .rocess5
(isten Carefully o ,ear the .rospect "ut
Confirm
-our Understanding
of the
"b&ection
o <alidate the .roblem
o Clarify and Classify
o Use confirmation >uestions
o Ask if there is anything else
o Try to distinguish between genuine ob&ections and e:cuses
Acknowledge their
.oint of <iew
o That is a logical >uestion
o Restate or rephrase in your own words
o Use words such as+ LI understand how you feelM
o .repare the prospect for your answer
o Select a specific
techni>ue
o $ase your decision on7
o The prospect;s beha0ioral style
o .hase of the inter0iew
o The prospect;s mood
o The number of times that this ob&ection came up
o The type of ob&ection
Answer the ob&ection o Confirm with the buyer that you ha0e answered the ob&ection
Attempt to Close o Continue the .resentation If -ou do Not Succeed
Specific Techni>ues for ,andling "b&ections
Answers $ased on Concrete !0idence
.roduct comparison7
o compare ad0antages and disad0antages
o #hen the prospect is mentally comparing the present product or a competing product with your
product+ you may make a complete comparison of the two
case history or testimonial o escribe the e:perience of a customer whose situation is similar to that of the prospect
emonstration
o "ne of the most con0incing ways to o0ercome buyer resistance and specific ob&ections'
o Sometimes a second demonstration is needed to o0ercome buyer skepticism'
Huarantees or warranty
o Remo0es resistance by reassuring that the purchase will not result in a loss'
o Huarantees must
be meaningful
pro0ide for recourse on the part of the customer
cost of delaying
o The prospect wants to wait a while before making a final decision'
o Use pencil and paper to show that delaying the purchase is e:pensi0e
Classic "b&ection ,andling Techni>ues
/eel
/elt
/ound
(et a Third .arty Answer'
o Answer it by referring to a third party and using that e:perience as your ?proof or testimony?'
o If the source is reliable or reputable this can be especially successful with the e:pert or skeptical prospect'
I understand how you feel
-our friend+ ,ugh %ass+ felt the same way
,ere is what he found'
Compensation
or
o Admit the ob&ection is 0alid
Strategies for eciding when to Answer "b&ections
Anticipate
and
/orestall "b&ections
o incorporate ob&ections and the answers in the presentation
o -ou should be certain that the ob&ection will arise
o .re0ents a confrontation and communicates ob&ecti0ity
.ostpone
the
Answer
o Hi0es you time to present more benefits
o Allows you to maintain control
o Hi0es you time to think about the response
o Acknowledge the ob&ection
o !mploy empathy
o .romise to get back to the >uestion
o #rite it down
Answer Immediately
.ostponement of
ob&ections
may result in7
o The prospect not listening'
o The prospect feeling that you are hiding something'
o The appearance that you also feel it;s a problem'
o The appearance that you;re not able to answer because you do not know the answer'
o The appearance that you are not interested in the prospects opinion'
o The appearance that you are not sympathetic
o Not
Answer
an !:cuse
o Serious ob&ection will be repeated
o Not answering suggests that the e:cuse is not truly rele0ant
isagree
#ithout
$eing
isagreeable
o Selling should be win-win
o on;t try to show up the prospect
o Challenge ideas without offending
Remo0e blame by prefacing answer' ?I ha0e not made myself clear''''''?
)ake a concession before taking e:ception7 ?-ou raise an e:cellent pointJ''?
o Add all new ob&ections to your database
o Share them with your cohorts
Counterbalance o escribe some counterbalancing benefit
Ask ?#hy8?
o Answer with a >uestion
o Rephrase the ob&ection
irect
enial
o Considered a high risk method of handling buyer resistance' Use it with care'
o If the buyer resistance is not 0alid+ there may be no other option than to refute it by pro0iding accurate information'
o !:ample7 If the >uality of the product is >uestioned+ meet the statement head on with whate0er proof seems
appropriate'
o $e firm in stating your beliefs and be sincere+ don;t be offensi0e'
Indirect
enial
o Acknowledge that the prospect is at least partially correct'
o It initially appears as agreement with the customer;s ob&ection but mo0es into denial of the fundamental issue'
o If done in a natural+ con0ersational way the salesperson will not offend the prospect'
o Rephrase or ha0e the prospect rephrase
o $lame yourself
o Hi0e the facts that answer the ob&ection
$oomerang
turn the ob&ection into a benefit
o .rospect7 ?I don;t
like the si@e?
o Seller7 ?The si@e is
e:actly the reason you should
buy it*?
Trial offer
o A trial offer lets prospect try product without obligation to buy'
o .opular with customers because they can get fully ac>uainted with a product without making a ma&or commitment'
2
!ffecti0e Strategies for Coping with .rice "b&ections
The meaning of a price ob&ection
o The prospect places insufficient 0alue on the product
o A competiti0e product is a better deal
o The prospect &ust wants to bargain
-"UR .RIC! IS T"" ,IH, -"UR .RIC! IS T"" ,IH,*
(earn to respond to this ob&ection'
It is ine0itable'
$uyers will ob&ect &ust to get a discount'
Inowledgeable buyers know that there is often a standard discount for which they >ualify
.rice ob&ections are an opportunity to sell the 0alue of the product or ser0ice'
The danger is to respond to the wrong price ob&ection'
?Tell me more? or ?!:plain?
Si: fundamental price perspecti0es7
.rice 0ersus
competition
o isco0er the differences between the competitor;s proposal and your proposal'
o The price is lower because
the product or ser0ice is less robust'
A time related ?special offer'?
.rice 0ersus
appro0ed budget
o #as it a budget+ or an e:pectation
o #as it based on old or unreliable data8
.rice 0ersus
buyer e:pectations
o #as the prospect told about a less e:pensi0e solution pro0ided to a friend8
!:plore the friend;s solution'
The buyer can then accept the other solution at a lower price
The buyer can then accept the higher price for the original solution'
.rice 0ersus
a process alternati0e
o -our price is being compared to a process alternati0e'
o $uying software may be compared to manual methods'
o There are often new benefits that are simply impossible with the manual method'
.rice 0ersus
a percentage of the product price 4for continuing ser0ices5
o )aintenance or support costs can be greater than the original cost'
o CN years ago hardware and software was more e:pensi0e than support'
o Today hadware and software costs are low' (abor for support is high'
o Support may be more comprehensi0e than in the past'
o Understand and communicate these changes to the prospect
.rice 0ersus
?do-it-yourself?
o enies the cost of labor of the participant
o enies the cost of e:tended time to implement'
o !:ample7 lawn care'
!0eryone can cut grass cheaper than hiring a ser0ice
/ew en&oy spending time on this chore'
?o it yourself? places less 0alue on your time
3
4
/i0e 6uestion Se>uence )ethod of "0ercoming "b&ections
"There must be some good reason why you're hesitating.
Do you mind if I ask what it is?"
"In addition to that, is there any other reason for not going ahead?"
-!
S
Ask what it is and Ho To 6C
N" Ho To 6D
<A(U! ANA(-SIS7
etermines the $est .roduct for the )oney'
o Comparison of your product;s features+ ad0antages+ and benefits to those of the product presently in use'
o Comparison of long range costs and sa0ings'
o !0aluation of the buyer;s present product - does it perform better than is re>uired8
o etermine if the buyer would benefit more from a higher-priced+ better performing product'
Types of <alue Analysis
True <alue
o Compare product costs to true 0alue'
o !stablish the 0alue of the product first so the buyer can intelligently compare the true worth of the product to its true monetary cost'
Reduce to the ridiculous
o Unit costs break price down
o Use the (owest Common enominator
o Inow basic >uantities
Return
on
in0estment
o Return-on-in0estment refers to an additional sum of money e:pected from an in0estment o0er and abo0e the original in0estment'
o !mphasi@e the percentage return that can be earned by purchasing your product'
#hen ealing with .rice Resistance
"
o Add 0alue with a cluster of satisfactions'
o .oint out the relationship between price and >uality'
o !:plain the difference between price and cost'
o !mploy the .resumption of !:clusi0ity
Stress your product;s e:clusi0e features
Identify e:tras that only come from you
Sell >uality+ e:clusi0ity and differential features
o Sell own
All prospects ha0e a buying range
Show the best first and then let the prospect reduce price by remo0ing features or lowering >uality
"N;T
o Apologi@e for the price'
o )ake price the focal point of your sales presentation'
o $ecome demanding+
o $ecome defensi0e
o $ecome hostile
"Just supposing, M. uyer, you !ould... then you'd want to go ahead?"
-!
S
Ho forward to discuss this
N"Ho To 6E
"Then there must be some other reason.
May I ask what it is?"
Answer
H" T"
6C
No Answer
H" T"
61
""hat would it take to !on#in!e you?"
This series of >uestions keeps the con0ersation going and gets the real ob&ections out in the open which helps increase your sales'
5
6
Some Thoughts on Negotiation
6ualities of a Hood Negotiator
o .atience
o !ndurance
o Stamina
o #illingness to continue
o Risktaker
o Tolerate ambiguity
Negotiating Skills
o Allow time for planning
o Collect all a0ailable information
o Negotiate internally first
o $e fle:ible
o onKt gi0e concessions too early
o onKt respond too >uickly to demands
o Call ?time-outs? when appropriate
o .ut yourself in the customerKs shoes
o onKt let egos interfere
o Always follow through
$uyer;s "0ert Concerns
o o we really need this product or ser0ice8
o #hat will the sa0ings be for the company8
o Are there alternati0es8
o o we ha0e sufficient budget8
$uyer;s Co0ert Concerns
o #ill I be at risk8
o #ill this reflect positi0ely on me8
o #ill this solidify my position8
o #ill this mean more work for me8
o o my potential gains outweigh the risks8
Ten $ooby Traps
o Sneak attacks
o /atal assumptions
o )isguided missiles
o Iiller impatience
o $ad intentions
o $lind faith
o )ental blocks
o .rice paralysis
o Unwise ultimatums
o )isplaced emotions
Remember
o .repare*
o .robe*
o .ropose*
,ow to #rite a Sales Huide 4)anual5
"0er0iew and "b&ecti0e
"ne of the fastest ways to increase sales of your product is to educate the sales force on the key features and
benefits of the product+ uni>ue ad0antages of the product+ how to sell the product+ and the competition'
This can be done through sales training+ a written sales guide+ and9or an audio or 0ideo file' A podcast+
sent out with the sales guide as a summary+ is a particularly useful tool because sales people generally
spend a great deal of time in the car'
The sales guide will vary drastically depending upon the target audience.A sales guide for a distribution channel,
for example, might be one page. A sales guide designed for a direct sales force to sell a complex set of products
may end up being multiple binders. In all cases, conciseness and good organization is important because sales
people don't have much time to read and they need quic access to the information.
Re>uirements
!ale people mae money when they are on the phone closing deals " so they often won't tae the time to read a
detailed sales manual. It is therefore critical that the sales guide be as concise and hard"hitting as possible.
#owever, this ob$ective should not compromise the quality of the information.
%ye catching formatting " &ou want the document to be a great reference manual 'no one will read it cover"
to"cover(. Information should be very easy to find so there should be a good table of contents 'if it is a large
guide() large, clear headings for each section and subsection) and index and*or glossary of terms. +iagrams,
tables, and illustrations are best used to summarize complex information.
,oncise length " The length of the document will vary dependent upon the target audience. -or channel
sales people, one to two pages is best as a quic reference that they can throw in their brief case. %ven if you
need a large sales guide to go through detailed demonstrations and competitive information for a direct sales
force, providing a quic reference summary in addition to the full guide is ideal.
.ronunciation " A new sales person may be unfamiliar with the buzz words of your specific industry.
.ronunciation must be called out wherever necessary and in the glossary of terms.
/ell mared customer sections " !ales people will often copy parts of the sales manual and hand it to
customers. !ections of the manual must be clearly identified as being customer consumable or not.
,onsistent updates " A sales guide that goes out of date is useless. ,onsistent updates will eep your
product in front of the sales person and eep them abreast of developments within the company and new
competitive announcements. -or this reason it is desirable to have an internal web site that has all the latest and
greatest information. The printed sales guide should reference the website as a resource for updated information.
"utline
0( ,ontact information " 1et the sales person now where they can get more information on product or on any
part of the guide. Include email addresses and phone numbers.
2( !elling strategies " 3utline target maret, maret size, sales cycle, ideal customer profile, list of current
customers, references, press mentions and success stories. If this is a one"page sales guide the information must be
ept to one paragraph with a few bullets.
4( .roducts and +emonstration " .ositioning of the product, how it fits into the overall product line, a list of ey
features and benefits, demonstration highlights, most common customer questions, and product updates. -or a one
page sales guide use only the top three the ey features and benefits.
5( ,ompetition " A table of competitors with a feature matrix is the best way to show this information. +on't
forget to include pricing. !hort write"ups on ey competitors including strengths, weanesses, and an overview of
their strategy can be useful if you have $ust a few competitors. !ince many competitors fall into similar categories
you may want to outline a more broad strategies for competing against competitors in those categories. &ou may
also want include write"ups of what the competitors will be saying to your customers.
6( .ricing " Include all pricing, ordering, and configuration information.
7( ,ollateral " All associated collateral including datasheets, brochures, and white papers.
8( !ales presentation " It is important to let the sales people now how to present the product. An online
presentation detailing high"level positioning, success stories, and features and benefits with a script is great. A
video of the presentation is also a useful tool. '.lease see building a product presentation for more information.(
9( :lossary " &ou may need a glossary of terms and acronyms associated with the product.
;( Index " Includ an index if the sales manual is over 6< pages.
0<( =eference >aterial " Include a listing of where they can find more information about the product or a specific
technology. This may be lins to your website or other websites.
.ackaging
The most important pacaging item to consider is how the guide be updated. If it is one or two pages, it can easily
be replaced. If it is many pages you may want a binder where sections can be updated. This can often be a problem
though because sales people don't always have time to put new sections in a binder. Ideally you would $ust replace
the entire guide when updates are required, but can be time consuming and expensive. In any case the sales guide
should ideally have a searchable on"line version.
As mentioned previously, a audio file or podcast is a great addition to the sales guide. I prefer to mae the audio
somewhat entertaining so the sales person is not bored to tears listening to it.
?ideo are also generally effective if you are trying to show how to demonstrate a product.
The pacage should come with a one page 'front and bac( introduction and summary.
.rocess
I have found the following to be the fastest way to write a !ales :uide@
0( :ather all associated materials including a copy of the product, sample files, datasheets, presentations,
competitive analysis, >aret =equirements +ocuments, and functional specs for bac"up information.
2( +etermine which mareting information 'competitive analysis, demonstrations, presentations, etc.( needs
updating or creating from scratch.
4( !pend an hour or so with a systems engineer or product manager who has gone on sales calls and nows the
ey selling features of the product. #ave them demonstrate the product to me as a prospect. Interview one or two
sales people for information on how they sell the product.
5( !pend an hour or so with a seasoned sales representative to understand where they have been successful
6( !pend an hour or so with a new sales representative to understand what they feel they need from a sales guide
7( /rite a first draft of all materials interactively reviewing sections as they are completed with the appropriate
product manager*systems engineer.
8( /rite second draft.
9( #ave one or two sales people review the document for completeness.
;( =eview second draft with product manager and engineering and other appropriate people.
0<( /rite final draft and distributeA
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00000000000000
$irect mail is a way of advertising in which advertisers mail printed ads, letters or other solicitations to large groups
of consumers. 5ulk-mail rates are used to lower the cost of the mailing, and targeted mailing lists are used to
ma"imi.e potential response.
