elements of selling

8/6/2019 Elements of Selling

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time utility to the product. The production become meaningful only if products timely

reach the point of consumption, if transportations is the process of transferring goods

form one place to another, storage is a function which helps in preserving the goods atone place until they are needed at the other place.

Classification of Transports

Broadly, the various modes of transport fall under three categories: Land, Water and Air

i. Land Transport: It includes Roadways, Railways and Tramways. The way for all

these kind of transport is land.

ii. Water Transport: Water transport is one of the primitive modes of transport. In the

past this was the only means of transport available for moving bulky goods of cheep

value. In fact, world trade and industry was developed through the medium of waterways.Sea routes were mainly responsible for new discoveries. Discovery of America in 1492

offers a good example. The contribution made by Inland Water Transport for the

development of internal trade is worth mentioning. Today its importance is fullyrecognized and most revolutionary changes taking place in the area of water transport.The various ways used for this kind of transport are: Rivers, canals, channels and ocean.

The vehicles are boats, ships, barges etc.

iii. Air Transport. With the advent of airways, distance now-a-days is measured not inmils but in hours. For instance one way say that any two places on the globe are no more

than twenty four hours. One may assert the time gap between the puranic Pushpak

Viman to the most modern Jet concord planes is only very little. Literally this mightbe incorrect, but the development in air transport is extremely fast.

Elements of Transport

The elements of transport are classified into four: the way, the vehicle, the motive power

and the terminals.

The way. Irrespective of the form, every kind of transport requires a particular way or

track. This is often called as the route. The way may be natural or artificial (e.g., ocean

provides a natural waterway while road is a man-made track). The way is also classified

on the basis of nature of operation, viz, Landways, Airways, and Waterways.

The vehicle. The ways and vehicles are twin factors of transport complementing each

other. The vehicles are classified on the basis of the ways they use for movement. Forexample, Landway vehicles (road or railway vehicles), waterway vehicle and airway

vehicles.

The motive power. The movement and the speed of the vehicles directly depend on the

kind of power or energy used to run the vehicle. Various kinds of powers are used

according to the requirements. The power such as human, animal, steam, coal, petroleumand electricity are usually used.


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The terminal. It is a place form where journey begins or where it ends. The terminal is a

gate way to a kind o transport. Except in roadways terminals are a necessity. Terminalsare artificial distinctions such as a bus-stand, port: aerodrome, etc.

Functions of Transport

Transport performs a large number of functions.

1. It helps in the growth of industries, whose products require quick marketing. Forexample, articles like fish, vegetables, are carried to various consumers quickly even in

distant markets.

2. It increases the demand for goods. Newer customers in newer places could be easilycontacted and products supplied, This widens the market.

3. It creates place utility. Geographical and climatic factors force certain industries to

locate in particular places. These places are far away from markets and in the place ofproduction there may not be any demand for their products. As such transport bridges thegap between production and consumption centers.

4. Of late, it has started creating the time utility also. This is mad possible mainly due to

the improvement in the speed of transport. Not only it reduces the gulf between producersand consumers but also helps the products to be distributed in the minimum possible

time.

5. It ensures even flow of the commodities in the hands of the consumers.

6. Transport intensifies the competition which, in turn, reduces the prices.

Transport of physical distribution functions

Transportation is a necessary function of marketing because most markets are

geographically separated from the areas of production.

Majority of manufacturing plants are far away form their most important markets because

of various factors. All goods (whether agricultural or manufactured) are not utilized at theplace of their origin. They require some kind of transportation to centre 'Place utility',

Customers Services of elements

These kinds of services are preferably required in the case of durable products. They arenet generally applicable.

It has become a usual practice (and of late accepted as a method ofdemand creation too) now will the manufacturers to offer after sales

services' Customer services has become major factor in choosing


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among competing sellers. Such type of service creates confidence inthe minds of the consumer about the product and there manufacture.

For the seller it is an opportunity to establish a direct contact with theconsumer. This helps the seller to know what exactly the consumer

wants and what has preference and prejudices are.

All the above discussed elements of selling require careful

consideration before a manufacturer brings his products in the market.This is not an easy job. It requires constant collection of data and

information form the markets. These elements, moreover are

combined indifferent patterns to determine a most favorablecombination. Blending of these activities in a concerted form is termed

as promotional mix. The promotional mix is not a commonmeasuring tool for all producers but it depends on the characteristics

of a company, its products and changing marking situations. These

decisions once taken also will have to be altered or changed to suit thechanging patterns of the society. Because the story of marketing so far

offered is a story of change; a story of gradual doubt revolutionarychanges.

Determining the Terms of Sale of elements

A seller generally has to decide three things before the sale of product is made.He will have to fix a price, consider concessions such as discounts etc., decide theforms of delivery, and fix the methods of transfer of ownerships. All these involve, in

a large measure, legal problems. They are important not only for present sale butalso pave the way for easier future sales. Hence it is also a management function.

