Personal selling and Sales promotion

I. PERSONAL SELLING Personal selling consists of interpersonal interactions with customers andprospects to make sales and maintain customer relationships. II. MANAGING THE SALES FORCE: Managing the sales forceis analyzing, planning, implementing and controlling sales force activities.It includes designing sales forces strategy and structure, recruiting, selecting, training, compensating, supervising and evaluating the firm’s sale people.

GROUP 12 Course : Principles of Marketing

-Class : International Business K56 (High-Quality Educational Program) Topic: Personal selling and Sales promotion

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Table of Contents

I PERSONAL SELLING 3

1 The Nature of Personal Selling 3

2 The Role of the Sales Force 3

2.1 Linking the Company with Its Customers 3

2.2 Coordinating Marketing and Sales 4

3 Advantages and disadvantages of Personal selling 4

3.1 Advantages of Personal Selling 5

3.2 Disadvantages of personal selling 5

II MANAGING THE SALES FORCE: 6

1 Designing the sales force strategy and structure: 6

1.1 The sales force structure: 6

1.2 Sales force size: 10

1.3 Other Sales Force Strategy and Structure Issues: 11

2 Recruiting and Selecting Salespeople: 12

3 Training salespeople: 13

4 Compensating salespeople: 14

5 Supervising and Motivating Salespeople: 15

5.1 Supervising salespeople: 15

5.2 Selling and the Internet: 15

5.3 Motivating salespeople : 16

6 Evaluating Salespeople and sales force performance: 16

III PERSONAL SELLING PROCESS 17

1 Prospecting and Qualifying 17

2 Pre-approach 18

3 Approach 18

4 Presentation and Demonstration 18

5 Handling Objections 19

6 Closing 19

7 Follow-up 19

IV SALES PROMOTION 20

1 The rapid growth of sales promotion 20

1.1 Target 20

1.2 Facters contributed to the growth 20

1.3 Sales Promotion Objectives 20

2 Major sales promotion tools 21

2.1 Consumer Promotions 21

2.2.Pros and cons of consumers promotion 22

2.3 Trade Promotions 23

2.4 Business promotion 24

3 Developing the sales promotion program 24

V THE DIFFIRENCES BETWEEN PERSONAL SELLING & SALES PROMOTION 25

1 The Nature of Personal Selling

Personal Selling isone of the oldest professions in the world People who do the selling go by

many names: salespeople, sales representatives, agents, district managers, account executives,sales consultants, and sales engineers.It is the personal presentations by the firm’s sales forcefor the purpose of making sales and building customer relationships Personal selling is theinterpersonal part of the promotion mix and can include:

 Face-to-face communication

 Telephone communication

 Video or web conferencing

Salespeople can include an order taker such as someone standing behind the counter or an

order getter whose position demands more creative selling and relationship building

2 The Role of the Sales Force

Personal selling can be more effective than advertising in more complex selling situationsbecause salespeople can learn about customer problems and adjust the marketing offer andpresentation accordingly to meet the special needs of each customer

2.1 Linking the Company with Its Customers

In many cases, salespeople serve two masters: seller and buyer Salespeople are an effectivelink between the company and its customers to produce customer value and company profit by:

 Representing the company to customers: They find and develop new customers andcommunicate information about the company’s products and services They sellproducts by approaching customers, presenting their offerings, answering objections,

negotiating prices and terms, and closing sales In addition, salespeople providecustomer service and carry out market research and intelligence work.

 Representing customers to the company: Salespeople relay customer concerns aboutcompany products and actions back inside to those who can handle them They learnabout customer needs and work with other marketing and non-marketing people in thecompany to develop greater customer value

To many customers, the salesperson is the company - the only tangible manifestation of thecompany that they see Strong relationships with the salesperson will result in strongrelationships with the company and its products

2.2 Coordinating Marketing and Sales

Sales force and other marketing functions (marketing planners, brand managers,andresearchers) should work together to create value for customers, however, some companiesstilltreat sales and marketing as separate functions If not repaired, such disconnects betweenmarketing and sales can damage customer relationships andcompany performance

A company can take several actions to help bring its marketing and sales functions closertogether by :

 Increasing communications between the two groups by arranging joint meetings andspelling out communications channels then create opportunities for salespeople andmarketers to work together

 Creating joint objectives and reward systems for sales and marketing teams or appointmarketing-sales liaisons-people from marketing who “live with the sales force” and helpcoordinate marketing and sales force programs and efforts

 Appointing a high-level marketing executive to oversee both marketing and sales

3 Advantages and disadvantages of Personal selling

3.1 Advantages of Personal Selling

- Convey More Information

You can express added information with personal selling when compared to anyother types of promotion, such as advertising Personal selling is predominantly

Page 5 of 26beneficial when functioning with goods of high value You will requireinfluencing buyers more with supplementary luxurious stuffs Most enterprisesuse notebook presentation, exhibitions and extremely comprehensive productinformation when promoting goods like medical equipment, computers, andindustrial goods.

