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Unit 13Personal Communication Channels
Book Code - MB0046
Dr. Smita Choudhary
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Contents
Introduction
Personal selling
Sales management Personal selling process
Direct marketing
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Introduction Advertisement clutter (confusion or mess or mix up) and large
product range is causing new challenges.
One of the biggest challenge is how to reach the consumer.
The indirect media has an effect on consumer but itseffectiveness in producing sales has decreased with time.
Organizations are looking forward to interpersonalcommunications.
Companies are encouraging word of mouth communication.
They are trying to increase the effectiveness and efficiency oftheir sales force.
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Learning ObjectivesAfter studying this unit, you will be able to
Define personal selling
Understand the process of personal selling
Analyze the sales management techniques
Identify and discuss the major forms of direct marketing
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Personal Selling
The communication technique in which sales people build the
personal relationship with customers to create value for the
organization.
The value for sales force is sales and for customer is benefits.
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Nature of personal selling
There has been a change in pattern in personal selling.
Earlier sales jobs were perceived to be low.
The emergence of modern corporations and rise of new Indiarequires professional selling.
Now days it is not only selling. It is using professional skills tohave a long term relationship with the customers to generatethe value continuously.
Due to this there is a growth of professional sales force.
Even companies that marketed through channels entered intothe personal selling. For example, Hindustan Unilever Limited(HUL) which has retail and wholesale channels, recently enteredinto the network marketing.
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There are many types of sales jobs used to sell the product of the
organizations. They are
1. Delivering: The job of sales executive is to make the products reach to
the customers destination. For example, A sales person working fortransport or courier company makes the goods reach the customers
places. Sales
2. Inside order taker: Sales executives in the retail stores like Subhiksha
help the customer in identifying the product. The person in the hotel
takes the order and serves better.3. Outside order:These are field executives who go to the customersplace
to get the order.
4. Missionary selling: These are sales executives who provide the
information and promote the companysproducts. For example, medical
representatives.5. Sales engineer:In this position, the sales executive is a technical expert
and works with non technical sales executive to provide help on technical
information required by the customer.
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Approaches to Personal Selling
1. Stimulus response selling: In this approach, sales personprovides the stimulus (motivation or encouragement) and
expects the response from the buyer. This process continuestill the purchase decision has been made.
2. Need satisfaction selling: In this approach, sales executivefinds the need of the customer and confirms it. He providesthe various offerings (options) to the customer to choose fromand this process continues till the purchase has been made.
3. Problem solving selling: This approach is used when thecustomer faces the purchasing problem. In this approach, salesexecutive defines the problem of the customer, finds analternative solution and evaluate them. Then he works withparticular solution till the customer purchase.
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Situations That Favor Personal Selling
Personal selling is useful when:
The price of the product is high, theproduct is technical in nature and needsdemonstration.
The product is in the introductory stage
of the product life cycle. Organization does not have enough money
to carry advertisement campaigns.
Product can be customized i.e. tailoredaccording to customer needs.
Market is concentrated.
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Advantages and Disadvantages of Personal Selling
Advantages
1. It can be customized.2. It can focus on prospective customers.
3. It results in the actual sale, while most other forms of promotion are
used in moving the customer closer to the sale.
Disadvantages
1. It is costly to develop and operate a sales force.
2. It is very difficult to attract upper class people.
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Sales Management
Deciding the sales territory
Sales territory is the
geographical area in which
the sales executives have to
work.
The territory is set to avoid
conflict between two sales
executives.
This helps to set a fixedquota for sales executives
and is used for performance
evaluation.
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Sales force size
The size of the sales force is decided by work load method.
The work load method consists of
a) Identification of customers and grouping them into differentcategories.
b) List out the activities of the sales executive.
c) Find out the time required for selling and non selling activities of
sales executives.
d) Find the number of calls the sales executive has to do in a particular
period.
e) Calculate the number of sales people required.
Sales organization
Sales activities in the organization are allotted on the basis of geography(Bangalore, Mysore etc), product (personal care, water purifier etc.)
customer (steel companies, electric companies etc) or matrix type. This
helps company to have better control over the sales executives.
