MKTG 377
Two-factor model of buyer evaluation
Buyers evaluate functional attributes and psychological attributes of sales offering to assess overall performance and satisfaction 3.4 book figure
Ethics definition
Ethics: Refers to right and wrong conduct of individuals and the institutions of which they are a part.
Categories of unethical behavior
Express Warranty- created by any affirmation of fact or promise. This is a way the salesperson can create product liabilities by giving a product warranty or guarantee that obligates the selling organization even if the salesperson does not intend to give the warranty Misrepresentation- False claims made by a salesperson Negligence- Salespeople must exercise "reasonable care" in formulating claims; false claims about the product or service Basis of the Bargain- the buyer relied on the seller's statements in making the purchase decision Illegal Behavior: Bribery Misuse of the company assets Negligence (see above) Deceptive (but not illegal) Behavior: Hard sell Pushy Pressure Fast talking
Customer communication styles
Low, high assertiveness Low, high responsiveness 3.6 figure
Business buyer types
Most common categorization of buyers splits them into either the (1) consumer market or (2) business market. 1) Consumers → highly influenced by peer group behavior, aesthetics and personal taste. 2) Business markets → firms - institutions - governments (use products for manufacturing process, day-to-day operations & resale. → Overall value influences purchase decisions.
Sequential stages of self-leadership
Stage 1: Setting Goals and Objectives · Stage 2: Territory Analysis and Account classification (Territory analysis = the process of surveying an area to determine customers and prospects who are most likely to buy. Account classification = the process of placing existing customers and prospects into categories based on their potential as a customer.) · Stage 3: Development and implementation of strategies and plans · Stage 4: tapping technology and automation (Selling technology and automation = tools that streamline the selling process, generate improved selling opportunities, facilitate cross-functional teaming and intra-organizational communication, and enhance communication and follow-up with customers.) · Stage 5: Assessment and Evaluation
The sales process & it's importance
The Sales Process: A series of interrelated steps beginning with locating qualified prospective customers. From there, the salesperson plans the sales presentation, makes an appointment to see the customer, completes the sale, and performs post sale activities. **Viewed as a Relationship Management process** Importance: Salespeople strive to attain lasting relationships with their customers. If salespeople are compatible with their customers and if their customers trust them---> then a productive relationship is formed.
Evolution of personal selling & company responses to change
-There has been increase in the level of competitive activity and buyer expectations -Sales Professionalism: requires a customer-oriented sales approach that uses truthful and non-manipulative tactics to satisfy the long-term needs of both the customer and the selling firm Company responses to change - ????? -Responding to competition: Create and deliver the maximum amount of customer value possible to differentiate from competitors; all about focusing in on customer-oriented behavior -Responding to sales productivity: Using technology as the catalyst for low-cost-per-contact sales methods (think productivity as outputs/inputs) -Responding to fragmentation of customer bases: 3 strategies -- 1. Globalized sales efforts 2. Getting specialists to deal with specific market segments 3. Utilizing multiple sales channels -Responding to bossy customers: 1. Team selling 2. Compensating on customer satisfaction 3. Emphasizing the sales dialogue (think more talking = less confusion on the buyer's end) -Responding to demand for in-depth knowledge as an input to purchase decisions: 1. Team selling (think leveraging internal resources, cross-departments for maximum amount of info) and 2. Training on customer-oriented sales strategy
Factors that help salespeople earn trust
-being customer oriented -honest(Candor) -dependable -competent -compatible → most important
5 alternative approaches to personal selling
1) ADAPTIVE SELLING:The ability of salespeople to alter their sales messages and behaviors during a sales presentation or as they encounter different situations and customers. prevalent with the need satisfaction, problem-solving, and consultative approaches NOT prevalent with mental states selling and stimulus-response selling 2) STIMULUS RESPONSE SELLING: The idea that a stimuli can elicit predictable responses **the simplest of all methods** EX. The video we watched in class (cleaning guy) Continued Affirmation= a type of stimulus response selling which a series of questions or statements furnished by the salesperson is designed to make buyer answer "yes" ADVANTAGES: -sales message can be structured in logical order -questions and objections from buyer can be anticipated -Great for new, inexperienced sales professionals LIMITATIONS: -most professional buyers want to take active role in sales dialogue. This type of approach calls for salesperson to do most of the