3.2 Disadvantages of personal selling

- Limited Reach

 One disadvantage is that your customer reach is limited through personal sales

As a result, it will require extended time period to create product awareness,particularly if you don’t use other forms of advertising Sales representativeshave to cover up one region or place at a time As a Sales representative, you canonly talk to twenty five potential buyers per day and put together 3-5presentations Contact can be principally partial in rural regions where fewerpotential buyers are situated

- Expensive

 Personal selling isexpensive, particularly when bearing in mind the salesrepresentative's salary, bonus, commission as well as travel time It requiresplenty of money to prepare sales representatives, educating them on a range ofgoods and sales techniques That is the reason it paramount to study the pros andcons of personal selling against other forms of advertising

II MANAGING THE SALES FORCE:

Managing the sales forceis analyzing, planning, implementing and controlling sales force

activities.It includes designing sales forces strategy and structure, recruiting, selecting,training, compensating, supervising and evaluating the firm’s sale people

1 Designing the sales force strategy and structure:

A marketing manager has to be careful in designing and structuring sales force and answersthese questions: How should salespeople and their tasks be structured? How big should thesales force be? Should salespeople sell alone or work in team? Should they sell in the field, bytelephone or on web?

1.1 The sales force structure:

1.1.1 Territorial sales force structure:

Each salesperson is assigned to an exclusive geographic area and sells the company’s full line

of products or services to all customers in that territory

Page 7 of 26This structure is preferred for the company sells only one product line to one industry with

customer in many locations and building relationships with local customers there force it

improves selling effectiveness

A particular example is Stanley Black & Decker which is a company sell tools and storage,

commercial electronic security and engineered fastening systems.each salesperson in Stanley

Black &Decker who is territory sales representative, is responsible for selling all of the

company’s products in assigned territories They start cover small areas such as Eastern

North Carolina then report to territory managers, cover larger areas like Carolinas and

Virginia Next, territory managers report to regional managers, who cover region such as the

Southeast or West Coast Finally, they report to director of sales.

- Advantages and Disadvantages :

+ Advantages:

 Low cost

Because sales force divided into geography, salesperson of company travels within a

limited area, travel expenses are relatively small

 Low geographic duplication of effort

Salespeople in territory just focus resources on an area to make best customer value

and build customer relationships Thus it has not duplication in geography

 Sensitive with demand of customers

In each region has different culture and custom, territory sales representative haveknowledge about customers can improve product fits to customer and caches trend.+ Disadvantages:

 Work best when products line is simple

If company have many products, personal selling would be too complex andcustomers can be confused

 Lack of management control over product or customer emphasis

 Duplication of customers:

If salespeople are require quotas of sale, sometime salesperson in the samegeography area can competitive each other and approach same customers In thatcase, territorial sales force structure can effectiveness

1.1.2 Product Sales Force Structure:

It is a sales force organization in which salespeople specialize in selling only a portion of thecompany’s products or line Salespeople must know their products and it can make themstronger sellers In addition, this structure leads the growth of product management

Product structure is used for complex and un-related product portfolio This is especially truewith products that are highly technical or which are sold to professionals such as medicaldevice and equipment sales, for example, requires a salesperson to have an in-depthunderstanding of his product Physicians who might purchase these products can havecomplicated and technical questions that require the salesperson to have a thoroughunderstanding of how the product works and the setting in which it is used Here the salespeople are directly associated with research and development of the products

Another example is FPT employ different sales forces within different products Within FPT Telecommunication, for instance, the company has separate sales forces for broadband internet, television services: HD box, One TV ; online service: sendo.vn, Fshare…; leased line; data center FPT technology has sales forces for software copyright, telephone, tablet,…

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- Advantages and disadvantages

+ Advantages:

 Sales reps develop product expertise

 Management can guide selling efforts

+ Disadvantages:

 Higher costs due to duplication of effort within geographies and customer accounts

 Coordination required when more sales reps have the same geography/accounts

1.1.3 Customer sales force structure:

Thesedays, more and more companies are now using a customer (or market) sales forcestructure In customer sales force structure, salespeople specialize in selling only to certaincustomers or industries This structure is used if the companies are operating different industry

or market segments Every sales force specializes in a definite market and helps push a productefficiently across the given market

For instance, Vietnam Airlines divided its sales force into two customers based teams One sales force focuses on “key” customers (economy class) – large accounts that purchase average equipment and price The second sales force focuses on “prime” customers (Business class) – smaller accounts that are generally more concerned about getting the high-end feature and service they need for the best possible price.