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HR PRACTICES IN SALES MANAGEMENT
Recruiting
Recruitment is the process of finding candidates and encouraging them to
apply against a vacancy in an organization.
Selection is the process of choosing some candidates out of all those who
have applied.
Selection is recruitment, but recruitment is not selection
Selecting means rejecting the unfit candidates.
After deciding the number of salesperson required, the sales manager
must select personnel. The normal sources of recruitment are:
Internal sources
External sources
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Internal Sources
Many firms feel that it is best to fill the vacancies of salesmen from the existing
employees of the organization.
It may also be called as promotion.
This can be used by analyzing the ability and potential of the staff on the basis of
seniority i.e., length of service.
Merits
1. Better co-operation can be expected.
2. They are loyal.
3. Since it is a promotion, sincere and honest performance can be expected.
4. They may not need training.
5. They may not need high salary.
Demerits
1. There is limited scope for selection.
2. Favoritism plays its role.
3. The person may not adjust himself to the new
job as the nature of work is different.
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External Sources
The external sources of recruitment are:
1. Employment Exchange
2. Competitors organization
3. Salesperson of non-competing firms
4. Educational institutions
5. Recommended cases
6. Advertisement
7. Unsolicited applications
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1. Employment Exchange: Private and public employment exchanges
are the best source of personnel. They maintain proper registers
with names and other full details of persons. The candidates may
be untrained and inexperienced and hence may requiring furthertraining.
2. Competitors Organization: The salesmen employed in other
competing firms can also be chosen. He is well trained. Such a
person may be attracted by giving more facilities and a higher
salary. In this case, his habits, sincerity and loyalty must beverified. But this method is not morally accepted.
3. Salesperson of Non-competing Firms: salesperson can also be
chosen from non-competing firms. Such persons may be
experienced but may need training to achieve the required sales
objectives.
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4. Educational Institutions: In this method of recruitment students are
directly selected from specialized institutions, where theoretical and
practical knowledge is gained by them. The head of the institution
maintains complete records of students. This method is used in advance
countries like America, England, etc. but in India it is rare. It has been
neglected with the feeling, justfrom eggi.e., inexperienced.
5. Recommended cases: The employees of the firm, managers,
superintendents, section heads etc., may recommend candidates from
their friend circles. They have a moral responsibility when such persons
are recruited. The employee who recommends personnel will be blamed,
if the person is not up to the mark.
6. Advertisement: This method is generally used for recruiting salesmen.
Advertisements are displayed in newspapers, trade journals specifying
the job and the required qualifications, experience and skill. The number
of people who apply is large because the news spreads over a widegeographical area. This gives more scope for selection.
7. Unsolicited applications: These are unrequested applications received at
the organizationsgate or through e-mail.
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1. Application Blank: In application blank the informationnecessary for appointment is collected from the candidate. Itgives a clear idea about the candidate. Generally, it consists ofinformation like name, gender, qualification, age, experience,health, social activities, references etc.
2. Screening: Screening is a process by which unsuitableapplications are rejected and not processed further. Theremaining applications are considered for appointment. Thissaves time and energy.
3. Reference: Applicants are asked mention the names of tworeferences or referees. References are used to enquire aboutthe integrity, general character and ability of the applicant. Ifthe opinions are favorable, the applications passes on to thenext stage else it is rejected at this stage.
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4. Personal Interview: The screened applications are considered for selection and
the firm sends out interview letters to such candidates. By personal interview, the
sales manager can understand the positive and negative qualities of the
applicant. A good interviewer must be unbiased, able to find facts and be a goodobserver of the interviewee.
Interviews are also of two types:
a) Patterned interviewIn patterned interview same questions are asked to all
candidates. It is easy for comparison purpose.
b) Non-patterned interview In non-patterned interview there are nostandards questions to be asked to all candidates. The applicant is allowed to
talk freely.
