Ch-1-Introduction to sales mgmt Sales persons positions (Robert N.McMurry) 1)deliver a product-e. g. milk,bread,oil,gas 2)internal order taker -counter sales clerk 3)order taker- but works in the field as pizza boy, soap seller, spice seller

Ch-15-customer-oriented logistics management A distribution network usually comprise 2 complementary net-works 1)The commercial net-work 2)the logistical net-work

Ch-15-customer-oriented logistics management The commercial net-work takes care of the resources required for the efficient and effective operation of the logistical network The logistical network is involved in the actual transportation of the goods and services from the place of manufacture to the place of consumption

Ch-15-customer-oriented logistics management In India, the logistics costs are higher than in the developed markets-estimated to be around 13%of the GDP, against 9% of the GDP in the US The logistical function, since it is concerned with the physical movements of goods, is also called the physical distribution function

Definition-council of logistics management Logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption for the purpose of confirming to customer requirements

Out-bound logistics Consists of the delivery of finished goods and services to the customers from the manufacturers end Is a critical activity in any firm as it directly links the company to its consumer and comprises a set of activities that complement the marketing function of the firm Usually absorbs significant resources of the firm both in terms of the financial resources as well as human resources

Out-bound logistics It is estimated that, in FMCG sector, almost 40%pf the final cost that a customer pays is absorbed by logistical activities

Out-bound logistics The cost of logistics may vary from one industry to another With improved coordination and efficient planning ,it is possible for a company to reduce the expenditure on logistics

Objectives of logistics The logistics function of a firm is normally guided by a logistics strategy The logistics strategy sets objectives and develops guidelines for allocating the resources for achieving these objectives Broad objectives of logistics are drawn from the distribution strategy

Objectives of logistics These broad objectives generally consist of the service output demands to be delivered to the customers

Objectives of logistics The logistics strategy is a key component of the distribution strategy of the firm which in turn forms part of the marketing strategy Usually the logistics strategy brings together the components of the manufacturing and marketing strategies of the firm

The logistics strategy Comprises 3 objectives1)cost-reduction 2)capital reduction 3)service improvement

Cost reduction strategy Is aimed at reducing the variable cost related to the movement and storage of goods The service levels are usually not altered for the sake of cost reduction The cost reduction is usually achieved by such tactics like altering the number and location of warehouses Altering the mode of transport

Cost reduction strategy Route optimization for the transport function Optimizing the quantum of inventory

Cost reduction strategy Technology can also be used to reduce the variable cost of logistics Several FMCG companies in India are providing palmtops to their grass-roots level sales people so that the order booking can be expedited to effect a reduction in the finished goods inventory

Ch-1-Introduction to sales mgmt 4)build goodwill or educate an actual potential user-medical representative 5)emphasis is on technical knowledgeselling engineering products or computers 6) creative selling of tangible productsvacuum cleaners, refrigerators 7)creative sale of intangibles such as insurance, advertising and education

Evolution of sales mgmt The roman meaning of the word sales person is cheater and mercury (the god of cunning and barter) As old as human civilization India was a great destination in the medieval age fro spices, carpets, jewellery etc.

Evolution of sales mgmt The first sales people in the US were Yankee peddlers (pheriwallahs) carrying clothing, spices etc. There were fewer than 1,000 travelling sales people before 1860 in the US who were basically credit investigators

Evolution of sales mgmt Modern sales mgmt. and selling techniques were refined by John Henry Patterson (father of modern sales mgmt) who ran the national cash registry Thomas J Watson was trained by Patterson who later founded IBM

Evolution of personal selling strategies Personal selling strategies have evolved in the last 150 years In the 19th century, persuasion was the primary skill used by the sales people

Evolution of personal selling strategies With growing competition ,it became important for the sales people to understand the needs of the customers In the 1970s,sales people were treating customers not just as accounts but as clients (similar to consultant)

Qualities for an industrial seller (as per purchase magazine) 1)Willingness to go to bid for the buyer within the supplier firm 2)thoroughness and follow through

Qualities for an industrial seller (as per purchase magazine) 3)knowledge of the salespersons product line 4)market knowledge and keeping the buyer posted 5)imagingation of applying his product and services to the buyers needs

Qualities for an industrial seller (as per purchase magazine) 6)knowledge of the buyers product line 7)preparation for sales calls 8)regularity of sales calls 9)diplomacy in dealing with operating departments 10)technical education

Evolution of personal selling 1)persuasion 2)negotiation 3)consultative selling 4)business management 5)partnership strategies

Marketing concepts 1)production concept 2)product concept 3)selling concept 4)marketing concept 5)societal concept

Production concept Has its origin in the production orientation Emphasis is on try to sell a higher volume of goods at low costs and through an intensive distribution strategy

Production concept Viable strategy in a developing market where market expansion is the crucial survival strategy

Production concept Companies interested in reaping scale economies pursue this orientation Such companies cannot deliver quality products and suffer from problems arising out of their impersonal behavior with customers

Product concept Assumption is that consumers favor those products that offer high quality attributes such as quality, performance and other innovative features (technology push model)

Product concept Sometimes the innovative products are launched without analyzing needs of the customers e. g. the golden eye technology was first introduced by videocon which was not accepted first, after a certain time, LG introduced the same technology and made it its USP

Sales concept Assumption is consumers need to be persuaded to buy Consumers are typically inert

Sales concept Applicable in case of un-sought goods such as life insurance,vaccum cleaner, fire-fighting equipments etc

Sales concept Applicable to firms having over-capacity and their goal is to sell what they produce rather than what a customer wants Companies pursuing this concept often fail in todays marketing where buyer has a number of options

Marketing concept Rests on the four key elements of 1)Target market 2)customer need

Marketing concept 3)integrated marketing (including internal marketing) 4)profitability

Marketing concept In todays scenario ,profitability of an enterprise through efficient marketing activities is the key success criteria Profitability is now treated as a by-product of creation of superior customer value and better understanding of customer needs

Societal marketing concept Combines the best elements of marketing to bring social change through integrated planning and action framework with the utilization of communication technology and marketing techniques Is an extension of the marketing concept

Societal marketing concept Often termed as cause-related marketing Excessive exploitation of resources, environmental deterioration and customer movements in particular have necessitated the recognition of relevance of marketing to society

Nature and role of sales management Sales management is more strategic and of long-term consequence, as it involves planning, organizing, directing and controlling of all the selling activities The role of a sales manager in an organization has become strategic and formidable (an accountant, a planner, a personnel manager and a marketer)

Nature and role of sales management Primary responsibility is to augment the sales force by augmenting the sales closing process

Duties and responsibilities of a sales manager 1)determining sales force objectives and goals 2)finalizing sales force organizations. size, territory and quota 3)forecasting and budgeting sales

Duties and responsibilities of a sales manager 4)selecting,recruiting and training the sales force 5)motivation and leading the sales force 6)designing compensation plan and control systems 7)designing career growth plans and building relationship strategies with key customers

Types of personal selling 1)industrial 2)retail 3)services selling

Industrial selling Also termed as business to business selling (manufacturing sector selling) 1)selling to resellers 2)selling to business users 3)institutional selling 4)selling to governments

Selling to resellers Reseller may be a wholesaler or a retailer or an intermediary who buys finished goods and resells them to the end-users

Selling to resellers Hero-cycles-series and sunshine chemicals sell to the reseller The sales persons objective in such a case is to gain larger shelf space and higher point-of-purchase display so that the products can reach the ultimate consumers rather quickly

Selling to business users Here the output of one producer enters into the production process of another producer to manufacture a final good for the consumption of the end-users The sales person of the first firm tries to sell the goods to the second firm which, in this case, is a business customer

Selling to business users IBM sells Intel Pentium processors which are used by Compaq or HCL to make computers Tata refractory produces bricks that go to other manufacturers involved in hot metal technology Producers of heavy machinery, ball bearings, fork-lifts and electrical cables

Institutional selling The institutional customers use the products in their daily operations

Institutional selling Xerox in photo-copiers, Johnson and Johnson in surgical equipments and Reynolds in office stationeries sell directly to institutions for institutional consumption