$irect mail is used in many different situations, limited primarily by the imagination of the advertiser. Stores
typically use direct mail to advertise new products or to distribute coupons. #harities typically use the it to raise
money or recruit volunteers. (lmost any sales pitch can be made by direct mail.
To create a direct mail mailing, advertisers will work to create an ad that will appeal to a substantial number of
people. They will then send it to a large group of people, depending on the potential audience of the ad. That could
be a QI' code, particular demographic, or entire nation
(dvertisers have found direct mail appealing for a number of reasons. It takes their message directly to the
consumer. 7hile consumers might walk away from a television ad or flip past a newspaper ad, they will eventually
open their mailbo". (dvertisers also like that they can direct their message as narrowly or broadly as they want,
using bulk mailing rates. 5y receiving the mail at home, direct mail puts the advertiser)s message in the hands of
the consumer at the time the consumer might be likely to read it, along with the rest of the mail.
$irect mail is not without its problems. 6ver the years, direct mail also became known by another name: unk mail.
Some consumers became irritated at receiving numerous ads in the mail each day. -any threw away the
suspected ad-filled mail.
Since consumers often throw away mail associated with ads, marketers were challenged to ensure that
consumers read their ads. $irect mail marketers now use a variety of techni&ues to ensure that the recipients open
their envelope. Some go to great lengths to make the envelope and mailing appear personal, even using special
computer fonts that look like handwriting. 6thers will target the mailing to the most-likely customers by using
targeted mailing lists. -any direct mail marketers have reali.ed that one of the biggest challenges can be getting
the reader to simply open the envelope and read the ad
$irect mail has entered the world of the internet, and many of the same techni&ues are showing up electronically
in email. Some advertisers now send emails with ads to large groups of consumers. They take advantage of the
relatively low cost of obtaining a long list of email addresses and the little time needed to mail to thousands or
millions of people. 'erhaps not surprisingly, many computer users reacted by deleting what they perceive as 4unk
email4
(lthough most people are familiar with direct mail to consumers, many businesses also advertise their products
and services to other businesses. 5usiness to business :5A5; direct mail is a particularly lucrative segment of the
market0 marketers can target their messages to precisely those recipients that are likely to become customers. In
the end, direct mail allows companies to isolate their marketing dollars to high-probability prospects and avoid
wasting money on those that are likely to be uninterested
Direct !ail Campaign on 1ise23340 6ne of the benefits of direct mail marketing is that the campaigns usually
involve a low cost in comparison to other alternatives. (ll that is needed to mount a basic direct mail campaign is a
mailing list, the mail piece itself, and money to cover postage costs.
market0 marketers can target their messages to precisely those recipients that are likely to become customers
Direct !ail Response on 1ise23340
5ulk-mail rates are used to lower the cost of the mailing, and targeted mailing lists are used to ma"imi.e potential
response. $irect mail is used in many different situations, limited primarily by the imagination of the advertiser.
(s one of the oldest forms of advertising, direct mail marketing is a low cost means of advertising that re&uires a
relatively low return in order to be considered successful. -any different businesses make use of direct mail
marketing. These include supermarkets that mail out circulars featuring items that are on sale for a limited amount
of time.
Direct !ail .ulfillment on 1ise23340
market0 marketers can target their messages to precisely those recipients that are likely to become customers.
of time.
Direct !ail -romotion on 1ise23340
of time.
market0 marketers can target their messages to precisely those recipients that are likely to become customers.
Importance of measurin$ the 1ffecti/eness of #d/ertisin$
34 It acts as a Safety measure
Testin( effectiveness of advertisin( helps in findin( out ineffective advertisement and advertisin( campai(ns. ,t
facilitates timely adFustments in advertisin( to make advertisin( consumer oriented and result oriented. Thus waste
of money in faulty advertisin( can be avoided.
3"4 Pro/ides feedbac5 for remedial measures
Testin( effectiveness of advertisin( provides useful information to the advertisers to take remedial steps a(ainst
ineffective advertisements.
3%4 #/oids possible failure
Advertisers are not sure of results of advertisin( from a particular advertisin( campai(n. Gvaluatin( advertisin(
effectives helps in estimatin( the results in order to avoid complete loss.
3'4 To 2ustify the In/estment in #d/ertisin$
The e)penditure on advertisement is considered to be an investment. The investment in advertisin( is a marketin(
investment and its obFectives should be spelt out clearly indicatin( the results e)pected from the campai(n. The rate
and si8e of return should be determined in advance. ,f the e)pected rate of return is achieved in terms of additional
profits+ the advertisement can be considered as effective one.
364 To 5now the communication 1ffect
The effectiveness of the advertisement can be measured in terms of their communication effects on the tar(et
consumers or audience. The main purpose of advertisin( is communicated the (eneral public+ and e)istin( and
prospective consumers+ various information about the product and the company. ,t is therefore desirable to seek
post measurements of advertisin( in order to determine whether advertisement have been seen or heard or in other
words whether they have communicated the theme+ messa(e or appeal of the advertisin(.
374 Compare two mar5ets
6nder this procedure+ advertisin( is published in test markets and results are contrasted with other. 'arkets H so
called control markets H which have had the re(ular advertisin( pro(ram. The measurements made to determine
results may be measurements of chan(e in sales+ chan(e in consumer attitudes+ chan(es in dealer display and so on
dependin( upon the obFectives sou(ht by the advertiser.
81T9:)S :( 81#S-&I;< #).1&TISI;< 1((1CTI.1;1SS
Advertisin( is aimed at improvin( the sales volume of a concern so its effectiveness can be evaluated by its impact
on sales. 'ost of the mana(ers believe that the advertisement directly affects the sales volume and hence they
evaluate the effectiveness of the advertisin( campai(n by the increase in the sales volume.
There may be two types measures
Direct measures; and
(i# ,ndirect measures;-
34 )irect 8easures of #d/ertisin$ 1ffecti/eness
6nder direct measures+ a relationship between advertisin( and sales is established. A comparison of sales of two
periods or two periods or two markets may be done and the correspondin( chan(es may be noted. The followin( are
some of the methods that are (enerally used in measurin( that advertisin( effects.
3a4 9istorical Sales 8ethod
Some insi(hts into the effectiveness of past advertisin( may be obtained by measurin( the relationship between the
advertisin( e)penditure and the total sales of the product. A multiple re(ression analysis of advertisin( e)penditure
and sales over several time periods may be calculated. ,t would show how the chan(es in advertisin( e)penditure
have correspondin( chan(es in sales volume. This techni4ue estimates the contribution that advertisin( has made to
e)plainin( in a co relational manner rather than a casual sales+ the variation in sales over the time periods covered
in the study
3b4 1xperimental Control
The other measure of advertisin( effectiveness is the method of e)perimental control where a casual relationship
between advertisin( and sales is established. This method is 4uite e)pensive when related to other advertisin(
effectiveness measures yet it is possible to isolate advertisin( contribution to sales. 'oreover this can be done as a
pre-test to aid advertisin( in choosin( between alternative creative desi(ns. 'edia schedules e)penditure levels or
some combination of these advertisin( decision areas. 2ne e)perimental approach to measurin( the sales
effectiveness of advertisin( is test marketin(.
3i4 =efore-after with Control <roup )esi$n
This classic desi(n uses several test and control cities in this desi(n two types of cities are selected. Cities in which
advertisin( campai(ns are affected may be named as test cities and other cities may be called central cities. 1irst of
all+ the normal sales level is calculated for both type of cities prior to advertisin( campai(n+ and then the advertisin(
campai(n is presented to the test cities and not the central cities. The effect of advertisin( campai(n+ can then+ be
measured by subtractin( the amount of post campai(n fi(ure of sale from the pre campai(n sale fi(ures in test cities
3ii4 8ulti/ariable 1xperimental )esi$ns
/hile the e)perimental desi(n discussed above yields a reasonably accurate estimate of the effects of the
advertisin( on sales+ it is not successful in e)plainin( the success or failure of the campai(n itself. 'ultivariable
desi(ns *roduce these e)planations and are+ therefore used by some very lar(e firm because of their dia(nostic
value.The power of this multivariable factorial desi(n is e)plained by :.%.Brown+ former 1ords Director of
'arketin( 5esearch. 1or any sin(le medium+ ei(ht possible (eo(raphic areas have been e)posed and ei(ht have not
been e)posed. Thus+ in this e)perimental model it is possible to evaluate how each individual medium behaves
alone and in all possible to evaluate how each individual medium behaves alone and in all possible combinations
with other media.
3"4 Indirect 8easures
As it is very difficult to measure the direct effect of advertisin( on company=s profits or sales+ most firms rely
heavily on indirect measures. These measures do not evaluate the effects of advertisements directin( on sales or
profits but all other factors such as customer awareness or attitude or customer recall of advertisin( messa(e affect
the sales or profits or (oals of the business indirectly. Despite the uncertainties about the relationship between the
intermediate effects of advertisin( and the ultimate results+ there is no other alternative but to use indirect measures.
The most commonly used measures are H
3i4 1xposure to #d/ertisement
,n order to be effective+ the advertisement must (ain e)posure. The mana(ement is concerned about the number of
tar(et audiences who see or hear the or(ani8ation messa(e set in the advertisement. /ithout e)posure+
advertisement is bound to failure. 'arketers or advertisers may obtain an idea of e)posure (enerated by the
medium by e)aminin( its circulation or audience data which reveal the number of copies of the ma(a8ine+
newspaper or Fournal sold the number of persons passin( the billboards or ridin( in transit facilities+ or the number
of persons livin( in the televiewin( or radio listenin( area+ and the number of persons switchin( on their T.<. and
radio sets at various points of time. This number can be estimated by interviewin( the numbers of the audience for
different media.
3ii4 #ttention or &ecall of #d/ertisin$ 8essa$e Content
This is one of the widely used measures of advertisin( results. 6nder this measure+ a recall of the messa(e content
amon( a specified (roup or (roups or prospective customers is measured within >@ hours of the e)posure of the
advertisement.
Attention value is the chief 4uality of the advertisin( copy the advertisements cannot be said to be effective unless
they attract the attention of the tar(et consumers. There are two methods for evaluatin( the attention (ettin( value
of the advertisements. 2ne is pre-test and the other is post-test. ,n a pre-test evaluation+ the consumers are asked to
indicate the e)tent to which they reco(nise or recall the advertisement+ they have already seen. This test is
conducted in the laboratory settin(. %ere consumers read+ hear or listen to the advertisement and then researchers
ask 4uestion re(ardin( the advertisement Fust to test the recall and then evaluate it. ,n post-test method+ the
consumers are asked 4uestions about the indication of reco(nition or recall after the advertisement has been run.
These measures assume that customers can recall or reco(ni8e what they have viewed or listened to. <arious
mechanical devices are bein( used in the western countries which provide indices of attention such as eye-camera
etc.
3iii4 =rand #wareness
The marketers who rely heavily on advertisin( often appraise its effectiveness by measurin( the customer=s
awareness about the particular product or brand. The assumption of this type of measure is that there is a direct
relationship between the advertisements and the awareness. This type of measure is also subFect to the same
criticisms as is applicable to direct measures of effectiveness (sales measures because awareness is also not the
direct result of the advertisements. ,t is also affected by many other factors. But+ for new products+ chan(es in
awareness can often be attributed to the influence of advertisin(.
3i/4 Comprehension
Consumers (enerally use advertisements as a means of obtainin( information about the product+ brand or the
manufacturer. They cannot be informed unless they comprehend the messa(e ((rasp the messa(e mentally and
understand it fully#. <arious tests for valuatin( comprehension are available H
2ne is recall tests H an indicator of comprehension because it is evident that consumers recall what they
comprehend. Another measure of the variable is to ask 4uestions about subFects how much they have
comprehended a messa(e they have recently heard or seen. 2ne may employ somewhat imprecise test of the
comprehension of a newspaper and radio advertisement. 2ne may ask typical tar(et consumers from time to time
such 4uestions like Iwhat did you think of our new commercial.= and IDid it (et the messa(e across=. The answers
of these 4uestions will provide sufficient insi(ht into advertisin( decision makin(.
3/4 #ttitude Chan$e
Since advertisin( is considered to be one way of influencin( the state of the mind of the audience towards a
product+ service or or(anisation+ the results are very often measured in terms of attitudes amon( (roups e)posed to
advertisin( communication. Several measures are used ran(in( from askin( the 4uestions about willin(ness to buy
the likelihood of buyin( to the measurement of the e)tent to which specific attributes (such as modern or new# are
associated with a product.
3/i4 #ction
2ne obFective of advertisement may be assumed to be to stimulate action or behavior. The action or intention to
take an action may be measured on the intention to buy measurin( instrument. 6nder this type of measure+
consumers are asked to respond why they are interested in purchasin( the product or brand. 2ne type of action that
advertisers attempt to induce is buyin( behavior. The assumption is that if an increase in sales follows a decrease in
advertisin( e)penditure+ the chan(e in sales levels are (ood indicators of the effectiveness of advertisin(. 0o(ic
su((ests that measurement of sales is preferable to other measurements.
Thus+ these above measures (direct or indirect# are used to evaluate the effectiveness of advertisements. ,t seems
from the analysis of the above methods of measurin( effectiveness that directly or indirectly chan(es in sales or
profits are taken as the measurin( rod of the effectiveness of the advertisin(.
C:88-;IC#TI:; 1((1CTS :( #).1&TIS181;T
The mana(ement should attempt to evaluate the effectiveness of the advertisin( campai(n if the firm=s advertisin(
(oals are to be achieved and the ad effectiveness is to be increased. By re(ular evaluation of the effectiveness+ the
short comin(s and the plus points would be revealed and the mana(ement would be able to improve the campai(n
by ne(atin( the shortcomin(s and retainin( the favorable point. 1or this purpose+ it is very necessary to know how
advertisin( affects the buyer=s behaviors. But this is very difficult task because measurements are imperfect and
imprecise.
The effectiveness of advertisin( can be measured by the e)tent+ it to which it achieves the obFectives set for it. ,f it
succeeds in attainin( the obFectives. Advertisin( can be said to be effective otherwise it will be a waste of money
and time. ,n this sense+ advertisin( can be reco(ni8ed as a business activity like other activities.
,n a very real sense the inte(rity of promotional activities rests on how well those activities work. An advertisin(
bud(et that is spent on some poorly defined task or on undefined tasks may be re(arded as an economic waste as
compared to that spent to achieve the well defined obFectives for which the results can be measured. Any social
institution upon which a si(nificant portion of our total productive efforts is e)panded should be able to point to its
specific accomplishment. ,ndeed+ it is a source of discomfort that specific results of advertisin( activities have not
always been subFect to precise measurement. Both practitioners and critics feel that promotional activities should
only be accepted as socio H economic H institution with full ri(ht and privile(es Dwhen the means
e)ist to prove that advertisin( super are productive rupees= ,t is undoubtedly a source of embarrassment that we
cannot e)actly measure the effectiveness of advertisin( in definitive terms.
The e)act result of advertisement e)penditure is very difficult to predict because.-
(a# The reaction of consumer H buyers to the advertisin( efforts cannot be known in advance.