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5. Tests: Test is an additional tool, with is used to further find the
suitability of the candidate to the job. The important types of
psychological tests are:
i. Ability Test: This test is used to find the candidates capacity to grasp things
and to know how well a person performs a particular task with motivation.This can also be called a mental ability or intelligence test. Such tests verify
the suitability of a candidate for a particular job.
ii. Habitual Characteristic Test: A person may be intelligent but may hesitate to
take a decision. This test is used to know ones aptitude and interest on
normal, daily work, irrespective of the best behavior occasionally.
iii. Achievement Test: This test is designed to know what knowledge a person
has gained from his education or training.
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6. Medical Examination: Besides qualities and eligibility, a person must be
physically fit for the job. Salesmen who have diseases and are not
physically perfect will affect the business. To ensure that salesmen are fit
and free from any diseases, selected applicants have to undergo medical
examination.
7. Final Interview and Appointment: The selected applicant is probably,
called for a final interview and his suitability is measured through
different tests, physical reports etc. The job must be explained to him
along with all relevant details, which are required to perform the duties
efficiently.
If everything is in favor of the applicant, an agreement is executed by him.
Generally, the agreement contains duties and authorities, sales quota, sales
territory allotted, salary and conditions of resigning. It is followed by an
appointment order, which contains designation, jobs to be performed, salary and
other financial benefits etc.
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Training
Training is in continuation of selection.
After selecting the salesmen, there are two options
They can be directly sent to the field. They can be sent for a training programme.
Salespersons need training to call them qualified.
Through training they achieve perfection and self development.
Training means making a salesperson perfect in his work.
Training programmes are procedures or methods through whichknowledge and skills are gained.
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Significance of Training
Now a days, there is cut-throat competition in the marketing world.
The world is dynamic and not static.
Customers are more benefit-oriented. Producers produce new products, new devices, and products with multiple uses to
satisfy the ever-changing demands of the consumers.
Thus, training is essential to keep the salesmen, with up-to-date knowledge, in
respect of new or developed goods.
Training gives scope for improvement.
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Objectives of Training
The objectives are:
1. To encourage the salesmen to learn the technique and principles of salesmanship, process
of sales, canvassing (surveying) etc.2. To reduce the labor turnover rate in the sales force.
3. To encourage better sales performance.
4. To improve the relations with the customers.
5. To increase the efficiency of sales personnel.
6. To keep the salesperson informed of the knowledge of products, market, competitors etc.,
to face all situations.
7. To lower the selling expense in order to increase the profits.
8. To maintain sound relation between employer and employee.
9. To develop better knowledge, and the ways and means to resist all situations.
10. To motivate the consumers more effectively.
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Advantages of Training to Salespersons
1. A trained salesperson always wins customers by systematic approach.
2. salesperson acquires better understanding of the firm, its past history,
policies and this helps the salesperson in effective dealings.3. A trained salesperson takes less time in completing a sale.
4. A trained salesperson increases volume of sales which brings more profit
to the firm and himself.
5. A trained salesperson is able to meet consumers demand and help in
solving problems.6. Increased volume of sales helps in reducing cost of production. The cost
per unit of order or per prospect can be minimized.
7. A better relation is created among the customers through reducing
customerscomplaint, increasing brand loyalty etc.
8. The ability of the salesperson is increased by expert knowledge.
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Training Programme
A firm should prepare a programme for sales training.
The training depends on nature of the job and the products to be sold.
A good training programme should work with the following ideas orprinciples, known as ACMEE:
A: Aim of Training
C: Content of Training
M: Method of Training
E: Execution of Training
E: Evaluation
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1. Aim of Training: The aim of training is to make a recruit a good salesman.
Some of the qualities of a good salesman may be natural in him, but not
all qualities. Training makes him have all qualities required of a salesman.
2. Content of Training: The content of the training programme depends on
the subject-matter of training. A training programme differs from firm tofirm, due to differences in products, markets, policies of the company,
trainees ability etc. A good training programme helps the trainee-
salesman to learn and understand the following contents:
a) The knowledge of his job
b) The products
c) The company
d) The markets and consumers
e) The competitors
f) The sales techniquesg) The routine reports etc.
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a) The knowledge of his job
A salesperson should have solid plans about his sales planning, meeting
customers, sales talks, demonstration, presenting the goods, concluding
sales, securing order, collecting dues, handling objections and complaintsetc.
