MKTG 4390 (Personal Selling : Butler) EXAM 1
False Claims Act
(Lincoln Law) -passed in 1863, during the civil war - to encourage citizens to press claims against vendors that fraudulently sold to the U.S. government
life-cycle costing
(also called total cost of ownership) method for determining the cost of equipment or supplies over their useful lives
price discrimination
(defined in Robinson-Patman Act) a seller giving unjustified special prizes, discounts, or services to some customers and not others
users
(manufacturing personnel for OEM products and capital equipment) typically do not make the ultimate purchase decision but they do have influence
spiffs
(push money) ex: if a cosmetics company gives a department store's cosmetic salespeople prizes based on sales of the company's products
lead
(suspect) a potential prospect that may or may not have what it takes to be a true prospect
Types of influencers
1. economic influencer 2. user 3. technical influencer 4. coach
Buying Process Steps:
1. recognition of a need 2. definition of product type 3. development of detailed specifications 4. search for qualified suppliers 5. acquisition and analysis of proposals 6. evaluation of proposals and selection of a supplier 7. placing and receiving the order 8. evaluation of product performance
creeping commitment
a customer becomes increasingly committed to a particular course of action while going through the steps in the buying process
automatic replenishment
a form of JIT where the supplier manages inventory levels for the customer (ex: coke and chips)
exclusive sales territories
a particular sales person can only sell to certain prospects
agent
a person who acts in place of his/her company - your statements and actions legally bind you to your company
economic influencer
a person who is concerned about the financial aspects of the decision
technical influencer
a person who makes sure the technical requirements (logistics, terms, requirements) are met
invitation to negotiate
a sales presentation is usually considered this
distribution channel
a set of people and organizations responsible for the flow of products and services from the producer to the ultimate user
reciprocity
a special relationship in which two companies agree to buy products from each other
supplier relationship management (SRM)
a strategy by which organizational buyers evaluate the relative importance of suppliers and use that information to determine with whom they want to develop partnerships
annual spend
amount that is spent with each vendor and for what products
conspiracy
an agreement between competitors before customers are contracted
warranty
an assurance by the seller that the products will preform as represented 2 types = expressed & implied
selling analytics
an attempt to gain insights into customers by using sophisticated data mining and analytic techniques
"just-in-time" inventory control (JIT)
an example of a logistics SCM system used by a producer to minimize its inventory by having frequent deliveries, sometimes daily, for assembly into the final product (these are referred to as ECRs or efficient consumer response systems)
expressed warranty
an oral or written statement by the seller
supply chain management (SCM)
began ---- as a set of programs undertaken to increase the efficiency of the distribution channel that moves products from the producer's facility to the end user now ---- it is more than logistics; its now a strategy of managing inventory while containing costs
personal value =
benefits received - (selling price + time and effort to purchase)
resellers
buy finished products or services with the intention to resell them to businesses and consumers
producers
buy products and services to manufacture and sell their products and services to customers
customer value proposition
collection of buyer-specific benefits
integrated marketing communication
communication programs that coordinate the use of various vehicles to maximize the total impact of the programs on customers
collusion
competitors working together while the customer is making a purchase decision ex: competitors agree to charge the same price for something the prospect is considering
electronic data interchange (EDI)
computer systems that share data across companies - for placing orders and receiving products, etc.
gatekeeper
control the flow of information and may limit the alternatives considered
lost for good
converting buying decisions into straight rebuys makes the decisions routine; minimizing the chances of a poor decision
deception
deliberately presenting inaccurate information, or lying, to a customer is illegal
"always a share" strategy
dividing the percentages of your orders between different suppliers in case a problem occurs, then the other supplier can meet the firm's needs
manipulation vs. persuasion
eliminates or reduces the buyer's choice unfairly vs. salespeople can do this but it may influence the buyer's decision in one direction is unethical vs. is not unethical
customer lifetime value
estimated value of the customer over the lifetime of the relationship
customer relationship management system (CRM)
ex: salespeople for a company enter, everyday, call report information and download all ordering and shipping info from the company mainframe to their laptop
referral events
gatherings designed to allow current customers to introduce prospects to the salesperson
sales puffery
glowing descriptions like "our service can't be beat"
profit margin
how much they (resellers) make on each sale
turnover
how quickly a product will sell
tying agreement
in this a buyer is required to purchase one product in order to get another product
MRO supplies
include things such as paper towels or replacement parts for machinery
services
include: Internet, telephone connections, employment agencies, consultants, and transportation
sexual harassment
includes unwelcome sexual advances, requests for sexual favors, jokes or graffiti; posting sexually explicit material on bulletin boards or cubicle walls; and physical conduct
manufacturer's agents
independent businesspeople who are paid a commission by a manufacturer for all products or services sold
subordination
involves paying larger sums of money to higher-ranking officials to get them to do something that is illegal or to ignore an illegal act
lubrication
involves small sums of money or gifts, typically made to low-ranking managers or government officials, in countries where these payments are not illegal
value analysis
is an example of a program in which suppliers and customers work together to reduce costs and still provide the required level of performance
Uniform Commercial Code (UCC)
is the legal guide to commercial practice in the United States
capital equipment
items are major purchases, such as mainframe computers and machine tools that the producer uses for a number of years
house accounts
large customers or potential customers that are handled exclusively by corporate executives
privacy laws
limit the amount of information that a firm can obtain about a consumer and specify how that information can be used or shared
customer-centric
making the customer the center of everything the salesperson does
go-to-market strategies
methods that companies use to approach customers as they add value ex: internet, telemarketers, field sales reps.