(b# The reaction of competitors in the field cannot be (uessed in anticipation and
(c# The une)pected events (such as chan(e in social and economic environment and the (overnment policies etc.#
cannot be accurately anticipated. Such events may influence the results of the advertisin( efforts. ,f we take a
hypothetical case of a retailer who contract to spent 5s.AJJJ on advertisement with a local newspaper for a special
sales even. The advertisement is seen and the response is much (reater than it is anticipated. /hat caused the
success of sale. They messa(e theme colors etc.+ of the advertisement or the low prices 4uoted durin( the sale of
the superior 4uality of the product or absence of competition in the market on the day or the favorable. /eather
conditions or the (oodwill of the firm etc. The overwhelmin( success of the sale is the Foint result of all the above
variables and it is 4uite impossible to isolate the role of any one variable. ,t is so because the cause and effect H
relationship cannot be established in advance when a multitude of variable impin(e upon a particular event. ,t is
entirely possible that a poor advertisin( support may push up the sale because everythin( else falls into its proper
place or the reverse may be possible. But it does not mean that that we cannot measure the effects of particulars
advertisin( effort. The advertisin( e)ecutives are much concerned about the assessment of the effectiveness of the
advertisin( efforts. 1or this purpose+ the mana(ement needs answers to such 4uestions as; was the advertisin(
campai(n really successful in attainin( the advertisin( (oals. /ere our T.<. commercials as (ood as those of our
competitors. /ill the print advertisement+ which we have desi(ned+ make consumers aware of our new product. To
(et answers of these 4uestions+ various tests of effectiveness (*re- tests and post H tests # are deeded to determine
whether proposed advertisement should be used+ and if they are not satisfactory how they mi(ht be improved+ and
whether on (oin( campai(n should be stopped continued or chan(ed. *re- tests are conducted before e)posin(
tar(et consumers to the advertisements and post tests after consumers have been e)posed to them.
As indicated earlier+ the advertisers are interested in knowin( what they are (ettin( for their advertisin( rupees+ So
they test the proposed advertisement with pre test and measure the actual results with a post test. ,n the past+
protestin( was done by the advertisin( a(encies but now the advertisers have been takin( an increasin(ly active role
in protestin( process. *re test may be done either before an advertisement has been desi(ned or e)ecuted after it is
ready for public distribution or at both points.
Durin( protestin( there is often research on three vital 4uestions;-
(i# Do consumers feel that the advertisement communicates somethin( desirable about the product.
(ii# Does the messa(e have an e)clusive appeal that differentiates the product from that of the competitors.
(iii# ,s the advertisement believable.
Althou(h a lot of money is spent on protestin( yet the advertisers like to confirm the results by post testin( of their
promotional campai(ns due to the followin( reasons;-
(i# There is a need produce more effective advertisin( by retainin( the (ood and removin( the bad.
(ii# The advertisin( e)ecutives can prove to the satisfaction of the mana(ement that a hi(her advertisin( bud(et will
benefit the firm.
(iii# There is a need for measurin( the results to determine the level of e)penditure that is most promisin(.
'ost research focuses on the communication effect rather than sales effect because it is a lon( run process. ,n the
short run+ however sales may be sli(ht and important but in the lon( run its effects ob brands and companies may be
of (reat importance. ,ndirectly it will affect the sales in the lon( run+ by chan(in( the consumer awareness and
attitude. The advertisers are therefore+ concerned with their impact on consumer awareness and attitude.
The communication effect on sales may be presented in the followin( fi(ure;-
Communication 1ffect on Sales
Awareness builds a favorable or at least a curious attitude towards the product which leads to e)perimentation. ,f
consumer is satisfied with the trial he may decide to purchase the product. There are many critical and unresolved
issues in determinin( how to test the communication effects of advertisin(. Amon( these are;-
(# G)posure Conditions H Should advertisin( be tested under realistic conditions or under more controlled
laboratory conditions.
(># G)ecution H *rotestin( a finished advertisement as an e)pensive and time consumin(. Does protestin( a
preliminary e)ecution produce accurate and useful data.
(?# 3uality <s. 3uantity Data- 3uantitative data are the easiest and the almost precise measurement. But 4ualitative
data collected throu(h interviews may provide information that short answer 4uestions never can.
'any types of advertisin( tests are conducted (different methods of pre tests and post H test are (iven in 4uestion
number# ,n T.<. commercials are tested by invitin( a (roup of people to the studio to view a pro(ram. The audience
is then surveyed about the commercials. *rint advertisements are tested throu(h dummy ma(a8ine portfolio tests.
Compunction 1ffecti/eness .s Sales 1ffecti/eness
,t is easier to assess the communication effect of advertisin( than the sales effect. 'any firms try to measure the
effectiveness of advertisin( in terms of sales results but this practice is always misleadin(. Since+ the effect is the
result of so many variables+ a distinct effect of advertisin( on sales cannot be correctly measured+ Althou(h there
may be some e)ceptions. 1or e)ample direct mail advertisin( can effectively be measured by the in4uiries received.
But in many situations the e)act relationship between advertisin( activity and sales cannot be established
satisfactorily.
/e can correctly assume that some sales will occur even thou(h there is no advertisin( or little advertisin( or
conversely there will be no increase in sales after the point of saturation is reached or it may be that sales will show
a decreasin( trend at this point in spite of lar(e amount of e)penditure on advertisin( is done. ,t is so because
advertisin( is no the only variable that effect the sales.
Thus+ we may conduct that sales effect of advertisin( is difficult to measure because a number of variables affect
the 4uantum of tales and the contribution of advertisement cannot be measured separately unless all other variables
are presumed to be constant. This situation is 4uite hypothetical and almost none)istent. Added to this is the fact
that advertisement itself is made of a variety of variables such as media+ messa(es+ colours+ pa(e or time of the day+
locations+ the si8e of the headline and the appeals used. Thus even if the advertisin( variable is separated this would
still not answer the 4uestion about the effectiveness of the individual components of the advertisin( campai(n. So
advertisers try to measure the communication effect of the advertisin(.
Suitability
,n small business firms where the marketin( research resources are limited advertisin( mana(ers may decide on less
e)pensive and less relevant measures. The bi( business house+ which has more access to research+ may decide on
the more relevant and e)pensive measures.
(actors #ffectin$ #d/ertisin$
The final e)ternal factor in the plannin( framework concerns environmental factor social+ le(al+ and (lobal. 0aw
forbids deceptive advertisin(. 2ne solution is to create brand advertisin( that is va(ue and contains little specific
information. %owever+ such an approach can result not only in ineffective advertisin(K by it can lessen the social
value of advertisin( by reducin( the amount for useful information that it provides to society. Thus+ and advertiser
who attempts to provide specific+ relevant information must be well aware of advertisin( re(ulation.
Gven more difficult consideration for people involved in the advertisin( effort is broad social and economic issues.
Another concern is that advertisin(+ especially when it is more irritatin( than entertainin(+ is an intrusion into an
already e)cessively polluted environment. A whole set of rules is emer(in( to cover advertisin( directed at
children+ and advertisin( for products such as alcohol and ci(arettes+ and the use of environmental and health
claims in advertisin(.
Thus advertisin( has a tremendous impact on international marketin( and the two concepts therefore (o hand in
hand and are dependent on each other.
I8P#CT :( #).1&TIS181;T
Advertisin( has an important effect on a country=s economy+ society+ culture+ and political system. This is
especially true in the 6nited States where the advertisin( industry plays such a prominent role.
. 1conomic Impact
'ost economists believe that advertisin( has a positive impact on the economy because it stimulates demand for
products and services+ stren(thenin( the economy by promotin( the sale of (oods and services. 'anufacturers
know that advertisin( can help sell a new product 4uickly+ enablin( them to recoup the costs of developin( new
products. By stimulatin( the development of new products+ advertisin( helps increase competition. 'any
economists believe that increased competition leads to lower prices+ thereby benefitin( consumers and the economy
as a whole. These economists also ar(ue that by interestin( consumers in purchasin( (oods+ advertisin( enables
manufacturers and others to sell their products in lar(er 4uantities. The increased volume of sales enables
companies to produce individual units at lower costs and therefore+ sell them at a lower price. Advertisin( thus
benefits consumers by helpin( lower prices.
2ther economists+ however+ believe that advertisin( is wasteful. They ar(ue that the cost of advertisin( adds to the
cost of (oods and that most advertisin( simply encoura(es consumers to buy one brand rather than another.
Accordin( to this view+ advertisin( simply moves sales from one company to another+ rather than increasin( sales
overall and thereby benefitin( the economy as a whole.
". Social Impact
Advertisin( can have wide-ran(in( repercussions on a society. Some critics su((est that advertisin( promotes a
materialistic way of life by leadin( people to believe that happiness is achieved by purchasin( products. They ar(ue
that advertisin( creates a consumer culture in which buyin( e)citin( new products becomes the foundation of the
society&s values+ pleasures+ and (oals.
2ther critics e)press concern over the way advertisin( has affected women and racial minority (roups. Ads in the
!AJs depicted women primarily as decoration or se) obFects. Althou(h millions of women worked outside the
home in the !"Js+ ads continued to focus on their role as homemakers. /hether owin( to the feminist movement
or to women&s increasin( economic power+ after the !"Js it became more common to see women depicted in
professional roles. %owever+ many ads today still emphasi8e a woman=s se)uality.
The way advertisin( has depicted racial minorities has also been harmful. *rior to !"J+ African Americans were
usually shown in a subordinate position. Due to the influence of the civil ri(hts movement+ however+ advertisers by
the !CJs had be(un to depict African Americans as students+ professionals+ or business people. %owever+ many
African American or(ani8ations and community activists continue to obFect to the way that alcohol and tobacco
companies have seemin(ly tar(eted low-income minority communities with a heavy preponderance of outdoor
advertisin( for their products.
As ads have be(un to more fully reflect the lives of women and African Americans in the 6nited States+ increasin(
attention has been paid to the way in which advertisin( shows other ethnic (roups+ includin( %ispanics+ Asians+
$ative Americans+ and Gastern Guropeans. There is still considerable debate over how advertisin( influences public
perception of (ender and of particular ethnic (roups.
Advertisin( has a maFor social impact by helpin( sustain mass communications media and makin( them relatively
ine)pensive+ if not free+ to the public. $ewspapers+ ma(a8ines+ radio+ and broadcast television all receive their
primary income from advertisin(. /ithout advertisin(+ many of these forms of mass communication mi(ht not e)ist
to the e)tent that they do today+ or they mi(ht be considerably more e)pensive+ offer less variety+ or even be subFect
to (overnment control throu(h subsidies. ,n-depth news pro(rams+ a diversity of ma(a8ines+ and free entertainment
mi(ht no lon(er be widely available.
At the same time+ however+ some critics warn that because advertisin( plays such a maFor economic role+ it may
e)ercise undue influence on the news media and thereby curtail the free flow of information in a free society.
5eporters and editors+ for e)ample+ may be hesitant to develop a news story that critici8es a maFor advertiser. As a
result+ society mi(ht not be alerted to harmful or potentially harmful conduct by the advertiser. 'ost members of
the news media deny that pressure from an advertiser prevents them from pursuin( news stories involvin( that
advertiser+ but some members of the media acknowled(e that they mi(ht not be inclined to investi(ate an issue
a((ressively if it threatened to offend a maFor advertiser.
Advertisers may affect media pro(rammin( in other ways+ too+ critics char(e. 1or e)ample+ companies that sponsor
T< pro(rams prefer relatively wholesome+ noncontroversial pro(rammin( to avoid offendin( a mass audience. This
preference causes T< networks to emphasi8e this type of pro(rammin(. The result is that society may be denied the
benefits of bein( able to view challen(in( or hi(hly ori(inal entertainment pro(rams or news pro(rams on
controversial issues. Because advertisers are especially interested in attractin( the C to ?@ year olds who account
for most consumer spendin(+ television shows are often developed with this audience in mind. ,f the ratin(s show
that a pro(ram is not attractin( lar(e audiences+ particularly amon( C to ?@ year olds+ advertisers often withdraw
support+ which causes a pro(ram to be canceled. As a result+ shows that are more likely to interest and to be of
value to older audiences are not produced.
The impact of television on youn( children has received much attention. 5esearch su((ests that children see
television advertisin( as Fust another form of pro(rammin( and react uncritically to its messa(es+ which makes
them especially vulnerable to advertisin(. There is also concern about the way in which adolescent (irls respond to
advertisin( that features beautiful+ thin models. 5esearch indicates that many adolescent (irls are unduly influenced
by this standard of beauty+ become dissatisfied with their own bodies+ and may develop eatin( disorders in pursuit
of a thin fi(ure. $ew research su((ests that adolescent boys are also bein( influenced by advertisin( ima(es of
bulked-up+ buffed bodies. As a result+ many become dissatisfied with their own body ima(e+ devote lar(e amounts
of time to wei(htliftin(+ and may even take dru(s that have harmful side effects in order to develop more muscle.
Those over the a(e of "J are thou(ht to be less influenced by advertisin(+ but some elderly people no lon(er process
messa(es as easily as youn(er people+ makin( them more susceptible to 4uestionable advertisin( claims.
%. Political Impact
Advertisin( is now a maFor component of political campai(ns and therefore has a bi( influence on the democratic
process itself. ,n !!C more than L@"B million was spent on election campai(ns in the 6nited States. That amount
of spendin( placed political advertisin( in the ranks of the country=s ?J leadin( advertisers that year. *olitical
advertisin( is a relatively new development in 6.S. history. Advertisin( professionals did not become involved in
electoral campai(ns until the !AJs. But since then+ political advertisin( has (rown in sophistication and
comple)ity.
*olitical advertisin( enables candidates to convey their positions on important issues and to ac4uaint voters with
their accomplishments and personalities. Television advertisin( is especially effective for candidates runnin( for
national or statewide office because it can reach so many people at once. Candidates can also use advertisin( to
respond effectively to the char(es of their opponents.
<arious campai(n finance reform proposals+ however+ have tried to address the impact of television advertisin( on
political campai(nin(. Because of the hi(h cost of television ads+ the costs of political campai(ns have skyrocketed+
makin( it necessary for candidates to raise money continually+ even after they have been elected to office. Critics
say this factor Feopardi8es the democratic process by makin( elected officials beholden to wealthy contributors and
by makin( it more likely that only the wealthy will run for office. Some reform proposals have called for free
airtime+ but television and radio networks have resisted this idea.
Critics of political advertisin( also char(e that the ?J-second television spot has become more important to a
political campai(n than a thorou(h discussion of the issues. As a result+ voters are bombarded with ima(e
advertisin( rather than bein( ac4uainted with the candidate=s positions. They contend that this practice is harmful to
(ood (overnment. ,ssues are simplified+ and candidates are Dpacka(ed and soldE much like a consumer product+
thereby distortin( the political process.
'. Cultural Impact
Advertisin( can affect cultural values. Some advertisin( messa(es+ for e)ample+ encoura(e a((ressive
individualism+ which may clash with the traditional cultural values of a country where the collective or (roup is
emphasi8ed over the individual or humility or modesty is preferred to a((ressiveness. /ith the (lobali8ation of the
world economy+ multinational corporations often use the same advertisin( to sell to consumers around the world.
Some critics ar(ue that advertisin( messa(es are thus helpin( to break down distinct cultural differences and
traditional values+ causin( the world to become increasin(ly homo(eneous.
'any advertisin( campai(ns+ however+ have universal appeal+ overridin( cultural differences+ or they contribute to
culture in a positive way. %umor in advertisin( has made many ad campai(ns widely popular+ in some cases
achievin( the status of folklore or takin( on new life in another arena. 1or e)ample+ a popular ad campai(n for a
fast-food chain with the slo(an D/here=s the beef.E became part of the !CJ Democratic presidential primary
campai(n between :ary %art and /alter 'ondale. The ad ridiculed a competitor by depictin( a small hambur(er
patty dwarfed by a hu(e bun. Durin( a primary debate one of the candidates used the ad slo(an to su((est that his
opponent=s campai(n lacked substance
$irect marketing is a form of advertising that reaches its audience directly through multiple channels including
email, direct mail, social media, catalogs, online advertising, interactive television, etc. 5usinesses communicate
straight to the consumer with advertising techni&ues such as fliers, catalog distribution, promotional letters, and
street advertising.