Institutional selling Here the sales person sells to the ultimate consumers but the product is used in providing support to the buyers business rather than in producing the buyers products

Selling to governments In most countries, the government is the leading buyer There are many companies such as escort Rites that sell only to governments or to government undertakings

Selling to governments A sales persons ultimate consumers are the employees of the government The procedure in government buying is different from the procedures involved with the other institutional buyers

Retail selling Retailing is defined as all the activities directly related to the sales of goods and services to the ultimate consumers for personal or non-business use or consumption The primary difference between retailing sales and industrial sales is the actual location of the sale

Retail selling Retail selling is effected at the level of a retailer, a dealer, or even a wholesaler who carries out retailing function for large buyers Shoppers stop, Big Bazaar and crossroads in India K-Mart, Wal-Mart, Tiffany

Services selling Services are activities or benefits provided to consumers Services are 1) intangible

Services selling 2)cannot be touched, seen, tasted, heard or felt like physical goods Services are less standardized and uniform in nature than the products (unique experiences) Some services are retail services (hotel room service, transport)

Types of selling 1)order takers 2)order creators 3)order getters

Order takers Respond to the already committed customers The account executives in an advertising agency are of this nature

Order takers They perform only client servicing function and take the release orders from the existing clients 1)Inside order takers, 2)delivery sales people and 3)outside order taker

Order takers Inside order takers are the retail sales assistants whose role is to complete the transaction The sales people that deliver milk, newspapers, magazines and pizzas can be called delivery sales people

Order takers The outside order (eureka forbes) takers visit the customers regularly to respond to the customer call They do not deliver anything at the customers place

Order creators Are missionary sales people who normally do not close a sale but persuade the customers to promote a sellers brand They do not directly receive orders since they talk to specifiers rather than customers

Order creators Medical representatives are called missionary sales people The objective is to educate and make the people aware of the product rather than closing a sale

Order getter Attempt to persuade customers to place an order directly Are 1) frontline sales people( door to door) 2)sales support sales people A) new business sales people

Order getter B)organizatinal sales people C)consumer sales people - persuade new buyers and non-user-e .g. business development executive in an agency

Order getter A) technical support sales people-support the front line( key account management team)

Order getter B )merchandisers-provide sales support in retail and wholesale selling situations(advice on display, execution of sales promotion programmes, help in displaying the point-of-purchase material, checking the stock level, maintaining contact with store manager (found in a more organized retail environment)

Difference-selling/marketing Selling Emphasis on product Product manufactured first, then sold Mgmt .is sales volume oriented Planning is short-term oriented for products and markets Stresses needs of a seller Views business as a goods producing process Emphasis on staying with existing technology and reducing cost Watertight compartments Cost determines price Views customer as the last link in business Marketing Emphasis on consumer needs Needs and wants first ,then delivery of product Profit oriented Long term planning in terms of tomorrows product/markets Stresses buyer needs and wants Views business as a consumer satisfying process Emphasis on superior technology, innovation All departments operate in an integrated manner Consumer determine price ,price determines cost View customers as the very beginning of the business

Features of marketing based companies (Bower and Garda) 1)they use market share, rather than volume, as the primary measure of marketing 2)they analyze and use market segmentation principles 3)research the process of monitoring customer needs, usage and trends as well as competitive activity

Features of marketing based companies (Bower and Garda) 4)evolve a structure or process of cocoordinating all non-marketing functions towards the achievement of marketing goals 5)they have set of specific marketing goals and targets

Features of marketing based companies (Bower and Garda) 6)follow a corporate style and culture where marketing plays a key role 7)follow a market based business concept that provides a unique value to the customers

Modern day sales activity Today, a salesperson spends only onethird of his sales time on the actual selling function Reporting systems are automated through SAP platforms

Modern day sales activity They are conducting functions such as territory analysis, sales reserch,market planning and sales promotion

Modern day sales activity In a developed market, (country), a sales person spends more time on sales presentations where as in a developing market, he has to do more prospecting to generate leads and make them qualify as prospects

The sales management process 1)formulation of a strategic sales management programme 2)implementation of a strategic sales management programme 3)evaluation and control of sales force performance

Strategic sales management-key decisions 1)how to dovetail the personal selling efforts to the companys environment and integrate with other elements of marketing strategy (firms personal selling strategy) 2)account management policies (sales approach)-how to approach, persuade and service customers?

Strategic sales management-key decisions 3)design of sales organization suitable to the market (organization of the sales force)

Strategic sales management-key decisions 4)decisions related to the level of performance of each member (forecasts, quota and budget- setting) 5)deployment of the firms sales force in the light of the account management policy and demand forecast (deciding and allocation of the territories)

Evaluation and control of a strategic sales mgmt.program 1)sales analysis 2)cost analysis 3)behavioral analysis

Sales analysis The sales figures can be broken by territory, by product line, by customer types and results can be compared with quota and forecasted sales in these areas

Cost analysis The costs can be evaluated on the basis of an individual sales man,territory,product line and customer type

Cost analysis Combined with sales analysis, the sales manager can find out the profitability on segment basis and also overall customer profitability Poses a challenge of distributing the administrative costs and overheads on sales accounts and among sales people or product lines

Behavioral analysis Thomas Bonama proposed the behavioral evaluation model for the performance evaluation of the sales people

Behavioral analysis Sometimes the sales people cannot achieve a certain level of sales due to the level of competition and nature of economic condition prevailing in the country (actual behavior should be evaluated with the sales volume)

Behavioral analysis Tools used are 1)self-ratings

Behavioral analysis 2)supervisors evaluation 3)self appraisals 4)field observations 5)survey of customer satisfaction used in behavioral analysis

emerging trends 1)Modern sales management is more oriented towards mapping customers needs and delivering products to satisfy customers needs (service ,quality, low cost)

emerging trends 2)non traditional methods are being used like tele-marketing, key-accounts management, part-time sales force, team selling and web-based e-selling techniques (Bazee. com)

emerging trends videocon used sales teams to make sales presentations

emerging trends 3)industrial sector (software companies) are using cross functional selling (team comprises of sales, marketing, finance,operations,HR Priceline.com in the USA uses a webbased sales model where reverse auctioning is practiced

Emerging trends Transactional selling to relationship selling Relationship selling examples HCL appoints a full-time employee

Emerging trends GE has opened back-office operation to attend customer complaints Customer loyalty program-Jet airways

Emerging trends Technology is being used in integrating business across enterprise (vendors, salesperson) Tata-Motors has integrated around 56 suppliers to its automated supply chain management Maruti has a sales automation process (dealers are linked with Gurgaon plant)

Emerging trends Archies and Hallmark use data derived from bar codes scanned at the check-out counters of retailers to supply information to their sales people

Emerging trends Torrent and Pfizer use technology to augment the job of their sales people to manage the demands in their marketplace

Emerging trends Many Indian companies provide hardware support in the form of notebooks to their sales people for data recording, transmission, and retrieval for faster access to customer order information, price data and bid specifications

Emerging trends More and more sales people today work from their homes through computers, faxes, copiers, voicemails and cellular phones

Emerging trends Business organizations are going global and the virtual organization has made possible for even smaller firms to compete with large firms (this global multi-cultural work force needs radical attention to the sales management practices

Emerging trends Various legislations in ethical/social/environmental challenges (GATT/WTO) make sales force team to take note of these issues Emerging markets (china, Malaysia) demand special attention to the structure, approach and nature of sales force and selling techniques

Emerging trends Modi-Xerox was found bribing for selling its office equipments and photo-copiers More and more companies are now moving to an ethics based corporate philosophy

Ch-2-selling skills and strategies Research has identified that it costs less to sell products to existing customers than to new customers One school of thought believes that selling comes naturally to some people

Ch-2-selling skills and strategies Another school of thought is based on the scientific management principles of skill and value development (ordinary people can be groomed)

Ch-2-selling skills and strategies Success in selling does not depend on some inborn quality; rather it is based on application of certain skills and development of commitment and professionalism in selling

Buying styles Innovators buy on impulse and consider non-functional reasons for making a choice

Buying styles Laggards start buying a product when another new product is on the door-step In B2B situation, many govt.organizations always go for buying the lowest priced commodity irrespective of quality level; where as quality conscious organizations may not give much importance to the price factor in buying solutions

