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