SDM-Ch.2 1

Chapter 2

Personal Selling:

Preparation and Process

SDM-Ch.2 2

Learning Objectives

• To understand psychology in selling, buying

decision process and buying situations

• To learn communication skills, sales knowledge,

and sales related marketing policies

• To understand personal selling process

• To learn about negotiation

SDM-Ch.2 3

Psychology in Selling

• If a sales person makes a presentation, the

prospect may or may not buy

• The above “buyer behaviour model” does not tell

us the reasons of buying or not buying

• To understand the psychological aspects of

selling or buying, salespeople should study

consumer or buyer behaviour, including buying

process and situations

Stimulus

(Sales Presentation)

Response

(buy or no buy)

Buyer’s decision

making process

SDM-Ch.2 4

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post-purchase Behavior

The Consumer Buying Decision Process

SDM-Ch.2 5

The Buyer Decision ProcessStep 1. Need Recognition

External Stimuli

• TV advertising

• Magazine ad

• Radio slogan

•Stimuli in the environment

Internal Stimuli

• Hunger• Thirst• A person’s normal needs

Need RecognitionBuyer Recognizes a Problem or Need

SDM-Ch.2 6

The Buyer Decision ProcessStep 2. Information Search

•Family, friends, neighbors•Most effective source of

information

•Advertising, salespeople•Receives most information from

these sources

•Mass Media

•Handling the product•Examining the product•Using the product

Personal Sources

Commercial Sources

Public Sources

Experiential Sources

SDM-Ch.2 7

The Buyer Decision ProcessStep 3. Evaluation of Alternatives

Consumer May Use Careful Calculations & Logical Thinking

Consumers May Buy on Impulse and Rely on Intuition

Consumers May Make Buying Decisionson Their Own.

Consumers May Make Buying DecisionsOnly After Consulting Others.

Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives

SDM-Ch.2 8

The Buyer Decision ProcessStep 4. Purchase Decision

Purchase IntentionDesire to buy the most preferred brand

Purchase Decision

Attitudes of

OthersUnexpectedSituationalFactors

SDM-Ch.2 9

The Buyer Decision ProcessStep 5. Post-purchase Behavior

Consumer’s Expectations of

Product’s Performance

Dissatisfied CustomerSatisfied Customer!

Product’s Perceived Performance

Cognitive Dissonance

SDM-Ch.2 10

Stages of the Business

Buying Process

Problem Recognition

General Need Description

Product Specification

Supplier Search

Proposal Solicitation

Supplier Selection

Order Routine Specification

Performance Review

SDM-Ch.2 11

Buying Situations Faced By

Household customers Business Buyers

• Routine decision-making • New task / New purchase

• Limited decision-making • Modified rebuy / change in

supplier

• Extensive decision-making • Straight rebuy / Repeat purchase

• Buying process and situations differ for household

consumers and business buyers.

• Consumers / Buyers may skip or reverse some stages in

buying process. E.G. A consumer buying toothpaste

SDM-Ch.2 12

Straight Rebuy

• A business buying situation in which the buyer routinely reorders something without any modifications

Modified Rebuy

• A business buying situation in which the buyer wants to modify product specifications , price , terms or suppliers

New Task

• A business buying situation in which the buyer purchases a product or service for the first time.

Business Buying Situations

SDM-Ch.2 13

The Sales Process

As a part of selling activities, if salespeople follow the steps

or phases shown below, their chances of success are far

better.

Prospecting &

QualifyingPreapproach /

Precall planningApproach

Presentation &

Demonstration

Follow-up &

ServiceTrial close /

Closing the sale

Overcoming

Objections

• The sequence of above steps may change to meet the

sales situation in hand.

• Some of the above steps may not be applicable for selling

to the trade

• We now discuss application of above steps to industrial

selling

SDM-Ch.2 14

Prospecting• It is identifying or finding prospects i.e. prospective orpotential customers.

• Methods of prospecting or sales lead generation are:(1) referrals from existing customers, (2) company sources(website, ads., tradeshow, teleprospecting), (3) externalsources (suppliers, intermediaries, trade associations), (4)salespersons’ networking (Rotary club, Chambers ofcommerce) (5) industrial directories, (6) cold canvassing,

Qualifying• Companies qualify sales leads by contacting them by mailor phone to find their interests (or needs) and financialcapacity.

• Leads are categorized as: Hot, Warm, and Cool

SDM-Ch.2 15

Preapproach

• Information gathering about the prospect.

