Confenfs

Prefoce xvPort I PENONAL SELLING AND I ARKEflNG STRATEGY

I Soles Monogement ond the Business Enterpdse 1Evolution of the Sales DepartmenSales Management

.--Objectives of Sales ManagementSales Managemenr and Financial ResultsSales Executive as Coordinator

Oryaniza,tion anl. coordin'ation Planning and, coordinalion Coordha,tion wilholhn elnnenk in tlu marheting prograrn Coord.irntion with the distribuliueruluorh coordhnrion and implznentarion of oaerall mnrkering straregy

Sales Management and ControlSales Control-Informal and FormalSales Control and OrganizationConclusion

2 Soles Monogement, Personol Selling, ond Solesmonship 16Buyer-Seller DyadsDiversity of Personal-Selling SituationsTheories of Selling

NDAS theory of selling "Right set of circunstarucs" tlwory of seltingformulo" tluory of selling "Belnvinral eqntion" ltuory

"Buying

^:-

Yl Contents

ProspectingSteps in prospecling

Sales Resistance

Closing SalesConclusion

,/ Setting Personol-Selling Objectives 36Types of Personal Selling ObjectivesSome Important Terms

Marhzl polentbl Salzs PotcntinlAnalyzing Market Potential

Sahs forecasl

Marhzt idmtifcation Marhel moliaalion Amlysis of marhet polenlialMarket IndexesSales Potential and Sales ForecastingSales Forecasting Methods

Jury of execulfue opinion PoII of sales force opinion Projeclian of paslsale.s Suruq of custnmers' buying plnns Regression arnlysis Econorutricmodcl building anl. simulntion

Converting Industry Forecast to Company Sales ForecastDerivation of a Sales Volume ObjectrveEvaluation of ForecastsConclusion

1 Determining Soles-Reloted Morketing Policies 58Product Policies-What to Sell

Relation lo prohrcl objecliaes Prohrcl lilv pol@ Produtt dzsignPofq Produrt qnli\ and serviee poliry

Distribution Policies-Who to SellPolicizs on ma,rhzting chanruk Polities on distribution inbrcily

Pricing PoliciesPoliq on prieing relntive lo llw compelilion Poliq on pricing rehliue tocosls Poliq on unifurmity of prbcs lo diffnml htyers Polity on lislpriting Poliq on discounh Geographital picing poliuizs Poliq on piceItadnship Prohrct line priling poliq Competitiae bidding poliq

Conclusion

5 Fomuloting Personol-Selling Strotegy 77Competitive Settings and Personal-Selling Strategy

Pure CompetitionMonopolistic CompetitionOligopolistic Competition

- No Direct ComPetitionPersonal-selling Objectives and Personal-Selling Strategy

Sales-Related Marketing Policies and Personal-Selling Strategy

vll Confents

Determining the Kind of Sales PersonnelProdwt marhzt analysis Analysis of salesperson's role in securing ordersChobe of ba^sit selling sQle

Determining the Size of the Sales ForceWork lood melhnd Salzs pobnlial method Incremental mzlhod

Individualizing Selling Strategies to CustomersConclusion

Coses for Port I 951-1 kripto, lnc.1-2 Soles ond Morketing Execufives of Greoter Boston, lnc.1-3 Phillips ComPonY1-4 Plostics lndustries, lnc.1-5 Benson's, lnc., Old Home Kitchens Division1-6 kientific-Atlonto,lnc.'l-7 RebelMills1-8 United Airflow, lnc.1-9 Grohom Monufocruring ComPonY1-10 Coloniol Heritoge Furnirure Compony1-11 Stonomer CorPorotton1-12 Piezo TechnologY, lnc.1-13 lhe Fomily Tree Monufocnrring Compony1-14 Dorts Vorehouse ComPonY1-15 EcolOil ComPonY1-16 The Bonner ComPonY1-17 Hormon Busines Forms1-18 Coggins Gronite, lnc.1-19 Dil-Dry, Grip-On Corporotion ond Subsidiories (A)1-2O The Kromer ComPonY1-21 Mortin Pockoging Compony, lnc.

PoTt II ORGANIZING THE SALES EFFORT6 The Effective Soles Executive 1lO

Nature of Sales Management PositionsPositinn gtide-salzs mrrrurger Posilion guifu-dislrict sales man'agn

Functions of the Sales ExecutivefQlafrties of Effective Sales Executtves

Relations with ToP ManagementRelations with Managers of Other Marketing Activities

Relations uilh pro;hut mttrmger Relations wilh promolion managenenlRelatiarc wilh pncing mnnagemznt Relatioru uith distribuliott manwgemenl

. Compensation Patterns for Sales ExecutivescdftliFr6.a, . ., _. **+..r

vlll Contens

182

I Soles Deportment Relofions 205Interdepartnrental Relations and C

lx Contents

Coses for Port ll 24O2-1 DonoldsonMonufocturingCompony2-2 Riverside ConroinerCorpororion2-3 Diomond pump2-4 Friro_Loy, lnc.2-5 Forbes Co., lnc., Heoilng Equipment Division2-6 Monrovio Oil Compony2-l Lindsoy Sponsweor2-8 Allen Speciolry Compony2-9 Scripro, lnc., (B)2-1O Owens-lllinois, lnc., Foresr produds Division2-1 1 Morris Mochine Vorks2-12 Delphic Corpororion2-13 Hillmon producrs Compony2-j4 Bil-Dry, Grip_On Corporotion ond Subsidiories (B)

Port lll SALES FORCE ATANAGEMENT'10 Personnel Monogemenf in the Selling Field 2gg

Sales Force ManagementEconornies of etfectizrc .sales lin'ce naragemenl Rale of sales persormel lultover

Inv.lvement .f'Sares Executives in Sares F.rce ManagementNeed fu the proper setting The law and sale.s force nanagement

Job AnalysisSalz.t job atwlysis Sales.iob fu.rcriplion Procedure for sales job anu,ly.ris arulpreparation of uritten job drscriptions Preparation ol .sales job specilicalitn;

Conclusion

1l/ Recruiting Soles Personnel OO1\-/ Organization [

x Contents

The InterviewWho shoull do llu interuieuing? Hou many interaiews? Interaiewing thespouse Inlerview lechni4ues

ReferencesCredit ChecksPsychological Tests

Valilation of te.sts Basis for eoaluation of leskTypes of lests Corrclusions on lesting

Physical ExaminationsConclusion

i-

19 Plonning Soles Troining Progroms \-ap'- f' Building Sales Training programs

Defining Training AimsIdentifying initinl training needs ldentifying conrinuing training need*

Deciding Training ContentProdwt d.an Sales technique,./ Markels Company informatian

Selecting Training MethodsThe leclure Tht personal confermce Demonslrarions RoIe phying casediscrusion Impromptu discttssion Gaming Onatu-jobtraining Programmzd lcarning '* conesponfunce courses Group vernsinl,iuihnl training mz thods

Conclusion

14 ,Executing ond Evoluoting Soles Troining hogroms 054

/ Philosophies of Sales TrainingOrganization for Sales Training

who uill be the trainees? who uiil do lhe rraining? when will rhe rraininglnhz place? where will rhe training sire be? Insrnrcriornl materinlsand training ails

Evaluating SaleS Training ProgramsConclusion

j Motivoting Soles PersonnelMeaning of Motivation /

366

Motivational "Help" from ManagementInherml nature of the salzs job salesperson's bounlary position and rolzconflicts Tendznq toward aparhy Mainlaining a feeling of group idcntity

Need Gratification and MotivationHbrarchyofweds Morhtatinn-hygierwtfuory Achfuuemcnl-motiuarionlluory Expeclancy model

Interdependence and Motivation -rMotivation and LeadershipMotivation and Communications

,d Contents

Inlerpersona,l conlacl Wrill.en comnntnicalionsUnionization of Sales PersonnelConclusion

;f Cornpensoting Soles Personnel 381Requirenrents of a Go

ContenR

Evaluating-{omparing Actual performance with StandardsTaking Action-The Dynamic phase of ControlContr

nil Contents

Budgetary ProcedurePlanning sglzs and budgelary procedures Achnl htdgetary procedure Hardlingcompelitim for aoailnble funds within tlu m.arhtting diuision "Selling" lhe salzshdget to lop nwngemznt Effecl of enors in budgetnry eslimntes Usirtg llufudgel for conlrol purposes Etfecl of enors in hrdgelary estimates I'lexibikly inbud,geting

Conclusion

2/, Quotos 536.a1/ Objectives in Using Quotas

To providz quanlilaliae perfotnarue slandnrds To obnin hghter sales and experceconlrol To moliaale dzsired perlormarce To ue in conneclion wilh sales conlesls

Quotas, the Sales Forecast, and the Sales BudgetTypes of Quotas and Quota-Setting Procedures

Salzs uolume quolas Proced.ures for selting salzs uolumt quolas Budgelquolas Acliuily quoku Comhinalion anl, olher point syskrn gnla^t

Administering the Quon SystemAccurale, fair, and atlainable quolas Securing and mainlaining sales personwl'saneplance of qwlas

Reasons for not Using Sales QuotasConclusion

22 Soles Tenifodes 555J The Sales Territory Concept

House ucounlsReasons for Establishing or Revising Sales Territories

Prooiding propn nnrhel coaerage Conlrolling salcs experr.ses Assisting inanahnling salcs prsowul Cantributing to sales force moralz Aiding incoord,inn'tion of pcrsonal selling and adunlising