Certain of Demand of elements

Creation of demand is an art. It is a process by which latent demand is converted intoeffective demand. A manufacturer has to deal with human beings with different

temperaments.

But the products are common and its physical qualities cannot be changed to suit theindividual requirements. Hence some artistic way of dealing is essential to make

'believe' the customer that a particular products suits his need. The problem is dealt

with in a psychological manner by experienced and trained salesmen. The methodslike advertisement, sales promotion, etc., are also used for this purpose. Creation of

demand is the sum total of the following elements:

a) Methods of sellingb) Making goods accessible

c) Promoting the sale.

There are two methods of selling. Personal selling and Impersonal selling.Impersonnel selling is classified as Direct methods and Indirect methods.

Advertisement and publicity are direct methods. Demonstrations, exhibitions,


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providing samples, etc. are examples of indirect methods. The fundamental ideabehind all these processes is to attract, persuade and commit people to purchase

some products. The varieties and importance of these methods grew along withcompetition. It is often remarked competition is the foster mother of various selling

methods.

There is an accepted formula for all these methods known as A-I-D-A. Formula. Itstands for

A- Attention

I- InterestD- Desire

A- Action

There are the four stages through which a 'prospect' travels and is ultimatelyconverted into a 'customer'. The success of any selling methods is basically

dependent on these processes.

The second aspects in the creation of demand is making the goods accessible to the

customer. Simply stated, the products should reach the market in time. It must beso timed that demand creation activities are followed by the availability of productsin the market. Proper timing will help speedy turnover. Transport and

communications and storing are also decisive factors. It is for the seller to determinethe mode of transport, costly of transport, etc, and hence, making the goods

available has come to stay as area for management decisions.

Promoting the sale is the real test to know the effectiveness of demand creationmethods. Consumers waiting in the markets to buy the product of your company is

an obsolete story now. The growth of competition and substitute products haveincreased to such an extent that selling a product in the market has become really

difficult. Today creation of demand is one of the additional jobs a manufacture has to

shoulder in addition to his responsibilities as a producer. Especially with the increaseof newspapers and other popular media such as cinema, television, etc., the

advertisement have become a perpetual evil. Extensive use of salesmen is also anusual method adopted for promoting the sale.

Marketing Channels: Origin and Benefits

The present day marketing system is characterized by the extensive use of marketing

channels.A Channel of distribution may be defined as a path traced in the direct or indirecttransfer of title to a product as it moves from a producer to ultimate consumers or

industrial users. The channel thus includes the original producer, the final buyer and

any middleman in between the two. The middlemen Agent middlemen. The formertakes the title to goods and resells the products. An agent middleman negotiates

purchases or sales or both but does not take title to the goods in which he deals. Onthe basis of their positions in the channel of distribution middlemen are classified into

Wholesalers and Retailers.

The problem of producers in establishing channels of distributions for their products

is essentially important and must precede selling function. A wrong decision willmake the product to reach a wrong place at a wrong time and to a wrong person for


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an exorbitant prices. The channel decision taken once is not permanent but itrequires close and continuous evaluation.

The above discussion in no way stresses that a producer cannot at all meet the

customer direct. Direct selling is possible where the product and other circumstancespermit such a course of actions. For example, industrial equipments and supplies are

mostly sold direct to the users. The same method however, will not be advisable inthe case consumer products. The direct selling involves a number of difficulties.However, the postwar experience shows that manufacturers prefer to have their own

selling arrangements as well. Of later, a large number of leading cloth manufacturers

have opened their own exclusive show-rooms in important cities. Bata ShoeCompany offers another example.

Selection of Channels of Distribution of elements

Markets, today, are characterized by heterogeneity on both demand and the supply sides.

This means that on the one side there is a wide variety of goods produced for sale,and on the other, there are highly varied and complex desires of consumers.

Moreover, all goods produced are not consumed at the place of origin. Consequently,the goods and services available must be matched against the wants and desires of

users. Channels of distribution serve to achieve this matching of goods and thedesires of potential buyers. It serves as a bridge which spans between the producer

and the user.

Sales Research

Sales research is a art of marketing research. The scope of marketing research is widerand it includes, besides Sales research, Product research, Advertising research,

Motivation research etc.

Marketing research is the practice of gathering and interpreting facts pertaining to

any field of the marketing activity. Facts are needed for better decision-making, forbetter planning and for

better programing. It is of utmost importance when decision is to be taken relatingto the future, for predictions to come true, they must be scientifically based. It is

there that marketing research plays its role.