Blake and Mouton grid Concern for sale on horizontal axis Concern for the customer on vertical axis (1,1)-take it or leave it-

Blake and Mouton grid Assumption is customers will buy the product themselves if the logistics are managed Suitable for FMCG products-

Blake and Mouton grid Sales force has the least role to play as they do the business of physical transfer Suitable where the demand exceeds supply (no advance selling techniques required)

Blake and Mouton Grid (9,1)-product oriented-push the product Sales people here are more productoriented and they always try to push the product for sale

Blake and Mouton Grid They try to sell without caring for the customer demand patterns They believe that it is possible to sell any product without considering customers buying intention and do the hard sell

Blake and Mouton Grid Sales people in (1,9) position treats himself as a friend of the customer who try to understand the customer and respond to his feelings and interests to establish a personal rapport

Blake and Mouton Grid Sales people in (9,9)are the problem solvers who consult with the customer (consultative selling)-seen in software and consultation selling industry

Blake and Mouton Grid Sales person in position (5,5)is a professional who keeps balance between concern for the customer and concern for the product. They use various sales techniques to do prospecting and sales presentation and pitch for sales by applying professional techniques (blend of personality and product orientation

Functions of a sales person 1)communication 2)listening 3)information dissemination (current and new products) 4)negotiations and bargaining 5)problem solving (solution selling)

Forms of selling 1)maintenance selling 2)developmental selling 3)contacts 4)technical expertise

Maintenance selling Involves art of servicing the existing accounts, securing promotional cooperation, counting inventory, taking replenishment orders and delivering the products Client service executives in ad agencies

Maintenance selling In IT sector, these sales people are posted at the client site In high-tech product categories also, service and maintenance people are found

Developmental selling Involves locating and qualifying potential buyers, securing specifications and approvals for the purchase, and closing the sale by getting the actual order The sales person must seek for the potential customers and obtain their order

The good salesperson-according to buyers Honest Loses a sale graciously Admits mistakes Possesses problem-solving capabilities Friendly but professional

The good salesperson-according to buyers Dependable Adaptable Knows my business Well-prepared patient

The Bad Does not follow up Walks in without appointment Begins call by talking sports Puts down competitors products Has poor listening skills

The Bad Makes too many phone calls Makes lousy presentations Fails to ask about needs Lacks product knowledge Wastes my time

The Ugly Has a smart Alec attitude Calls me dear or sweetheart(I am a female) Gets personal Does not give purchasing people credit for their intelligence Whines

The Ugly Lies Wines and dines me Plays one company against another Acts pushy Smokes in my office

Selling skills 1)communication skills 2)listening skills 3)conflict management and resolution skills 4)negotiation skills 5)problem-solving skills

Communication skills Trust between a buyer and seller largely depends on 1)truth of words communicated by the sales person 2)predictability of action

Communication skills 3)competency(ability/knowledge/resource s 4)intent or empathy 5)likeability(is an emotional issue; perception of commonality by both the parties)

The communication process Is defined as a set of activities and systems integrated for an exchange of ideas, concepts, information, and knowledge between a sender and receiver through alternative channels

The communication process Sales communication can be both personal and non-personal Non-personal communication means the use of mass media (TV, newspaper, etc) suitable for disseminating product information to enhance the level of product awareness

The communication process The message has to be encoded into a presentable format that can be transmitted to the customers The active voice should be used to express ideas ad communicate with the audience

The communication process The dress code, body movements, voice intonations and expressions of emotions like laughter and surprise constitute part of the communication process

The communication process Noise is the unnecessary factor that hinders the smooth transmission of message (physical noise of telephones/computer or psychological in the form of fantasies and day-dreams or the mental blocks of the receiver due to cultural, religious and other reasons

The communication process Noise may also mean factual distractions which happens due to preoccupations with certain factors that deter the reception of the real message Semantic noise occurs when a salesperson over responds to an emotional statement

The communication process Self-focus (level of pre-occupation), defensiveness (threat due to negative feed-back) experiential superiority (varied experiences) and egocentrism affect the reception of the message Egocentrism is a tendency to view the self as the centre of everything

The communication process Selective perception occurs as a result of a high level of distortion in the process of decoding the intended message

The communication process Selective attention means people will pay more attention to information which is of value to them in the present situation rather than which has long-term relevance (interpretation in terms of own set of personal factors like beliefs, opinions, attitudes and experiences)

The communication process Communication can occur through personal visit, telephone, e-mail, the web, various written forms (for a sales person to provide product information)

The communication process The understanding of communication for a sales manager will be verbal and nonverbal

The communication process Facial expressions, gestures, spatial relationships, and attitude towards time and people are non verbal Non-verbal is less structured and more difficult to study; it is also different from verbal in intent and spontaneity Sales people prefer oral communication channels to written ones

Managing body language Personal appearance1)posture 2)gestures 3)facial expressions 4)eye-contact 5)space distancing

posture Refers to the way one stands, sits, and walks The mobility of the body and the positions of hands, legs and other parts reveal an individuals personality

posture A good sales person stands tall with his feet together, weight directly over the instep keeping his chin parallel to the floor or at a right angle to the backbone

posture A drooping shoulder and a protruding stomach indicate sales person being discouraged, tired and worn-out One must learn where to keep the hands and how to shift the weight of the body on legs while speaking

gestures Playing with a ring, twisting a key chain or clasping ones hand tightly robs effectiveness of a presentation Sometimes gestures do not accompany oral delivery and are used to communicate short messages like-yes, no, come here, go there, be silent etc.

gestures Gestures along with oral communication enhance the impact and value of what has been said Through a process of self-evaluation in the use of gestures, sales people can achieve greater success

Facial expressions A smile as a symbol of friendliness ,a frown as a symbol of discontent, raising of eyebrows as an expression of disbelief, tightening of jaw muscles as a symbol of antagonism Brightness in the eyes may keep the interest sustained and may evoke enthusiastic response

Facial expressions Exuding zeal or a smile while explaining the product features makes the job of sales person easy Biting the lips, raising the eye-brows at regular intervals, blinking the eyes too often can certainly mar the presentation

Eye-contact Eye is believed to be an extension of the brain and window to the soul Continuous eye-contact is must

Eye-contact Is a means of obtaining feedback, and enabling the sales person to alter, adjust and re-frame his sales message In a majority of the instances, this process is automatic, and the interaction through eyes between sales person and the customer takes place automatically

Space distancing For a formal presentation, a zone of 4-12 feet is maintained (social distance) Usually the senior most salesperson stands and other members remain seated

Space distancing Occasionally there should be spells of silence on the part of sales person to garner new points and ideas regarding customer reactions

Space distancing When sales people communicate without proper groundwork, they lack adequate knowledge about the organization, the product, competitor products, and the market situation communication breakdown is possibility

Space distancing When the customer is more knowledgeable than the sales person, break-down is possible Mixing up business with friendship in sales often invites conflict of interest and bring break-down

Space distancing Confusing processes with outcomes and the related stress may bring a halt to sales communication Use of inappropriate forms of communication and wrong channels of customer contact also adversely affects the flow of sales communication

Listening skills Generally, sales people spend more time in receiving communication and information than in transmitting it A good listener welcomes new ideas, and stays informed, up-to-date

Listening skills Research suggests that people are only 25%efficient in their ability to listen

Listening skills An average person remembers only about half of what is being told to him after 10 minutes, and forgets half of that within48 hours Usually people would prefer to talk about the products and services to listening about them in a real selling situation

Types of listening 1)content listening 2)critical listening 3)empathetic listening

Content listening When someone listens to a sales representative or a medical representative, he is engaged in content listening The objective is to understand and retain the speakers message

Content listening Information flows from speaker to the receiver It is just the reception of the message by the receiver who remains mostly inactive

Critical listening The objective here is to understand and evaluate the meaning of the speakers message at several levels-the logical level of the argument, strength of the evidence, and validity of the conclusions; the implications of the message for the customer; the speakers intentions and motives; and the omission of any relevant data

Critical listening Involves interaction and evaluation of the speakers orientation