Procedures for Setting up or Revising Sales TerritoriesSelccling a basic geographit conlrol unit Delernining saLes poltnlial presmt in erchcontrol unit Conbinin'g conlrol unils into lenlaliue lcrrilorics Adjuling fordiffnmtes in couerage dfficulE and redislricling lmlaliae lzrrilorizs

Deciding Assignment of Sales Personnel to TerritoriesRouting and Scheduling Sales PersonnelConclusion

,!les Control ond Cost Anolysis 576.X The Sales Audit

/ s"l.r AnalysisAllocation of satzs ctlbrt Dab for sabs arwlysis llhultalive sabsarwlysis Purposes of sabs ana,lyses

2g@

tt

I

Marketing Cost AnalysisPwposes of rut'rkeling cosl aruilysLs Murkctitrg t'osl unul,9.ti.s t.echritlttt,tM arhe ling cosl aru,l,jsis-

Soles Mqnqgemenf

fhe Dusiness Enferprise

ssionals. They plan, build, and maintain

them to productsactivities iales perring' and pnd assurance that the products and services arewise investments in the competitive marketplace. Society r""r.r i" them to assurethe delive.ry of goods and services that finai buyers *on, u, tri.o that final buy_ers are willing to pay rdTf increasing imporrance-to hevelop and marketproducts whose potentials for damaging-the'environmenr are minimal. If thegoods and services made and sold are ne-and if these products are "socially resment's objectives will have been achievpend upon how well, or how poorly, th

Port One Personol Selling ond Morketing Snotegy

and society are blended. -fo the extent that these interests are in harmony, thefirm experiences sales volume, net profits, and business growth.

flOUMOil OF THE SAIES DEPARTTIIEI{T

Prior to the Industrial Revolution, small-scale enterprises dominated the eco-nomic scene, and selling was no problem. The chief problem was to produceenough goods for nearby customers. Orders were obtained with minimum ef-fort, indthey were on hand before goods were produced. In most firms a singleindividual supervised all phases of the business, including both manufacturingand selling. Manufacturing problems received the most attention. Selling andother marketing problems were handled on a part-time basis.

With the Industrial Revolution, which began about 1760 in England andshortly after the American Revolution in the United States, it became increas-ingly necessary to find and sell new markets. Newly built factories were turningout hrrge quantities of goods of every description. Their continued operationdemanded great expansions in the area of sales coverage, as adjacent marketscould not absorb the increased quantities being manufactured. But even underthese circumstances other business problems took precedence over selling.These were problems associated with hiring large numbers of workers, and ac-quiring land, buildings, and machinery. To solve them, large amounts of capitaltiad to be raised. The result was that more and more businesses adopted the cor-porate form of organization-the day of large-scale manufacturing enterprisesirad arrived. Firsthand administration of all phases of the operation being be-yond the capabilities of most individuals, authority was increasingly delegated toothers. Separate functional departments were established, but sales departmentswere set up only after the activation of manufacturing and financial depart-ments.

The advent of specialized sales departments helped to solve the organiza-tional problems of market expansion, but another problem remained----commu-nicating with customers. Little by little, manufacturers shifted portions of themarketing function to middlemen. At the start, goods were sold to retailers, whoresold them directly to consumers. Eventually, some larger retailers began topurchase for resale to other retailers, and, as time passed, many of these evolvedinto wholesale institutions. Other wholesalers developed out of the import-export business. The manufacturer's sales department was becoming more re-mote from consumers, and it was increasingly difficult to maintain contact withfinal buyers and users of the product and to control the conditions under whichwholesalers and retailers made their Sales. Thus, in some resPects, the addition

" of middlemen to the channel of distribUtion complicated the problem of marketexpansion.

Meanwhile, marketing activities conducted by the manufacturer's sales de-partment grew in importance. Many tasks, such as advertising and sales promo-

Soles fulonogemenr ond the Busines Enterprise

partmenb for the inward flow of incdepartment is the income-producing

and uct merchandi In time, business,

-r

-rr lrrrrLr uuJlltCDS,

:. J:::i:: ^.:.T.- _.,,,r" . :h" :..T .. marketin g _un"s.*.ni;

l**1,1""". ^':,:', : i "1s: - e^n t " t? a.r. ri u. tr,. ;;, ;;; ; :#: Tf:il t:*:*':T::TTl:,::':f_llr1=..,,r""Marketinse,.*r"u"""rft ""ll,",ilmanagement meant,,the control of personal selline. in_cludi

lfif ": yi::.j,:g. 1,j::i",io',,,' Jln.i,iilffiites managemen tsynonymous with:e*r:1!:!.:i:itei f?ife, but ;odern sates managerse_r._reqporr_s_ib_il,i1ie5_,_ charge of

dis

fefsonar-siiiilA-";ri",r)r-ilalh;Fp.i;#;,fi ;fi 'lf,T_ffi :}.'llT,n"jpersonal sales force- Hnwe.." ^o-"^^-^r -lt^.^i- , -, -- -"-"*personal sales force.

,- sales managers are responsibre for organizing the sales effort, both withinand oand informal

n/,ensure e communrce-inside rhe sales deparrmenr uut inilir-iffi r organiza-ide the the sales manager serves as a ke contact withcu sJosrersand other:

uon not onltional units.

taining an effective distribution .r.,*o.LSales managers have srill oihei responsibilities. They are responsible for

.1flff:'."-:,Y"r'l'.:111,sjff'ru3ili,?:Til""'on Dennitions, Marheting Defmri,a, (chicago: Ameri-

Pon One Personol Selling ond Morketing-Strotegy

ration of information critical to the ma of key mar-TIi.yng, quotas, ancl te

paiii.ipati-to an-extnt thar veaGs @-de-crsions on prod-policies, advertising and other promo-r is both an administrator in charge of

s mar-ttypes.-"--nt ii a key function in many kinds of enterprises. Manufac-

turing and wholesaling enterprises encounter a wide range of problems in salesmanagement. Retail institutions, small and large, have sales management prob-

lems, even though the differences (when compared to the problems of manufac-

turers and whoiesalers) are so great that retailing problems (at least in the aca-demic world) are ordinaril,v coniidered separately. But some retailers have sales

management problems more akin to those of manufacturers and wholesalersthan to those tf other retailers-the automobile dealer, the real-estate broker,and the direct-to-consumer marketer all are in this category. Firms selling intan-

gibles, such as the insurance company, the stockbroker, the mutual fund, andihe airline, have problems in sales management. Sales management problemsexist even in companies not employing sales personnel as, for example, in thecompany that uses manufacturers'agents (rather than its own sales pe-rsonnel) to

reach its markets; indeed, the problems of managing a sales force of "indepen-dent outsiders" often are more complex than when sales personnel are on the

comPany PaYroll.

ODTECIwES OF SArrdt ilAllAGElrlEllT\

From the company viewpoint, there are three general objectives of-sales man-

agement: sales-volume, contribution to profits, and continuing growth. Sales ex-

ecutives, of course, do not carry the full burden,in the effort to reach these ob-jectives, but they make major cohtributions. Top managem.ent has.the finalresponsibility, because it is iccountable for the success or failure of the entireenterprise. tJltimately, too, top management is accountable for supplying anever-increasing volume of "socially responsible" products that final buyers wantat satisfactorY Prices.

Top management delegates to marketing management, which then dele-gates ro iahs management, sufficient e general ob-j"ectives. In the ptoi.st, objectives are c goals-they-are

broken down and restated as defi has a reason-abk chance of reaching. During the planning that precedes goal setting,- salesexecutives provide estiirates on market and sales potentials, the caPabilities ofthe sales foice and the middlemen, and the like. Once these goals are finalized, itis up to sales executives to guide and lead the sales personnel and middlemenwho play critical roles in implementing the selling plans'

Soles Monogemerit ond the Busines Enrerprise

r,sr6mmeErEtT Ar{D FtxAtctAt RE UrIs

Sales management and financial results are closely related. Financial results arestated in terms from two basic accounting formulas:

sales _ cost of sales = gross margrngross margin - expenses : net profit

Sales management influences the "numbers cranked into these formulas."expenses are affected by the caliber and performanced these are rhe major dererminants of net profit. Thet be affected dir ectly by sales management, but it can be

affected indirectly since sales volume musr be larg. ..,oug.-h to permit mainte-

sales management.lSometimes, safes executives stress sales volume while neglecting gross mar-

gin and though sales voluir. i.r.i.irer, grosmargin ionately, and net profits are rediced.If these s disappear and losses appear. Oftenthe best rink sales volume and exp-enses. Evenwith a lower sales volume, skilled sales management can reduce expenses andraise gross margin sufficiently to convert a loss into a profit.

rectlon, to overemphasize highpreoccupation with percenta'gexpense are impdrtant, but sales

Porr One Personol Selling ond Morkering Strotegy

ship hmong the four factors. Sales management, both in its planning andoperating roles, aims for an optimum relationship among the three factors it candirectly affect: sales, gross margin, and expenses. Sales management works withothers (such as those in charge of production and advertrsing) to assure that salesvolume is sufficient to attain targeted cost of sales, the fourth h.tolf

Optimum marketing performance in terms of sales volume, net profits, andlong-term growth requires coordination, and sales executives play significantroles in coordinating. Sales executives have responsibilities for coordination in-volving (1) the organization, (2) the planning, and (3) other elements in the mar-keting strategy. Higher-ranking sales executives are those most concerned withobtaining effective coordination, but sales executives at all organizational levelshave some responsibility for coordinating.