$irect (dvertising is a sub-discipline and type of marketing. There are two main definitional characteristics which
distinguish it from other types of marketing. The first is that it sends its message directly to consumers, without the
use of intervening commercial communication media. The second characteristic is the core principle of successful
(dvertising driving a specific 4call to action.4 This aspect of direct marketing involves an emphasis on trackable,
measurable, positive responses from consumers :known simply as 4response4 in the industry; regardless of
medium.
If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a
7eb site, then the effort is considered to be direct response advertising.
$irect marketing is practiced by businesses of all si.es - from the smallest start-up to the leaders on the >ortune
DII. ( well-e"ecuted direct advertising campaign can offer a positive return on investment as the message is not
hidden with overcomplicated branding. Instead, direct advertising is straight to the point0 offers a product, service,
or event0 and e"plains how to get the offered product, service, or event.#ontents RhideS
*istory
-ail order pioneer (aron -ontgomery 7ard knew that by using the techni&ue of selling product directly to the
consumer at appealing prices could, if e"ecuted effectively and efficiently, revolutioni.e the market industry and
therefore be used as an innovative model for marketing products and creating customer loyalty.R?S The term 4direct
marketing4 was coined long after -ontgomery 7ardTs time.
In ?HEF 1ester 7underman identified, named, and defined 4direct marketing4. 7underman U considered to be the
father of contemporary direct marketing U is behind the creation of the toll-free ?-GII numberR?S and numerous
loyalty marketing programs including the #olumbia Record #lub, the maga.ine subscription card, and the
(merican +"press #ustomer Rewards program.RAS The term unk mail, referring to unsolicited commercial ads
delivered via post office or directly deposited in consumers) mail bo"es, can be traced back to ?HDC.RBS The term
spam, meaning 4unsolicited commercial e-mail,4 can be traced back to -arch B?, ?HHB,RCS although in its first few
months it merely referred to inadvertently posting a message so many times on =se*et that the repetitions
effectively drowned out the normal flow of conversation.
In ?GFA, (aron -ontgomery 7ard produced the first mail-order catalogue for his -ontgomery 7ard mail order
business. 5y buying goods and then reselling them directly to customers, 7ard was conse&uently removing the
middlemen at the general store and, to the benefit of the customer, drastically lowering the prices.RDS The $irect
-ail (dvertising (ssociation, predecessor of the present-day $irect -arketing (ssociation, was first established in
?H?F.RES Third class bulk mail postage rates were established in ?HAG.RFS
Benefits and dra1backs
$irect marketing is attractive to many marketers, because in many cases its positive effect :but not negative
results; can be measured directly. >or e"ample, if a marketer sends out ?,III solicitations by mail, and ?II
respond to the promotion, the marketer can say with confidence that campaign led directly to ?IV direct
responses. The number of recipients who are offended by unk mail9spam, however, is not easily measured. 5y
contrast, measurement of other media must often be indirect, since there is no direct response from a consumer.
-easurement of results, a fundamental element in successful direct marketing, is e"plored in greater detail
elsewhere in this article.
The Internet has made it easier for marketing managers to measure the results of a campaign. This is often
achieved by using a specific 7eb site landing page directly relating to the promotional material, a call to action will
ask the consumer to visit the landing page, and the effectiveness of the campaign can be measured by taking the
number of promotional messages distributed :e.g., ?,III; and dividing it by the number of responses :people
visiting the uni&ue 7eb site page;.
(nother way to measure the results is to compare the proected sales for a given term with the actual sales after a
direct advertising campaign.
7hile many marketers recogni.e the financial benefits of increasing targeted awareness, some direct marketing
efforts using particular media have been critici.ed for generating unwanted solicitations, not due to the method of
communication but because of poorly compiled demographic databases, advertisers do not wish to waste money
on communicating with consumers not interested in their products. >or e"ample, direct mail that is irrelevant to the
recipient is considered 4unk mail,4 and unwanted e-mail messages are considered 4spam.4 Some consumers are
demanding an end to direct marketing for privacy and environmental reasons,Rcitation neededS which direct
marketers are able to do to some e"tent by using 4opt-out4 lists, variable printing, and more-targeted mailing lists.
In response to consumer demand and increasing business pressure to increase the effectiveness of reaching the
right consumer with direct marketing, companies speciali.e in targeted direct advertising to great effect, reducing
advertising budget waste and increasing the effectiveness of delivering a marketing message with better
geodemography information, delivering the advertising message to only the consumers interested in the product,
service, or event on offer.
The most common form of direct marketing is direct mail,Rcitation neededS sometimes called unk mail, used by
advertisers who send paper mail to all postal customers in an area or to all customers on a list.
5unkmail
(ny low-budget medium that can be used to deliver a communication to a customer can be employed in direct
marketing. 'robably the most commonly used medium for direct marketing is mail, in which marketing
communications are sent to customers using the postal service. The term direct mail is used in the direct
marketing industry to refer to communication deliveries by the 'ost 6ffice, which may also be referred to as 4unk
mail4 or 4admail4 and may involve bulk mail.
$irect mail includes advertising circulars, catalogs, free trial #$s, pre-approved credit card applications, and other
unsolicited merchandising invitations delivered by mail or to homes and businesses, or delivered to consumers)
mailbo"es by delivery services other than the 'ost 6ffice. 5ulk mailings are a particularly popular method of
promotion for businesses operating in the financial services, home computer, and travel and tourism industries.
In many developed countries, direct mail represents such a significant amount of the total volume of mail that
special rate classes have been established. In the =nited States and =nited ,ingdom, for e"ample, there are bulk
mail rates that enable marketers to send mail at rates that are substantially lower than regular first-class rates. In
order to &ualify for these rates, marketers must format and sort the mail in particular ways J which reduces the
handling :and therefore costs; re&uired by the postal service.
(dvertisers often refine direct mail practices into targeted mailing, in which mail is sent out following database
analysis to select recipients considered most likely to respond positively. >or e"ample a person who has
demonstrated an interest in golf may receive direct mail for golf related products or perhaps for goods and services
that are appropriate for golfers. This use of database analysis is a type of database marketing. The =nited States
'ostal Service calls this form of mail 4advertising mail4 :admail for short;.
Telemarketing
(nother common form of direct marketing is telemarketing, in which marketers contact consumers by phone. The
unpopularity of cold call telemarketing :in which the consumer does not e"pect or invite the sales call; has led
some =S states and the =S federal government to create 4no-call lists4 and legislation including heavy fines. This
process may be outsourced to specialist call centres.
In the =S, a national do-not-call list went into effect on 6ctober ?, AIIB. =nder the law, it is illegal for
telemarketers to call anyone who has registered themselves on the list. (fter the list had operated for one year,
over EA million people had signed up.RGS The telemarketing industry opposed the creation of the list, but most
telemarketers have complied with the law and refrained from calling people who are on the list.Rcitation neededS
:The list does not apply to non-profit organi.ations.;
#anada has passed legislation to create a similar $o *ot #all 1ist. In other countries it is voluntary, such as the
*ew Qealand *ame Removal Service.
3mail !arketing
+mail -arketing is a third type of direct marketing. ( maor concern is spam. (s a result of the proliferation of
mass spamming, IS's and email service providers have developed increasingly effective +--ail >iltering
programs. These filters can interfere with the delivery of email marketing campaigns, even if the person has
subscribed to receive them,RHS as legitimate email marketing can possess the same hallmarks as spam. There are
a range of e-mail service providers that provide services
Door/to/Door %eaflet !arketing
1eaflet distribution services are used e"tensively by the fast food industries, and many other business focussing
on a local catchment. 5usiness to consumer business model, similar to direct mail marketing, this method is
targeted purely by area, and costs a fraction of the amount of a mailshot due to not having to purchase stamps,
envelopes or having to buy address lists and the names of home occupants.
Broadcast fa6ing
( fourth type of direct marketing, broadcast fa"ing, is now less common than the other forms.Rcitation neededS This
is partly due to laws in the =nited States and elsewhere which make it illegal.Rcitation neededS
7oicemail !arketing
( fifth type of direct marketing has emerged out of the market prevalence of personal voice mailbo"es, and
business voicemail systems. $ue to the ubi&uity of email marketing, and the e"pense of direct mail and
telemarketing, voicemail marketing presented a cost effective means by which to reach people directly, by voice.
(buse of consumer marketing applications of voicemail marketing resulted in an abundance of 4voice-spam4, and
prompted many urisdictions to pass laws regulating consumer voicemail marketing.
-ore recently, businesses have utili.ed guided voicemail :an application where pre-recorded voicemails are
guided by live callers; to accomplish personali.ed business-to-business marketing formerly reserved for
telemarketing. 5ecause guided voicemail is used to contact only businesses, it is e"empt from $o *ot #all
regulations in place for other forms of voicemail marketing.(nother variation is voicemail courier :an application
where pre-recorded voice messages are couriered into voicemail by live callers; to accomplish personali.ed
voicemail marketing. 2oicemail courier is used for both business-to-business marketing and also business-to-
consumer applications.
Couponing
#ouponing is used in print media to elicit a response from the reader. (n e"ample is a coupon which the reader
cuts out and presents to a super-store check-out counter to avail of a discount. #oupons in newspapers and
maga.ines cannot be considered direct marketing, since the marketer incurs the cost of supporting a third-party
medium :the newspaper or maga.ine;0 direct marketing aims to circumvent that balance, paring the costs down to
solely delivering their unsolicited sales message to the consumer, without supporting the newspaper that the
consumer seeks and welcomes.
Direct/response television marketing
$irect marketing on T2 :commonly referred to as $RT2; has two basic forms: long form :usually half-hour or hour-
long segments that e"plain a product in detail and are commonly referred to as infomercials; and short form, which
refers to typical BI-second or EI-second commercials that ask viewers for an immediate response :typically to call
a phone number on screen or go to a 7eb site;.
T2-response marketingUi.e. infomercialsUcan be considered a form of direct marketing, since responses are in
the form of calls to telephone numbers given on-air. This both allows marketers to reasonably conclude that the
calls are due to a particular campaign, and allows the marketers to obtain customers) phone numbers as targets
for telemarketing. =nder the >ederal $o-*ot-#all 1ist rules in the =S, if the caller buys anything, the marketer
would be e"empt from $o-*ot-#all 1ist restrictions for a period of time due to having a prior business relationship
with the caller. >irms such as M2#, Thane $irect, and Interwood -arketing %roup then cross-sell and up-sell to
these respondents.
6ne of the most famous $RT2 commercials was for %insu ,nives by %insu 'roducts, Inc. of RI. Several aspects
of ad, such as its use of adding items to the offer and the guarantee of satisfaction were much copied and came to
be considered part of the formula for success with short-form direct-response T2 ads :$RT2;
Direct selling
$irect selling is the sale of products by face-to-face contact with the customer, either by having salespeople
approach potential customers in person, or through indirect means such as Tupperware parties.
-opularity of Direct 8dvertising
( reportR?IS produced by the $irect -arketing (ssociation found that DFV of the campaigns studied were
employing integrated strategies. 6f those, almost half :CFV; launched with a direct mail campaign, typically
followed by e-mail and then telemarketing
-------------------------------------------------------------------------------------------------------------------------------------------Recently,
,eith *orris, the #hief +"ecutive of the $irect -arketing (ssociate :$-(; defined direct marketing as, Ka
database-driven, one-to-one marketing structure.L #onfused< 7ell, perhaps a better way to define direct
marketing though may be through the use of e"amples of direct marketing.Suppose you own a business that sells
automobiles J cars, trucks, vans and S=2@s. 3ou have an active database of customers that have purchased from
you in the past and you know who your customers are J who purchased a car, who purchased a truck, and so on.
3ou then develop specific communications to the different segments of that database. That is one of the e"amples
of direct marketing J a database-driven, one-to-one marketing structure.$irect marketing is all about finding out
your customers individual needs, and then finding ways to meets these needs. Such as a lu"ury goods seller that
knows you fit into a certain income bracket or a toy manufacturer that knows from their database that you have
children, or even grandchildren.(nother one of the e"amples of direct marketing is when you receive a letter from
a charity organi.ation or a political group seeking donations. Typically, these letters are derived from a database
that lets them know that you fit into the same demographics as their target market. These mailings are usually
tailored specifically to you, with your name strewn throughout the letter.
These e"amples of direct marketing all focus on one thing J customi.ation. The marketer is trying to ma"imi.e the
return on his direct marketing dollars by selecting those on his list that are most likely to respond based on certain
predetermined criteria. They then take this criteria and produce a targeted direct marketing campaign.
I,,78TI73 R"R8% !3DI8
In addition to the conventional media vehicles, a lot of innovative mediums are used in rural advertising and
marketing. Some of the most striking ones are:
-uppetry
'uppetry is the indigenous theatre of India. >rom time immortal it has been the most popular form and well-
appreciated form of entertainment available to the village people.
It is an ine"pensive activity. The manipulator uses the puppets as a medium to e"press and communicate ideas,
values and social messages.1ife Insurance #orporation of India used puppets to educate rural masses about 1ife
Insurance0 enlisting the help of the literacy house in .These plays were shown to the audience in villages in =',
5ihar, W -'. The number of in&uires at local 1ife Insurance #ompanies during the period immediately following
the performance was compared with normal fre&uency and found to be considerable higher. The field staff of the
corporation also reported a definite impact on the business.
.olk Theater
>olk theaters are mainly short and rhythmic in form. The simple tunes help in informing and educating the people
in informal and interesting manner. It has been used as an effective medium for social protest against inustice,
e"ploitation and oppression.
%overnment has used this media for populari.ing improved variety of seeds, agricultural implements, fertili.er etc.
'unab (gricultural =niversity produced Two (udio #assettes.
(; 5alliye ,anak 5iye - 7heat #ultivation.
5; ,hiran ,epah *arme - #otton #ultivation.
5oth were well received by farmers.551I1 used -agician &uite effectively for launch of ,adak #hhap Tea in
+tawah.
$emonstration: 4$irect #ontact4 is a face-to-face relationship with people individually and with groups such as the
'anchayats and other village groups. Such contact helps in arousing the villager)s interest in their own problem
and motivating them towards self-development.
$emonstration may be
(. i. -ethod demonstration
ii. Result demonstration
5. i. Simple $emonstration
ii. #omposite $emonstration
In result demonstration, help of audio -visual media can add value. (sian 'aints launched =tsav range by painting
-ukhiya)s house or 'ost office to demonstrate that paint does not peel off.
9all -aintings
7all 'aintings are an effective and economical medium for advertising in rural areas. They are silent unlike
traditional theatre .( speech or film comes to an end, but wall painting stays as long as the weather allows it to.
Retailer normally welcomes paintings of their shops, walls, and name boards. Since it makes the shop look
cleaner and better.
Their shops look alluring and stand out among other outlets. 5esides rural households shopkeepers and
panchayats do not e"cept any payment, for their wall to be painted with product messages.
To get one)s wall painted with the product messages is seemed as a status symbol. The greatest advantage of
the medium is the power of the picture completed with its local touch.
The images used have a strong emotional association with the surrounding, a feet impossible for even a moving
visual medium like television, which must use general image to cater to greatest number of viewers.
Mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm
mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm
mmmmmmm
'ersonal selling - 'ersonal presentation by the firm@s sales force for the purpose of making sales and building
customer relationships. 'ersonal selling is paid personal communication that attempts to inform customers and
persuade them to purchase products or services. =ndoubtedly by now you)ve figured out that marketing enables
both individuals and organi.ations to sell products and services to other people to help them satisfy their needs
and wants. (t some point in the selling process, personal selling usually becomes involved.
It is the personal selling process that allows marketers the greatest freedom to adust a message to satisfy
customers) information needs. 'ersonal selling allows the marketer or seller to communicate directly with the
prospect or customer and listen to his or her concerns, answer specific &uestions, provide additional information,
inform, persuade, and possibly even recommend other products or services.
The personal selling process consists of the following steps:
$: -rospecting
'rospecting refers to identifying and developing a list of potential clients. Sales people can seek the names of
prospects from a variety of sources including trade shows, commercially-available databases or mail lists,
company sales records and in-house databases, website registrations, public records, referrals, directories and a
wide variety of other sources. 'rospecting activities should be structured so that they identify only potential clients
who fit the profile and are able, willing and authori.ed to buy the product or service.
This activity is greatly enhanced today using websites with specially-coded pages optimi.ed with key words so
that prospects may easily find you when they search the web for certain key words related to your offering. 6nce
prospecting is underway, it then is up to the sales professional to &ualify those prospects to further identify likely
customers and screen out poor leads. -odern websites can go along way in not only identifying potential
prospects but also starting this &ualification process.
&: -re/approach
5efore engaging in the actual personal selling process, sales professionals first analy.e all the information they
have available to them about a prospect to understand as much about the prospect as possible. $uring the 're-
approach phase of the personal selling process, sales professionals try to understand the prospect)s current
needs, current use of brands and feelings about all available brands, as well as identify key decision makers,
review account histories :if any;, assess product needs, plan9create a sales presentation to address the identified
and likely concerns of the prospect, and set call obectives. The sales professional also develops a preliminary
overall strategy for the sales process during this phase, keeping in mind that the strategy may have to be refined
as he or she learns more about the prospect.
(: 8pproach
The approach is the actual contact the sales professional has with the prospect. This is the point of the selling
process where the sales professional meets and greets the prospect, provides an introduction, establishes rapport
that sets the foundation of the relationship, and asks open-ended &uestions to learn more about the prospect and
his or her needs.
): !aking the -resentation
$uring the presentation portion of the selling process, the sales professional tells that product 4story4 in a way that
speaks directly to the identified needs and wants of the prospect. ( highly customi.ed presentation is the key
component of this step. (t this point in the process, prospects are often allowed to hold and9or inspect the product
and the sales professional may also actually demonstrate the product. (udio visual presentations and9or slide
presentations may be incorporated at this stage and this is usually when sales brochures or booklets are
presented to the prospect. Sales professionals should strive to let the prospect do most of the talking during the
presentation and address the needs of the prospect as fully as possible by showing that he or she truly
understands and cares about the needs of the prospect.
+: vercoming bjections
'rofessional sales people seek out prospects) obections in order to try to address and overcome them. 7hen
prospects offer obections, it often signals that they need and want to hear more in order to make a fully-informed
decision. If obections are not uncovered and identified, then sales professionals cannot effectively manage them.
=ncovering obections, asking clarifying &uestions, and overcoming obections is a critical part of training for
professional sellers and is a skill area that must be continually developed because there will always be obections.
Trust me when I tell you that as soon as a sales professional finds a way to successfully handle 4all4 his or her
prospects) obections, some prospect will find a new, unanticipated obection-- if for no other reason than to test
the mettle of the sales person.
;: Closing the Sale
(lthough technically 4closing4 a sale happens when products or services are delivered to the customer)s
satisfaction and payment is received, for the purposes of our discussion I will define closing as asking for the order
and ade&uately addressing any final obections or obstacles. There are many closing techni&ues as well as many
ways to ask trial closing &uestions. ( trail &uestion might take the form of, 4*ow that I)ve addressed your concerns,
what other &uestions do you have that might impact your decision to purchase<4 #losing does not always mean
that the sales professional literally asks for the order, it could be asking the prospect how many they would like,
what color they would prefer, when they would like to take delivery, etc. Too many sales professions are either
weak or too aggressive when it comes to closing. If you are closing a sale, be sure to ask for the order. If the
prospect gives an answer other than 4yes4, it may be a good opportunity to identify new obections and continue
selling.
<: .ollo1/up
>ollow-up is an often overlooked but important part of the selling process. (fter an order is received, it is in the
best interest of everyone involved for the sales person to follow-up with the prospect to make sure the product was
received in the proper condition, at the right time, installed properly, proper training delivered, and that the entire
process was acceptable to the customer. This is a critical step in creating customer satisfaction and building long-
term relationships with customers. If the customer e"perienced any problems whatsoever, the sales professional
can intervene and become a customer advocate to ensure ?IIV satisfaction. $iligent follow-up can also lead to
uncovering new needs, additional purchases, and also referrals and testimonials which can be used as sales tools.
Sales !anagement0-anaging the sales process is typically the ob of the Sales -anager. %ood sales managers
usually e"hibit the characteristics of: organi.ation, a good personal sales record, enthusiasm, ambition, product
knowledge, trustworthiness, mentoring skills, and somebody who is respected by others. 7hile an in-depth
discussion of sales management is beyond the scope of this crash-course, I)ll mention one tool often used by sales
managers to manage the sales process. This is called the Sales >unnel or Sales 'ipeline Report.
The Sales .unnel =or Sales -ipeline:
( sales funnel report presents a 4snapshot4 of your sales function at any given point in time. >or conceptual
purposes, the sales process is often compared to a funnel where new leads coming into the system :i.e.
prospects; are initially placed into the top of the funnel :the widest part; and then worked through the system by
informing, persuading, overcoming obections, providing information, demonstrating, providing free samples, etc.,
etc. until at the narrow part of the funnel, an order is placed and a sales is closed when payment from the
customer is received.
The funnel framework works fairly well because for all new leads that are generated by marketing, there is a
closing rate that represents the sales that ultimately result. The number of resulting sales is usually significantly
less than the number of total leads generated hence it is useful to think that as leads work their way further down
the funnel there will be less and less of them until they come out the narrow end of the funnel as sales.
6ne important thing to note is that organi.ations define each phase in the sales process :or, part of the funnel;
differently. +ach step working through the funnel should have clearly defined criteria that go along with it so at
each part of the funnel, there is specific knowledge about all the leads at that stage. In other words, leads become
more and more &ualified as they work their way through the funnel and at each step, you will know e"actly what
that specific level of &ualification is. (nother important thing to keep in mind is that the funnel is a great way to
track and forecast sales, as well as, gauge marketing activities. 5y running a Sales >unnel Report, the sales
manager can visually see how many leads are at each step, if there are any 4bottlenecks4, or if there are an
insufficient number of leads at any stage. (rmed with that knowledge, then the sales manager may instruct his or
her sales force where they should focus more attention to keep sales at the desired level. !e or she can then also
work closely with the marketing manager to ensure they are generating enough leads to hit sales goals, whether
the leads are of high enough &uality, or what further needs to be done to hit sales goals.In short, the funnel can
clearly point out what adustments need to be made within the sales function to hit sales goals. That might mean
that marketing activities need to be adusted, that addition sales training is needed, or that sales personnel need to
focus their efforts and activities on certain parts of the sales pipeline to keep the entire process on balance and
running smoothly. The sales funnel also helps sales and marketing work closely together to meet organi.ational
sales obectives. It is a wonderful management tool.
Sales tips0I think success in sales depends upon some basics. I can humbly share a few pointers that I think have
allowed me to enoy success in sales:
5e sincere with people. Too many sales people act in a manner that seems artificial or they only feign
interest in their prospects) problems and concerns. 'eople are smart and see right through such insincerity.
If you are not sincere and honest with everyone you meet then you should not be in sales.
Sell products or services that you believe in and that have customers you gravitate toward naturally or that
you inherently like and want to be around and learn more about. If you do not have a passion for the
product and the customers then you will not be happy--or very successful.
It is vitally important to constantly hone your sales and communications skills. #ontinuous growth and
training in formal professional selling techni&ues is also very important. Take training classes, listen to
professional development audio podcasts and seminars, read all the professional development material
you can get your hands on, and start a program of self-study and development in sales today if you haven)t
already.
>irst listen to your customer, understand his or her wants and needs, and only then try to determine
whether or not you can deliver the product or services to meet those wants and needs. If you approach a
prospect with a solution before understanding the problem you are likely to be wrong about the solution.
The best sales people ask a lot of &uestions and genuinely listen to the answers before speaking again.
3our prospects and customers are all different so you should treat them differently.
The best sales people listen much more than they talk.
>ind out what your prospects want and then give it to them.
If you cannot give your prospects what they want tell them so and help them find what they are looking for
elsewhere...or at least point them in the right direction. 3ou)ll help them and learn more about your own
market in the process.
If you think that you cannot make it in sales as a profession then you probably should not even try.
1ssential elements of Personal Sellin$
*ersonal sellin( consists of the followin( elements;
i. (ace-to-(ace interaction; *ersonal sellin( involves a salesmen havin( face-to-face
interaction with the prospective buyers.
*ersonal Sellin(
J
ii. Persuasion; *ersonal sellin( re4uires persuasion on the part of the seller to the prospective
customers to buy the product. So a salesman must have the ability to convince the customers
so that an interest may be created in the mind of the customers to use that product.
iii. (lexibility; The approach of personal sellin( is always fle)ible. Sometimes salesman may
e)plain the features and benefits of the product+ sometimes (ive demonstration of the use of
product and also faces number of 4ueries from the customers. 0ookin( into the situation
and interest of the customers+ the approach of the salesman is decided instantly.
i/. Promotion of sales; The ultimate obFective of personal sellin( is to promote sales by
convincin( more and more customers to use the product.
/. Supply of Information; *ersonal sellin( provides various information to the customers
re(ardin( availability of the product+ special features+ uses and utility of the products. So it
is an educative process.
/i. 8utual =enefit: ,t is a two-way process. Both seller and buyer derive benefit from it.
/hile customers feel satisfied with the (oods+ the seller enFoys the profits.
Importance of Personal Sellin$
*ersonal Sellin( is e)tremely important as it helps in increasin( sales. But there are other features
as well which make it important. 0et us discuss the importance of personal sellin( from the point
of view of manufactures as well as consumers.
1rom manufacturer=s point of view
i. ,t creates demand for products both new as well as e)istin( ones.
ii. ,t creates new customers and+ thus help in e)pandin( the market for the product.
iii. ,t leads to product improvement. /hile sellin( personally the seller (ets ac4uainted with the
choice and demands of customers and makes su((estions accordin(ly to the manufacturer.
1rom customer=s point of view
i. *ersonal sellin( provides an opportunity to the consumers to know about new products
introduced in the market. Thus+ it informs and educates the consumers about new products.
ii. ,t is because of personal sellin( that customers come to know about the use of new products
Business Studies
in the market. The sellers demonstrate the product before the prospective buyers and
e)plain the use and utility of the products.
iii. *ersonal sellin( also (uides customers in selectin( (oods best suited to their re4uirements
and tastes as it involves face-to-face communication.
iv. *ersonal sellin( (ives an opportunity to the customers to put forward their complaints and
difficulties in usin( the product and (et the solution immediately.
>ualities of salesperson en$a$ed in Personal Sellin$
,t is very difficult to enlist the 4ualities of people en(a(ed in personal sellin(. The 4uality will vary
from time to time and from situation to situation. ,t also depends upon the customers= demand
and nature of the product. A(ain a salesman may be effective in one situation but may fail in
another situation. So in real life certain 4ualities may be suitable for a particular line of product
and may be irrelevant in any other case. %owever+ there are certain common 4ualities+ which
every salesman should possess in order to become successful in their life. These 4ualities are
listed below.
i. Physical >uality
ii. 8ental >uality
iii. Inte$rity of character
i/. ?nowled$e of the product and the company
/. <ood beha/iour
/i. #bility to persuade
$ow let us discuss the above 4ualities in detail.
i. Physical @uality: A salesman should have a (ood appearance and an impressive personality.
%e should also have a sound health.
*ersonal Sellin(
ii. 8ental @uality: A (ood salesman should posses certain mental 4ualities like ima(ination+
initiative+ self-confidence+ sharp memory+ alertness etc. %e should be able to understand
the needs and preferences of customers.
iii. Inte$rity of character: A (ood salesman should posses the 4ualities of honesty and inte(rity.
%e is to (ain the confidence of the customers. %e should be able to understand their needs
and (uide them how to satisfy those needs. %is employer too should have faith in him. A
salesman should be loyal both to the employer and to the customers.
i/. ?nowled$e of the product and the company: A salesman should have full knowled(e of
the product and the company he is representin(. %e should be able to e)plain each and
every aspect of the product i.e. its 4ualities+ how to use it+ what precautions to be taken+
etc. %e should be able to e)plain the business and service record of the company. %e
should also have knowled(e of products of rival companies. So that he can put across the
superiority of his own products.
/. <ood beha/iour : A salesman should be co-operative and courteous. :ood behaviour
enables one to win the confidence of the customers. %e should not feel irritated if the buyer
puts up many 4uestions even if the 4uestions are irrelevant. ,t is also not necessary that the
person he is tryin( to convince buys the product. The salesman has to remain and courteous
in every case.
/i. #bility to persuade: A (ood salesman should be (ood in conversation so that he can
en(a(e the person he is attendin( in conversation. %e should be able to convince him and
create the desire in his mind to posses the commodity.
In comparison to other marketing communications tools such as advertising, personal selling tends to:
=se fewer resources, pricing is often negotiated.
'roducts tend to be fairly comple" :e.g. financial services or new cars;.
There is some contact between buyer and seller after the sale so that an ongoing relationship is built.
#lient9prospects need specific information.
The purchase tends to involve large sums of money.
There are e"ceptions of course, but most personal selling takes place in this way. 'ersonal selling involves a
selling process that is summarised in the following >ive Stage 'ersonal Selling 'rocess. The five stages are:
?. 'rospecting.
A. -aking first contact.
B. The sales call.
C. 6bection handling.
D. #losing the sale.
( >ive Stage 'ersonal Selling 'rocess.
Stage ne / -rospecting.
'rospecting is all about finding prospects, or potential new customers. 'rospects should be )&ualified,) which
means that they need to be assessed to see if there is business potential, otherwise you could be wasting your
time. In order to &ualify your prospects, one needs to:
'lan a sales approach focused upon the needs of the customer.
$etermine which products or services best meet their needs.In order to save time, rank the prospects and leave
out those that are least likely to buy.
Stage T1o / !aking .irst Contact.This is the preparation that a salesperson goes through before they meet with
the client, for e"ample via e-mail, telephone or letter. 'reparation will make a call more focused.
-ake sure that you are on time.
5efore meeting with the client, set some obectives for the sales call. 7hat is the purpose of the call< 7hat
outcome is desirable before you leave<
-ake sure that you)ve done some homework before meeting your prospect. This will show that you are committed
in the eyes of your customer.To save time, send some information before you visit. This will wet the prospect)s
appetite.,eep a set of samples at hand, and make sure that they are in very good condition.7ithin the first minute
or two, state the purpose of your call so that time with the client is ma"imised, and also to demonstrate to the client
that your are not wasting his or her time.!umour is fine, but try to be sincere and friendly.
Stage Three / The Sales Call =or Sales -resentation:.