Empathetic listening Is to understand the speakers feelings, needs, and demands so that it can be appreciated by the listener irrespective of the fact whether he likes it or not

Empathetic listening By listening empathetically, the listener allows the speaker to vent his emotions and thus avoids a dispassionate approach to the subject The sales person should avoid the temptation to give advice, and should try to judge the individual customers feelings

The process of listening 1)attention 2)interpretation 3)remembrance 4)evaluations 5)response action

Attention The customer physically responds to the message and takes note of it. This reception can be blocked by noise, inattention, psychological barriers and impaired hearing

Interpretation stage Calls for assigning meaning to sounds according to the customers own values, beliefs, expectations, roles, needs and wants and ideas about himself, products, and the world The sales person needs to determine what customer really means since their frame of reference may be different

Stage of remembrance The messages are stored for future use by the seller as well as the customer As the customer listens, he takes note or draws a mental line about the product and service offered for sale

Evaluation Customer applies his thinking skills to weigh the buyers remarks and queries The sales person should separate facts from opinions, and evaluate the quality of the judgments

Response action stage One responds after evaluating the receivers message If the sales person is communicating in a small group or a one-to-one conversation, the initial response is generally a verbal feedback

Response action stage In large groups, it can be in the form of an applause, laughter, or silence. Later on the sales person can work on what he has heard

Levels of listening 1)feed-back 2)paraphrasing 3)clarifications 4)empathy 5)active listening

feedback Is fundamentally the reaction of the customer to a sales call After listening to the customer, the sales person says something back to him, giving away his attitude towards or evaluation of what the customer said

paraphrasing Salesperson tries to paraphrase the question by mirroring the questioners point thus creating a more receptive listener in his customer

Clarification of the issues Involves working a little harder with the customers words to identify his real concerns The idea is to establish a level of agreement with the questioner

Clarification of the issues The sales person by clarifying the problems shows the customer that he is trying to sort out the vital issues in their conversation

Empathetic listening Is the level in which the sales person tries to show that he understands the feelings of the questioner (customer) The empathetic listener finds similar emotions in his or her own experience and shares them with the questioner (customer)

Active listening Is the last stage in which the sales person identifies the emotions underlying the customers words This is potentially the most powerful listening response, because it is usually the emotion behind the phrases that prompted the customers objections in the first place

Barriers to listening Includes physical and mental barriers Prejudgment is the most common barrier to listening Some people listen defensively assuming every communication as a personal attack on them or their social position

Barriers to listening Many listeners are also guilty of selfcenteredness Selective listening (out-listening) The reason of wandering mind is that, we tend to think faster than we speak (sales people can speak100-150 words per minute; mind can analyze 800-900 words per minute)

How sales people should improve listening skills? 1)depersonalize the listening 2)avoid distractions by closing the doors, and moving closer to the customer

How sales people should improve listening skills? 3)listen to the customers idea of the product and price, and try to distinguish between facts and arguments by applying their own market knowledge 4)they should try to stay ahead of the customer by anticipating what he is going to say next and by keeping a link with what has already been said by him

How sales people should improve listening skills? 5)be alert to the un-spoken messages expressed through the customers body language 6)review the messages delivered in between presentations and ask clarifications where ever possible

How sales people should improve listening skills? 7)do not judge the customers point of view 8)should not interrupt the customer because the customer may think this to be and injury to his social image 9)it is always better to evaluate the content of the customers feedback than the customer himself

Effective listening tips Find areas of interest Judge content and not delivery Hold your fire Listen for ideas

Effective listening tips Take selective notes when desired Block out competing thoughts Paraphrase the speakers idea Stay open-minded Capitalize on the fact that thought moves faster than speech

Conflict management skills Conflict is a form of relating or interacting where the sales manager finds himself under some sort of perceived threat to his individual or collective goals These goals are impersonal in nature

Conflict management skills The perceived threats may be either real or imaginary Conflict is not only a positive force in a group but it is absolutely necessary for a group to perform effectively

Conflicts-classification 1)Functional conflicts-supports the goal of the group and improves its performance 2)Dysfunctional conflicts-hinders group performance

Conflicts-classification 3)Task conflicts-are the disputes over the content and goals of the work 4)Relationship conflicts-is a tussle based on inter-personal relationships 5)Process conflicts-is fight over how work gets done

Models of conflict The Dollard and Miller model explains 3 kinds of conflicts 1)approach-approach 2)approach-avoidance 3)avoidance-avoidance

Approach-approach conflict Arises when both options for resolving a situation are equally attractive but mutually exclusive Only one option can be executed despite both having potential for execution

Approach-avoidance conflict Arises where a person wants an outcome but must not have It for equally compelling reasons Wants to have something but avoid it at the same time

Avoidance-avoidance conflict Arises when the one dislikes all the options equally but has to decide on one out of them. Salesperson having several products to sell often faces such conflict when the customer switches between the product alternative either for making a choice or for avoiding it

Rummels model of conflict Differentiates between conflict structures, conflict situations, and manifest conflicts In this model, conflict is seen as either latent, with an underlying potential for conflict, or an actual conflict

Rummels model of conflict Conflict structure means interests that have a tendency to oppose each other Deutsch has divided conflict based on underlying motives as 1)underlying and overt 2)manifest conflict; the former is hidden, denied or implicit whereas the latter is expressed and open in nature

Components of conflict Frustration and aggression are the major reasons of conflict Power, status and level of hierarchy are the major sources of conflict in business organizations 1)interests 2)emotions 3)values

interests Interests motivate people and are termed as silence movers They are subjective as well as objective in nature

interests They not only depend on a particular individuals desires and wishes, but also depend on their roles and statuses in an organization Interest-based conflicts also arise due to differences in practices, rules and policies, roles, needs and levels of resource use

emotions The emotional component of conflict originates with the ever-present feeling that accompanies human interactions It includes feelings such as anger, resentment, fear, rejection, anxiety and loss

value This component is often the most difficult part to resolve because values are intangible Values represent deeply rooted ideas and feelings about right and wrong, which guide and govern our behavior

The conflict resolution process The problem of conflict starts with the perception of conflict

The conflict resolution process One or both the parties experience a sense of un-ease often characterized by a sense of feeling of frustration, anger and anxiety It can also be a sense of dis-orientation and confusion as they may feel a discrepancy in the levels of interests, emotions and value orientation

Methods of conflict resolution 1)competing-each party pursues it sown interests, regardless of the impact on the other party 2)collaborating-both parties in a conflict try to satisfy fully the concerns of both parties

Methods of conflict resolution 3)avoiding-one party withdraws or suppresses the conflict 4)accomdating-one party agrees to place the opponents interests above its own 5)compromising-both the parties agree to give up something

When avoidance? When the conflict is trivial, emotions are running high, and time is needed to cool down, or when a potential disruption from a more assertive action outweighs the benefits of a resolution

When competing? When we need a quick resolution on important issues where un-popular actions must be taken, or when commitment by others to our solution is not critical

Nader and Todd(in The Disputing Process Law in ten societies 8 procedures to handle conflict1)lumping 2)Avoidance 3)Coercion

Nader and Todd(in The Disputing Process Law in ten societies 4)Mediation 5)Conciliation 6)Arbitration 7)Adjudication 8)Negotiation

Lumping/avoidance/coercion Lumping refers to the failure of one party in a conflict to pursue their complaint The issue is simply ignored and relationship with the offending party continues

Lumping/avoidance/coercion In avoidance or exit, the relationship is called off (the decision is usually based on the relative powerlessness of one party, or the social, economical and emotional costs involved in their relation ship

Lumping/avoidance/coercion Coercion is imposition of the outcome by one party on the other (there is a level of threat and force involved-widespread in business)

Mediation,arbitration,adjudication Mediation involves a third party who intervenes in a dispute to help the parties to reach at an agreement (mediator may be appointed by the disputing parties or by another party with adequate authority like the government

Mediation,arbitration,adjudication In arbitration, both parties consent to the intervention of a third party whose judgment they must agree to accept beforehand

Mediation,arbitration,adjudication In adjudication, the third party has the authority to intervene to make a decision, and to enforce the decision on both the parties irrespective of the parties wish (judiciary)