talking Lack of flexibility , and buyer responses and unforeseen interruptions may damage the effectiveness of stimuli barely any sales dialogue 3) MENTAL STATES SELLING: This approach assumes that the buying process for most buyers is essentially identical and that buyers can be led through certain states, or steps in the buying process. -These states are referred to as AIDA (attention, interest, desire, and action) ADVANTAGES: - forces the salesperson to plan the sales presentation prior to calling the customer -helps salesperson recognize that timing is an important element in the purchase decision process & that careful listening is important to determine what stage the prospective buyer is in LIMITATIONS: -relies on highly structured sales presentation -sales person does most of the talking -hard to determine what state the buyer is in - NOT customer oriented 4) NEED SATISFACTION SELLING: based on the notion that the customer is buying to satisfy a particular need or set of needs. STEPS: Uncover and Confirm Buyer's Needs→ Present Offering to Satisfy Buyer Needs → Continue Selling Until Purchase Decision -salesperson using a questioning, probing tactic to uncover buyer needs PROS: Customer oriented CONS: Takes a lot of time at the initial stages of the sales dialogue PROBLEM- SOLVING SELLING: an extension of need satisfaction selling. It goes beyond identifying needs to developing alternative solutions for satisfying these needs STEPS: Define problem→ Generate alternative solutions→ Evaluate alternative solutions→ Continue selling Until Purchase Decision PROS: Customers are generally willing to engage in these conversations LIMITATIONS: can take a lot of time 5) CONSULTATIVE SELLING: the process of helping customers reach their strategic goals by using products, services, and expertise of the sales organization. **Focuses on achieving strategic goals -salespeople fulfill 3 roles: -Strategic orchestrator - arranges the use of sales organization's resources in an effort to satisfy the customer (think internal resources) - business consultant- salesperson uses internal and external sources to become an expert on the customer's business (think internal and external resources → delivering value through educating the customer on their own busienss) - long term ally- salesperson supports the customer even when an immediate sale is not expected (in it for the long-run, committed; not a one-night stand)
Characteristics of effective goals
1) Realistic, yet challenging 2) Specific and quantifiable 3) Time specific
6 Salesperson teamwork skills
1) Understanding the other individuals - salespeople must learn the objectives of other functional areas and consider how those needs and requests might affect the salesperson's goals and objectives 2) Attending to the little things 3) Keeping commitments 4) Clarifying expectations - with regards to roles and goals 5) Showing personal integrity - generates trust. 6) Apologizing sincerely when a mistake is made
Buying process steps & actions (typical B2B process)
1. Identify the need 2. Determine the characteristics needed to 3. fulfill that need 4. Describe the characteristics 5. Source suppliers/products to fulfill the need 6. Acquire proposals 7. Evaluate the proposals 8. Select your supplier 9. Feedback and evaluation
Portfolio/two factor account classification
Account classification = places existing customers and prospects into categories based on their sales potential and assists salespeople in prioritizing accounts for call planning and time allocation purposes. Portfolio classification = A method for analyzing accounts that allows two factors to be considered simultaneously.
Contributions of personal selling to society
Act as stimuli for economic transactions -salespeople make contributions by assisting in recovery cycles and by helping to sustain periods of relative prosperity. Salespeople play critical role in Diffusion of Innovation -Diffusion of Innovation= the process where new products, services, and ideas are distributed to members of society -early adopters rely heavily on salespeople as primary source of info. -Ex. imagine trying to purchase a company wide computer system→ you NEED assistance from competent salesperson
Contributions of personal selling to the firm
Because salespeople are in direct contact with customer, they can make valuable contributions to their employers. 1) as 'Revenue Producers' concerned with sales revenue and profitability of firm 2) as sources of 'Market Research' and 'Feedback' firms rely on feedback from salespeople to gather customer feedback 3) Salespeople as 'Future Managers' sales personnel have been in strong demand for upper management positions sales job→ entry level positions that provide a foundation for other positions
Distinguishing characteristics of business vs. consumer markets
Business Market: Composed of firms, institutions, and governments. Business customers tend to stress overall value as the cornerstone for purchase decisions. -Concentrated Demand -Derived Demand -Higher Levels of Demand Fluctuation -Purchasing Professionals -Multiple Buying Influences -Close Buyer-Seller -Relationships Consumer Market: Consumers purchase goods and services for their own consumption and are highly influenced by peer group behavior, aesthetics, and personal taste.