implied warranty
not actually stated by is still an obligation defined by law
business defamation
occurs when a salesperson makes unfair or untrue statements to customers about a competitor, it products, or its salespeople
canned sale pitch
one that is believed to be the most effective and is then scripted and distributed to all the salespeople of a company
sales force-intensive organizations
organizations whose go-to-market strategies rely heavily on salespeople
kickbacks
payments made to buyers based on the amount of orders placed
bribes
payments made to buyers to influence their purchase decisions
influencers
people inside or outside the organization who directly or indirectly provide information during the buying process
original equipment manufacturers (OEMs)
purchase of goods to use in making other products ex: a distributor sells pizza toppings to a restaurant
derived demand
purchases made by these customers (OEMs and resellers) ultimately depend on the demand for their products
types of needs
rational emotional
insight selling
salespeople evaluate prospects who do not necessarily have a clear understanding of what they need but are in a state of flux and have been shown to be quite agile in making changes
characteristics of successful salespeople
self-motivated dependable/trustworthy ethical knowledgeable ability to use own product
systems integrators
service vendors who have the authority to buy products and services on behalf of the delegating firm
coach
someone in a buying organization who can advise and direct you, the salesperson, in maneuvering through the buying process in an effective fashion
field salespeople
spend lots of time in the customer's place of business, communicating with the customer face to face
offer
takes place when the salesperson quotes specific terms -specifically states what the seller promises to deliver and what it expects from the buyer
emotional intelligence (EI)
the ability to effectively understand and regulate one's own emotions and to read and respond to the emotions of others
straight rebuy
the customer buys the same product from the same source it used when the need arose previously
modified rebuy
the customer has purchased the product or a similar product in the past but is interested in obtaining new information
new task
the customer purchases a product or service for the first time
creativity
the fait of having imagination and inventiveness and using them to come up with new solutions and ideas
buying center
the group of people who are involved in new task and modified rebuy decisions
supply chain logistics
the management of the supply chain ex: someone buys plane from Boeing but wants features added by other company, the salesperson has to coordinate that
customer referral value
the monetary value of customer referrals as well as the costs to get and maintain the referrals
referred lead
the name of a lead provided by either a customer or a prospect
deciders
the person or people in a buying center who make the final decisions
initiator
the person who starts the buying process - can sometimes be a user
personal selling
the phenomenon of human driven interaction between and within individuals/organizations in order to bring about economic exchange within a value-creation context
ethics
the principles governing the behavior of an individual or a group
value
the total benefit that the seller's products and services provide to the buyer
sale
the transfer of title to goods by the seller to the buyer for a consideration known as price
material requirements planning (MRP)
these systems are used to forecast sales, develop a production schedule, and then order parts and raw materials with delivery dates that minimize the amount of inventory needed, thereby reducing costs
credulous person standard
this standard means the company and the salesperson have to pay damages if a reasonable person could misunderstand a statement
emotional needs
those associated with the personal rewards and gratification of the person buying the product
rational needs
those directly related to the performance of a product (also known as organizational needs)
vendor loyalty
to continue buying from suppliers that proved satisfactory in the past
backdoor selling
when a salesperson ignores the purchasing agent's policy and goes around his/her back and contacts other people directly involved in the purchasing decision
multichannel strategy
when firms use several strategies at the same time
end users
when producers buy goods and services to support their own production and operations
inside salespeople
work at their employer's location and typically communicate with customers by telephone or computer
missionary salesperson
works for a manufacturer and promote the manufacturer's products to other firms, however the products are not bought directly from the salesperson but instead from a distributor or other manufacturer
orders
written offers from buyers -become contracts when they are signed by an authorized representative in the company