Mediation,arbitration,adjudication Negotiation refers to the mutual settlement of conflict by both the parties without intervention of any third party. Both the parties reach at a conclusion not because it is required by law, but because they wish to settle the dispute and work together

Negotiation skills The core skills required for successful negotiation includes the 1)ability to define and prioritize a range of objectives 2)the ability to explore a wide range of options 3)the ability to prepare well 4)interactive competence

Negotiation skills Day-to-day managerial negotiations include arrangement of pay, terms of payment, working conditions, defining job roles and areas of responsibilities in sales organizations

Negotiation skills Commercial negotiations include winning a supply contract, scheduling the delivery of goods and service, agreement on quality and prices etc

Negotiation skills Wal-mart globally follows the strategy of negotiated exchange with its suppliers which are for a long-term period

Negotiation skills TATA and Maruti Udyog also follow the same strategy in dealing with auto ancillary and equipment manufacturer

Negotiation skills Traditionally, price has been the only element, modern negotiations involve-time of contract completion, quality levels and norms for supply of products, volume of goods, responsibility of financing, level and quantity of risk involved, risk ownership, promotion and title, ownership of intellectual property rights, level of safety and other norms of maintenance

Bargaining Usually involves the presentation of demands or proposals by one party and evaluation of those by the other, followed by concessions and counter-proposals Bargaining theories have gained attention in disciplines like economics, applied mathematics, industrial relations, social psychology and international relations

Bargaining According to von Neumann and Morgenstern ,each actor in bargaining has an objective (either to minimize loss or to gain profits) and the outcome depends on the opponents decisions Rubin and brown have found 4 variables in their study of bargaining behavior-

Bargaining 1)structural context of bargaining 2)behavioral pre-disposition of bargaining

Bargaining 3)interdependence of bargainers 4)use of social influence strategies on bargaining effectiveness Bargaining effectiveness Is measured in terms of the number of co-operative and competitive choices made throughout the process and/the magnitude of outcomes obtained by the bargainer

Situation and timing for negotiations According to Lee and Dobler, negotiation is appropriate for purchasing agents when 1)many variable factors bear not only on price but also on quality and service

Situation and timing for negotiations 2)business risk involved cannot be accurately predicted 3)long period of time is required to produce the items purchased 4)production is interrupted frequently because of numerous change orders

The theory and strategy of principled negotiations Fisher and Ury have proposed a bargaining strategy popularly known as principled negotiations It involves to decide on issues on the basis of their merits rather than through haggling.

The theory and strategy of principled negotiations It suggests that you look for mutual gains where ever possible, and that where your interests conflict, you should insist that the results be based on some fair standards independent of the will of the either side The method of principled negotiations is hard on merits and soft on people

Roger Fisher and William Ury(Harvard Negotiations Project) 4 principles1)separate the people from the problem 2)focus on interests, not on positions 3)invent options for mutual gains 4)insist on objective criteria

Substantive issues Terms Conditions Prices Dates Numbers liabilities

Relationship issues Balance of emotion and reason Ease of communication Degree of trust and reliability Attitude of acceptance and rejection Emphasis on persuasion or force Degree of mutual understanding

Fisher and Ury recommends Fighting hard on substantive issues increases the pressure for an effective solution, giving support to the human beings on the other side tends to improve your relation ship and to increase the likelihood of reaching agreement. It is the combination of support and attack which works, either alone is likely to be insufficient

Sources of difference between parties 1)risk-large institutions are better prepared to handle risk than small institutions; risk averse buyers need to be handled strategically 2)timing-what is impossible this month may be possible next month; what is unaffordable in this budget, can be managed next year

Sources of difference between parties 3)perceptions-for people whom others opinion matters, public victory may be made; for others, will satisfy their separate more valued interests 4)marginal value-differences in the marginal value of the negotiated goods, services and terms create opportunities to draft the final agreement

BATNA Is best alternative to a negotiated agreement Is a standard against which the proposed agreement should be measured

BATNA Is a standard of comparison that can protect a sales person from accepting unfavorable terms and rejecting favorable terms

BATNA The more attractive BATNA is, higher is the possibility of a salesperson making successful negotiations

BATNA If the other partys BATNA seems good and they see no need to negotiate, then the sales person should consider what he or she can do to reduce the BATNA effect in their eye The firmer you are at the beginning, the more you will loose credibility by discounting at a later point of time

Tactical considerations and strategy 1)let the other party have it in your own way 2)visit the balcony-for a detached view 3)step to their side-to disarm them

Tactical considerations and strategy 4)reframing rather than rejection 5)let them take ownership-involving them in drafting the agreement 6)educating them to senses-by using BATNA or by warning which is respectful and objective

Negotiation tactics 1)acting crazy 2)auctioning 3)the good-guy bad-guy routine-two buyers taking stand 4)big pot

Negotiation tactics 5)budget bogey-budgets are flexible and can be increased 6)get a prestigious ally-a person or a project 7)escalation 8)the well is dry 9)limited authority-

Negotiation tactics 10)whipsaw/auction-let several competitors know that he is negotiating with all of them at the same time 11)divide and conquer-sell to one person of the team who will sell it to other members

Negotiation tactics 12)reunion-take a stand somewhat away from the negotiator; then allow the other person to convince him of the rightfulness of his stand and then accepts his stand 13)deadline 14)sticks and stones-verbal and other humiliation

Negotiation tactics 15)get lost/stall for time-long or short break 16)take it or leave it-

Negotiation tactics 17)wet noodle-sales manager sits at the negotiation table like wet noodle and keeps a poker face 18)veiled threat-last year we dropped a supplier who was charging 4% more 19)lets split the difference-negotiator who suggests this first has least to loose

Negotiation tactics 20)play the devils advocate-before I say yes or no,lets look at all the bad things that may possibly happen if we did what you want 21)trial balloon-sales manager releases his decision through a so-called reliable source to test the opponents reaction

Negotiation tactics 22)surprises-drastic,dramatic and sudden shift in his tactics in general (unpredictable behavior) 23)whats the rock bottom price 24)adversarial negotiating tactics

Negotiation tactics 1)extreme initial position 2)emotional tactics 3)stingy in their concessions 4)ignore deadlines

Pre-conditions for adversarial negotiating tactics 1)dis-continuation of relationship 2)no remorse afterwards 3)un-awareness by the victim

Difference-typical buying-selling and negotiation In typical buying-selling, the prices, promotional terms and distribution schedule are already identified In negotiations, these terms are decided upon through bargaining and negotiations between the buyer and the seller

Problem-solving skills Identify the true problem and not the effect of the problem The true problem is so complex that it is linked to multiple sources Inculcate 7 habits of 1)being pro-active 2)beginning with an end in mind

Problem-solving skills 3)putting first things first 4)thinking win-win 5)first understand and then be understood 6)synergising 7)re-newal-physical,mental,spiritual,social and emotional

Paradigm pioneers A paradigm is a model or pattern based on a set of rules that defines boundaries and specifies how to be successful at and within these boundaries Paradigm shifts can occur in an evolutionary or revolutionary process

Problem solving process 1)define the problem 2)generate alternative solutions 3)decide the solution 4)implement the solution 5)evaluate the solution

McMaster-5 point strategy 1)Define 2)Explore 3)Plan 4)Act 5)Reflect

Define-step-1 1)identify the unknown or stated objective 2)isolate the system and identify the knowns and unknowns, such as inputs, laws, assumptions, criteria and constraints, stated in the problem 3)list the inferred constraints and the inferred criteria 4)identify the stated criteria

Step-2 explore 1)identify tentative pertinent relationships among inputs ,outputs and unknowns 2)recall past related problems or experiences, pertinent theories and fundamentals

Step-2 explore 3)hypothesize,visualize,idealize and generalize 4)discover the real problem and the real constraints 5)consider both short-term and long term implications

Step-2 explore 6)identify meaningful criteria 7)choose a basis or a set of conditions for reference 8)collect missing information, resources and data

Step-2 explore 9)guess the answer or the result 10)simplify the problem to obtain an order of magnitude result 11) first solve related problem or solve part of the problem

Step-3-plan 1)identify the problem type and select the heuristics 2)generate alternative ways to achieve the objective 3)map out the solution procedure to be used 4)assemble the resources needed