x__2fr{onlzqf lon ond Coordlnotlon

Coordination of the different order-getting methods (personal selling, advertis-ing, and so forth) is achieved through a single responsible, top-ranking execu-tive. Generally, this.jr the marketing vice-president, director of marketing, ormarketing manager$his executive is responsible for minimizing the possibilitythat the different order-getting departments will work at cross-purposes or worktoward sales goals independentlflwith little knowledge of what others aredoing). --)

f Inside the sales department, from the department head on down, all salesexe-cutives are responsible for coordinating the organizational units under theircontrol. In sales departments that function smoothly, generally democratic ad-ministration is the rule. AII subordinates affected by a decision are consulted inadvance and are allowed to participate in making it-thus reducing the tendencyto resist directives issued by superiors. Not only are there minimum opportuni-ties for misunderstandings to occur, but subordinates asl{ell as superiors areable to visualize the circrimsrances giving rise to decisioyQ

Plonnlng ond Coordlnqflon

The sales executive, having specialized knowledge of the market and of thecapabilities of the sales force, is involved in achieving coordination in marketingobjectives and drafts plans that achieve desired results at optimum cost, Salesexecutives determine the elements (personal selling, advertising, and so forth)that make up the marketing program, apportioning the relative amounts of eachso as-at least theoretically-to equate its marginal effectiveness with that ofother elementslCoordination among the marketing planners is essential if they

V

Soles Monogement ond the Business Enterprise

are to lay out specific programs for achieving predetermined sales, profit, andgrowth objectives. The sales executive, as

" m.mber of the planning gioup, seeks

to secure a marketing program that is both appropriate for *".k.i .o.rditio.r,and reflects the probable conrriburion of the-sates force.l

'WfuFdlil(otbn wlfh Ofher Elemenfs tn fhe lloteflng prcgrom

onizing personal selli with adveAdvert-is-ifrFhTlnterest a

the same appeals-if bothhe-iimin

up i4

the salesln

italizes upon theforcelnterest aroused. Personal-selling effort isbe explained by advertising, but when s:advertising, but when sales personnel and the advertising use

details that might

with which differentand adcJss. An advertising effort should be implemented within rhe contexr of thelarger marketing effort, and the same is true of personal-selling effort.. -!e!.t executives are involved in coordinating orher prom6tional efforts

Jor e13gpl9 are setthem at the precise time tha-itiErn

vertisements appear in national and local media. It is the iadvertlsements appear in national and local media. It is the iob of the sales force,toachieve.thistimingandcoordination.I"nneialerts deale;-m-speaarcoqonng or sampling efforts so rhar they cin benefitfrom heightened customer interest.

Coordlnoflon wlfh fhe Dlsfrlbutlve Netwodr

Sales.executives coo f themiddleff-ellTmong ribu_tion, obtainingdealemotional risks.

rr! Pro-

{@"s!!tdug!di!!rib@r. tin". a new product is introduced, sales exec-@btainiigdistribution.Unlesstheproductissolddi-rectly to final users, the sales department must persuade middlemen to associatethemselves with the new product's distribution- Gaining distribution is not easy.Middlemen refuse to stock a new product unless the manufacturer's sales staifpresents convincing argumnts of its salability. Some manufacturers succeed in"pulling" the_ir products through the distribution channel by means of heavy ad-vertising to final buyers, but such instances of "forced distribution" ur. .ur..

increasingly important as the product is made available in more outlets, and salesexecutives must acljust their coordinating effbrts accordingly.

\-@fifiaing dealer identification. In f urthering the chances that th. P9I99lg!.--selling effort wilt succeed, the sales executive must enJure ih-at Fnafbuters know

Pon One Perrcnol Selling ond Morketing Srrotegy

Regardless of the distributinn channels used, the manufacturer of a newproduct, as often as not, faces distributor lethargy and dealer indiff'erence andmust use missionary scllirrg. But, as frequently happens in marketing a new con-sulner product, even missionary selling may be handicapped because corporatechains and other integrated retailers commonly do not permit decentralized callson their individual ()utlets. 'I-hus, the manufacturer of a new product may haveto build a demand fbr it in as many outlets as are initially willing to handle it andthen prove the existence o['an established market demand to the remaining "de-sired

Soles Monogement ond the Busines Enterprise

usithe ghsale ening research studies, for example, have significance for individual middlemen,sales executives have special reports prepared for personal presentation and ex-plaga-tion by the sales force.

L_Jn. manufacturer needs informalcms of the middlemen. Sales Personserve as the vehicles of communicatiotimely information is available on thesible to provide them with effective promotional and other assistance. The salesexecutive makes periodic appraisals of existing marketing policies in the light ofinformation provided by salespeople in the field, thus ensuring that those poli-cies already in effect, as well as those newly formulated, are appropriate for thetotal marketing situation.

Sales executives ensure that sales personnel are fair and impartial in theirdealings with middlemen. No outlet should be favored at the expense of an-other; all should receive equitable treatment. Salespeople need continual train-ing to keep them abreast of current operating policies, practices and procedures;they require effective supervision to apply them fairly as well as properly. Pro-viding this training and supervision is the responsibility of sales executives.

Slrrlritry pronotional rishs. Lfn. marketing program often calls for the manu-facturer and the middlemen to share promotional risks (such as through cooper-ative advertising). In these cases, sales executives ensure that the sales personnelmake effective presentations designed to convince dealers to participate. Manu-facturers utilizing selective or exclusive agency distribution stand to gain themost from sharing promotional risk with middlemen; in these situations, salesexecutives and the sales force play roles in both the initial selection of middle-men as well as in obtaining thiir consent to share promotional risks]lManufac-turers using mass distribution do not find it feasible to delegate much promo-tional authority to their middlemen. However, regardless of the company'sdistribution policy, any steps that the sales executive takes to make the job of themiddleman more interesting, more profitable, and more challenging facilitatethe task of coordination.

r-4f-Oncbn ond lmplcmentotlon of Overcll lltortellng Sfrofegy

or exhibition, the sales executive coordinates with advertising executives to en-sure that the proper interval elapses before advertisements apPear or salespeo-ple make balls on dealers itr.the product's behalf. Similar coordinating action en-sures proper spacing of the advertising in relation to the call schedules of

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I I Soles Monogement ond the Business Enrerpnse

salespeople. Furthermore, s:rles executives see that field sales pers()nnelintegrate every phase and segment of'the promotional programs of distributorsand dealers.

Successf'ul market introduction of a new brand is a severe test of the mettleand the level of competence possessed by all members of the marketing manage-me nt team, including sales executives. Introduction

12 Port One Personol Selling ond Morkering Snotegy

course of sizing uP the situation, sales executives find and correct weaknesses orimperfections in the sales plans and the policies and procedures used in theirimplementation.

Setting qua Crr.. ironing out planningweaknesses, tandards against *-t i.h to measurEperformanc s continual expirimentation, and moststandards are far from precise. The ultimate test of a particular standard's ap-propriateness is whether it contributes more to personal-selling efficiency than itcosts.''.]

'-?ntelligent standard setting requires identification of the individuals whoare responsible for the activity or group of activities being put under control. Notwo salespersons or executives perform exactly alike, even though they may op-erate in circumstances identical in every other respect. Thus, standards are oftinexpressed as ranges of acceptable performance. Although it is convenient tothink of a standard as a fixed value, there should be an upper and lower limitwithin which human variation may take place. when the performance of anorganizational unit passes either of these control limits, the danger flag is up,signaling that the situation is out of control.Ga^the-ring and processing data on actual performance. \Jt. ,yp. and amountof information needed for controlling sales depend upon the standards selected.But, regardless of the nature of this information, it should not be in excess ofsales management's real needs, nor should its cost of collection and processing

o r s i m il a r i n ro rm a tio n i s be i n g o u,"i.,.lo?, jf ti::: H:"::.-r1'"1'.:: Hl:senting opportunities for savings through eliminating duplications in reporting.sometimes, also, saving are realized through reducing orlengthening the intei-vals at which information is gathered and processed.

For standards to be of maximum value, sales executives must have infor-mation on actual performances soon enough to permit timely corrective action.An efficient system of sales control not only furnishes information necessary tomanagerial evaluation of performance but also promptly relays it, together withsuggestions for actions, to the appropriate organizational unit. But informationon actual sales performance is often slow in arriving on the sales executive'sdesk, considerably delaying performance evaluations. For example, many com-panies, perhaps even most, require sales personnel to make weekly sales reports;in such casbs, a week or more may pass before the sales executive acts on therePort. But progress is being made in improving the timeliness of sales controlinformation. Utiliaation of electronic data-processing systems for handling salescontrol data has sped up infcrmation evaluation and feedback.

lO Soles Monogemenf ond the Busines Enterpnse

lEwluating performance. Evaluation of performance means comparing ac-tual results with standards. Because of differences in territorial and other condi-tions, it is difficult to compare individual performances. However, it is possibleto explain each individual salesperson's variations from standard. Departuresfrom standard are classified into uncontrollable and controllable variations.Variations outside the control of the person being appraised include thosecaused by rapid and unexpected changes in economic conditions; changes ingovernmental activities; and wars, strikes, floods, droughts, and other naturaldisasters. Variations over which the person held responsible has responsibilityinclude obtaining proper sales coverage, following up leads, selling a balancedline, securing adequate credit information, and the like. The principle is thatsubordinates should not be held responsible for conditions outside their control.In appraising performance, it is important to exclude uncontrollable variations.