- Advantages and disadvantages:

+ Advantages:

 Sales reps know the needs of their customers and build stronger relationships with them

 Management control can be strategically allocated to different markets

+ Disadvantages:

 Higher costs

 Geographic duplication

1.1.4 Complex sales force structure:

When a company sell a wide variety of products to many types of customers over a broadgeographic area, it often combines several types of sale forces structures Salespeople can bespecialized by customer and territory; product and territory; customer and product or all of threecustomer, product and territory

For example, unilever is a multinational company with a number of product lines And Unilever have used all three structures Within Unilever shampoo, it has product for male customer and female customer In female customer it has many products for types of hair: Dove, Clear…And all products have salespeople in different regions like Hanoi to Vietnam, Asia and, finally director of sales.

No single structure is best for all companies and situations Therefore, each company shouldselect a sales force structure that the best serves the needs of its customers and fits its overallmarketing strategy

1.2 Sales force size:

Once the company has set its structure, it is ready to consider sales force size The addition ofsalespeople increases sales considerably more than the selling cost However, as salespeoplecontinue to be added, sales increases tend to decline until a point is reached when the costs to add

a salesperson are more than the revenue that salesperson can make

Some sales force are huge such as PepsiCo employs 36 000 salespeople

Many companies use some form of workload approach to set sales force size

The number of salespeople = _T otalselling effort needed _

Average selling effort per salesperson

Suppose we have 1000 A-level accounts and 2000 B-levels accounts

A-level accounts requires 36 calls per year

B-level accounts requires 12 calls per year

The sales force’s workload – the number of calls it must make per year – is 60 000 calls(1000*36 + 2000*12)

Average salesperson can make 1000 calls a year

Therefore, the salespeople need = 60 000/1000= 60

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1.3 Other Sales Force Strategy and Structure Issues:

1.3.1 Outside and inside sales force:

Outside sales force (or field sales force) work from the office, but frequently visit prospect

and client sites to call on customers in the field and may be involved in overnight travel for thispurpose

Inside salespeople conduct business from their offices via telephone, the internet or visit from

buyers.Telemarketers and Web sellers use the phone and internet to find new leads and qualifyprospects or sell and service account directly The company may have an outside sales force,

an inside sales force or both.Some inside salespeople provide support for the outside salesforce More specifically, technical sales support people provide technical information andanswer customer’s questions Sales assistants provide administrative backup for outsidesalespeople.Combination of inside and outside salespeople can help serve important customerbetter

1.3.2 Team selling

Team sellingis using teams of people from sales, marketing, engineering, finance, technical

support and even upper management to service large, complex accounts

For example,P&G used team selling for a long time and its organized into Customer business development (CBD) teams.

- Advantages and disadvantages of team selling

+ Advantages:

 Save time

 More effectively

+ Disadvantages:

 Conflict in team selling

 Difficulty in evaluating individual contributions

 Confuse or over whelm customers who are used to working with only one salesperson.

2 Recruiting and Selecting Salespeople:

Recruitment of talented employees is an essential part of any company's ability to maintainsuccess and ensure the achievement of standards within an organization

When a salesperson quits, the cost of finding and training a new salesperson can be very high

In addition, a sales force with many new people is less productive and disrupts importantcustomer relationship

It is research suggest that the best salespeople possess four key talents:

- Intrinsic motivation

Some salespeople are driven by money, a desire for recognition, or the satisfaction ofcompeting and winning Others are driven by the desire to provide service and buildrelationship

- Disciplined work style

The good salespeople also lay out detailed, organized plans and then follow through in atimely way

- Ability to close a sale

Super salespeople build the skills and knowledge to understand their customers need.They are also are excellent customer problems solvers Last but not least, they want toadd value for their customers

- Ability to build relationship with customers

Personal selling plays an important role in building profitable customer relationships.And top performers have to have: good listener, empathetic, patient, caring andresponsive

Before recruiting, company should analyze the sales jobs itself and the characteristics of itsmost successful sales people to identify the traits needed by a successful salesperson in theirindustry