Step-4-act 1)follow the procedure developed in the plan phase, use the resources available 2)evaluate and compare the alternatives 3)eliminate alternatives that do not meet all the objectives 4)select the best alternative from the remaining

Step-5-reflect 1)check that the solution is blunder free 2)check the reasonableness of results 3)check the procedure and logic of your arguments 4)communicate results

Techniques of problem definition 1)find out origin of the problem 2)explore the problem 3)present desired state analysis 4)Dunkers diagram 5)statement and re-statement-by Parnes 6)evaluate problem statement

Mental blocks 1)perceptual blocks 2)emotional blocks 3)cultural blocks 4)environmental blocks 5)intelletual blocks 6)expressive blocks

Perceptual blocks May happen due to the inability of the problem-solver to clearly perceive the information or the problem This may be due to the stereotyping attitude which limits the problem unnecessarily, or due to saturation and information overload

Emotional blocks Due to the fear of taking risk by the problem-solver, the lack of the appetite for the chaos that the problem may create, inclination to judge than generate ideas, lack of potential challenges in the work environment and inability to incubate the problem

Cultural/environmental blocks Are acquired by exposure to a given set of cultural patterns Environmental blocks are imposed by our immediate social and physical environment

Cultural/environmental blocks Distractions like telephone calls and intrusions, which inhibit deep and prolonged concentration, create blocks in creative problem solving Work environment lacking in emotional, physical and social motivation also has the potential to create environmental blocks

Intellectual blocks Arise out of inflexible and inadequate use of problem-solving techniques Lack of intellectual capability sometimes inhibits the problem-solving skills

Expressive blocks Are the inabilities to communicate your ideas to others in either verbal or written form

Gomans block-busters Negative attitude Fear of failure Following the rules Over-reliance on logic You are not creative Attitude adjustment Risk-taking Breaking the rules Internal creative climate Creative beliefs

Ch-3-the selling process In mature industries, salespeople have to face more objections in the area of pricing In an emerging sector (IT) the majority of customer complaints will be about the adaptability of the technology to the relevant work environment

Ch-3-the selling process In retail selling, the demonstration efforts are less significant where as in businessto-business selling seller has to demonstrate the product In high-tech consumer products, demonstration and consumer education plays a greater role

Ch-3-the selling process In case of solution and service selling, customers demand a relationship for a longer period of time In impulse product category ,the seller expects that customers will extend loyalty as an indicator of relation ship and satisfaction

Ch-3-the selling process In cash based buying ,a sale closure leads to payment of the worth of the product instantly and transfer of ownership as a post-facto experience In installment buying, the real sale closure happens long after the transfer of ownership and consumption of the product

The selling process-stages pre-sales preparation Prospecting Pre-approach before the interview Approach to the customers

The selling process-stages Sales presentation Handling customer objections Closing the sale Follow-up action

Sales persons knowledge universe 1)product knowledge 2)company knowledge 3)competitors knowledge

Product knowledge Features Benefits Styles Origin price

Company knowledge History Finance Management Size Policies and procedure

Competitors knowledge Industry Structure Market share Market behavior Other policies

Product information-sales persons check-list What led to the development and launch of the product by the company? What is the product made of ? How is the product made? what processes are followed? What are the unique features and styles?

Product information-sales persons check-list What is the use? how to use (standard and other ways) What is the price? cheaper than competitor? expensive? justify? Is after sales-service readily available? Recognized by outside government agency ?quality certifications? Is there breadth and depth in product line?

Step-2-prospecting Is the process of identifying potential buyers who have a need for the products and services offered by the company ,the ability to pay for it, and the adequate authority to buy it

Step-2-prospecting Suspects have no potential demand for the goods at the point of probe in the selling process (a proper follow-up many a time results in converting the suspects into prospects)

Step-2-prospecting 3 sets of customers are identified at the stage of prospecting-1)lead customers 2)prospect customers 3)qualified customers

Lead customers Have a desire and need to purchase the product but no or inadequate purchasing power

Lead customers Sales persons needs screening skills to identify their buying power, financial transaction capacity, volume of transaction possible at their end, special need requirement for delivery and choice, location parameters for delivery, likelihood of generating additional sales in future either for the same product in offer or for any other product in the portfolio of the firm

Prospect customers Have a current demand current for the product and can get substantial benefit through the acquisition of the product A sales persons job in this case is to take the prospects higher in the decision process

Prospect customers Consumer move from a stage of being aware about to being interested in them, and then evaluate the alternatives before making a purchase decision

Qualified prospects Have the need for the product or services in offer and have the ability to buy them, but need further persuasion about the product delivering the desired level of satisfaction The prospects in an advance stage of decision making become qualified prospects for the sales person

Process of prospecting 1)identify and define the prospects 2)search for sources of potential accounts 3)qualify the prospects from the suspects

Sources of prospects 1)primary-family,friends and relatives, suppliers of goods and services, employees, business associates, shareholders and customers of the firm

Sources of prospects 2)secondary-surveys,replies to queries in the past, enquiries generated through advertising and marketing communications, list of trade associations, magazines and journals, social contacts, directorate of intelligence offices at the centre and state level

indicators 1)need indicators 2)ability indicators 3)authority to pay indicators 4)accessibility indicators 5)sales person fit indicators

Need indicators Are demographic and psychographic indicators like age, gender, life-style, lifestyle stages, means of entertainment, dependence on family income and self income and materialistic possessions

Ability indicators Profession, age, sources of income, personal habits, social status, credit card buying habits, bank account holding patterns and regularity of the income of the customer

Authority to pay indicators Business and official responsibilities Personal influence on his own life and business Organizational roles and responsibilities

Accessibility indicators Physical and psychological distance of the buyer His position in business and family

Sales person fit indicators Matching of the lifestyle and personality of the sales person with that of the buyer Education, age, cast ,religion and political thinking largely influence the purchase process in a country like India

Qualified prospect testing-MAD principle 1)does the prospect have money to buy? 2)does the prospect have the authority to buy? 3)does the prospect have the desire to buy?

Methods of prospecting 1)cold canvassing 2)orphaned 3)prospect pool 4)centre of influence 5)direct mail 6)observation

Methods of prospecting 7)end-less customer referral 8)customer sales lead clubs 9)non-competing sales force 10)trade shows/demonstration 11)telemarketing 12)networking

Cold canvassing involves going door-to-door in an identified area and try to find out the prospects Is effective in consumer products and services that are general in use Useful for B2B selling for standard items like copiers, calculators and faxes Insurance agents and ready-made garment resellers do cold calling (allocated territory)

Endless chain customer referral Each customer is requested to give a list of names who might be interested in the product Useful for insurance and securities Birla sun-life insurance advisor ask for 5 names of interested persons

Endless chain customer referral Eureka Forbes also uses this method Getting referral is sometimes difficult May be in the form of a letter, business card or a phone call

Prospect pool Is a group of names gathered from various sources like a telephone directory or mailing list Sources to create prospect pool 1)leads-people and organizations sales people know nothing or very little about

Prospect pool 2)referrals-people or organizations sales people know very little about other than what they learned from the referrals

Prospect pool 3)orphans-customers whose sales person has left the company (company records are the only source of information about these past customers) 4)customers-the most important prospects for future sales

Centers of influence Are the people who because of their position, responsibilities, accomplishments or personality exercise more than ordinary influence Found in spheres of 1)social 2)business

Centers of influence 3)religious 4)political They are found in trade associations, trade shows ,seminars and any business related social event The principle of power lead works in this case

Non competing sales force Have the information about new business openings, names of authorities who make decisions, changes in the purchase department personnel Can strike agreements to exchange information

Non competing sales force Copier sales person can provide information about the prospects for fax machines or computers By listening to and observing the sales people in the reception area of a prospect, a sales person can collect a large amount of information on the prospects likelihood for qualifying and criteria of buying

Observation EPABX sellers look for construction sites and newly coming up office space to prepare list of prospects

Observation Many sales people use their sales associates called as bird dogs to make arrangements for their presentation to the prospect Service station executives also work as bird-dogs for the automobile sellers