Action to correct controllable aariation. Management corrects the variationexplained by factors within the control of the person being evaluated. Manage-ment, in other words, takes steps to move the individual's performance in thedirection of the standards. The specific actions taken differ with the nature ofthe variation. But management's actions assume one or more of three forms: (l)direction, or pointing out more effective ways to perform certain tasks; (2) guid-ance, or providing additional instructions or training; and (3) restraint, or theinstallation of procedures and practices aimed at keeping results within desiredbounds.

Adjustbry for uncontrollablc aariation The amount of uncontrollable varia-tion in the comparison indicates the relative need for adjusting sales plans andpolicies. [f uncontrollable variation suggests that present sales objectives areunrealistic or not in line with current expectations, basic revisions in the objec-tives are made. Thus, if a comparison of results with standards reveals substan-tial uncontrollable variation, adjustment of standards to attainable levels is in or-der.

sAttt coilnoL{llFoRlrlAL AllD FoRltlAL

Informal control. Circumstances exist in which awareness of the changing sit-uation, and the ability to analyze it, are adequate control devices. Effective salesexecutives have their "fingers on the pulse of the business"-they have an un-canny ability to detect situations that require attention. But the larger a comPanyis, and the higher up in the administrative hierarchy the sales executive is, theharder it becomes to use "fingertip" control. As the business grows and the struc-ture of the sales orpSanization becomes more complex, the more pressing theneed is for formal control. For effective management, a growing business needsdependable machindry to provide the facts for making workable decisions andfor formulating appropriate polities.

l1 Port One Personol Selling ond Morketing Snorcgy

Formal control and uritten sales policies, Early evidence of the introductionof formal sales controls is the appearance of sales policies in writing. No enter-prise, however small, can survive for long without policies, but smaller firms of-ten operate satisfactorily, even thouAs the sales organization grows, thegiven situations is spelled our in detail.complex problems than a small organione will know what to do in every circumstance. The large organization needswritten sales and marketing policies to ensure substantiafunifirmity of action.Uniformity is essential both among different persons handling similar problemsand among the same persons handling similar problems at diflerent times. Writ-ten policies also conserve executive time. Because policies are written, more timecan be used for planning and making decisions on problems not covered by ex-isting policies. sales execurives reseive time for hindling .,policy exceptions,"and if they encounter enough exceptions of similar natur:e, i .r.* policy is for-mulated and is pur in writing.Poliey formulation and reoiew. The process of policy formulation and reviewillustrates- the dynamics of execurive control. A gbod policy evolves from thor-ough study and evaluation.of tangible informatioi. Ho*.n.i, -u.ry sales policiesdeal with subjects on which quantitative data are lacking, especiaily when man-agement is experimenting with new ideas. When objeciives are not set clearly(because of lack of information), resul i vary from th-e standard because of fac-

ond the control ofing down of objectiv

*::Hj#::';I;* ""d

..sood,,

Formal control ouer sales volume. one formal control, introduced early in thehistory of a firm, is that over sales volume. Estimating how much of a productcan be.sold in aspecified_future period is a prerequisite both for planning andcontrol. Sales volume performance is best appraised by comparingit with p"oten-tial sales volume. The "sales or market forecist," therefore,'serves as a standardfor evaluating sales performance. However, the periodic forecast of sales is notenough for effective control over sales volume. During the intervals betweenforecasts, sales_management monitors such factors as ind-ustry sales trends, activ-ities of competitors, and share-of-the-market percentages. significant changes inthese factors may call for changes in sales objectives, flans, lolicies, and p"-..-dures.

Budgetary control. Ultimately, formal control requires installation of salesbudgetary controls a^nd setting up of sales territories. Budgetary control repre-sents an extension of control over sales volume to control over marginr

"r,d a*-

penses and, hence, over profits. when control reaches this stage, ,J., -"n"g.-ment can project individual profit-andJoss statements for sulh units u, ,"'i",territories, products, rnarketing channels, and classes of customers. Through

t! Sohs f{onogement ond rhe Busines Enrerpnse

using such shndard costs of distribution, sales manage-ment sets s g individual expense items and the gross mar-gin. Throu l; sis, sales management appraises sales perfor-mance against predetermined standards. In this way, the soft points, the areaswhere sales performance is below par, are brought to management's attention.The net result is to reduce the time between drops in performance and correct-ive action.

SAI.ET COilTROI AIID ORGAIIIZATIOT

Paradoxically, the points in the organizational structure at which effective con-trol is exercised depend upon the degree to which management adheres to thephilosophy of "decentralization." In the decentralized sales organization, greatercontrol is exercised by executives lower in the hierarchy than is true in the cen-tralized organization. The higher up executives are in the organization, themore they deal with "policy" or "control" exceptions than with thC control mech-anism itself. At all organizational levels except the top, situations falling outsidethe control limits are handed up to that executive who has authority to deal withthem. For speed in the initiation of corrective action, the power to make deci-sions is delegated as far down in the organizational structure as is consistent withthe caliber and experience of executives.

coxcrJstot

: ::liiJx;t tinues to

them to assure the delivery of products that final buyersand to use their influence to see to it that products are

ing strategy. They control the personal-selling effort of the organizational unitsthey lead, assuring that sales department objectives are reached. Modern salesexecu tobuild inplann iesmake

Sqles lVlqnqgemenf,

Personql Selling,

ond Sqlesrnonship

Sales management, personal selling, and salesmanship are all related. Salesmanagement directs the personal-selling effort, which, in turn, is imple-

mented largely through salesmanship. In managing personal selling, the salesexecutive must understand the many activities comprising the salesperson's job(including salesmanship), know the problems sales personnel meet (includingmany in salesmanship), and suggest solutions (including ways to handle prob-lems in salesmanship).

Personal selling is a broader concept than salesmanship. Personal selling,along with other marketing elements such as pricing, advertising, product devel-opment and research, marketing channels, and physical distribution, is a meansfor implementing marketing programs. Salesmanship is one aspect of personalselling-i1 is never all of it. Salesmanship is one of the skills used in personalselling: ir it lhe art of w,ecessfully pernnding prospects or cuslomers n ht1 prodrcts orseruices from which thq can deriae suitable benefts, tfure@ increasing their tota,l satisfac-tions.' At one time, the emphasis in salesmanship was almost wholly on Persua-sion; today while recognizing the significance of persuasion, the emphasis is onthe benefrts attractive to prospects and customers. One variation of benefit-oriented salesmanship is "consultative selling"--

17 5oles Monogement, perrcnol Selllng, ond Solesmonshlpers with information and other bcide in favor of the seller,s prways with the different custouct andsome inothers,

Advertising, often described as ,

deal about personal selling andthe theoretical aspects andiavethe theories relate to and work

ing situations-and the continual cthat sales personnel face daily.

DTIYIR.SEI.EI DYADS

anship is recognition thar it involvese the term ,,dyadl b describe a situation

and the prospect, interacting with-seller dyad." Another is thelnter-

ment or support each other, and the

greater was the likelihood that a sale

'!P, J. Micali, Tlv Laq Techniqus of sarestnatship(Hoinewo

to Port One Personol Selling ond Morketing Snotegy

characteristics (age, height), other objective factors (income, re-llgion., education),

and variables rh;t relare ro personality factors (politics, smoking).'Evans's findings have significance for sales management. Whenever possi-

ble, sales p.rrorr.r.ishould 6e assigned to prospec-ts whose^characteristics aresimilar to their own, [hus improving the chance of successful dyadic relation-ships. Pairing salespersons with customers of'similar backgrounds is more easily

accomplisheJ in ittdrrtttial selling, where there are f'ewer prospects about whominforrnation is needed, than in ..r.tt,r-..-g

19 Soles Monogement, Peronol Selling, ond Solesmonship

FICURE 2.1 Concepruol Model of "Solesperson-Buye/' DyodicRelotionships

f-----5 $slgspel5qp

souRcE: Reprinted by permission of the publisher lrom "The Personal Selling Process: A CriticalReview and Model," by Rosann L. Spiro, William D. Perrault,Jr., and Fred D. Reynolds, InfuslrialMarhetbry Manngemenl, Vol. 5, p. 353. Copyrighr.l9TT lry Elsevier Science Publishing Co., Inc.

cal persons' perceptions of each other's needs may lead to adjustments of theirown (see the "feedback" mechanism represented by the broken lines in Figure2. I ).u

Based on individual needs and expectations, each focal person devel

20 Pon One Personol Selling ond Morketing Strotegy

strategy aimed to negotiate a favorable exchange. That strategy may embracepersuasion, ingratiation, communication of facts or offers, friendship, and otherelements. If the strategies are compatible, an exchange takes place. Otherwise,the salesperson and the buyer may stop interacting, or based on feedback fromthe unsuccessful negotiation, either or both may adapt by altering strategy, at-tempting to adjust needs and expectations, or modifying role requirements.Role requirements, as well as needs and expectations, often are determined byforces beyond the focat person's control, so one or both may find it impossible toadapt. For instance, to meet a buyer's expectations, a salesperson may need to setprices, yet this may be against company policy and beyond the salesperson's con-trol. When the particular round of negotiations is terminated regardless of itsoutcome, the experience becomes input into future interactions of the salesper-son and customer.

D]YERSNY OF PENOI{AI'SEUJ1{G SMJANOilS

Considerable diversity exists among personal-selling situations, and it is helpfulto distinguish between service and developmental selling. Service selling aims toobtain sales from existing customers whose habits and patterns of thought arealready conducive to such sales. Developmental selling aims to convert prospectsinto customers. Developmental selling, in other words, seeks to create customersout of people who do not currently view the salesperson's company favorably,and who likely are resistant to changing present sources of supply.