It is best to be enthusiastic about your product or service. If you are not e"cited about it, don)t e"pect your prospect
to be e"cited.>ocus on the real benefits of the product or service to the specific needs of your client, rather than
listing endless lists of features.Try to be rela"ed during the call, and put your client at ease.1et the client do at least
GIV of the talking. This will give you invaluable information on your client)s needs.Remember to ask plenty of
&uestions. =se open &uestions, e.g. T+$)s, and closed &uestions i.e. &uestions that will only give the answer )yes)
or the answer )no.) This way you can dictate the direction of the conversation.*ever be too afraid to ask for the
business straight off.
Stage .our / bjection *andling.6bection handling is the way in which salespeople tackle obstacles put in their
way by clients. Some obections may prove too difficult to handle, and sometimes the client may ust take a dislike
to you :aka the hidden obection;. !ere are some approaches for overcoming obections:>irstly, try to anticipate
them before they arise.
)3es but) techni&ue allows you to accept the obection and then to divert it. >or e"ample, a client may say that they
do not like a particular colour, to which the salesperson counters )3es but X is also available in many other
colours.)(sk )why) the client feels the way that they do.
)Restate) the obection, and put it back into the client)s lap. >or e"ample, the client may say, )I don)t like the taste of
X,) to which the salesperson responds, )3ou don)t like the taste of X,) generating the response )since I do not like
garlic) from the client. The salesperson could suggest that X is no longer made with garlic to meet the client)s
needs.The sales person could also tactfully and respectfully contradict the client.
Stage .ive / Closing the Sale.This is a very important stage. 6ften salespeople will leave without ever
successfully closing a deal. Therefore it is vital to learn the skills of closing.8ust ask for the business/ - )'lease may
I take an order<) This really works well.1ook for buying signals :i.e. body language or comments made by the client
that they want to place an order;. >or e"ample, asking about availability, asking for details such as discounts, or
asking for you to go over something again to clarify.
8ust stop talking, and let the client say )yes.) (gain, this really works.
The )summary close) allows the salesperson to summarise everything that the client needs, based upon the
discussions during the call. >or e"ample, )3ou need product X in blue, by >riday, packaged accordingly, and
delivered to your wife)s office.) Then ask for the order.
The )alternative close) does not give the client the opportunity to say no, but forces them towards a yes. >or
e"ample )$o you want product X in blue or red<) #heeky, but effective.
,ature of -ersonal Selling
2ives marketers0 The greatest freedom to adust a message to satisfy customers informational needs, dynamic.
-ost precision, enabling marketers to focus on most promising leads. vs. advertising, publicity and sales
promotion
2ive more information Two way flow of information, interactivity.
$iscover the strengths and weaknesses of new products and pass this information on to the marketing
department.
!ighest cost. 5usinesses spend more on personal selling than on any other form of promotional mi".
%oals range from YP
finding prospects
convincing prospects to buy
keeping customers satisfied--help them pass the word along.
Return to #ontents
Types of Sales -ersons
rder Takers
Seek repeat sales, make certain that customers have sufficient product &uantities where and when they need it.
$o not re&uire e"tensive sales effort. (rrange displays, restocks them, answer phone calls. 1ow compensation,
little training re&uired. !igh turnover of personnel. A types:
Inside rder Takers receive orders by mail9phone, sales person in a retail store.
>ield 6rder Takers travel to customers. =se laptop computers to improve tracking of inventory and orders etc.
rder 2etters
Sell to new customers and increase sales to present customers, sometimes called creative selling.
%enerate customer leads, provide information, persuading customers and closing sales. Re&uired for high priced,
comple" and9or new products. !igh pressure, re&uires e"pensive, time consuming training.
Support -ersonnel
>acilitate the selling function. 'rimarily business to business products.
-issionary Salespeople $istribute information regarding new goods or services, describes attributes and leaves
materials, does not close sales. (ssist producers) customers in selling to their own customers. I+ call on retailers
and persuade them to carry the product. 'harmaceuticals may go to doctors offices and persuade them to carry
their products.
Trade Salespeople -ay perform order taking function as well. Spend much time helping customers, especially
retail stores, to promote the product. Restock the shelves, set up displays. Technical Salespersons 6ffer technical
assistance to current customers. =sually trained engineers etc.
Service Salespeople interacts with customers after sale is complete.
Team selling...entire team of selling professionals in selling to and servicing maor customers, especially when
speciali.ed knowledge is needed to satisfy different interests in customers) buying centers.
3lements of the -ersonal Selling -rocess
*o A salespersons use e"actly the same sales method, but it is generally a seven step process:
'rospecting and +valuating
Seek names of prospects through sales records, referrals etc., also responses to advertisements. *eed to
evaluate if the person is able :=ndergraduate degree to attend a graduate program;, willing and authori.ed to buy.
5lind prospecting-rely on phone directory etc.
'reapproach :'reparing;
Review key decision makers esp. for business to business, but also family
assess credit histories
prepare sales presentations
identify product needs.
!elps present the presentation to meet the prospects needs.
(pproaching the #ustomer
-anner in which the sales person contacts the potential customer. >irst impression of the sales person is 1asting
and therefore important.
Strive to develop a relationship rather than ust push the product.
#an be based on referrals, cold calling or repeat contact.
Return to #ontents
-aking the 'resentation
*eed to attract and hold the prospects (ttention to stimulate Interest and stir up $esire in the product so the
potential customer takes the appropriate (ction. (I$(
Try to get the prospect to touch, hold or try the product. -ust be able to change the presentation to meet the
prospect needs.
Three types of presentations:
Stimulus Response >ormat: (ppropriate stimulus will initiate a buy decision, use one appeal after another hoping
to hit the right button...#ounter #lerk Z -c$onald)s 47ould you like fries with your burger<4
>ormula Selling >ormat: :#anned Sales 'resentation; memori.ed, repetitive, given to all customers interested in a
specific product.
%ood for ine"perienced sales people.
5etter with heavily advertised items that are presold.
Telemarketing a credit card//
*eed Satisfaction >ormat: 5ased on the principal that each customer has a different set of needs9desires.,
therefore the sales presentation should be adapted to the individual customer)s needs, this is a key advantage of
personal selling vs. advertising.
Sales person asks &uestions first, then makes the presentation accordingly.
*eed to do homework, listen well and allow customers to talk etc.
-ust answer two types of &uestions:
for more information
overcome obections.
6vercoming 6bections
Seek out obections and address them.
(nticipate and counter them before the prospect can raise them.
Try to avoid bringing up obections that the prospect would not have raised.
'rice obection is the most common
*eed to provide customers with reasons for the Ns, build up the value before price is mentioned
-ust be convinced of price in own mind before you can sell to customer.
%et budget info. on buyer before you try to sell, and must know what they want, must sell service on top of
product augmented product--to create value//
-ust know value of product, provide warranties etc.//
Return to #ontents
#losing
(sk prospect to buy product9products. =se trial closes, I+ ask about financial terms, preferred method of delivery.
AIV sales people generally close GIV sales., (von, over ?9A =S N?.C bn business from ?FV of C?D,III SRs.
*eed to be prepared to close at any time. The following are popular closing techni&ues:
Trial #lose :-inor decision close;
(ssumptive close :Implied consent close;
=rgency close
(sk for the sale close
If prospect says no, they may ust need more reasons to buy//
Return to #ontents
>ollowing =p
-ust follow up sale, determine if the order was delivered on time, installation 6, etc. (lso helps determine the
prospects future needs. (ccomplishes four obectives:
customer gain short term satisfaction
referrals are stimulated
in the long run, repurchase
prevent cognitive dissonance
6ld school, sell and leave//--Muickly before customer changes her mind//
*ow:
Stay a few minutes after sale--reinforce, make them feel good, made wise choice, leave small gift :with co. name
on it//;, call office at any time etc//
>ollow up, reinforce, know birthdays, new year etc, friendly correspondence...relationship building//
!andout...Toyota #alling In 8apan)s #ar -arket
!alf of cars are sold door-to-door. This is shrinking due to environmental changes. Toyota has more than ?II,III
door-to-door sales people.
$eveloping 1ong-term relationships is key, ,eiretsu, do business with only those you know and trust. >ace-to-face
meetings before business to establish trust, the approach stage.
>ollow up is key to relationship:
(fter sales:
call in&uiring on car)s immediate performance
hand written greeting cards
written invitations for low cost oil changes
'rospecting includes:
$riving schools for people to obtain licenses P prospects
(lso referrals from e"isting customers is very important
#urtesy calls to clients who referred new customers.
Timing of presentation:
To housewife in the middle of the day
8ust before B year 4Shaken4, following A years
4(t first I had no intention of buying a new car, but -r. Saito is very good at proposing reasons why I should
change4 P N?,EII shaken.
Return to #ontents
-anagement of Salesforce
Sales force is directly responsible for generating sales revenue.
+ight general management areas:
+stablish Salesforce obectives
Similar to other promotional obectives
$emand oriented or image oriented.
-aor obective is persuasion, converting consumer interest into sales.
Sales obectives0 e"pected to accomplish within a certain period of time.
%ive direction and purpose and act as a standard for evaluation.
Set for total salesforce and each individual salesperson.
#an be Ns, units sold, market share to achieve, for individual salespersons, also include ave. order si.e, ave. [ of
sales9time period, and ratio orders9calls.
Return to #ontents
6rgani.ing the Salesforce
In-house vs. independent agents :manufacturer)s sales agents;.
6rgani.e by:
%eography :simplest, but not suitable if product:s; are comple" or customers re&uire speciali.ed knowledge;
#ustomer: $ifferent buyers have different needs
'roduct: Specific knowledge re: products is needed
Si.e. -arginal analysis, or determine how many sales calls9year are needed for an organi.ation to effectively
serve its customers and divide this total by the average [ of sales calls that a person makes annually. (lso use
subective udgement.
-5*( estimates how many calls to e"pect, one year in advance, and then determines the si.e of the salesforce
at any given time.
Return to #ontents
Recruiting and Selecting Salespeople
*eed to establish a set of re&uired &ualifications before beginning to recruit. 'repare a ob description that lists
specific tasks the salesperson should perform and analy.e traits of the successful salespeople within the
organi.ation.
-ay use assessment centers--intense training environment that places candidates in realistic problem settings in
which they give priorities to their activities, make and act on decisions.
Recruitment should be a continual activity aimed at reaching the best applicants.
(pplicants that most match the demographics of the target market. #hanging demographics, may be wise to hire
hispanic sales people if your territory is in >lorida//
Return to #ontents
Training Sales 'ersonnel
=se formal programs, or Informal on-the-ob training. #an be comple" or simple.
Training should focus on:
the company
products
selling techni&ues.
(imed at new hires and e"perienced personnel.
#an be held in the field, educational institutions or company facilities.
6ldsmobile spent NAD million last year to teach its dealers how to better treat its customers.
Return to #ontents
#ompensating Sales 'eople
To attract, motivate and retain sales people, that facilitate and encourage good treatment of the customers. *eed
to understand personalities of sales people. Strive for proper balance of freedom, income and incentives.
*eed to determine the best level of compensation re&uired, and the best method of calculating it.
Straight salary
straight commission :selling insurance;--single percentage of sales or sliding rate
#ombination plan
Return to #ontents
-otivating Sales 'eople
*eed a systematic approach, must also satisfy non-financial needs:
8ob security
7orking #onditions
6pportunities to succeed
Sales contests increase sales.
Symbolic awards--pla&ues, rings etc.
#an also use negative motivational methods for under performers.
$ue to burn out--even the best need motivating//
6ngoing process...keep reps. hungry
*eed a motivational program.
Spend time with reps, personal attention//
Take interest in them and the sales goals
#ompensation packet that rewards &uality salesmanship and e"tra effort
Recognition of e"tra effort of sales force
-ake sure SR feel important
,eep SR informed of company activities
-ake certain reps. believe in the company
%oals must be realistic and achievable and changeable
$etermine what they want and give it to them
#ontrolling and +valuating Salesforce performance
Rely on information from call reports, customer feedback and invoices. 'erformance is determined by obectives.
-ay compare with predetermined performance standards or with other sales people working under similar
conditions.
!andout (von....
NC billion business, relied solely on personal selling until recently, environmental changes have changed this...no
longer is the wife e"pected to be at home...model is dual income earning parents with children in day care.
*eed to develop more efficient ways to reach customers.
Salespeople earn pure commission, ?IV...DIV for top sellers :over NBA,FDI;
Strategies tried:
(von Select.
$irect mail catalog and toll free number, attract those that didn)t know an 4(von 1ady4, or didn)t want to deal with
one. (lso used national T2 and print campaign in conunction. 'roblems P
Salesperson creates confidence in the brand, delivering much more than advertising is able to do. 7hen you take
away the selling relationship, you)re left with a brand that)s relatively naked.
,ey is not to undercut the field salesforce, similar to dual distribution creating channel conflict.
-ary ,ay #orp has also tried this strategy but differently and more successfully:
#atalogs carry different merchandise
>orward commission to sales rep. in customer)s area 4*ever have a grey area regarding competing with sales
force.4
6ther demotivational concerns:
Restructured commissions
$ropped awards, trips and other incentives
1eadership 'rogram.
( -ulti-level marketing :-1-; concept. Rewarded for products sold as well as people you recruit as a sales
rep....by getting some of their commission and a portion of the commission of reps. they recruit etc. #reated a hard
sell environment and was conse&uently scrapped.
To remotivate:
,ature of -ersonal Selling
%ives marketers:
v The greatest freedom to adust a message to satisfy customers informational needs, dynamic.
v -ost precision, enabling marketers to focus on most promising leads. vs. advertising, publicity and sales
promotion
v %ive more information
v Two way flow of information, interactivity.
v $iscover the strengths and weaknesses of new products and pass this information on to the marketing
department.
v !ighest cost. 5usinesses spend more on personal selling than on any other form of promotional mi".
v %oals range from:
>inding prospects
#onvincing prospects to buy
,eeping customers satisfied--help them pass the word along
Scope and Importance of Personal Sellin$
,n the 6S+ @ million people are employed in sales positions+ accordin( to the department of labor.
Sales personnel include stockbrokers+ manufacturin( sales representatives+ real estate brokers etc.
'ost students in this class will have been employed as a sales person.
5eturn to Contents
;ature of Personal Sellin$
:ives marketers;
The (reatest freedom to adFust a messa(e to satisfy customers informational needs+ dynamic.
'ost precision+ enablin( marketers to focus on most promisin( leads. vs. advertisin(+ publicity and sales
promotion
:ive more information
Two way flow of information+ interactivity.
Discover the stren(ths and weaknesses of new products and pass this information on to the marketin(
department.
%i(hest cost. Businesses spend more on personal sellin( than on any other form of promotional mi).
:oals ran(e from
o findin( prospects
o convincin( prospects to buy
o keepin( customers satisfied--help them pass the word alon(.
5eturn to Contents
Types of Sales Persons
:rder Ta5ers
Seek repeat sales+ make certain that customers have sufficient product 4uantities where and when they need
it. Do not re4uire e)tensive sales effort. Arran(e displays+ restocks them+ answer phone calls. 0ow
compensation+ little trainin( re4uired. %i(h turnover of personnel. > types;
o Inside Order Takers receive orders by mail-phone+ sales person in a retail store.
o Field Order Takers travel to customers. 6se laptop computers to improve trackin( of inventory and
orders etc.
:rder <etters
Sell to new customers and increase sales to present customers+ sometimes called creative sellin(.