Friends and acquaintances Insurance agents and mutual fund sellers use this to build a prospect list

Friends and acquaintances For industrial sellers, FICCI,CII, and trade associations like Indian Automobile Manufacturers constitute a source of prospects

Friends and acquaintances The sales people can ask the questionwhom do I know? in the sphere of school, previous job, hobbies and sports, club members, participants in public service organizations, neighborhood, professional organizations etc. to prepare list of prospects

Lists and directories List of customers already entertained in the past Newspapers having information about new births, weddings and engagements, society news, new arrivals in town, new business ventures coming up in the city, real estate information, community events and participants

Lists and directories Trade magazines, commercial publications, computer generated databases

Direct mail Prospects are mailed a business letter inviting reply if they are interested in certain products and services Rich source although the response rate is low Repetition and follow-up procedure is used to improve the response rate

Tele-marketing In inbound telemarketing, the prospect calls the company In out-bound telemarketing, the company representatives call the customers Companies use mass media like advertising, direct mail and other promotional activities to stimulate calls from prospects and customers

Tele-marketing By including a toll-free number, the company motivates customers to respond to their mass media campaign and call for added information Data obtained through inbound telemarketing are used by sales people to make outbound calls so that prospecting can be done for further sales

Trade-shows and demonstrations Large number of people who visit the tradeshow register their names for demonstration and subsequently sales people can call on those interested people to make a sale

Pre-approach information-checklist 1)What is the size of the business? 2)what product lines do they sell and what markets do they serve? 3)who are the responsible executives and key personnel in the company? 4)what are the buying routines and procedures followed in the client organization?

Pre-approach information-checklist 5)who is the competitor? 6)from whom the customers are buying now? 7)what are the levels of volume possible? 8)where,when,why and by whom will the products be used? 9)what are the prospects of developing future sales?

Steps-pre-sales approach (planning) 1)determination of call objectives-specific, measurable and beneficial to customer 2)development of customer profiledemographics or psychographics or behavioral characteristics

Steps-pre-sales approach (planning) 3)determination of customer benefits-FAB (features, advantages,benefits) 4)determination of sales presentationanalysis of FAB, marketing plan and business proposition

Benefits of pre-approach planning 1)sales people build a high level of selfconfidence before meeting the customer 2)they are able to develop an atmosphere of good-will and trust with the customers

Benefits of pre-approach planning 3)they help in creating image of professionalism in the eyes of the customer 4)this increases the scope of achieving higher sales

step-4-approach to the customer 1) consumer benefit approach 2) referral approach-when the prospect values the status and opinion of the referee 3)introductory approach-company, self and product (most common)

9-Commonly occurring mistakes 1)Disregarding the concept of first impression 2)Forgetting the goal of obtaining the order 3)Selling the companys image than the products 4)Lack of response to needs and objections of customers

Commonly occurring mistakes 5)Overcomplicating with technical and managerial jargons 6)Relying on product literature for product information 7)Talking and arguing instead of listening 8)Brushing of questions and objections 9)Failing to ask for the order

What the customer wanted to ask you but did not spell out to you Why should I listen to you? What is important in your presentation? What will I get out of it?

What the customer wanted to ask you but did not spell out to you Who says that your product is the best in the business? So what if you have a great product, everybody else also has? Who else has done the buying of your product ?do I know anyone of them?

Sales presentation approaches 1)attracting attention 2)creating interest 3)arousing desire and conviction building

Attracting customer attention a) mechanical factors b) interest factors Mechanical factors 1)showroom conditions 2)illuminatinon and display of products in the show-room, 3)contrast of colors, decoration and exclusiveness of product display-

Interest factors Customers choices and preferences Personal problems and expectations from the buying

Creating interest Charles fernard has identified 3 features 1)appreciation-people appreciate the things of interest 2)serviceabiilty-people show interest in things that help to solve their problems 3)identification-people want to keep a separate identity of the things they like most

Creating interest approaches 1)benefit approach 2)factual approach 3)curiosity approach

Creating interest approaches 4)dramatic approach-banging the product on the floor, throwing from balcony, burning in fire etc. 5)I-am-here-approach-personal visit 6)opinion approach-product is handed over and facial expressions are observed

Creating interest approaches 7)praise and complement approach 8)article feature approach-product is handed over and asked about whether he sees a particular feature in competitors product 9)premium approach-premium or gifts like calendars, desk-tops, pens, bags to create interest

Creating interest approaches 10)visualization approach-uses charts, sales slogans, models and copy of advertisement 11)information approach-information is given on special discount and reduction plans ,schemes etc.

Creating interest approaches 12)service approach-after sales service 13)problem solving approach-hinting about situation when customer had faced problem in the past

Arousing desire and building conviction Interest is converted into desire when the customer agrees that he is in need of a product His emotional needs will be satisfied by buying motive The advantages of using the product have influenced his mind

Conviction building- ways Allowing inspection and demonstration of the product Giving references of people known to the consumer who use the product Offering warranty

Conviction building- ways Giving facts and arguments By stating the goodwill and brand image of the seller By offering consumers a right to claim compensation in case of damages Invoking the image or prestige appeal

Methods of sales presentation 1)oral presentation 2)written proposals

Oral/written presentation Less expensive business-to-business selling involves only oral presentation Oral presentations motivate people for verbal interchange between seller and customer Written proposals are used for selling high value industrial products and selling to the government

Sales presentations-types 1)Canned presentation 2)Organized presentation 3)tailored presentation

Canned presentations Are prepared by the company Little scope for modification for each prospect

Canned presentations When prepared by research and with the help of senior experienced people of the company, can address all the issues Companies prepare printed as well as audiovisual material to support the sales presentation This type helps in building the confidence of the new sales people

Canned presentations Difficult to use in multiproduct situation Common in direct selling situations Not suitable where the sales person has to make repeated calls to the same customer Discourages the prospects participation and is non-enthusiastic in nature

Organized presentation Sales people have enough scope to word the presentation, but on the lines of the company policy and systems Brings more flexibility and encourages participation of the prospective customers with the overall structure as per company guidelines

Organized presentation Can be developed on the basis of information collected from field research which is not available with individual sales person Useful for both new and experienced sales people Sales person tends to give stereo-typed responses to customer calls

Tailored presentation Is specifically developed for the specific customer Most common in business-to-business selling Useful in case of selling to resellers and whole-sellers

Tailored presentation Puts emphasis on buyer category and buyer demand More time consuming and suitable for experienced sales people Care should be taken not to exaggerate company claims on the quality of the products and services

Qualities a sales proposal should convey 1)tangibility-should enhance and support the sales persons message and invite readership 2)assurances-should build trust and confidence in ability to deliver, implement resulting in substantial benefits

Qualities a sales proposal should convey 3)responsiveness-should invite purchase proposals from the customers in a timely manner 4)reliability-should identify 5)empathy-proposal should confirm the sales persons understanding of the customers business and needs

Handling customer objections(Smith) 1)Start with your highest expectations 2)Avoiding conceding first 3)Be sure the customer understands the value of a concession 4)Make concessions in small amounts

Handling customer objections(Smith) 5)Admit mistakes and make corrections accordingly 6)Be prepared to withdraw a concession 7)Avoid split the difference strategy 8)Do not advertise willingness to concede

10 excuses customers use on sales people 1)denial 2)blaming 3)minimizing 4)I have no choice 5)reframing reality

10 excuses customers use on sales people 6)alibi 7)justification 8)derogation 9)helplessness 10)yes.but

denial I dont need this new product I dont think I should trade with my old machine There is no reason for changing now

blaming It is not my responsibility to make a decision My boss will not like products like that of yours I dont mind buying but my wife (or husband) may not appreciate this

minimizing This new idea will not do much good for us I dont see anything great in this There is little value in spending money on this

I have no choice Ii tried my best but I had no choice but to go along with the majority With the past experience that we had with you, I have no alternative to canceling the deal with you. Base on the offer from your competitors and the lower price, I had no choice but to decide on their favour