Different sales positions require different amounts and kinds of serviceand developmental selling. McMurry and Arnold classify positions on a spec-tpum ranging from the very simple to the highly complex. They categorize salespositions into three mutually exclusive groups each containing subgroups, a totalof nine subgroups in all:

C'roup A (sentice selling)

l. Insifu Ordzr Taker-"waits on" customers; for example, the sales clerkbehind the neckwear counter in a men's store.

2. Deliaery Salesperson-mainly engages in delivering the product; for ex-ample, persons delivering milk, bread, or fuel oil.

3. Route or Merchandising Salzsperson

21 Soles Monogemenl personol 5elling, ond Solesmonship

Group B (deaelopmental selling)

6. Creatiue Salesperson of Tangibles-for example, salespersons sellins vac-uum cleaners, automobiles, siding, and encycloped'ias.

7. Creatiae Salesperson of Inta.ngibtes-Jo. .*ample, ialespersons selling in-surance' advertising services, and educational progrims. c

Group C (basically dcvelopmental selling, but requiring unusual creatiaity)

8. "Political," "Indirect," or ,parricularly commoditiesSales are consummated th(which have little or no cmakers in customers'lands large orders forbuyers' interests in fishin

9. Multiple -Sales-involves sales of big-ticket items

;1,:rj,T"U. presentarions ro several individuals in

say "yes," but all of whomtive of an advertisingselection committees"the salesperson has to wo

The more developmental selling required in a particular sales jqb and themore complex it is, the harder it is :o make sales. Theamount and kind of devel-opmental selling depends upon the natures of prospects and customers, on theone hand, and the nature of products, on the rithei hancl. The easiest sales areself-service sales: customers know their needs, know the products capable of s2t-i9_fling these needs, sell themselves, and go through the iheckout line.'Ihe mostdiffic sell sgmetimes thesales her , or ,,multiple,,sales an ;keep

an is required to

fltEoRtEs oF sEtul{Gl

Is selling a science with easily taught basic concepts or an art learned throughexperience? In a survey of lT3.marketing executives, 46 percent perceived seil-ing as an art, 8 percent as a science, and 46 percent as an art evolving into aTRobert

\:.Y.Ygty and_James S. Arnold, Hou to Build a Dynmic Saks Organiutdon (New york:McGraw-Hill, 1968), pp. ll-16.tSelling, in this section, is used synonymously with salesmanship. This is in line with rhe cusronraryusage found in the literature of selling and'salesmanship.

22 Port One Personol Selling ond Morketing Stroregy

science.o The fact that selling is considered an art by some and a science by othershas produced two contrasting approaches to the theory of selling.

The first approach distilled the experiences of successful salespeople and,to a lesser extent, advertising professionals. Many such persons, of course, suc-ceeded because of their grasp of practical, or learned-through-experience psy-chology and their abiliry to apply it in sales situations. It is not too surprising thattheseielling theories emphasize the "what to do" and "how to do" rather thanthe "why." Th.t. theoriel, based on experiential knowledge accumulated fromyears of "living in the market" rather than on a systematic' fundamental body ofLnowledge, aie subject to Howard's dictum, "Experiential knowledge can beunreliable."ro

The second approach borrowed findings from the behavioral sciences. Thelare E.K. Strong, Jr.i professor of psychology at the Stanford Graduate School ofBusiness, *"r i piott.er in this effort, and his "buying formula" theory is pre-sented later in this section. John A. Howard of the Columbia Graduate School ofBusiness was in the forefront of those who adapted the findings of behavioralscience to analysis of buying behavior; his "behavioral equation," discussed laterin this section, attempts to develop a unified theory of buying and selling.

In this section wi examine four theories. The first two, the "AIDAS" theoryand the "right set of circumstances" theory, are seller oriented. The third, the',buying-foinula" theory of selling, is buyer oriented. The fourth, the behavioralequati;, emphasizes the buyer's decision process but also takes the salesperson'sinfluence process into account'

AIDAS lheory of Selllng

This theory-poputarly known as the AIDAS theory, after the initials of the fivewords used toeipress it (attention, interest, desire, action, and satisfaction)-isthe basis tising texts and is the skeleton around whichmany sal organized. Some support for this theory isfound in s of William James," but there is little doubtthat the construct is based upon experiential knowledge and, in fact, was in exis-

tence as early as 1898.r' During thesuccessful selling interview, according to this

theory, the prospect's mind passes through five successive mental states: atten-tion, interesi, d.ii.., action, ind satisfaction. Implicit in this theory is the notionthat the prospect goes through these five stages consciously, so the sales presen-

tation must liad the ptotpe.l through them in the right sequence if a sale is toresult.

el. L. Goldstucker, B. A. Greenberg, and D. N. Bellenger, "How Scientific-Is Marketing? What Do

tf"it.ii"g Execut'ives Think?" MSU Businzss Topics,22, no. 2 (Spring l97a)' p. 41.'John A. Howard, Morfuting T/reory (Boston: Allyn & Bacon,

1965)' p' 71'rrsee W. James, Pgciologr (New York: Henry Holt, 1908).

'rE. K. Strong,lr., Psychobgicot Aspecls of Business (New York: McGraw-Hill, 1938)' p' 24'

2C Soles Monogement, Personol Selling, ond Solesmonship

Securing attention. The goal is to put the prospect into a receptive state ofmind. The first few minutes of the interview are crucial. The salesperson has tohave a reason, or an excuse, for conducting the interview. If the salesperson pre-viously has made an appointment, this phase presents no problem, but experi-enced sales personnel say that even with an appointment, a salesperson mustpossess considerable mental alertness, and be a skilled conversationalist, to sur-vive the start of the interview. The prospect's guard is naturally up, since he orshe realizes that the caller is bent on selling something. The salesperson mustestablish good rapport at once. The salesperson needs an ample supply of "con-versation openers." Favorable first impressions are assured by, among otherthings, proper attire, neatness, friendliness, and a genuine smile. Skilled salespersonnel

21 Pon One Personol Selltng ond Morketing Srroregy

saved, and the chance of making a sale improved if objections are anticipatedand answered before the prospect raises them. External interiuptions causebreaks in the presentation, and when conversation resumes, good salespeoplesummarize what has been said earlier before continuing. Digressive remarksgenerally should be disposed of tactfully, with finesse, but sometimes distractingdigression is best handled bluntly, for example, "Well, that's all very interesting,but to get back to the subject. ... "Inducing actions, If the presentation has been perfect, the prospect is readyto act-that is, to buy. However, buying is not automatic and, as a rule, must beinduced. Experienced sales personnel rarely try for a close until they are positivethat the prospect is fully convinced of the merits of the proposition. Thus, it isup to the salesperson to sense when the time is right. The trial close, the close ona minor point, and the trick close are used to test the prospect's reactions. Somesales personnel never ask for a definite "yes" or "no" for fear of getting a "no,"from which they think there is no retreat. But it is better to ask for the orderstraightforwardly. Most prospects find it is easier to slide away from hints thanfi'om frank requests for an order.

Building satisfaction, After the customer has given the order, the salesper-son should reassure the customer that the decision was correct. The customershorrld be left with the impression that the salesperson merely helped in decid-irrg. Building satisfaction means thanking the customer for the order, and at-tending to such matters as making certain that the order is filled as written, andf

25 5oles Monogemenf, Personol 5ellln9, ond Solesmonshtp

Proponents of this theory tend to stress external factors and at the expenseof internal factors. They seek selling appeals that evoke desired r.rponr.r. S"1.,personnel who try to apply the theory experience difficulties traceible to inter-nal factors ilTl"y selling situations, but the internal factors are not readily ma-nipulated. This is a seller-oriented theory: it stresses the importance of the sales-Person controlling -the situation, does not handle the probtem of influencingfactors internal !o th prospect, and fails to assign appropriate weight to the re-sporlse side of the situation-response interaction.

"Duy'ng Fomulo" Theory of Sclllng

In contrast to the two previous theories, the third emphasizes the buyer's side ofthe buyer-seller dyad. The buyer's needs or problems receive major attention,and the salesperson's role is to help the buyer find solutions. This theory pur-Ports to answer the question: What thinking process goes on in the prosp-ect'smind that causes the decision to buy or not to buy?

The buying fgrmula is a schematic representation of a group of responses,arranged in psychological sequence. The buying formula theory emphasizes theProspect's resPonses (which, of course, are strongly influenced by internal fac-tors) and deemphasizes the external factors, on the assumption that the salesper-son, being naturally conscious of the external factors, will not overlook them.Since the salesperson's normal inclination is to neglect the internal factors, theformula is a convenient way to help the salesperson remember.

ure, but recognizable versions appear in aand selling by authors who had experien-eral psychologists also advanced explana-The name "buying formula" was given to

, Jr., and the following step-by-step explana-tion is adapted from his teaching and writings.rs

Reduced to their simplest elements, the mental processes involved in a pur-chase are

need (or problem) + solution -) purchase

Because the outcome of a purchase affects the chance that a continuing relation-ship will develop between the buyer and the seller, and because tte".ly all salesorganizations are interested in continuing relationships, it is necessary to add afourth element. The four elements then, are

rSee, for e,xample, H. Tipper and others, Adaerlising, ILs Principles and Practices (New York: RonaldPress' l9l5), and w.w. charters, Hou to sell at Retail (Bosron: Houghton Mitflin, 1922).i_s99, for examp-le, A. T. Poffenberger, Psychology in Aduertising, rev. ed. (New york: McGraw-Hill,1938), pp. 1L39,rsDr' Stro.ngl exPlanation is in his Pslclologi ca] Aspecls of Bu.einsa;, pp. I ti-39. The exptanation here isPatterned after Dr. Strong's, but some terminolbgy hls been cha'nged in line witli ntodern usage.