Also, he must be a keen observer of market conditions, competition,
consumerslikes and dislikes etc. He should co-operate with his seniors.
Thus, he is trained with a purpose, he should know what the firm expects
from him.
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b) Products
A salesman must have good knowledge about the product.
The salesman must have the following knowledge about the product:
1. Raw materials used in the product.2. Manufacturing methods in brief.
3. Research and development undertaken.
4. Improvement brought out.
5. Its suitability to the consumers.
6. Its trade mark, brand, characteristics.
7. Its color, weight, packaging, quality control etc.
8. Selling points of the products.
9. Product merits and uses to consumers.
10. Limitation of the product performance.
11. Its price and discounts offered.
12. Service after sales and guarantee period.13. Demonstration of its actual working.
14. Availability of the products.
15. Cost of operation and maintenance.
16. Comparative study of similar products.
17. Strength and weakness of competitors products.
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c) The Company
A salesperson must have the following information about the company:
1. Brief history of the firm.
2. Its marketing policies.
3. Objectives and purposes of the firm.
4. Economic and social objectives.
5. Its position in the market field.
6. Credit policies, sales policies, personnel policies.
7. Capacity of the plant.
8. Personnel of the firm-directors, stock-holders.
9. Execution and handling of orders, sales accounting and collection methods.
10. Salary, commission computation, traveling and daily allowances etc. and their
payment procedures.
11. Method of exercising control over the salesman.
12. Allocation of quotas and territories.
13. Marketing policies, pricing policies.
14. Handling of complaints and their adjustment.
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d) The Markets and Consumers
The salesman must have a good knowledge of the size of the market, demand for
the products and the area under the competitorsside.
Also, the salesman should know about the type of customers, buying motives, likes
and dislikes of the customers.
The salesman should pursue customers according to their gender, age, place, etc.
The salesman must adjust himself according to the nature of the customers.
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e) The Competition
Salesman must have good knowledge or comparative study of the selling
activities of rivals.
A salesman must know the merits and demerits of his product as well as
rivalsproduct to make a comparison.
The salesman should know the rival firmspolicies, method of approaching
the customers, how they are paid, the customers opinion, how their
product is, how they fulfill their duties, the area they like or dislike, their
selling-points etc.
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f) The Sales Technique
The sales techniques are the essential part in sales training.
After training, the salesman is sent to the field, where he has to sell the companys
product.
He must be given complete training in SalesProcess.
Training must be provided on the following items:
a) Selling process.
b) Method of gaining interview from consumers.
c) Method of approach to consumers.
d) Demonstration and presentation.
e) Method of handling objections of consumers.
f) Why salesman fails in the field?
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Routine Reports
Salesperson should be trained to know his routine work and
submit his report to the firm.The report may include:
a) Amount of sales made.
b) List of new customers.
c) Credit outstanding of customers.
d) Collection of outstanding dues.
e) Competitorsposition in the market.
f) Maintenance of accounts of expenses.g) Demonstration and display of products.
h) Action taken on complaints, grievances etc.
i) The attitude of market in respect of competitors.
j) Consumerssuggestion if any.The reports may be sent to the firm daily, weekly or monthly, etc.
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Training Needs of Salesmen at Different Times
New Salesmen Need
1. Facts about the companyhistory, policies
etc.
2. Product details
3. Companys systems and procedures
4. Fundamentals of selling their specific products
5. Moral training
Regular Salesmen need
1. The above five items
2. Changes in policies and procedures
3. Facts about new products
4. Future plans of the company5. Knowledge to supervise others
6. Know-how to fulfill responsibility
7. Attitude or moral training
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Training Methods
Different methods are used for providing training to
salesperson. They are divided into two broad categories:
1. Group traininga) Lecture Method
b) Audio-visual method
c) Discussion method
d) Conference methode) Role playing method
f) Panel method
g) Round table method
h) Brain storming method
2. Individual training
a) On-the-job training
b) Sales manual
c) Initial or break-in training
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1. Group Training
a) Lecture Method: An expert or a lecturer speaks to trainee-
salesmen about the various aspects of selling. It involves
verbal talk in a classroom. This system is widely used. Tomake the lecture more interesting, visual aids,
demonstration, suitable examples may be added. This
method is economical, and easy and quick in providing
theoretical training to a group of salesman. But it is difficult
to evaluate the effectiveness of lecture method.
b) Audio-Visual Method: In addition to the lecturing (telling)
method, training programs include the use of visual aids,
such as films, slides, posters etc., and are capable of making
the lectures more interesting.