Reframing reality Our purchasing system is not unfair, but we are limiting our number of suppliers It may seem like we have caused you some inconvenience in canceling the order, but we are saving you a lot of money, as with this kind of product, the applications we expect would have cost you more on the services

alibi I dont have the money to buy I dont have the authority

Justification We do not have a need for the product but currently we are busy with our internal reorganization I would like to go ahead now, but the budget is not approved Its of no use, as long as the business is not moving there is no point in spending money

Derogation I have heard that this product gives night burns When it comes to providing service, nobody will be around after the deal You dont enjoy a good reputation in this area

helplessness Its out of my hands,I cant do anything now If I could convince my boss There is no way my wife (husband will agree with this proposal

Yesbut Its a fantastic idea but it will not work here It looks inexpensive but we cannot afford it We would like to buy two, but not at this point of time

Methods of handling customer objections 1)superior feature method 2)yesbut method 3)Revese English method 4)indirec denial method 5)pass out method

Customer objections handling methods 6)comparison method 7)direct denial method 8)another angle method 9)narrative method 10)testimonial method 11)question or why method

Superior feature method Sales person accepts the objections and persuades the customer through providing additional advantages or benefits of his product, which may compensate the objection raised by consumer, thus allowing to buy the product

Yes.but method Sales person agrees with the objection at the beginning and then slowly makes an effort to remove the objections from the customers mind by tactful handling of the argument

Reverse English method The salesperson pitches his presentation on the objections raised by the customer and then solves them through offering benefits to the customer only on those points raised by the customer as objections

Indirect denial method Sales person denies the objections cleverly but indirectly by giving affirmative answers to the objections Most of the salespersons use this method so that the customer does not feel offended

Pass-out method The salesperson does not pay any attention to the customer objections and expresses neutral opinion

Pass-out method When objections are baseless, it is suggested to pass them off without attending to them in detail the customer may feel neglected and it not handled properly the sales person may lose an opportunity to realize a sale

Comparison method Sales person demonstrates similar products of other producers before the customer, and tries to remove their objections by comparing the benefits of his product with those of others

Direct denial method The salesperson rejects the customer objections outright. He turns down the customer objections by calling them absolutely wrong and then builds up his presentation Mostly applicable to a sellers market

Another angle method The sales person advises the customers to look from another angel, which is positive for the product ,rather than making looking at it from a negative angle The sales person tries to make a positive impact on the customer by enumerating the number of advantages that outnumber the disadvantages

Narrative method The sales person uses a story to remove customer objections

Narrative method He listens to the objections systematically and sympathetically and then gives his responses in the form of a story description that would appeal to the customer The customer gets the answers to his objections from the story and develops a positive interest in the product

Testimonial method The sales person presents the sales message by referring to celebrities and persons of importance as the users of the product Most of the sales people use this technique of celebrity endorsement to counter customer objections

Question or why method Sales person asks questions again and again without any break to the customer against his objections and tries to get suitable answers to those objections from the customer themselves

Question or why method He occupies the customer's seat and customer to be the sales person The customer finally adopts a defensive attitude and the objections never sustain themselves

Closing the sale (closing techniques) 1)assumptive close 2)negative close 3)caution method 4)implied consent method 5)special induced method

Closing the sale (closing techniques) 6)direct order method 7)choice narrowing method 8)ownership suggestion method 9)advantages and disadvantages comparison method 10)emotional method

Assumptive close Assumes that the sale is made so that the sales person proceeds to issues such as spelling names, proper address, quantity desired, size, and color

Assumptive close It may also concern the details about installation and demonstration Handling the prospect a pen to sign the order or handing over the keys is an example of physical action denoting a sale close

Caution method The sales person first makes the customer cautious about the availability of the product or the period of availability and then suggests the close or requests the customer to place the order

Implied consent method The salesperson believes that the customer is satisfied with the presentation and may place the order at the end of the presentation

Special induced method The sales person reminds the customer about the promotional schemes offered by the seller and suggests the customer to avail himself or herself of the benefit by placing the order

Direct order method The customer will come forward to place the orders without any further persuasion and the sales person takes the order

Choice narrowing method The sales person presents a product with its various specifications-designs, colors, and size-so that the customer may be able to narrow down his choice

Choice narrowing method the customer rejects most of the varieties in this process and finally approves of the same item that the sales person really intended to sell(pheriwallas and sariwallas)

Ownership suggestion method the sales person suggests the customer that he should buy the product to impress upon the social standing he has in the social hierarchy Status related products like cars, branded jewellery and club membership are mostly closed down in this process

Advantages and disadvantages comparison method The sales person asks the customer to compare his own products with that of the competitors on objective features If the customer is satisfied, then the sales person asks him to place the order

Emotional method The sales person created emotions on matters of social interest Such a break in the presentation may change the course of negotiation and may be able to convince customers who are sensitive to social issues

Follow-up action Helps the sales person to evaluate the competitive sales moves, generate additional leads from satisfied customers

Follow-up action Helps the company in the idea of crossselling and up-selling Helps in maintaining goodwill and taking corrective actions for the promises made during the sales presentation

B2B selling 1)prospecting 2)qualifying 3)need identification 4)demonstration 5)overcoming objections 6)closing(first billing)

B2B selling 7)lead generation 8)prospecting 9)demonstration 10)objections handling 11)closing 12)follow-up and servicing

B2B-systems selling approach Has 4 distinct structures 1)power structure 2)group structure

B2B-systems selling approach 3)role structure 4)status structure Each of these structures has life of its own with embedded behavioral codes and dynamics, performance standards, vocabulary. objectives and criteria for entry

B2B-the Dow Corning program The Dow Corning program uses a negotiation worksheet that includes elements that are subject to negotiation like characteristics of the product, special features, packaging,

B2B-the Dow Corning program inventory, delivery, price, technical support and safety factors Each of these negotiable dimension is then analyzed according to the customer requirement in terms of-

B2B-the Dow Corning program Value of that dimension to the consumer Whether Dow Corning meets that requirements Which competitor meets that requirements

B2B-the Dow Corning program Which items are not negotiable for the customer Limits beyond which the company will not go for negotiations Sales people are trained for their limits of authority and powers in the process of negotiation

Ch-4-managing sales information An important use of the sales information system in an organization is to forecast the market demand

Ch-4-managing sales information A market forecast is the estimated rupee or unit sales for a specific future time period based on the companys marketing plan and an assumed marketing environment Total industry sales, market share of the firm, growth rate in the category and the firms product lines and individual products performance in the market are considered

Market demand Is the sum total of all individual demand for a product or service Important determinants of market demand are consumer preferences, income levels of the consumers and prices of other goods

Marketing decision support system Is an ongoing, future-oriented infostructure designed to collect, collate, categorize, edit, store and retrieve information on demand to aid decision making in an organizations sales and marketing program

Marketing decision support system It involves problem solving technology consisting of people, knowledge soft-ware and hardware integrated through information technology platform into the sales management process

Marketing decision support system A MDSS collects data from both transactional systems and analytical systems and uses the data to build meaningful patterns by application of analytical tools embedded in the analytical system for customer use and decision making

MIS of ICICI Prospecting for its value added savings account is done by the DCID agency through its FOS.

MIS of ICICI Leads are generated by the FOS from various sources which are fed into a lead management system, which is assigned to the FOS covering the particular locality for conversion

MIS of ICICI The marketing decision support system at ICICI helps the sales people to see the entire consumption pattern of its customers and the level of transaction and then mine the data generated from various customer inter-action points to find out patterns and prospects for selling value added products and services

Importance of sales forecasting Optimum inventory at each level of production process Companies with seasonal business will prefer to follow a LIFO (last in and first out) as the costly raw material can be consumed at peak time the the lower priced raw material can be used at a convenient point of time

Importance of sales forecasting MNC sales managers forecast customer, sales territory, regional, divisional, national and global sales Forecasting can be done for shortrange(3-6 months). medium range (6-24 months) and long range (more than 2 years)

The forecasting process Determination of objectives, which can be explained in terms of rupee sales, unit sales, or the number of sales people hired

The forecasting process 1)forecast objectives 2)determine independent and dependent variables 3)develop forecast procedure 4)select forecast analysis method

The forecasting process 5)comprehend total forecast procedure 6)collect,collate,gather and analyze data 7)present all the assumptions about data 8)make and finalize the forecast 9)eva