26 Port One Personol Selling ond Morketing Strotegy

need (or problem) r solution purchase ---) satisfaction

Whenever a need is felt, or a problem recognized, the individual is conscious of adeficiency of satisfaction. In the world of selling and buying, the solution willalways be a product or service or both, and they will belong to a potential seller.

In purchasing, then, the element "solution" involves two parts: (l) product(and/or service) and (2) trade name (name of manufacturer, company, or sales-person).

In buying anything, the purchaser proceeds mentally from need or prob-lem to product or service, to trade name, to purchase, and, upon using the prod-uct or service, he or she experiences satisfaction or dissatisfaction. Thus, when adefinite buying habit has been established, the buying formula is:

need or _ product and/or trade name --+ purchase -+ satisfaction/problem service dissatisfaction

To ensure purchase, the product or service and the trade name (that is, thesource of supply) must be considered adequate, and the buyer must experience a(pleasant) feeling of anticipated satisfaction when thinking of the product and/orservice and the trade name. [n many cases, an item viewed as adequate is alsoliked, and vice versa, but,this is not always so. Some products and services thatare quite adequate are not liked, and some things are liked and bought that areadmittedly not as good as competing items. Similar reasoning applies to tradenames. Some sources of supply are both adequate and liked, others are adequatebut not liked, still others are Iiked but patronized even though they are inade-quate compared to competing sources.

With adequacy and pleasant feelings included, the buying formula be-comes

AdequacyI

//

need or + product and/orproblem service\\\

Pleasant feelings

Adequacy

trade name + purchase + satisfaction

Pleasant feelings

When a buying habit is being established, the buyer must know why theproduct or service is an adequate solution to the need or problem, and why thetrade name is the best one to buy. The buyers also must have a pleasant feelingtoward the product or service and the trade name.

Thert, whenever the buyer's buying habit is challenged by a friend's re-mark, a competing salesperson's presentation; or a comPetitor's advertisement,the buyer needs reasons to.defend the purchase, and, in addition, he or sheneeds a pleasant feeling toward both the product or service and the trade name.All this is represented by the dashed lines in the formula.

27 Soles Monogement, Personol Selling, ond Solesmonship

The primary elements in a well-established buying habit are those con-nected by s

2C Pon One Personol Selling ond Morkerlng Strotegy

a. Innate drives stem from the physiological needs, such as hunger,thirst, pain, cold, and sex.

b. or social approval, are ac-f innate drives. They areas a faEade behind which

e drives is hidden, lnsofar as marketingrives are dominant in economically ad--

vanced societies.2. Cu,es are weak stimuli that determine when th

a. Triggering cues activate the decision procesb. Nontriggering cues influence the decision p

it, and may operate at any time even though the buyer is not contem-plating a purchase. There are two kinds:(l) Product cues are exter

rectly, for example, col(2) Informational cues are

of a symbolic nature abfrom advertising, convsales personnel), and so on.

c. Specific proqlj! and informario-n cues may also function as trig-gering cues. This may happen when price rriggers the buyer's deci-slon.

3. Response is what the buyer does.4. A reinforceme.nl is any event that strengthens the buyer's tendency to

make a particular response.'6

Howard incorporates these four elements into an equation:

B=PxDxKxV

where

I = response or the internal response tendency, that is, the act of purchasing abrand or patronizing a supplier

P = predisposition or the inward response tendency, that is, fbrce o[ habitD = present dlive level (amount o[ motivation)K = "incentive potential," that is, the value of the product or its potential saris-

facti

t Soles Monogement, Personol Selling, ond Solesrnorship

the variables is multiplicative. Thus, if any indepen_alue, B will also be zero and there is no rejponr.. Nomay be, for example, if the individual is pnmotivated

Each time there is "o?lloo"r.-" purchase-in which satisfaction (K) issufficient to yield a reward, predisposition (p) increases

when the satisfaction yields a reward, reinforcementwhat is reinforced is the tendency to make a responsethat immediately preceded the rewarded ..rpotts.. After reinforcement, theprobability increases that the buyer will buy the product (or patronize rhe sup-plier) the next time the cue appears-in other words, the buyer has learned.,nBuyer'sellcr dyad anil reinforcemont. In the interactions of a salesperson anda buyer, each can display a rype of behavior that is rewarding, rhat is r'einforcing,to the other. The salesperson provides the buyer with a prod,rct (and the .r...i-sary information about it and its uses) that the buyer needs; this satisfaction ofthe need who, in turn, can reward the salesperson bybuying th eward the other by another type of behavioi,that of p The salesperson gives social'approval ro abuyer by displaying high regard with friendly greetlngs, warm conversarion,praise, and the like.

In understanding the salesperson-client relation, it is helpful to separateeconomic aspects from social features. The salesperson wishes tb sell a product,and the buyer wishes to buy it-these are the economic features. Each partici-pant also places a value and cost upon the social features. Behavior conierningthese features of the relationship consist of sentiments, or expressions of differlent degrees of liking or social approval. Salespersons attempf to receive rewards(reinforcements) either in sentiment or economic by changing their own behav-ior or getting buyers to change theirs.

salesperson's influence process. The process by which the salesperson influ-encesthebuyerisexplainableintermsof theequationB: p x D x K x v.Thesalesperson influences P (predisposition) directly, for example, through inter-acting with the buyer in ways rewarding to the buyer. The greatest efflct on p,however, comes from using the product. The salespers6n exerts influencethrough D (amount of motivation), this influence being strong when the buyerseeks information in terms of informational cues. If theinds to be served are notclearly defined, by helping to clarify these, the buyer's goals, the salespersonagain exerts influence througfr D. whe r the buyer has stopped learning-whenthe buyer's bulins behavior becomes automatic-the salesperson influen'ces D byproviding triggering cues. When the buyer has-narrowed down the choices to afew sellers, the salesperson, by communicating the merits of the cornpany brand,

rTHoward states, however, that "additional reinforced purchases . . . increase p at a negativelyaccelerated rate [as] illusrrated in the shape o[ the learning curve . . . ,'. ibid., p. 4b.

co Pon One Perrcnol Selling ond Morketing Strotegy

can cause it to appear relatively better, and thus affect K (its potential satisfactionfor the buyer). Finally, the salesperson can vary the intensity of his or her effort,so making the difference in V (the intensity of all cues).'E

Solesperson's rolc in reducing buyer dissonance. According to Festinger'stheory of cognitive dissonance, when individuals choose between two or morealternatives, anxiety or dissonance will almost always occur because the decisionhas unattractive as well as attractive features. After decisions, people exPosethemselves to information that they perceive as likely to suPPort their choices,and to avoid information likely to favor rejected alternatives.'s

Although Festinger evidently meant his theory to apply ohly to postdeci-sion anxiety, it seems reasonable that it should hold for predecision anxiety.Hauk, for instance, writes that a buyer may panic on reaching the point of deci-sion and rush into the purchase as an escape from the problem or Put it offbe-cause of the difficulty of deciding.20 [t seems, then, that a buyer can experienceeither predecision or postdecision dissonance, or both.

Reducing pre- and postdecision anxiety or dissonance is an importantfunction of the salesperson. Recognizing that the buyer's dissonance varies bothaccording to whether the product is an established or a new one, and whetherthe salesperson-client relationship is ongoing or new, these are four types ofcases involving the salesperson's role.

L. An establi^shed producl----an ongoing salesperson-client relatioruhip. Unless themarket is unitable, the buyEr tCnds toward automatic response behav-ior, in which no learning is involved and thus experiences little, if any,dissonance; but insofar as it does occur, the salesperson is effective be-cause the salesPerson is trusted by the buyer.

2. An established product--a new salesperson-ckmt relationship. The salesper-son, being new, is less effective in reducing dissonance.

erson-client relationshi'p. Unless the buyerrience with an established similar prod-

i,l1T1i1i.ii:tll'il"'ul rT,H:'liliance.

4. A new product--

0l Soles Monogemenf, Personol Selling, ond Solesmonship

many characteristics of the chosen item are similar to products the buyer hasforgone, but which are approved by the reference groups.2' In other words, thebuyer experiencing cognitive dissonance needs reassuring that the decision is orwas a wise one; the salesperson provides information that permits the buyer torationalize the decision.

PROSPECNil6

Efficient organization of time and thorough planning of work are earmarks ofabove-average salespersons. They look for ways to "stretch" productive sellingtime. They arrange travel and call schedules to economize on time spent enroute and distance traveled. They make appointments to avoid prolonged wait-ing for callbacks. They do not waste time trying to s.ell to people who cannor buyor are not likely to do so. The planning work, which is essential in eliminatingcalls on nonbuyers, is called "prospecting."

Improvement in prospecting is one way to stretch productive selling time.Many sales personnel devote too little time to prospecting and, as a consequence,too much to calling on nonprospects. Salespersons who are proficient in pros-pecting apply their selling eff

o2 Port One Personol Selling ond Morketing Snotegy

prospects in other respects, they may be inaccessible to thedent of a large corporation, for example, may need insur-d able to pay for it, bur a particular salesperson may haveontact.