Sources of information: the Internet, industrial

directories, government publications,

intermediaries, etc.

• Precall planning

• Setting call objectives

• Tentative planning of sales strategy: which

products, features and benefits may meet the

customer needs

SDM-Ch.2 16

Approach

• Make an appointment to meet the prospect

• Make favourable first impression

• Select an approach technique:

• Introductory

• Customer benefit

• Product

• Question

• Praise

• The approach takes a few minutes of a call,

but it can make or break a sale

SDM-Ch.2 17

Presentation and Demonstration

There are four components:

• Understanding the buyer’s needs

• Knowing sales presentation methods / strategies

• Developing an effective presentation

• Using demonstration as a tool for selling

SDM-Ch.2 18

Knowing Sales Presentation Methods/Strategies

Firms have developed different methods / styles / strategies of

sales presentation

• Stimulus response method / canned approach.

• It is a memorised sales talk or a prepared sales presentation.

• The sales person talks without knowing the prospect’s needs.

E.G. Used by tele-marketing people

• Formula method / formulated approach.

• It is also based on stimulus response thinking that all

prospects are similar.

• The salesperson uses a standard formula – AIDA (attention,

interest, desire, and action).

• It is used if time is short

• Shortcomings are: prospects’ needs are not uncovered and

uses same standard formula for different prospects.

SDM-Ch.2 19

Sales Presentation Methods (Continued)

• Need – satisfaction method• Interactive sales presentation

• First find prospect’s needs, by asking questions andlistening

• Use FAB approach: Features, Advantages, Benefits

• Effective method, as it focuses on customers

• Consultative selling method / Problem-solvingapproach• Salespeople use cross-functional expertise

• Firms adopt team selling approach

• It is used by software / consulting firms

SDM-Ch.2 20

Developing an Effective Presentation

Some of the guidelines are:

• Plan the sales call

• Adopt presentation to the situation and person

• Communicate the benefits of the purchase

• Present relevant and limited information at atime

• Use the prospect’s language

• Make the presentation convincing – giveevidence

• Use technology like multi-media presentation

SDM-Ch.2 21

Using Demonstration

• Sales presentation can be improved by

demonstration

• Demonstration is one of the important selling

tools EGs: Test drive of cars; demonstration of

vacuum cleaners by Eurochamps

• Benefits of using demonstration for selling are:

• Buyers’ objections are cleared

• Improves the buyer’s purchasing interest

• Helps to find specific benefits expected by the

prospect

• The prospect can experience the benefit

SDM-Ch.2 22

Overcoming Sales Objections / Resistances

• Objections take place during presentations / when

the order is asked

• Two types of sales objections:

• Psychological / hidden

• Logical (real or practical)

• handling and overcoming objections

SDM-Ch.2 23

Trial close and Closing the sale

• Trial close checks the attitude or opinion of the

prospect, before closing the sale (or asking for

the order)

• If the response to trial close question is

favourable, then the salesperson should close

the sale

• Some of the techniques used for closing the

sale are: (a) alternative-choice, (b) assumptive,

(c) summary-of-benefits, (d) T-account,

(e) special-offer, and (f) negotiation

SDM-Ch.2 24

Follow-up and Service

• Necessary for customer satisfaction

• Successful salespeople follow-up in different

ways: For example,

• Check order details

• Follow through delivery schedule

• Visit when the product is delivered

• Build long-term relationship

• Arrange warranty service

SDM-Ch.2 25

Key Learnings

• For understanding psychology in selling, study

consumer or buyer behaviour, buying process and

situations

• Salespeople are given knowledge of sales and relevant

marketing policies in order to increase their self-

confidence and sales, and meet customers’

expectations

• Typical steps in the sales process include prospecting

and qualifying, preapproach, approach, presentation

and demonstration, overcoming objections, trial close /

closing the sale, follow-up and service

• Salespeople should know when to negotiate, how to

prepare for negotiation and which style of negotiation to

use

SDM-Ch.2 26

Knowledge of Sales and Sales-related

Marketing Policies

Sales Knowledge Marketing Policies

• Company knowledge • Pricing and Payment policies

• Product knowledge • Product policies

• Customer knowledge • Distribution policies

• Competitor knowledge • Promotional policies

Major reasons for giving above information / knowledge

through training programmes to salespeople are:

• increase their self-confidence

• Meet customers’ expectations

• Increase sales

• Overcome competition