:enerate customer leads+ provide information+ persuadin( customers and closin( sales. 5e4uired for hi(h
priced+ comple) and-or new products. %i(h pressure+ re4uires e)pensive+ time consumin( trainin(.
Support Personnel
1acilitate the sellin( function. *rimarily business to business products.
o Missionary Salespeople Distribute information re(ardin( new (oods or services+ describes attributes
and leaves materials+ does not close sales. Assist producers& customers in sellin( to their own
customers. ,G call on retailers and persuade them to carry the product. *harmaceuticals may (o to
doctors offices and persuade them to carry their products.
o Trade Salespeople 'ay perform order takin( function as well. Spend much time helpin( customers+
especially retail stores+ to promote the product. 5estock the shelves+ set up displays. Technical
Salespersons 2ffer technical assistance to current customers. 6sually trained en(ineers etc.
o Service Salespeople interacts with customers after sale is complete.
Team selling...entire team of sellin( professionals in sellin( to and servicin( maFor customers+ especially
when speciali8ed knowled(e is needed to satisfy different interests in customers& buyin( centers.
5eturn to Contents
1lements of the Personal Sellin$ Process
$o > salespersons use e)actly the same sales method+ but it is (enerally a seven step process;
. Prospectin$ and 1/aluatin$
Seek names of prospects throu(h sales records+ referrals etc.+ also responses to advertisements. $eed to
evaluate if the person is able (6nder(raduate de(ree to attend a (raduate pro(ram#+ willin( and authori8ed to
buy. Blind prospectin(-rely on phone directory etc.
5eturn to Contents
". Preapproach 3Preparin$4
5eview key decision makers esp. for business to business+ but also family
o assess credit histories
o prepare sales presentations
o identify product needs.
%elps present the presentation to meet the prospects needs.
%. #pproachin$ the Customer
'anner in which the sales person contacts the potential customer. 1irst impression of the sales person is
0astin( and therefore important.
Strive to develop a relationship rather than Fust push the product.
Can be based on referrals+ cold callin( or repeat contact.
5eturn to Contents
'. 8a5in$ the Presentation
$eed to attract and hold the prospects Attention to stimulate Interest and stir up Desire in the product so the
potential customer takes the appropriate Action. A,DA
Try to (et the prospect to touch+ hold or try the product. 'ust be able to chan(e the presentation to meet the
prospect needs.
Three types of presentations;
o Stimulus Response Format: Appropriate stimulus will initiate a buy decision+ use one appeal after
another hopin( to hit the ri(ht button...Counter Clerk M 'cDonald&s N/ould you like fries with
your bur(er.N
o Formula Selling Format: (Canned Sales *resentation# memori8ed+ repetitive+ (iven to all customers
interested in a specific product.
:ood for ine)perienced sales people.
Better with heavily advertised items that are presold.
Telemarketin( a credit cardOO
o Need Satisfaction Format: Based on the principal that each customer has a different set of
needs-desires.+ therefore the sales presentation should be adapted to the individual customer&s needs+
this is a key advanta(e of personal sellin( vs. advertisin(.
Sales person asks 4uestions first+ then makes the presentation accordin(ly.
$eed to do homework+ listen well and allow customers to talk etc.
'ust answer two types of 4uestions;
for more information
overcome obFections.
:/ercomin$ :b2ections
Seek out obFections and address them.
Anticipate and counter them before the prospect can raise them.
Try to avoid brin(in( up obFections that the prospect would not have raised.
*rice obFection is the most common
$eed to provide customers with reasons for the Ls+ build up the value before price is mentioned
'ust be convinced of price in on mind before you can sell to customer.
:et bud(et info. on buyer before you try to sell+ and must know what they want+ must sell service on top of
product augmented product--to create valueOO
'ust know value of product+ provide warranties etc.OO
5eturn to Contents
6. Closin$
Ask prospect to buy product-products. 6se trial closes+ ,G ask about financial terms+ preferred method of
delivery.
>JP sales people (enerally close CJP sales.+ Avon+ over -> 6S L.@ bn business from BP of @A+JJJ
S5s.
$eed to be prepared to close at any time. The followin( are popular closin( techni4ues;
o Trial Close ('inor decision close#
o Assumptive close (,mplied consent close#
o 6r(ency close
o Ask for the sale close
,f prospect says no+ they may Fust need more reasons to buyOO
5eturn to Contents
7. (ollowin$ -p
'ust follow up sale+ determine if the order was delivered on time+ installation 2Q etc. Also helps determine
the prospects future needs. Accomplishes four obFectives;
o customer (ain short term satisfaction
o referrals are stimulated
o in the lon( run+ repurchase
o prevent co(nitive dissonance
2ld school+ sell and leaveOO--3uickly before customer chan(es her mindOO
$ow;
o Stay a few minutes after sale--reinforce+ make them feel (ood+ made wise choice+ leave small (ift
(with co. name on itOO#+ call office at any time etcOO
o 1ollow up+ reinforce+ know birthdays+ new year etc+ friendly correspondence...relationship buildin(OO
9andout...Toyota Callin$ In Aapan's Car 8ar5et
%alf of cars are sold door-to-door. This is shrinkin( due to environmental chan(es. Toyota has more than
JJ+JJJ door-to-door sales people.
Developin( 0on(-term relationships is key+ Qeiretsu+ do business with only those you know and trust. 1ace-
to-face meetin(s before business to establish trust+ the approach sta(e.
1ollow up is key to relationship;
After sales;
o call in4uirin( on car&s immediate performance
o hand written (reetin( cards
o written invitations for low cost oil chan(es
*rospectin( includes;
o Drivin( schools for people to obtain licenses R prospects
o Also referrals from e)istin( customers is very important
o Curtesy calls to clients who referred new customers.
Timin( of presentation;
o To housewife in the middle of the day
o 7ust before ? year NShakenN+ followin( > years
NAt first , had no intention of buyin( a new car+ but 'r. Saito is very (ood at proposin( reasons why ,
should chan(eN R L+"JJ shaken.
5eturn to Contents
8ana$ement of Salesforce
Sales force is directly responsible for (eneratin( sales revenue.
Gi(ht (eneral mana(ement areas;
1. 1stablish Salesforce ob2ecti/es
Similar to other promotional obFectives
Demand oriented or ima(e oriented.
'aFor obFective is persuasion+ convertin( consumer interest into sales.
Sales obFectivesK e)pected to accomplish within a certain period of time.
:ive direction and purpose and act as a standard for evaluation.
Set for total salesforce and each individual salesperson.
Can be Ls+ units sold+ market share to achieve+ for individual salespersons+ also include ave. order
si8e+ ave. S of sales-time period+ and ratio orders-calls.
5eturn to Contents
2. :r$ani*in$ the Salesforce
,n-house vs. independent a(ents (manufacturer&s sales a(ents#.
2r(ani8e by;
:eo(raphy (simplest+ but not suitable if product(s# are comple) or customers re4uire
speciali8ed knowled(e#
Customer; Different buyers have different needs
*roduct; Specific knowled(e re; products is needed
Si8e. 'ar(inal analysis+ or determine how many sales calls-year are needed for an
or(ani8ation to effectively serve its customers and divide this total by the avera(e S of sales
calls that a person makes annually. Also use subFective Fud(ement.
'B$A estimates how many calls to e)pect+ one year in advance+ and then determines the
si8e of the salesforce at any (iven time.
5eturn to Contents
3. &ecruitin$ and Selectin$ Salespeople
$eed to establish a set of re4uired 4ualifications before be(innin( to recruit. *repare a Fob
description that lists specific tasks the salesperson should perform and analy8e traits of the
successful salespeople within the or(ani8ation.
'ay use assessment centers--intense trainin( environment that places candidates in realistic problem
settin(s in which they (ive priorities to their activities+ make and act on decisions.
5ecruitment should be a continual activity aimed at reachin( the best applicants.
Applicants that most match the demo(raphics of the tar(et market. Chan(in( demo(raphics+ may be
wise to hire hispanic sales people if your territory is in 1loridaOO
5eturn to Contents
4. Trainin$ Sales Personnel
6se formal pro(rams+ or ,nformal on-the-Fob trainin(. Can be comple) or simple.
Trainin( should focus on;
the company
products
sellin( techni4ues.
Aimed at new hires and e)perienced personnel.
Can be held in the field+ educational institutions or company facilities.
2ldsmobile spent L>A million last year to teach its dealers how to better treat its customers.
5eturn to Contents
5. Compensatin$ Sales People
To attract+ motivate and retain sales people+ that facilitate and encoura(e (ood treatment of the
customers. $eed to understand personalities of sales people. Strive for proper balance of freedom+
income and incentives.
$eed to determine the best level of compensation re4uired+ and the best method of calculatin( it.
Strai(ht salary
strai(ht commission (sellin( insurance#--sin(le percenta(e of sales or slidin( rate
Combination plan
5eturn to Contents
6. 8oti/atin$ Sales People
$eed a systematic approach+ must also satisfy non-financial needs;
7ob security
/orkin( Conditions
2pportunities to succeed
Sales contests increase sales.
Symbolic awards--pla4ues+ rin(s etc.
Can also use ne(ative motivational methods for under performers.
Due to burn out--even the best need motivatin(OO
2n(oin( process...keep reps. hun(ry
$eed a motivational pro(ram.
Spend time with reps+ personal attentionOO
Take interest in them and the sales (oals
11 Compensation packet that rewards 4uality salesmanship and e)tra effort
11 5eco(nition of e)tra effort of sales force
11 'ake sure S5 feel important
11 Qeep S5 informed of company activities
11 'ake certain reps. believe in the company
11 :oals must be realistic and achievable and chan(eable
11 Determine what they want and (ive it to them
11 Controllin( and Gvaluatin( Salesforce performance
5ely on information from call reports+ customer feedback and invoices. *erformance is determined
by obFectives. 'ay compare with predetermined performance standards or with other sales people
workin( under similar conditions.
9andout #/on....
L@ billion business+ relied solely on personal sellin( until recently+ environmental chan(es have
chan(ed this...no lon(er is the wife e)pected to be at home...model is dual income earnin( parents
with children in day care.
$eed to develop more efficient ways to reach customers.
Salespeople earn pure commission+ JP...AJP for top sellers (over L?>+BAJ#
Strate(ies tried;
Avon Select!
Direct mail catalo( and toll free number+ attract those that didn&t know an NAvon 0adyN+ or
didn&t want to deal with one. Also used national T< and print campai(n in conFunction.
*roblems R
Salesperson creates confidence in the brand+ deliverin( much more than advertisin( is
able to do. /hen you take away the sellin( relationship+ you&re left with a brand that&s
relatively naked.
Qey is not to undercut the field salesforce+ similar to dual distribution creatin(
channel conflict.
'ary Qay Corp has also tried this strate(y but differently and more successfully;
Catalo(s carry different merchandise
1orward commission to sales rep. in customer&s area N$ever have a (rey area
re(ardin( competin( with sales force.N
2ther demotivational concerns;
5estructured commissions
Dropped awards+ trips and other incentives
"eaders#ip $rogram!
A 'ulti-level marketin( ('0'# concept. 5ewarded for products sold as well as people you
recruit as a sales rep....by (ettin( some of their commission and a portion of the commission
of reps. they recruit etc. Created a hard sell environment and was conse4uently scrapped.
To remotivate;
$ew CG2
5einstate Birthday presents
Anniversary plates
Annual *ins
*hone Blit8s to indicate appreciation
N:ifts Tand reco(nitionU are part of the ma(icN
8dvantages of -ersonal Selling
6ne key advantage personal selling has over other promotional methods is that it is a two-way form of
communication. In selling situations the message sender :e.g., salesperson; can adust the message as they gain
feedback from message receivers :e.g., customer;. So if a customer does not understand the initial message :e.g.,
doesn@t fully understand how the product works; the salesperson can make adustments to address &uestions or
concerns. -any non-personal forms of promotion, such as a radio advertisement, are infle"ible, at least in the
short-term, and cannot be easily adusted to address audience &uestions.
The interactive nature of personal selling also makes it the most effective promotional method for building
relationships with customers, particularly in the business-to-business market. This is especially important for
companies that either sell e"pensive products or sell lower cost but high volume products :i.e., buyer must
purchase in large &uantities; that rely heavily on customers making repeat purchases. 5ecause such purchases
may take a considerable amount of time to complete and may involve the input of many people at the purchasing
company :i.e., buying center;, sales success often re&uires the marketer develop and maintain strong relationships
with members of the purchasing company.
>inally, personal selling is the most practical promotional option for reaching customers who are not easily reached
through other methods. The best e"ample is in selling to the business market where, compared to the consumer
market, advertising, public relations and sales promotions are often not well received.
Disadvantages of -ersonal Selling
'ossibly the biggest disadvantage of selling is the degree to which this promotional method is misunderstood.
-ost people have had some bad e"periences with salespeople who they perceived were overly aggressive or
even downright annoying. 7hile there are certainly many salespeople who fall into this category, the truth is
salespeople are most successful when they focus their efforts on satisfying customers over the long term and not
focusing own their own selfish interests.( second disadvantage of personal selling is the high cost in maintaining
this type of promotional effort. #osts incurred in personal selling include:
!igh cost-per-action :#'(; J (s noted in the 'romotion $ecisions tutorial, #'( can be an important measure of
the success of promotion spending. Since personal selling involves person-to-person contact, the money spent to
support a sales staff :i.e., sales force; can be steep. >or instance, in some industries it costs well over :=S; NBII
each time a salesperson contacts a potential customer. This cost is incurred whether a sale is made or not/ These
costs include compensation :e.g., salary, commission, bonus;, providing sales support materials, allowances for
entertainment spending, office supplies, telecommunication and much more. 7ith such high cost for maintaining a
sales force, selling is often not a practical option for selling products that do not generate a large amount of
revenue.
Training #osts J -ost forms of personal selling re&uire the sales staff be e"tensively trained on product
knowledge, industry information and selling skills. >or companies that re&uire their salespeople attend formal
training programs, the cost of training can be &uite high and include such e"penses as travel, hotel, meals, and
training e&uipment while also paying the trainees@ salaries while they attend.
( third disadvantage is that personal selling is not for everyone. 8ob turnover in sales is often much higher than
other marketing positions. >or companies that assign salespeople to handle certain customer groups :e.g.,
geographic territory;, turnover may leave a company without representation in a customer group for an e"tended
period of time while the company recruits and trains a replacement
!hat is Consumer =uyin$ =eha/ior?
Definition of Buyin( Behavior;
Buyin( Behavior is the decision processes and acts of people involved in buyin( and usin( products.
$eed to understand;
why consumers make the purchases that they make.
what factors influence consumer purchases.
the chan(in( factors in our society.
Consumer Buyin( Behavior refers to the buyin( behavior of the ultimate consumer. A firm needs to analy8e buyin(
behavior for;
Buyers reactions to a firms marketin( strate(y has a (reat impact on the firms success.
The marketin( concept stresses that a firm should create a Marketing Mi% (''# that satisfies ((ives utility
to# customers+ therefore need to analy8e the what+ where+ when and how consumers buy.
'arketers can better predict how consumers will respond to marketin( strate(ies.
5eturn to Contents 0ist
Sta$es of the Consumer =uyin$ Process
Si) Sta(es to the Consumer Buyin( Decision *rocess (1or comple) decisions#. Actual purchasin( is only one sta(e
of the process. $ot all decision processes lead to a purchase. All consumer decisions do not always include all "
sta(es+ determined by the de(ree of comple)ity...discussed ne)t.
The " sta(es are;
. $ro&lem Recognition(awareness of need#--difference between the desired state and the actual condition.