Producers finally have to sell their products to consumers. Consumers are human

begins and their wants, needs aspirations and capacities are changing constantly.Hence, their behavior cannot be predicated accurately. The prediction was not

needed when the whole operation of marketing was production-oriented. As the

consumer orientation became a reality, consumers' behaviors started shattering theexpectation of firms. Most companies failed; the then exiting companies started to

rely on advertisements and other methods for increasing the value of sales. In short,their arose a nece3ssity to study consumer behavior as a part of marketing function.

Though it was the sales research which first received the attention of marketers, itssuccess spread the use of research to other marketing aspects and thus as a result

of marketing research evolved as a separate field of study.


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Sales research includes not only fact finding but also its analysis and interpretation.The establishment of sales territories, variations in sales yield in such territories,

sales planning, measuring effectiveness of salesmen, cost-benefit analysis of physicaldistribution systems, etc., are the important aspects considered under sales

research. Collection of past experiences in all these fields if processed andinterpreted with efficiently and projected in a proper manner should help answer

such marketing questioning as Who ? What ? Where ? And How ?

Product Packaging and Design of product planning

Product packaging has assumed great importance in modern marketing.

Packaging is not only an important means of protecting the content but it is also a

powerful means of preselling the consumer and of assisting the in-store selection.Because of high potentialities, packaging and marketing are considered to be variables of

extraordinary scope, complexity an dynamism.

The necessity for goods packaging arose with the growth of self-service stores incountries like U.S.A. And U.K. In a short period, the original purpose, viz., protection

was under rated, particularly, in the consumer goods field and promotional aspect got

emphasized. Today packaging has become the most powerful selling tool. It often

effectively used as a method of demand creation. Packages are of trend described as asilent salesman.

Grading of product planning

It is a process of sorting out products that show similar characteristic features.

Its application is mostly found in the case of agricultural products, where, nature

plays a vital role in the production. But the products that pass through machines aremore or less standardized. Grading, according to Cundiff and Still, refers to the

application of basic descriptive standards, such as size, colour, or weight, to the

products' of nature, where growers or producers have very limited control over theirproducts' physical specifications. Orange growers, for example, find that they cannot

produce oranges which are all unfurl in size. The case of manufactures product isentirely different. In areas, the standardization is more or less easily applied. A

manufacturer who can control product specifications must start with an assessmentof the market before selections standards to which he wants his production to

conform. For example, a shoe manufacturer is able to plan his production accordingto present standards. A manufacturer with foresight will measure the potential

market for each size of shoe and produce each in proportion to the probable

demands, or he may decide to produce only certain sizes. Grading not only reducesthe marketing tasks of producers, but it also makes it easier for consumers toidentify the specifications of the products which they buy.

Product Image and Product Differentiation of product planning

The aim of every manufacture is that his product should be preferred to others by the

customers.


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This is not an easy job and in fact requires an intelligent handling. The Aim is

achieved with the help of Brand or Brand names, trade Marks and Patents.

American Marketing Association has defined Brand a name, term, sign, symbol or

design, or a combination of them which is intended to identify the goods or servicesof one seller or a group of sellers and differentiate them form those of competitors.

Brand name consists of words, letters and of numbers which may be vocalized orpronounced. In India, the brand names could be registered under Patents and Trade

Marks act to get legal protection.

Simplication of Modification in the product line

Is also an essential element of product planning. It is technology termed as product

elimination.

This is a major decision form the point of view of management. Many sick ormarginal products never die; they are allowed to continue in the company's productmix until they fade away. These products will, in course of time, eat away the profits

earned by the other products. The decision to give away a product often result form

changes in the market. Market saturation mares a product unprofitable. Productsmay also be abandoned, even though still profitable, if management feels that the

same resources could yield a higher profit form other products. Thus, the process of

avoiding or stopping the production of a particular product is called simplification. Tiis also termed as Product Line Contraction. From this viewpoint it is opposite to

diversification.

Necessary reason of cange of diversification

Some of the reasons when such a change is necessitated are

1. There is a technological development in the process of

production.2. New markets are to be created.

3. The advantage of reputation of company's name and its

existing products is to be spread to products.4. There is a constant threat for the existing product due to

abrupt changes in fashion.5. The spare capacity of the factory is to be fully utilized.

The diversification is profitable only in the case of largecompanies which have multi-markets and multi-products.

Further, such companies must have financial resourcessupported by a well-organized management. Diversification of

products, to a very large extent, is capable of preventing

recessionary trends entering the industry. The usual way in


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which diversification is brought into effect is by means ofmergers like one company acquiring the other.

Diversification of modification in the product line

By definition, means that something new will be added. It may be new products , new

markets, new technologies or even a new company.

Generally, it means adding a new product (not variousqualities of the same product) to the existing product line ormix. Fro example, if a fan manufacturing company startsproducing sewing machines, it is a case of diversification. Itdoes not mean that the new product should becomplementary or an allied product to the existing one. Itmay be a product which may be entirely distinct anddifferent from the existing products. The term is applicablenot only to production but also to selling. For instance, if awholesaler dealing in engineering goods, starts sellingsimultaneously confectionery items, it is also a case ofdiversification.