CRM definition & example
CRM = Customer Relationship Management - applications and strategies that integrate multiple communication and customer contact channels - including the Web, e-mail, call center, and salespeople in order to maximize customer interactions. · Mobile salesperson CRM solutions - Wireless broadband applications that enable users to view, create, and modify data on any internet-capable device such as smartphones, netbooks and laptops. · Example: Internet/intranets/extranets - communication networks used for communication, training, videoconferencing, secure data exchange etc.
Customer value definition and example
CUSTOMER VALUE: A customer's perception of what they get in exchange for what they give up. Ex. Customer buys a product in exchange for money. A lot of times customers will define value in terms of viewing the salesperson and the selling company... -Is this salesperson dependable? -Is the salesperson's company easy to work with and hassle free? -Does the sales representative understand my business and my industry?
Derived demand definition & example
Derived demand: denotes that demand in business markets is closely associated with the demand for consumer goods. Ex. When the consumer demand for new cars and trucks increases, the demand for rolled steel also goes up.
The factors that drive trust (components of trust) - definitions & examples
EDCCC Expertise: deals with the salesperson's skill, knowledge, time, and resources to do what is promised and what the buyer wants Dependability: predictability of the salesperson's actions ex. once a promise is made, the salesperson must make it happen Candor: deals with the honesty of the spoken word ex. Customer Orientation: means placing as much customer emphasis on the customer's interests as you would on your own. ex. a salesperson who has customer orientation gives fair and balanced presentations. This includes covering both pros and cons of the recommended product. Compatibility/ Likability: The salesperson's ability to find commonalities with buyers
Types of buyer needs definitions & examples
KFPSS Situational Needs: Specific needs that are contingent on conditions related to the environment, time, and place Ex. providing for quick initial shipment to meet a buyer's out of stock status Ex. I need a cell phone because mine broke. Functional Needs: Represent the need for a specific core task or function to be performed. THE NEED FOR A SALES OFFERING TO DO WHAT IT IS SUPPOSED TO DO! Ex. The switches work properly to control the flow of something. Ex. I need a cell phone with a keyboard. Social Needs: The need for acceptance from and association with others--a desire to belong to some reference group. Ex. Ralph Lauren clothing is associated with upper-income, successful people Ex. I need this phone to look tech-savvy. Psychological Needs: Reflect the desire for feelings of assurance and risk reduction, as well as positive emotions and feelings such as success, joy, excitement, and stimulation. Ex. Want to make sure you didn't make the wrong choice Knowledge Needs: The desire for personal development, information, and knowledge to increase thought and understanding as to how and why things happen Ex. I need comprehensive training on how to use a new phone.