In addition to meeting the stated requirements, there are other require-menls unique to each company's customers. Starting with data on the profitabil-ity of present accounts, any characteristics typical of profitable accounts but notshared b detected. These identifying charac-teristics i irom information appearing in di-rectories es and professions, for instance, arereadily identifi in telepho Keycharacteristics counts are tionsof the various these are s.

?l',,n. ffiIof pros f all

kinds, news and notes in trade papers and business magazines, credit reports,membership lists of chambers of commerce and trade and manufacturers; asso-ciations, lists purchased from list brokers, and records of service requests. other

QuaWi"s prospects and determining probablc requirements. As informationis assembled on each tentative prospect (i.e., "suspect"), it is easier to estimate theprobable requirements of each for the types of products sold by the company.Prospects with requirements too small to represent profitable business aie re-moved from further consideration, unless their growth possibilities show prom-ise. Even after tapping all readily available information sources, additionallnfor-mation often is required to qualify certain prospects, and personal visits bysalespersons may be the only way to obtain it. These visits may not bring in sales,but they save'time, as prospects are separated from nonprospects.

Relating company products to each prospect's requirements. The final step is toplan the strategy for approaching each prospect. From the information assem-bled, it is usually possible to determine each prospect's probable needs. Fromwhat the salesperson knows about the company's products, their uses, and appli-cations, he or she selects those that seem most appropriate for a particular pros-pect.

Cil Soles Monogement, Personol Selling, ond Solesmonship

The salesperson's presentation is now easy to construct, and it is tailored tofit the prospect. The salesperson should have clear ideas about specific objec-tions- the ProsPect may raise and other obstacles to the sale that may be encoun-tered. The salesperson is ready to contact the prospect, the only tasks remainingare making an appointment, deciding how to op..t the preseniation, and deter-mining how to persuade the prospect to become a customer.

SAI.EI REIISTAI{CE

Prospects show sales resistance by pointing out real or imagined obstacles, andby voicing objections, sincere or insincere. in analyzing salesiesistance, the sales-person needs skill in the accurare and rapid appraisal of people and their moti-vations. A Prospect's expressed sales resistance is either an obstacle or an objec-tion. An obstacle is real or unreal; an objection is sincere or insincere.obstacles to sales. obstacles are real or apparent reasons that the prospecthas for not buying. tf the obstacle is real, it pricludes rhe consummation of thesale. But if it is apparent, there are ways to circumvent it. A prospect says a tem-porary shortage of cash prevents buying-an obstacle, not an objiction-and thesalesperson helps the prospect to circumvent it by explainin"g a method forfinancing the purchase. some obstacles can be circumventedi others cannot.when an obstacle arises, the salesperson determines whether or not there is away to get around it. If the salesperson recognizes the specific obstacle andknows a way to circumvent it, the next move ii to preseni the solution to theprospect.

to completeion from itsat worst, it

tween effec-

salestheyneedthe salesperson's personality. Except wsolved (a real obstacle, n9t an objection), sincere objections are overcome by pa-tient and thorough explanations.

Prospects raise insincere objections to discourage salespersons, to get rid ofthem, to test,their competence, and as false excuses ior not buying. wh"en sales-persons sense that an objection is insince re, they see k to regain th1 offensive assoon as possible. They do not permit an insincere objeciion to provoke anargument-{ne of the surest ways to lose a sale.

Ca Port One Perrcnol Selling ond Morketing Snorcgy

Some sales executives say that every objection, no matter how insincere,should be treated with the utmost courtesy. Others say that insincere objectionsshould be ignored. The best defensive strategly often is the strong counterattack,and the salesperson should seek to regain the initiative as soon as he or she cangracefully do so.

closrlrc sAt.Et

The selling tactics followed affect the ease of closing the sale. Low-pressure salesare closed more easily than are high-pressure ones. In low-pressure sales, pros-pecds feel that they aie reaching tf,e buying decisions themselves, and primarilythrough rational processes of thought, so there is no need for extra push justbefore the sales are consummated. In high-pressure sales, the main thrust is tothe prospects'emotions, so salespersons attempt to propel prospects into buyingdecisions. Often, the prospect regains normal perspective as the sale nears itsclimax, and, if this happens, the salesperson needs unusually effective persua-sion to close the sale.

Every salesperson approaches certain closings with apprehension. Atclosing time, either the salesperson sells the prospect an order or the prospectsells the salesperson on a "no sale." Closing time provides an opportunity to reg-ister tangible proof of selling skill. Occasionally even the best salesperson mustrely upon closing skill to make the sale.

Prospecting, if well done, puts the salesperson in the proper frame of mindfor the close. The salesperson feels that a real service is being performed for theprospect, not that "a bill of goods is being sold." There is no doubt that the prod-uct is the best solution to the prospect's problems.

When the sales presentation is complete and clear, no difficulty is met inclosing the sale. All obstacles to the sale and all objections have been removed, tothe prospect's entire satisfaction. Basic agreement has been reached, and theprospect is ready to accept the proposal.

But even after an excellent presentation, and in spite of thorough pros-pecting, some prospects refrhin from positive commitments. The natural ten-dency of many people is to let inertia guide their reactions-many are happy toleave things as they are, and salespersons leave empty-handed unless they joltthese prospects into buying. The skilled closer gives the extra push that triggersa buying response. But failures to get an order result as much from poor pros-pecting and inept'plesentations as from ineffective closing.

When an attempted close fails, the salesperson should normally try an-other. The refusal does not necessarily imply an unwillingness to buy; it mayindicate the prospect's need for additional information or for clarification ofsome point. Some executives recommend that sales personnel attempt as manyas five closes before giving up. Early closing attempts should be so expressed thata refusal will not cut off the presentation. A salesperson judges the sincerity of a

Ot Soles lvlonogemenr, Personol Selllng, ond Solesmonship

prospect's refusal, surrendering gracefully when it is clear that no sale will bemade.

The salesperson first uses an indirect close, that is, attempts to get th orderwithout actually asking for it. The salesperson may ask the prospect to state apreference from among a limited number of choice (as to models, delivery dates,order size, or the like), so phrasing the question that all possible responses are inthe salesperson's favor except for one:- "None at all." br the saleiperson maysummarize, emphasizing features that visibly impress the prospect, s[owing howthe reasons for the purchase outweigh those opposed to it. Then thisalespirsonPauses for the Prospect's response, which is expected to be, "Go ahead and writethe order." Sometimes, the extra push may be a concession that makes the pur-chase sufficiently more attractive to make the sale. Or the salesperson may as-sume that the sale is made, write out the order, and hand it to the prospect forapProval-if the prospect balks, the issue is clearer. Perhaps one last objection isvoiced, but after it is answered, the sale is made. Many indirect closes are in com-mon use, and books on selling contain numerous examples.

When one or more attempts at an indirect close fail, the salesperson usesthe direct approach. Few prospects respond negatively to a frank request for theorder. In fact, many people, especially those who are themselves engiged in sell-ing, do not buy unless the order is asked for outright

coxcuJstot

sales executives must understand the jobs of those reporting to rhem. of thetasks- assigned to sales personnel, among the most important are those requiringapplication of selling techniques. When sales executives understand the tasks as-signed to sales personnel, and have insight into how these tasks affect rhe

behavior patter they are ready tol. They have the to rrain sales per-es force's efforts dual salesperson's

Sefting Personql-Selling

Obiecfives

Marketing management in consultation with sales management determinespersonal selling's exact role in the promotional program. Figure 3.1 shows

how personal selling fits into the promotional program. The markering planninggroup sets personal-selling objectives, determines sales-related marketing poli-cies, formulates personal-selling strategies, and finalizes the sales budget. Thecombined impact of these decisions constitutes the framework within which thesales force is managed. Generally, this means that the company fields its ownsales force, but, occasionally, as in the insurance industry, personal-selling activi-ties are largely shifted to middlemen.

TYPES OF PENOI{ALSELUI{G ODJECT]VES

The qualitative personal-selling objectives are long term and concern the contri-butions management expects personal selling to make in achieving long-termcompany objectives. These objectives generally are carried over from one peri-od's promotional program to the next. Depending upon company objectives andthe promotional mix, personal selling may be assigned such qualitative objectivesAS

t. To do the entire selling job (as when there are no other elements in thepromotional mix).To "service" existing accounts (that is, to maintain contacts with presentcustomers, take orders, and so forth).To search out and obtain new customers.

2.

3.

g6

07 Sefiing Penonol-Selling ObJectives

EURE C.l Personol Selling os Port of rhe Promotionol Progrom

Manage the Sales Force-Recruiting and Selecting-Training and Dareloping-Motivating-Compensating-Asigning to Territorier-Routing and Scheduling-Evaluating and Superviing+tc,

Evaluationof Personal.Selling

Progrrm

4. To secure and maintain customers'cooperation in stocking and promot-ing the product line.

5. To keep customers informgd on changes in the product line and otherr aspects of marketing strategy.6. To assist customers in selling the product line (as through "missionary

selling").

cc Port One Personol Selling ond Morketing Snoregy

7. To provide technical advice and assistance to customers (as with compli-cated products and where proclucts are especially designed to fit buyers'specifications).

8. To assist with (or handle) the training of middlemen's sales personnel.9. To provide advice and assistance to middlemen on management prob-

lems.10. To collect and report market information of interest and use to com-

pany management.