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c) Discussion Method: In this method, an actual case or an imaginary case
is given as a problem to be solved, to the different groups. Each group
has to understand the problem and find a solution. The different
conclusions or suggestions are analyzed collectively. This type of training
helps the salesmen in correcting their own views. It is suitable for a smallgroup. It is slow and costly.
d) Conference Method: Sales conferences and sales meeting are a kind of
gettogetherof staff, weekly, fortnightly or monthly. In a conference, the
opinions of various persons are shared. Meetings or conferences provide
good motivation as the participants get a chance for creative thinkingand to express their views. To make the conference more interesting,
dramas, demonstrations etc., are added. Topics like, sales policies, facing
competition, publicity ideas, dealings with complaints etc., are handled.
e) Role Playing Method: It is a new method. The sales trainees have to
perform roles in artificial problems. The trainer explains the situation orthe problem and assigns the role of salesman and customers of different
characters to the sales trainees. Each one has to act according to the
assigned role. The trainer watches the role played by each person and
discusses their weaknesses and strong points.
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f) Panel Method: In this method, the panel members are experts.
They discuss the problems and pass the solutions to the sales-
trainee groups, who may have further discussion. This system is
ineffective.
g) Round Table method: It is similar to the discussion method. It
consists of few members. The salesmen sit around a table along
with a good discussion leader. They deal with the problems of
actual cases. Every participant takes part freely in discussing the
problems and solutions. Exchanges of new ideas take placeadvantageously.
h) Brain Storming Method: Under this method, more or less, similar
to round table conference, persons sit around the table. The
leader presents the problems for discussion. The sales trainees
have to understand the problems and find the solutions. The
solutions are analyzed by the leader or tested by the panel of
experts. This method practically fetches no value.
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2. Individual Training
a) On-the-job Training: Under this method, a new salesman works
under an experienced or senior salesman who trains him. The
doubts of trainee are clarified. The sales trainee is allowed to dealwith the customer and the coach observes the performance. If
there is any weak point, it is discussed.
b) Sales Manual: It is a textbook. It contains details of the firm and
products, job description, sales policies, opinions or reports
required for reference purposes etc. A copy of this book is given toa salesman to go through it and understand the ideas. It works as a
ready-reckoner.
c) Initial or Break-in Training: New recruits are provided an
orientation training to give them knowledge about the company
and its products. He works in the firm for some time to gain good
knowledge about the products. After that he is sent to the field.
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Evaluation of Training
After training the salesmen, the marketing manager must evaluate
the effectiveness of training on the basis of the performance of the
sales personnel. Training requires money, effort and time. Therefore an organization
expects returns also.
Evaluation is made on the basis of performance of sales executive in
terms of sales volume, sales profitability, order-size, expenses etc.,
before and after training.
Aims of Training:
1. To prepare the salesman to perform his job efficiently.
2. To tell him what to do.
3. To guide him how to demonstrate.
4. To allow him to practice or perform it.
5. To check him in his performance.
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Motivating
The organization finds the attributes that motivates the sales executive to perform
well.
Some executives are motivated by money and some are motivated by status or
control.
Hence the incentives given to salesperson are of two types - financial incentives
and non financial incentives.
In financial incentives salary package, flexible expenses and fringe benefits act as
motivators.
In non financial incentives promotion, recognition and awards act as motivators forsalesperson.
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Evaluating
Companies want to know whether sales executives are achieving their
targets or not.
For this purpose, they ask sales executives to send the different sales
reports.
The sales reports may be in the form of call reports, expense reports, loss
order report, travel plan and expenditure, etc.
The information in these reports are compared with the set standards.