The different types of knowledge - definitions & examples
MCCTIPPPS9 Competitor Knowledge: Knowledge of a competitor's strengths and weaknesses in the market (helps you articulate your value proposition relative to the competitors) Product Knowledge: Detailed information on the manufacture of a product and knowing whether or not the company has up-to-date production methods ex. What materials are used to make a product? Who are the design engineers? Service: ex. Does a company service its products or send them to a third party? How long does the service generally take? What does the service agreement include? Promotion Knowledge: knowledge tools salespeople must possess to explain their firm's promotional programs Price knowledge: knowledge tools salespeople must have about pricing policies in order to quote prices and offer discounts on products Market Knowledge: information salespeople must have if larger companies break their customers into distinct markets; must be familiar with these markets in order to tailor sales presentations ex. salesperson may only sell to manufacturers, wholesalers, financial institutions. Customer Knowledge: Information about customers that is gathered over time and from different sources that helps the salesperson determine customer needs to better serve them Technology Knowledge: Information salespeople must have about the latest technology Industry/Company Knowledge: Typically the most "superficial" (i.e. this is our mission statement) --- industry: gives you context into where you're coming from and where they're coming from
Procedures for evaluating suppliers & products - actions
Multiattribute Model: Weighted averages for performance across desired characteristics -The weighted averages incorporate: - assessments of how well the product or supplier performs in meeting each of the specified characteristics - the relative importance of each specified characteristic 3.5 book exhibit
Buying team roles - buying center roles
PGDUII Employees from one or more departments fill the roles in the buying center and work together to affect the outcome of the purchase decision - Initiators - Influencers - Users - Deciders - Purchasers - Gatekeepers
Definition of trust and example
PRODSCCHF TRUST: the extent of the buyer's confidence in the salesperson's integrity Buyers define trust with such terms as: openness, dependability, candor, honesty, confidentiality, security, reliability, fairness, and predictability
Different levels and types of goals
PTAS Four different levels/types (each of the levels is interrelated and interdependent with the others) : 1) personal goals - A salesperson's individual desired accomplishments, such as achieving a desired annual income over a specific period of time. 2) territory goals - a salesperson's desire of selling a certain amount of product within an area or territory in order to achieve personal goals. 3) account goals - A salesperson's desire of selling a certain amount of product to one customer or account in order to achieve territory and personal goals 4) sales call goals - A salesperson's desire of selling a certain amount of product per each sales call in order to achieve account, territory and personal goals.
Sales technology types
Portable Computers and Smartphones -Mobile CRM applications -Presentation Capabilities -E-mail, texting, Social Networking -Wireless Communications Deal Analytics -"Smart" sales force automation tools that -analyze data on past customer behavior cross-selling opportunities, and demographics to identify areas of opportunity and high customer interest.
Sales dialogue definition and example
SALES DIALOGUE: series of conversations between buyers and sellers that take place over time in an attempt to build a relationship. The purpose of Sales Dialogue: -allows for more thorough qualifying -clarify customer situation and buying process -discover customer unique needs and requirements **Both parties gain from the process** EXAMPLE: The first videos shown to us in class where they are trying to sell security to the video game company
Self-leadership definition
Self-leadership = the process of guiding oneself to do the right things and do them well. It includes the strategic application of effort that is honed and aligned with one's goals.
Types of purchasing decisions
Straight Rebuy: This is the easiest of buying decisions for the salesperson. Needs have been predetermined with the corresponding specifications, pricing, and shipping requirements already established by a blanket purchase order. -Ordering is automatic and often computerized by using Electronic Data Interchange -There is no difference or needs gap between the actual and desired state Modified Rebuy: There was a change in wants/expectations of the buyer. Salesperson must modify the process -Salespeople will emphasize how well their product has performed in resolving the needs gap. New Task: Occurs when the buyer is purchasing a product or service for the first time. The buyers have no experience or knowledge on which to rely. Consequently, they undertake an extensive purchase decision and search for information designed to identify and compare alternative solutions. Selling strategies for a new task -The salesperson can provide expertise in fully developing and understanding need. -assist the buyer in making a purchase decision and provide extensive follow-up to ensure long-term satisfaction (CONSULTATIVE STRATEGY) 3.6 Exhibit
Transaction versus trust based relationship selling characteristics
TRANSACTION SELLING: Focused on maximizing sales in the short run -primary focus→ Salesperson and selling firm -One-way communications -isolated from consumer's decision process -NO FOLLOW UP TRUST BASED SELLING:Requires that salespeople earn customer trust and that their selling strategy meets customer needs and contributes to creation, communication, and delivery of value. **BETTER OF THE TWO** -Focuses on solving customer problems/ providing opportunities/ adding value to customer's business -role of salesperson→ to be a long-term ally and key player in the customer's business -actively involved in customer's decision making process -CONTINUED FOLLOW UP! → to ensure satisfaction/ keep customer informed
Trust based sales process
Understanding customer value -> Creating and communicating customer value -> Delivering and increasing customer value See Figure 1.4 and know!!!