Deficit in assortment of products. %un(er--1ood. %un(er stimulates your need to eat.
Can be stimulated by the marketer throu(h product information--did not know you were deficient. ,.G.+ see
a commercial for a new pair of shoes+ stimulates your reco(nition that you need a new pair of shoes.
>. Information searc#--
o ,nternal search+ memory.
o G)ternal search if you need more information. 1riends and relatives (word of mouth#. 'arketer
dominated sourcesK comparison shoppin(K public sources etc.
A successful information search leaves a buyer with possible alternatives+ the evoked set.
%un(ry+ want to (o out and eat+ evoked set is
o chinese food
o indian food
o bur(er kin(
o klondike kates etc
?. 'valuation of Alternatives--need to establish criteria for evaluation+ features the buyer wants or does not
want. 5ank-wei(ht alternatives or resume search. 'ay decide that you want to eat somethin( spicy+ indian
(ets hi(hest rank etc.
,f not satisfied with your choice then return to the search phase. Can you think of another restaurant. 0ook
in the yellow pa(es etc. ,nformation from different sources may be treated differently. 'arketers try to
influence by Nframin(N alternatives.
@. $urc#ase decision--Choose buyin( alternative+ includes product+ packa(e+ store+ method of purchase etc.
A. $urc#ase--'ay differ from decision+ time lapse between @ 9 A+ product availability.
". $ost($urc#ase 'valuation--outcome; Satisfaction or Dissatisfaction. Cognitive Dissonance+ have you made
the ri(ht decision. This can be reduced by warranties+ after sales communication etc.
After eatin( an indian meal+ may think that really you wanted a chinese meal instead.
9andout...Pillsbury -BCCDs
-CJJ Ss (ives the consumer a way of communicatin( with the marketer after purchase. This helps reduce co(nitive
dissonance when a marketer can answer any concerns of a new consumer.
Types of Consumer =uyin$ =eha/ior
Types of consumer buyin( behavior are determined by;
0evel of ,nvolvement in purchase decision. ,mportance and intensity of interest in a product in a particular
situation.
Buyers level of involvement determines why he-she is motivated to seek information about a certain
products and brands but virtually i(nores others.
%i(h involvement purchases--%onda 'otorbike+ hi(h priced (oods+ products visible to others+ and the hi(her the
risk the hi(her the involvement. Types of risk;
*ersonal risk
Social risk
Gconomic risk
The four type of consumer buyin( behavior are;
5outine 5esponse-*ro(rammed Behavior--buyin( low involvement fre4uently purchased low cost itemsK
need very little search and decision effortK purchased almost automatically. G)amples include soft drinks+
snack foods+ milk etc.
0imited Decision 'akin(--buyin( product occasionally. /hen you need to obtain information about
unfamiliar brand in a familiar product cate(ory+ perhaps. 5e4uires a moderate amount of time for
information (atherin(. G)amples include Clothes--know product class but not the brand.
G)tensive Decision 'akin(-Comple) hi(h involvement+ unfamiliar+ e)pensive and-or infre4uently bou(ht
products. %i(h de(ree of economic-performance-psycholo(ical risk. G)amples include cars+ homes+
computers+ education. Spend alot of time seekin( information and decidin(.
,nformation from the companies ''K friends and relatives+ store personnel etc. :o throu(h all si) sta(es of
the buyin( process.
,mpulse buyin(+ no conscious plannin(.
The purchase of the same product does not always elicit the same Buyin( Behavior. *roduct can shift from one
cate(ory to the ne)t.
1or e)ample;
:oin( out for dinner for one person may be e)tensive decision makin( (for someone that does not (o out often at
all#+ but limited decision makin( for someone else. The reason for the dinner+ whether it is an anniversary
celebration+ or a meal with a couple of friends will also determine the e)tent of the decision makin(.
Cate$ories that 1ffect the Consumer =uyin$ )ecision Process
A consumer+ makin( a purchase decision will be affected by the followin( three factors;
?. *ersonal
A. *sycholo(ical
B. Social
The marketer must be aware of these factors in order to develop an appropriate '' for its tar(et market.
Personal
6ni4ue to a particular person. Demo(raphic 1actors. Se)+ 5ace+ A(e etc.
/ho in the family is responsible for the decision makin(.
Voun( people purchase thin(s for different reasons than older people.
9andout...(rom choices to chec5out...
%i(hli(hts the differences between male and female shoppers in the supermarket.
Psycholo$ical factors
*sycholo(ical factors include;
8oti/es--
A motive is an internal ener(i8in( force that orients a person&s activities toward satisfyin( a need or
achievin( a (oal.
Actions are effected by a set of motives+ not Fust one. ,f marketers can identify motives then they can better
develop a marketin( mi).
'AS02/ hierarchy of needsOO
o *hysiolo(ical
o Safety
o 0ove and Belon(in(
o Gsteem
o Self Actuali8ation
$eed to determine what level of the hierarchy the consumers are at to determine what motivates their
purchases.
9andout...;utrament )ebun5ed...
$utrament+ a product marketed by Bristol-'yers S4uibb ori(inally was tar(eted at consumers that needed to
receive additional ener(y from their drinks after e)ercise etc.+ a fitness drink. ,t was therefore tar(eted at
consumers whose needs were for either love and )elonging or esteem. The product was not sellin( well+ and
was almost terminated. 6pon e)tensive research it was determined that the product did sell well in inner-
city convenience stores. ,t was determined that the consumers for the product were actually dru( addicts
who couldn&t not di(est a re(ular meal. They would purchase $utrament as a substitute for a meal. Their
motivation to purchase was completely different to the motivation that B-'S had ori(inally thou(ht. These
consumers were at the $#ysiological level of the hierarchy. B'-S therefore had to redesi(n its '' to better
meet the needs of this tar(et market.
'otives often operate at a subconscious level therefore are difficult to measure.
Perception--
/hat do you see.. *erception is the process of selectin(+ or(ani8in( and interpretin( information inputs to
produce meanin(. ,G we chose what info we pay attention to+ or(ani8e it and interpret it.
,nformation inputs are the sensations received throu(h si(ht+ taste+ hearin(+ smell and touch.
Selective '%posure-select inputs to be e)posed to our awareness. 'ore likely if it is linked to an event+
satisfies current needs+ intensity of input chan(es (sharp price drop#.
Selective Distortion-Chan(in(-twistin( current received information+ inconsistent with beliefs.
Advertisers that use comparative advertisements (pitchin( one product a(ainst another#+ have to be very
careful that consumers do not distort the facts and perceive that the advertisement was for the competitor. A
current e)ample...'C, and AT9T...do you ever (et confused.
Selective Retention-5emember inputs that support beliefs+ for(ets those that don&t.
Avera(e supermarket shopper is e)posed to B+JJJ products in a shoppin( visit lastin( ?J minutes-"JP of
purchases are unplanned. G)posed to +AJJ advertisement per day. Can&t be e)pected to be aware of all these
inputs+ and certainly will not retain many.
,nterpretin( information is based on what is already familiar+ on knowled(e that is stored in the memory.
9andout...South #frica wine....
*roblems marketin( wine from South Africa. Consumers have stron( perceptions of the country+ and hence
its products.
#bility and ?nowled$e--
$eed to understand individuals capacity to learn. 0earnin(+ chan(es in a person&s behavior caused by
information and e)perience. Therefore to chan(e consumers& behavior about your product+ need to (ive them
new information re; product...free sample etc.
South Africa...open bottle of wine and pour itOO Also educate american consumers about chan(es in SA.
$eed to sell a whole new country.
/hen makin( buyin( decisions+ buyers must process information.
*noledge is the familiarity with the product and e)pertise.
,ne)perience buyers often use prices as an indicator of 4uality more than those who have knowled(e of a
product.
$on-alcoholic Beer e)ample; consumers chose the most e)pensive si)-pack+ because they assume that the
(reater price indicates (reater 4uality.
"earning is the process throu(h which a relatively permanent chan(e in behavior results from the
conse4uences of past behavior.
#ttitudes--
Qnowled(e and positive and ne(ative feelin(s about an obFect or activity-maybe tan(ible or intan(ible+
livin( or non- livin(.....Drive perceptions
,ndividual learns attitudes throu(h e)perience and interaction with other people.
Consumer attitudes toward a firm and its products (reatly influence the success or failure of the firm&s
marketin( strate(y.
9andout...:ldsmobile.....
2ldsmobile vs. 0e)us+ due to consumers attitudes toward 2ldsmobile (as discovered by class e)ercise# need
to disassociate Aurora from the 2ldsmobile name.
G))on <alde8-nearly >J+JJJ credit cards were returned or cut-up after the tra(ic oil spill.
%onda NVou meet the nicest people on a %ondaN+ dispel the unsavory ima(e of a motorbike rider+ late
!AJs. Chan(in( market of the !!Js+ baby boomers a(in(+ %ondas market returnin( to hard core. To
chan(e this they have a new slo(an NCome ride with usN.
Attitudes and attitude chan(e are influenced by consumers personality and lifestyle.
Consumers screen information that conflicts with their attitudes. Distort information to make it consistent
and selectively retain information that reinforces our attitudes. ,G brand loyalty.
There is a difference between attitude and intention to buy (ability to buy#.
Personality--
all the internal traits and behaviors that make a person uni4ue+ uni4ueness arrives from a person&s heredity
and personal e)perience. G)amples include;
o /orkaholism
o Compulsiveness
o Self confidence
o 1riendliness
o Adaptability
o Ambitiousness
o Do(matism
o Authoritarianism
o ,ntroversion
o G)troversion
o A((ressiveness
o Competitiveness.
Traits effect the way people behave. 'arketers try to match the store ima(e to the perceived ima(e of their
customers.
There is a weak association between personality and Buyin( Behavior+ this may be due to unreliable
measures. $ike ads. Consumers buy products that are consistent with their self concept.
Eifestyles--
5ecent 6S trends in lifestyles are a shift towards personal independence and individualism and a preference
for a healthy+ natural lifestyle.
0ifestyles are the consistent patterns people follow in their lives.
GWA'*0G healthy foods for a healthy lifestyle. Sun tan not considered fashionable in 6S until !>J&s.
$ow an assault by the American Academy of Dermatolo(y.
9andout...9ere Comes the Sun to Confound 9ealth Sa//y Eotion 8a5ers..
G)tra credit assi(nment from the news (roup+ to access <alue and 0ifestyles (<A0S# *ro(ram+ complete the survey
and Gmail ale)Mudel.edu the results. This is a survey tool that marketers can use to better understand their tar(et
market(s#.
Social (actors
Consumer wants+ learnin(+ motives etc. are influenced by opinion leaders+ person&s family+ reference (roups+ social
class and culture.
:pinion leaders--
Spokespeople etc. 'arketers try to attract opinion leaders...they actually use (pay# spokespeople to market
their products. 'ichael 7ordon ($ike+ 'cDonalds+ :atorade etc.#
Can be risky...'ichael 7ackson...27 Simpson...Chevy Chase
&oles and (amily Influences--
5ole...thin(s you should do based on the e)pectations of you from your position within a (roup.
*eople have many roles.
%usband+ father+ employer-ee. ,ndividuals role are continuin( to chan(e therefore marketers must continue
to update information.
1amily is the most basic (roup a person belon(s to. 'arketers must understand;
o that many family decisions are made by the family unit
o consumer behavior starts in the family unit
o family roles and preferences are the model for children&s future family (can reFect-alter-etc#
o family buyin( decisions are a mi)ture of family interactions and individual decision makin(
o family acts an interpreter of social and cultural values for the individual.
The 1amily life cycle; families (o throu(h sta(es+ each sta(e creates different consumer demands;
o bachelor sta(e...most of B6AD?J
o newly married+ youn(+ no children...me
o full nest ,+ youn(est child under "
o full nest ,,+ youn(est child " or over
o full nest ,,,+ older married couples with dependant children
o empty nest ,+ older married couples with no children livin( with them+ head in labor force
o empty nest ,,+ older married couples+ no children livin( at home+ head retired
o solitary survivor+ in labor force
o solitary survivor+ retired
o 'oderni8ed life cycle includes divorced and no children.
9andout...Two Income 8arria$es #re ;ow the ;orm
Because > income families are becomin( more common+ the decision maker within the family unit is
chan(in(...also+ family has less time for children+ and therefore tends to let them influence purchase
decisions in order to alleviate some of the (uilt. (Children influence about L?J billion of (oods in a year#
Children also have more money to spend themselves.
&eference <roups--
,ndividual identifies with the (roup to the e)tent that he takes on many of the values+ attitudes or behaviors
of the (roup members.
1amilies+ friends+ sororities+ civic and professional or(ani8ations.
Any (roup that has a positive or ne(ative influence on a persons attitude and behavior.
Mem&ers#ip groups (belon( to#
Affinity marketin( is focused on the desires of consumers that belon( to reference (roups. 'arketers (et the
(roups to approve the product and communicate that approval to its members. Credit Cards etc.OO
Aspiration groups (want to belon( to#
Disassociate groups (do not want to belon( to#
%onda+ tries to disassociate from the NbikerN (roup.
The de(ree to which a reference (roup will affect a purchase decision depends on an individuals
susceptibility to reference (roup influence and the stren(th of his-her involvement with the (roup.
Social Class--
an open (roup of individuals who have similar social rank. 6S is not a classless society. 6S criteriaK
occupation+ education+ income+ wealth+ race+ ethnic (roups and possessions.
Social class influences many aspects of our lives. ,G upper middle class Americans prefer lu)ury cars
'ercedes.
o 6pper Americans-upper-upper class+ .?P+ inherited wealth+ aristocratic names.
o 0ower-upper class+ .>P+ newer social elite+ from current professionals and corporate elite
o 6pper-middle class+ >.AP+ colle(e (raduates+ mana(ers and professionals
o 'iddle Americans-middle class+ ?>P+ avera(e pay white collar workers and blue collar friends
o /orkin( class+ ?CP+ avera(e pay blue collar workers
o 0ower Americans-lower class+ !P+ workin(+ not on welfare
o 0ower-lower class+ BP+ on welfare
Social class determines to some e)tent+ the types+ 4uality+ 4uantity of products that a person buys or uses.
0ower class people tend to stay close to home when shoppin(+ do not en(a(e in much prepurchase
information (atherin(.
Stores proFect definite class ima(es.
1amily+ reference (roups and social classes are all social influences on consumer behavior. All operate
within a lar(er culture.
Culture and Sub-culture--
Culture refers to the set of values+ ideas+ and attitudes that are accepted by a homo(enous (roup of people
and transmitted to the ne)t (eneration.
Culture also determines what is acceptable with product advertisin(. Culture determines what people wear+
eat+ reside and travel. Cultural values in the 6S are (ood health+ education+ individualism and freedom. ,n
american culture time scarcity is a (rowin( problem. ,G chan(e in meals. Bi( impact on international
marketin(.
9andout...!ill =ritish warm up to iced tea?
$o...but that is my opinionOO...Tea is a part of the British culture+ hot with milk.
Different society+ different levels of needs+ different cultural values.
Culture can be divided into subcultures;
o (eo(raphic re(ions
o human characteristics such as a(e and ethnic back(round.
,G /est Coast+ teena(e and Asian American.
Culture effects what people buy+ how they buy and when they buy.
+nderstanding ,onsumer )uying )e#avior offers consumers greater satisfaction -+tility.! /e must assume t#at t#e
company #as adopted t#e Marketing ,oncept and are consumer oriented!

Sales Incentive

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Negotiation and the Relationship Sales Cycle

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