The incentives are announced on the basis of evaluation reports.
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Compensation
There are three methods of compensation for sales
executives.
They are direct salary, direct commission and combined plans.
In direct salary method, sales executives are given fixed salary
per month.
In direct commission method sales executives work on
commission basis only. For example, agents of Life Insurance
Corporation of India (LIC) get direct commission.
The combined method is mixture of direct salary and direct
commission method. In this method sales executives are paid
fixed salary and also commission on the sales they make. Forexample, BMTC (Bangalore Metropolitan Transport
Corporation) pays its conductors fixed salary and also 2% of
commission on total tickets sold in a day.
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Quota
Quota is the target set for the sales executive for a fixed
period
Quotas are of following five types:
1. Sales quota: The sales executives have to sell a particular
volume. For example, organization may ask sales executives
to sell Rs 50,000 of goods in a year or 5000 units in a year.
2. Expense quota: Sales executivesquotas are set on the basisof sales generated and percentage of it is used for the sales
expenses. For example, If sales executive X achieves Rs 1,
00,000 of sales and his expense ratio is 5% then he can spend
Rs 5000 for his expenses.3. Profit quotas: The company focuses on the profit margin and
not on the volume. Hence it always asks its sales executives
to get better margin from the sales.
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4. Activity Quota: In this method sales executive performs multiple tasks. For
example, Medical representatives meet the doctors in the morning and explain
the product. They also meet the retailers where they try to push the product and
takes promotional activities. In the afternoon they meet distributors and in theevening they sends all the report to company and checks the order status from
the head office.
5. Combination quota: In this type of quota, any of the above five quotas can be
mixed and quotas shall be set for a certain period.
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Personal Selling Process
1. Lead generation: Identification of prospects is first step in
personal selling process. Prospects are identified through
customer references, trade association, customer directories
or through cold calling.
2. Lead evaluation: The leads should be reliable. Marketershould find out whether the lead generated has willingness,
purchasing power and authority to buy.
3. Buyer analysis: Before approaching the customer, the sales
force should understand what products prospects bought inthe past, what products he is using now and his attitude and
buying habits towards the products.
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4. Approaching the customer: The sales person should know
how to meet the prospect and how to build good
understanding with him. For example, In Japan business
meetings start in the evening. Any company selling itsproduct in china should not use number 8 in their
presentation.
5. Presentation and demonstration: The sales personnel give a
briefing of the product, understand the needs of thecustomer and then change the mode of presentation
according to the need of customer. The presentation should
be clear, simple and attracting.
6. Providing solutions to customer: The sales executive shouldhandle the queries of the customer. He should handle the
questions properly with lot of attentiveness and should solve
the problems of customer.
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7. Order generation: This is the most important step of the selling process.
Sometimes customers collect all the information from the sales executive
but hesitate to place the order. Sales executive should know order closing
techniques i.e. how to get the order.
8. Follow up: Sales executives should follow up after taking the order. It will
help the company to know whether the customer is satisfied with the
product. It also helps them to encourage the buyer for repeat purchase.
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Direct Marketing1. Telephone marketing
It is used to sell the product directly to consumer.
The growth of BPOs in India led to the development of telephone marketing. In
case BPOs there are two types of verticals.
They are inbound call center and outbound call center. In case of inbound call
center, customer is given a toll free number for enquiry and executives try to sell
the product to such customers.
In out bound call center employees call the customers and sell the products.
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2. Catalog marketing: According to Philip
Kotler catalogue marketing is direct
marketing through print, video or electronic
catalogs that are mailed to select customers,
made available in stores or presented online.Catalogue marketing is in growing stages in
India. The famous example of this type of
marketing worldwide is J.C. Penny.
3. Kiosk marketing: Organizations spread the
information and keep ordering machines
called kiosks in the shopping malls and other
places. For example,
Ambi pur a perfume company recently
organized a kiosk related marketing campaign
in the Nirmal life style Mumbai. Company
used hot air balloon to attract small boys.4. Online marketing: In this type of marketing
the organizations products are marketed on
the virtual medium. In this format buyers and
sellers exchanges the products on the
internet.
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