The Effectiveness of Personal Selling in the Marketing of Capital Goods
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Transcript of The Effectiveness of Personal Selling in the Marketing of Capital Goods
THE EFFECTIVENESS OF
PERSONAL SELLING IN THE
MARKETING OF CAPITAL GOODS
TABLE OF CONTENTS
CONTENTS PAGE
Cover page
Title
Certification
Dedication
Acknowledgement
Abstract
Table of content
CHAPTER ONE
1.0 Introduction
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Formulation of hypotheses
1.5 Significance of the study
1.6 Scope of the study
1.7 Definition of terms
CHAPTER TWO
2.0 Literature review
2.1 An overview of personal selling
2.2 An overview of personal selling process
2.3 Objectives of personal selling
2.4 Types of personal selling
2.5 Evaluation of personal selling
2.6 An overview of capital goods
2.7 The effective of personal selling in the marketing of capital goods
2.8 The effectiveness of personal selling in the marketing of ANAMMCO
products
CHAPTER THREE
3.0 Research methodology
3.1 Sources of data
3.2 Population of the study
3.3 Sample size
3.4 Sample technique
3.5 Method of data collection
3.6 Method of distributing questionnaire
3.7 Structuring the instruments
3.8 Method of data analysis & interpretation
3.9 Limitation of study
CHAPTER FOUR
4.0 Presentation, Analysis and Interpretation of Data
4.1 Data analysis and interpretation
4.2 Testing of hypotheses
CHAPTER FIVE
5.0 Summary of findings, recommendations and conclusion
5.1 Summary of findings
5.2 Recommendations
5.3 Conclusion
CHAPTER ONE
INTRODUCTION
For over a decade and half now, which specialize in the production of
quality Mercedes Benz products like: Benz vehicles such as tippers, lorries,
tankers, jeeps and a lot a host of others has for the nation of fears been keeping
the nation on a regular speed.
Utilizing considerable ideal components these vehicles are built as
nothing but replica of the household Mercedes Benz tradition of excellent and
durability.
At its inception, MB ANAMMCO was nothing but a mere motor
assembling plant, which was initially planned to produce trucks for the
Nigerian market. But today, the prevailing situation with the company situation
with the company has changed drastically from a mere assembling plant to a
manufacturing company. The plant has diversified its product range to include
the full range vehicle for the rapid commercial vehicle for the rapid
industrialization of the country. It not only produces trucks such as L800,
L1418, and ACTROS, but has gone a step further in design, fabrication
manufacturing production and sales of buses and other utility vehicle.
Part of its product range include MBO 800, MBO 1418, MBO 1721,
MBO 400 Marcopolo/Busscar, fire fighting vehicles Ambulances, Mobile
Clinics, Refuse Collectors and other various specialized types of vehicle.
Unstressed by the evergreen availability of genuine spare parts and
efficiently of their sales services which is a major trait of any personal selling
effort, MB ANAMMCO has not only been keeping the nation a motion but has
also been baron with regard to the incessant strife towards developing the path
to establishing an indigenous auto industry.
The company is a joint venture between the federal government of
Nigeria and Daimler Chrysler AG. It is a franchising one, which was
commissioned on July 8, 1980 and started its official production in January
1981 having been mandated by the original owner of the Mercedes Benz
trademark.
At its preamble, Mercedes Bens ANAMMCO was established with its
cooperate headquarters at Emene industrial layout PMB 2523 in Enugu state.
However, the aforementioned company having attained the peak in the
field of manufacturing as well as the provision of after sales services in the
motor industry had decided to spread its sales offices over almost all states in
Nigeria. Primarily as a result of increase in the demand for its products and
thus positive experience is due mainly to the dissemination of words of mouths
to others who have not detected the wonders in the company’s products
especially in the areas of efficiency, durability, prestige, comfort and a host of
others.
This words of mouth confession being made by both current as well as
previous patronized of the firms product is a partial brain behind the
company’s elevation in production capacity in previous years and this also
created rooms for the absorption of more workers in the divergent department,
thus helped to reduce the high rate of social menace that would have associated
the situation of mass unemployment.
Thus certain individuals particularly the enlightened have been thanking
ANAMCO for its laudable act in the continued improvement into our economy
through its previous but high productive attainment bin the previous years.
However, the senior assistant manager in charge of franchise and
marketing development has not failed to give credence to the various
promotional techniques in ensuring the previous attainment. According to him,,
the use of promotional tools are indispensable in the marketing of capital
(industrial) foods. This is apparent as users of such products are seeking both
current information as well as the provision of after sales services and those
terms related to the purchase and application of industrial (capital) goods.
However, the aforementioned company which either had attained the
peak in the motor manufacturing industry has started experiencing a dwindling
ground in its sales volume and market share. This current situation has thrown
the management of the aforementioned company into chaos as a reliable
percentage of their market shares have been captured by other competitions in
the same industry.