The basic considerations in setting qualitative personal-selling objectivesare decisions on sales policies and personal-selling strategies and their role inthe total promotional program. After this role is defined, qualitative long-rermpersonal-selling objectives are set. In turn, the qualitative perso4al-selling objec-tives become the major determinants of the quantitative persongl-selling objec-tives.

The quantitative objectives assigned to personal selling are short term andare adjusted from one promotional period to another. The sales volume objec-tive-the dollar or unit sales volume management sets as the target for the pro-motional period-is the key quantitative objective. All other quantitative person-al-selling objectives derive from or are related to the sales volume objective.Thus, discussion here focuses upon the setting of sales volume objectives. Settingthe sales volume objective influences the setting of other quantitative personal-selling objectives, among them the following:

To capture and retain a certain market share.To obtain sales volume in ways that contribute to profitability (for exam-ple, by selling the "optimum" mix of company products).To obtain some number of new accounts of given types.To keep personal-selling expenses within set limits.To secure targeted percentages of certain accounts' business.

SOIIE llrlFORTAl{T TERIIS

l.2.

3.4.5.

Before examining the planning and analytical work involved in setting salesvolume objectives, it is important to define three terms: market potential, salespotential, and sales forecast. Some executives use these terms synonymously,but, as the following discussion indicates, there are good reasons for distinguish-ing among them.

tlorlrc,f Pofonflo!

A market potential is an estimate of the maximum possible sales opportunitiespresent in a particular market segment and open to all sellers of a good or ser-vic.g during a stated future period. Thus, an estimate of the maximum number

cc Senlng Personol-Selllng Objectives

of low-priced pocket cameras that might be sold in san Mateo County, Califor-nia, during the.calendar year lg87 by all sellers competing for this market wouldrepresent the 1987 San Mateo County marker potential for low-priced pocketcameras. A market potential indicates how much of a particular product can besold to a particular market segment over some future period, assuming the ap-plication of appropriate marketing methods.

$ols Porcmbl

A sales potential is an estimate of the maximum possible sales opportunitiespresent in a particular market segment open to a specified company selling agood or service during a stated future period. To illustrate, an estimate of thenumber of low-priced pocket cameras that might be sold in San Mateo County,California, during the calendar year 1987 by the Eastman Kodak Companywould be the 1987 San Mateo County sales potential for Eastman Kodak low-price pocket cameras. A sales potential represents sales opportunities available toa particular manufacturer, such as to Eastman Kodak Company, while a marketpotential indicates sales opportunities available to an entire industry.

Sohs Foncort

A sales forecast is an estimate of sales, in dollars or physical units, in a futureperiod under a particular marketing program'and an assumed set of economicand other factors outside the unit for which the forecast is made. A sales forecastmay be for a single product or for an entire product line. It may be for a manu-facturer's entire marketing area, or for any suMivision of it. Such forecasts areshort-term, or operating, sales forecasts rather than long-range sales forecasts,which are used for planning production capacity and for long-run financialplanning. l.ong-range sales forecasts, although of interest, are so tentative thatsales planners give them only passing attention. It is the short-term, or operat-ing, sales forecast that is important to the sales executive. Keep in mind, then,that an oprating sales forecast is a prediction.of how much of a company's par-ticular product (or product line) can be sold during a future period under agiven marketing program and an assumed set of outside factors.

A,XALYZ|X tARtGt FOtElfltAt

tofief ldontlicofloa

The first step in analyzing a product's market potential is to identify its market.Market identification requires finding out

l. Who buys the product?

& Port One Perrcnol Selling ond lvlorfterlng $roregy

2. Who uses it?3. Who are the prospecrive buyers and/or users?

_ Some companieb find answers to these questions in their internal records,but most companies, especially those that use lbng marketing channels, rnust usefield research to obtain meaningful answers. In consumer-goods marketing,buyers,.users, and prospects are identified and classified

".corJir,g to such chai

acteristics a! age, sex, education, income, and social class. in inlustrial-goodsmarketing, buyers, users, and prospects are identified and classified by si-he offirm, geographical location, type of industry, and the like.

Market identification studies reveal the characteristics that differentiate themarket segments making up the product's market porential. Frequently they un-cover unexploited market segments whose patronage might be- obtainedthrough redirecting personal-selling effort or changing proriotional strategy.sometimes, market identification studi :s provide, as i sideresult, customer diLon such factors as purchase frgguency, searching time expended, unit of pu1-chase, and seasonal buying habits. when assembled and analyzed, these datahelp in estimating market porential.

lloilref iloflvotlon

The second step in analyzing market potential is to detect rhe reasons why cus-mers might buy it.

fiTh|HJ;ITIIprograms.

rease the effectiveness of promotional

Motivation research techniques vary, but the most widely used are theprojective techniques, in which respon lents project themselves, their attitudes,interests, and opinions into interpretatiresearcher. Analysis of results by trainbuyers' minds, including, importantly, tthe product. Most morivation studies abehavior of ultimate consumers rathermotivation studies helps not only in estimating a prodtrct's market potential butassists in deciding

l. How best to present the product in sales talks2. The relative effecriveness of different selling appeals.3. The relative appropriateness of various promotional methods.

Anoltsb of lloftcf Porefflol

Having identified rhe-potenrial buyers and -their

buying behavior, the third stepis ro analyze the market potential. Generally, market potential cannot be ana-

11 Sening Penonol-Selling Objecives

lyzed directly, so analysis makes use of market factors (a market factor is a mar-ket feature or characteristic related to the product's demand). For instance, thenumber of males reaching shaving age each year is one market factor influenc-ing the demand for men's electricage is a prospective buyer of an elshave, orhers will adopt other shavbuy a shaver or will prefer to use twill use borrowed shavers or, perhtors'for analyzing market potential is a two-step process:

l. Select the market factor(s) associated with the product's demand.2. Eliminate those market segments that do not contain prospective buyers

of the product.

IIARKEI ITDEXE

A market index is a numerical expression indicating the degree to which one ormore market factors associated with a given product's demand is present in agiven market segment-usually a given geographical market segment. Marketindexes are expressed in relative terms, such as in percentages,-rather than inabsolute numbers. In analyzing the market for furniture, forixample, a marketindex might contain three factors: population, effective buying income, andnumber. of marriages. In the united states, the most widely usel single-factormarket indexes are population as a percentage of U.S. total and effectiie buyingincome as a percentage of U.s. total. fany companies refine these indexes'furltfrer by breaking them down into greater detail; for example, the population in-dex is divided into subindexes covering different age gro,rpr ana ihi income in-dex into subindexes for different income groups.

Sales and' Marheting Management, a trade publication for sales executives,publishes annually an issue giving Buying power Index (BpI) data by stare,county, city, metropblitan area, and even by the suburban components olmetro-politan areas. The BPI combines effe-ctive buying income, retail sales, and popu-lation into a single index using weighring of facrors of 5 for income, 3 forreiailsales, and 2 for population. This particular combination and weighting of mar-ket factors serves as a satisfactory measure of market potential Ior *l"tty .o.r-sumer-products marketers.

Other marketers construct their own market indexes, including differentmarket factors and using different weighting systems. one producer of lightingfixtures includes data on new housing starts, and a makei of autb seat ioveriincludes motor vehicle registrations. Other market factors frequently used inconstructing consumer-goods market indexes are registrations of new automo-biles, home ownership, marriage licenses issued, births, and deaths. Marketers-of industrial products construct market indexes using such market factors as'value added by manufacture, number of employ..r Jng"ged in certain kinds

12 Port One Personol Selltng ond Morkeflng Srrotegy

of manufacturing, numhr of manufacturing establishments, person-hoursworked, total value of shipments of particular items, and capital expendituresfor new plant and eqdrpment.

SAI.ET POIETTIAI ATD SAIIS FORECAI'TII{G )T?

sales potentials, as defined earlier, are quantitative estimates of the maximumpossiblecified coderivedships and adjustments for changes in companies'and competitors'selling strate-gies and practices.

A firm's sales potential and its sales forecast are not usually identical-inmost instances, the sales potential is larger than the sales forecast. There are sev-eral reasons for this: some companies do not have sufficiento capitalize on the full sales porenrial; other firms have ntributive networks capable of reaching every potential cusattemPt to realize their total sales potentials because of limited financial re-sources; and still others, being more profit oriented than sales oriented, seek tomaxi sales potentialindic resources anddesir stimate-it in-dicates how much a company with a given amount of resources can sell if it im-plements a particular marketing program.

sAt Et FoRECAtilttG tlEilODs

A sales forecasting method is a procedure for estimating how much of a givenproduct (or product line) can be sold if a given marketing program is imple-mented. No sales forecasting method is foolproof

a3 Settlng -Perrcnol-Selllng ObJecfives

lvty of Erccuflve Oplnlon

There are two steps in this method: (1) high-ranking executives estimate proba-ble sales, and (2) an average estimate is calculated. The assumption is that theexecutives are well informed about the industry outlook and the company's mar-ket position, capabilities, and marketing program. All should supporr their esri-mates with factual material and explain their rationales.

Companies using the jury of executive opinion method do so for one ormore of four reasons:

l. This is a quick and easy way to turn out a forecast.2. This is a way to pool the experience and judgment of well-informed

people.3. This may be the only feasible approach if the company is so young rhar

it has not yet accumulated the experience to use other forecasting meth-ods.

4. This method may be ales and market statistics aremissing,_or when the t been put into the form re-quired for more sop methods.

The jury of executive opinion method has weaknesses. fts findings arebased primarily on opinion, and factual evidence to support the forecast is oftensketchy. This approach adds to the work load of key execurives, requiring themto spend t