Sales Management

CONTENTS & COVERAGE

Sales Management Personal Selling: Theories of Buyer-Seller Dyads Third Lecture Sales management portfolio Evolution of personal selling Classification of Personal Selling Approaches Bottoms up approach to sales management Dyad- buyer seller interaction Theories of personal selling Simulation models

Sales Management : Diversified Portfolio 1. 2. 3. 4. 5. • • • • •

Planning, direction and control of personal selling Recruiting, training, assigning, supervising, motivating & rewarding the sales force Deciding on targets, quotas, budgets, territories, servicing, etc Coordination with top management, marketing team & channel members Strategic decision support for the marketing team in: Market feed back Sales plan & targets Product planning Channel selection & distribution planning Promotional plan & advertising

Personal Selling – Defined Personal selling refers to building lasting professional relationship between the buyer and seller

Evolution of Personal Selling Peddlers selling door to door . . . served as intermediaries

Selling function became more structured

1800s 1900s 2000s st As we begin Post-Industrial the 21 century, selling continues toModern develop, Industrial War and becomingRevolution more professional and more relational Revolution Depression Era

Business organizations employed salespeople

Selling function became more professional

Transaction-Focused vs. Relationship Focused Transaction-Focused • •

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Short term thinking Making the sale has priority over most other considerations Interaction between buyer and seller is competitive Salesperson is selfinterest oriented

Relationship-Focused • •

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Long term thinking Developing the relationship takes priority over getting the sale Interaction between buyer and seller is collaborative. Salesperson is customer-oriented

Contributions of Personal Selling • • • •

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Salespeople help stimulate the economy Salespeople help with the diffusion of innovation Salespeople provide solutions to problems Salespeople provide expertise and serve as information resources Salespeople serve as advocates for the customer when dealing with the selling organization

Classification of Personal Selling Approaches • Stimulus Response Selling • Mental States Selling • Need Satisfaction Selling • Problem Solving Selling

Stimulus Response Selling Sony vs. LG TV

Salesperson Provides Stimuli

Buyer Responses Sought

Continue Process until Purchase Decision

Mental States Selling Sony vs. LG TV

Attention

Interest

Conviction

Desire

Action

Need Satisfaction Selling (Any color TV)

Uncover and Confirm Buyer Needs

Present Offering to Satisfy Buyer Needs

Continue Selling until Purchase Decision

Problem Solving Selling (Any color TV)

Define Problem

Generate Alternative Solutions

Evaluate Alternative Solutions

Continue Selling until Purchase Decision

The Sales Process: Selling Foundations In order to be successful in today’s global business environment, salespeople must have a solid relationship building foundation. They must: Be Trustworthy Behave Ethically Understand Buyer Behavior Possess Excellent Communication Skills

THE EIGHT STEPS OF THE SALES PROCESS 8. Follow-up 7. Gaining Commitment 6. Meeting objections 5. Presentation 4. Need Assessment (ascertain buyer’s needs) 3. Approach (contacts between the buyer and seller) 2. Preapproach (qualifying leads) 1. Prospecting( master list)

The Sales Process: Selling Strategy To be successful in today’s business environment, salespeople must also think and act strategically. The must develop strategies for: Each Sales Call Each Customer Their Sales Territories Each strategy is related to the other

Sales Management: Corporate Goals (General Objectives)

Topmanagement: management: Top CorporateGoals Goals Corporate Coordinated through through Coordinated ofMarketing Marketing&&Sales Sales of Management Management

Achievingtargeted targeted Achieving salesvolume volume sales

Costcontrol control Cost && contributionto to contribution Profits Profits

Sustainedfuture future Sustained growth growth

Organizational Success: Inter Dept communication chain Crucial Role of Sales & Marketing Dept.

Promoters/ Directors

President

Vice presidents Prod/Fin/HR

of Sales Management

Vice president Marketing General Manager Sales Sales managers Regional/product

Customer is the king

Bottoms Up Approach

Sales Executives/ Salesmen

leads to the realization Organizational goals

Personal Selling: DYAD Two-way flow of communication between buyer and seller.

Buyer

DYAD: Buyer-Seller Interaction

Seller

Key Factors: • Involves buyer seller interaction

•Seller motivates the customer to buy the products •Strategy may embrace persuasion, ingratiation, friendliness, etc •Skills of the salesman (salesmanship) •Perception of customer

Sales Management: Personal selling by the salesman using the skills of salesmanship

Sales management

Sales Sales management management

Personal Personal selling selling

Salesmanship Salesmanship

Salesman Salesman

directs personal selling efforts which are Implemented through the skills of salesmanship

Theories of personal selling (related to salesmanship) Seller Oriented : AIDAS (Attention, Interest ,Desire, Action & Satisfaction)

Behavioral oriented

Buyer oriented

First Theory: AIDAS (Attention, Interest ,Desire, Action,& Satisfaction)

Five Successive Mental States of customer: Securing attention: • Sales person should put the prospect( new customer) in receptive state of mind • First few minutes of the interview are crucial & the first impression is important • He should be skilled conversationalist, friendly and with a genuine smile AIDAS Gaining interest is a • Second goal is to intensify the prospects attention into strong interest seller oriented theory • Explain product USP, technical features, benefits, etc stressing • Try and match customer’s needs with what is being offered Kindling desire sales person • Third goal is to kindle the customer’s desire to ready to buy point controlling the • Objections need answering to the prospects satisfaction situation Induction of action • If the above process is tactfully handled the customer should be ready to buy. Building satisfaction • After the customer has given the order, he should get the feeling of great satisfaction that the salesman has helped in making the right choice

Titan show room: Seller Oriented theory ( AIDAS :Attention, Interest, Desire, Action &Satisfaction)

Brother buying Gift for sister

Seller Oriented theory

Son in law buying Suitings & accessories For marriage ( father in law paying)

Second theory: Buyer Oriented theory of selling

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Buyer’s needs (or problems) receive major attention and sales person has the role in meeting buyer’s requirement and total satisfaction( find solution)

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Through interaction the sales person is expected to read psychology of the buyer facilitating his buying decision.

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Buying formula (stages of thinking process involved in buyer’s purchasing decision) Ascertain the Need Offer the Product…..Adequacy/pleasant feeling Trade name.... Adequacy/pleasant feeling Purchase….

Buying habits are influenced by the impact of Advertisement & person selling skills of sales person

Satisfaction/ dissatisfaction

Buyer Oriented Theory

Toyota Corolla

New Honda City

Third theory: Behavioral equation based on stimulus response Stimulus Response Model: Based on buying behavior & purchasing decision process Four essential elements of the stimulus response model : 1.

Drive: strong internal stimuli that impels the buyer’s response

2.

Cue : This stimuli about the product may come from advertising, sales person or conversation with some friend

3

Response: What the buyer does

4.

Reinforcement : Reinforces buyer‘s decision to respond

• Behavioral theory of selling

Thank you •Start using Sales Theories Even when you are buying