According to an insider, this nauseating experience is accounted for by a
number of recent developments. Some of these developments are:
The incessant increase in the number of companies currently involved in
the manufacturing and sales of different cars, trucks etc and besides the
increase and efficient application of the divergent promotional tools.
In accordance with his contention, previously, there were relatively few
firms in the motor industry and thus tends to reduce the level of competition
among the few producers; he further stipulated that under such situation a
particular firm will generate a reliable volume with a minimum promotional
effort of ANAMMCO as at the said era.
He buttered his points by revealing that increase in the number of
companies constituting a particular industry is synonymous to increase in
technological developments and innovations as well as extreme competitions
coupled with efficient utilization of the promotional strategies.
Before this experience of related sales volume and profitability, the
management of the company has been adopting both advertising, publicity
sales promotion and personal selling in relating as well as persuading both
current and potential customers to indulge in the constant application of the
company’s products.
However, the management of ANAMMCO is not skeptical regarding the
wonders of personal selling in the marketing of capital goods and that this
promotol could only justify its wonders in capital goods marketing, only when
it is effective. To this end, the management is interested in knowing if its sales
force is effective or otherwise. This is the core of this study.
1.1 BACKGROUND OF THE STUDY
Selling has been a standard business activity for thousands of years. The
earliest peddlers were traders who had some type of ownership interest in the
goods they sold after manufacturing or importing them. In many cases, these
people viewed selling as a secondary activity.
Selling later became a separate business function. The peddlers of the
18th century sold to the farmers and settlers of the vast North American
continent. In the 19th century, sales people called drummers sold to both
consumers and marketing intermediaries. These early sellers sometimes used
questionable sales practices and technique, and they carried undesirable
reputations for themselves and their firms.
But selling is far different from what it was in its early years. Far from
the fast-talking, joke telling, backslapping caritures in some novels and comic
strips, today’s sales person is usually a professional. Professor Ingram and
Laforge (1995 defined sales professionalism as, a “a customer-oriented
approach that employs truthful, non manipulative tactics to satisfy the long
term needs of both the customer and the selling firm”. Professional sales
people are problem solvers, focusing on satisfying the needs of customers
before, during and after the sale. They are armed with knowledge about their
firm’s goods or services, those of competitors and their customers businesses.
Personal selling today is a vital, vibrant dynamic process. It is an
interpersonal persuasion process designed to influence certain persons
decisions it is an important ingredient available to the executive responsible for
determining the promotional mix. It involves face-to-face experience between
the seller on his/her representative and the prospective customers as the case
may be. The effectiveness of personal selling as a major promotional tools in
the industrial (capital) goods industry cannot be over emphasized. Sales forces
accomplish this objective in a number of ways.
According to Ropers, (1992 P 40) management, personal selling has
become one of the vital promotional tools in marketing. He further buttressed
the above all the theorists’ planners must have had their moment and the
predicaments associated with production, finance and labour have been
resolved then someone has to go out and knock at someone’s door and sell.
This revelation is apparently acceptable because a product cannot be
produced at Enugu and is not available in a place like Lagos where such
product is highly needed. This is the significance behind the notion of sales
contention that, the sale people for prospecting, the should investigate into the
needs of consumers as well as filling them with satisfaction and optimize profit
objective.
A critical analysis of the aforementioned statement highlight the
importance’s of the effectiveness of personal selling on the marketing of
capital goods. A product may be of extremely high grade but has no utility it
gets to the hands of prospective buyers; and the most appropriate state for
passing products from manufacturing arena to the hands of potential buyers
happens to be through personal selling. It is pertinent to recognize at this
moment that personal selling is nothing but a Herculean task.
This is so as the sale-person has little or no time for rest primarily
because he/she indulges at home works and at certain times involves himself in
some sale calls that, may never result into sales.
A sales philosopher called “stake holders alignment” says that people
attempts to become partners with their customers. He continued by saying that
sale people should have more of business mentality and contemplate more on
the customers profit needs.
How someone sells is an offspring of what is being sold. To this regard,
good sales person should be able to identify correctly the persuasive message
that is precise in a given sales situation.
MB ANAMMCO is a global and also a franchising company whose
headquarter is in Germany with its subsidiary manufacturing plant located at
Emene industrial layout here in Enugu state. As the company began to
experience increase in productivity sales volumes, it states opening sales
branches in different states of the country. It has been a leading firm in the
motor industry with transparent image.
However, in recent times the company stated experiencing a reduction in
its market share and this is willing but a problem and if not taking care of will
affect the companies past glory.
1.2 STATEMENT OF THE PROBLEMS
Anambra motor manufacturing company has started experiencing a
reduction in its sales volumes in recent times.
This low sales volume is as result of a keen competition that exists in the
industry.
Thos situation is a direct opposite of what the company used to witness
in the previous years.
The reason for the new low sales volumes leading to other serious
problems like reduced profitability, low market share, reduction in the rate of
promotion as well as that of employment is still unknown to the management
of the company.
However, the company’s management is seriously questioning the
effectiveness of the sales force other problems like.