Modification in the product line of product planning

There are two aspects of it, one of Diversification and the other of Simplification.

These are :

Diversification

Simplication

Trading down of method

It is just the opposite of trading up.

It happens when a manufacturer of high quality starts selling a low quality product. Highquality followed by high prices may fit only certain markets. A manufacturer who

purposely wishes to widen the market for his products, this policy is an apt one. The

policy will be most effective where the manufacturer has already established a name forethe quality of this products.

Trading up of method

The process of introducing higher quality products by a manufacturer whose low quality

products are famous, is termed as trading up.


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The higher quality invariably demands a higher price too. This is

practicable only when the manufacturer has already earned areputation for his lower quality products.

A number of manufacturers are now-a-days practicing this method.

They have started selling higher quality products designated as 'exportmodels'. Household equipments such as fans, sewing machines,

refrigerators, etc., offer such examples. The strategy of trading up isalso used when a manufacture in order to attract and induce the

prospective buyer to go in for a superior quality high priced model

introduces a low priced model with the object of attracting andencouraging such buyers to evaluate such model.

Method of Quality variations

The process of changing the quality falls under two method

1. Trading up of method2. A number of manufacturers are now-a-days practicing this method3. Trading down of method

Quality variations of product planning

Decision regarding the quality is another consideration to be taken up under product

planning.

Generally, the manufactures prefer to have one standard quality only, due to the

convenienfce they might get. But under certain circumstances a manufacturer is forced to

produce differing qualities of a particular product. The quality might be high, medium or

even low. For example, manufacturers of pens invariably market pens of differentvarieties with varying quality at different prices. The decision on quality depends on

variety of factors ranging form market conditions and consumer's capacity to objectives

and resources of the manufacturer. In the long run single quality products may createproblems to the manufacturer, if that single quality is not capable of retaining the market.

In the matter of quality,. The manufacturers of consumer goods, such as specialty goodsand convenience goods, often face the problem of changing the quality to suit the market.

Variety of models or styles of product planning

The variety of models of products required presents a number of difficulties for the

manufacturer. The customers belong to various classes and patterns and naturally their

buying behavior also would be different.


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There will, therefore, be demand for innumerable varieties from different customers. A

manufacturer will have to concede to these demands if he wants to be in the business. Forexample, some time ago, a cigarettee manufacturing company sued to sell two varieties

of cigarettes: One variety was popular in South India while the latter predominated North

Indian markets. The company withdraw one variety and stressed on the other. Quitecontrary to this, another cigarette manufacturing company that had only a medium

variety, introduced other varieties in the market. These kinds of problems arise mainly

because of the fundamental fact that taste of individual differs. A manufacturer has todecide beforehand whether he should produce all the varieties demanded or need

concentrate only on one variety or a few limited varieties. This, however, depends on the

internal and external economies of the concern. In the case of products where the fashion

changes quickly this is a real problem to be looked into with foresight.

Activities to be performed under Sales Planning

There are is a few activities of product sales planning.) Variety of models or styles

b) Quality variationsc) Modifications in the existing product line

d) Product image and product differentiation

e) Grading

f) Product packaging and design.

Activities to be performed under Sales Planning

There are is a few activities of product sales planning.

a) Variety of models or stylesb) Quality variations

c) Modifications in the existing product line

d) Product image and product differentiatione) Grading

f) Product packaging and design.

Product (Sales) Planning

A product is always a bundle of attributes. These attributes include physical factors,

e.g., colour, design, features, performance and non-physical factors, e.g., utility, valuequality.

A product is very often described as quick mover' when all these attributes are present. Itis said that product Planning and Development is concerned with the determination of

the precise nature of the product. Product planning involves varieties of decisions to be

taken firmly before the real product is brought into the market. 'Trial and error' method is

unsuitable and only that person who visualizes things beforehand could be successful in


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this area. This is exactly the basic reason by which marketing is considered a science and

a subject to be dealt form the management perspective

Product (Sales) Planning and Development of elements

This is the starting point. Before selling the products, one has to decide what exactly isthe product to be sold.

This is what was earlier described as marketing precedes physical

production. This exact nature of the product in all details is

determined at this stage.

This element comprises two sub elements:(i) Product (Sales) planning (ii) Sales research and estimating sales

potentials.

Elements, for the sake of convenience

Pre-planning is the most important activity in the field of sales. The element of sales

function point out how complicated the mechanism of selling is. These elements, for thesake of convenience, are classified as follows:

1. Product (Sales) Planning and Development2. Selection of Channels of Distribution

3. Creation of Demand

4. Determining the Terms of Sale.5. Customer Services.

elements of selling

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