- Is the ratio of sales expenses to sales volumes high or low?
- Is the ration of sales to sales calls high on low?
- Does the company not budget enough for sales reps, these and other
issues will form the task of this research work.
1.3 OBJECTIVES OF THE STUDY
Whatever the nature and structure of an organization is personal selling
activities needs to be inculcated. Personal selling has over he years been seen
as the bedrock of a company’s success which helps to generate more funds for
company’s operation.
It is therefore one aim of the researcher in this study, which was
conducted in Anambra motor manufacturing company ANAMMCO Enugu to
focus on the finding on the following activities.
(1) To know the effectiveness of personal selling in the creation of
awareness.
(2) To study how ANAMMCO product demonstration awakens the
customers interests.
(3) To know if the rate of company’s sales expenses to sales volume is
high or low
(4) To study the performance of ANAMMCO sales persons and how
their performance affects the company’s profit.
1.4 OBJECTIVES OF THE STUDY
Whatever the nature and structure of an organization is, personal selling
activities need to be menlcated. Personal selling has over the years been has
over the years been seen as the bedrock of a company’s success which helps to
generate more funds for company’s operation.
It is therefore the aim of the researcher in this study which of the was
conducted in Anambra Motor manufacturing company ANAMMCO Enugu to
focus on the following activities.
i. To know the effectiveness of persona selling in the creation of
awareness
ii. To study how ANAMMCO product demonstration awakens
the customers interest.
iii. To know if the customers patronage is high a low relation to
personal selling activities ANAMMCO
iv. To know if the ratio of the company’s sales expenses to sales
volume is high or low.
v. To study the performance of ANAMMCO sales persons and
how their performance affects the company’ profit.
1.4 FORMULATION OF HYPOTHESES
This study is meant to know the effectiveness of personal selling in the
marketing of capital goods of Anambra Motor Manufacturing company
ANAMMCO. The following hypotheses are therefore formed for this study
Ho: Personal selling activities of ANAMMCO do not create awareness of
their product
Hi: Personal selling activities also in the marketing of ANAMMCO products
do not awaken the customers interests.
H2: Personal selling activities adopted in the marketing of ANAMMCO
products awaken the customer interest.
Ho3: Personal selling activities of ANAMMCO does not head to increased
customers patronage of their goods.
H3: Personal selling activities of ANAMMCO leads to increased customers
patronage of their goods
Ho4: Personal selling activities of ANAMMCO impacts negatively on the
profit of the organization
H4: Personal selling activities of ANAMMCO does impacts negatively on
the profit of the organization
1.5 SIGNIFICANCE OF THE STUDY
According to Brown S. (1991:169) “it is a company is to continue
answering its customers patronage, then it has no other alternative than the
maintenance of a clear cut competitive advantage and managing the marketing
mix in a manner that will ensure continuous customers satisfaction”.
Mercedes Benz Anammco has been and will continue to strive holder in
the area of cooperate and social responsibilities says the public relation
manager MB ANAMMCO Enugu.
To this end the significant of this study are as follows:
(i) To help the MB ANAMMCO management to overcome the problems
of low sales volume as well as make use of the recommendations to
tackle other problems.
(ii) It is also the primarily view of the researcher that both current and
potential researchers will find this work relevant with regard to
directing and facilitating the bearing and solution of their problem in
relation to this study
(iii) The study will also be of paramount importance to other companies
in the same industry with ANAMMCO in their strife to surmount low
sales volumes and low profitability.
(iv) This study also will help the researcher to gain more experiences to
be a field sales person.
1.6 SCOPE OF THE STUDY
These study aught to have taken a wider dimension to make it more
elaborate. However, because the researcher of this study is a student and do not
have enough time and resources, to study the whole ANAMMCO branches and
customers in the country, the scope was restricted to the findings in Enugu
metropolis.
1.7 DEFINITION OFTERMS
(a) ANAMMCO:
Anambra Motor Manufacturing Company
(b) M.B
Mercedes Benz
© Capital/ Industrial Goods:-
Goods/Products intended to be used for further production (Odoh
2003:2)
(d) Promotools:-
All short term devices utilized in boosting sales (Adirika, Ebue, Nnolin
1996: 143)
(e) Sales Force Size:-
Number of sales representative in a company (Adirika, Ebue, Nnolin
1996:143)
(f) Trade Ins:-
Allowances given for a used item. When a customer purchases a new
item. (Boone & Kuntz 1995:721)
(g) Cognition Dissonance:-
Post – purchase anxiety that results when an in balance exists among an
individuals cognitions (knowledge beliefs, and attitudes). (Boone &
Kurtz 1995: 272)
(h) Push Strategy:-
Promotional effort by a seller to members of the distribution channel
goods and service, thereby pushing it through the marketing channel
(Boone & Kurtz 1995:582)
(i) Sales Quota:-
Level expected sales on profits for a territory, product, customer or sales
person against which actual results are compared (Boone & Kurtz
1995:663)
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