ssm-lecture-01 & 02 (development and role of selling in marketing)

07/06/10 1

By :

Prof. Amit Kumar

07/06/10 2

“A student pursuing management education from IILM-

Graduate School of Management, for example may find

himself or herself placed in a firm as a Sales Manager.

Our goal is to prepare the student for the exciting

challenges related to leading sales organizations in

today’s hyper-competitive global economy”.

IILM-GSM

Importance of this course

Selling & Sales Management

07/06/10

IILM-GSM

Selling & Sales Management

07/06/10

Contents

• The Mystique of Super Salesmanship

• The Nature and Role of Selling

• The Strategy Hierarchy

• Selling Approach

• Types of Selling

IILM-GSM

Selling & Sales Management Development & Role of Selling in Marketing

07/06/10

Organizations, large or small, are into selling something or the other for their survival and growth. It may be a product (shampoo, steel or toothpaste), service (airline, insurance), idea (patriotism), concept (family planning), destination (India, Brazil) or person (politician).

IILM-GSM

Introduction to Sales Management


07/06/10

Robert Louis Balfour Stevenson (13 November 1850 – 3 December 1894) was a Scottish novelist, poet, essayist and travel writer. His most well known books

include ‘Treasure Island and Kidnapped’.

He said 'everybody is surviving on selling something to someone'.

IILM-GSM

Introduction to Sales Management


07/06/10

1. Positions where a salesperson's job is predominantly to deliver a product, e.g. milk, bread, oil, gas

2. Positions where a salesperson's job is predominantly an internal order taker, e.g. the counter sales clerk

3. Positions where a salesperson's job is predominantly an internal order taker but works in the field e.g. as a pizza boy, soap seller, spice seller

IILM-GSM

Robert N McMurry in his famous article 'The Mystique of super salesmanship' in Harvard Business Review (March-April 1961, p.114) classified a salesperson's position in the following ways:


07/06/10

4. Positions where a salesperson is not expected or permitted to take an order but is called only to build goodwill or to educate an actual or potential user, e.g. medical representative

5. Positions where emphasis is placed on technical knowledge, e.g. salesperson selling engineering or computer equipment

6. Positions which demand the creative sale of tangible products, such as vacuum cleaners

7. Positions requiring the creative sale of intangibles, such as insurance, advertising and education

IILM-GSM

Robert N McMurry in his famous article 'The Mystique of super salesmanship' classified a salesperson's position in the following ways:


07/06/10 9

The Nature and Role of Selling

IILM-GSM


• The simplest way to think of the nature and role of selling (traditionally called salesmanship) is that its function is to make a sale.

• Companies spend large sums of money training their sales personnel in the art of selling.

• The reason for this attention to personal selling is simple: in most companies the sales personnel are the single most important link with the customer.

• The term selling encompasses a variety of sales situations and activities.

07/06/10 10

The Strategy Hierarchy

IILM-GSM


• A strategy is a plan designed to accomplish a mission.

• A mission is a set of objectives.

• Once the mission’s objectives are set, strategy can be created.

07/06/10 11

Company Mission Statements

IILM-GSM


IBM will be driven by these values:• Dedication to every client’s success• Innovation that matters, for our company and for the worldCoca-Cola• To refresh the world ..in body, mind, and spiritDell• Delivering the best customer experience in markets we serveIILM-GSM• Pursuit of education, scholarship and research at the highest levels of excellence.Chick- Fil -A• Be American’s best quick-service restaurant

07/06/10 12

Strategy Hierarchy

IILM-GSM


• A firm’s corporate strategy encompasses its plan and goals for the entire organization.

• Once the company’s strategy is formulated, it is then communicated to various business units- marketing, sales, manufacturing, and so forth- who create their own plans to support the corporate strategy.

The flow of the strategy from the organization level to the unit level is called the strategy hierarchy.

CORPORATE STRATEGY

07/06/10 13

Strategy Hierarchy

IILM-GSM


An abbreviated exampleof how a firm’s strategymight be different atdifferent levels of theorganization.

CORPORATESTRATEGY

“To be a leader inwomometer technology”

MARKETINGSTRATEGY

“To sell womometer to space engineersand to hydraulic engineers at a premium price”

SALESSTRATEGY

“To sell to NASA, Boeing, and Rockwell International using a key account structure, a consultative approach,

with account executives on straight salary…..”

07/06/10 14

Strategy Hierarchy

IILM-GSM


• Note that firm’s marketing plan is likely to precede its sales plan. This order does not imply that sales executives do not participate in the process until after the firm’s marketing plan is done.

• Rather, marketing and sales work together to create an overall marketing strategy.

• Then the sales executives must create the action plans specifically for salespeople to carry out the strategy.

07/06/10 15

Strategy Hierarchy

IILM-GSM


At the marketing level, planners have to answer the

following four questions:

1. What markets do we serve with what products?

2. What type of relationship do we form and with whom?

3. What level of investment will be required, and how will we locate and allocate the needed resources?

4. What are the detailed objectives and action plan?

MARKETING STRATEGY

07/06/10 16

Strategy Hierarchy

IILM-GSM


1. What markets do we serve with what products?

MARKETING STRATEGY

CURRENT MARKET NEW MARKET

Market PenetrationHP creates “full linecontracts” to encouragecustomers to buy all HP products

MARKETS

PRODUCTS

CURRENT

NEW

Product DevelopmentDell adds consumerelectronics such ascameras

DiversificationCarlson Marketing expands fromselling promotional trips topromotional products, suchas cups and caps

Market DevelopmentIntel sells computer chipsfor use in John Deeretractors

07/06/10 17

Strategy Hierarchy

IILM-GSM


2. What type of relationship do we form and with whom?

• Companies do not operate in a vacuum- they have suppliers, customers and competitors who operate in a network: touch one and like, ripples in a pond, others are affected.

• Customer Life Time Value concept (Sum of all of the purchases made over a customer’s lifetime, is worth a significant amount)

• Customer Relationship Management

MARKETING STRATEGY

07/06/10 18

Strategy Hierarchy

IILM-GSM



• This includes money but also human & social capital.• Human capital refers to the people that make up an

organization.• Social capital, or the ties that the firm has with others,

can also be drawn upon as a resource. At its simplest, social capital is who owes you a favor or who can be asked a favor.

MARKETING STRATEGY

07/06/10 19

Strategy Hierarchy

IILM-GSM



An historic example dating from early eighties concerns Chrysler. At one point, the firm was within days of declaring

bankruptcy when David, the CEO of Xerox Corporation, called Lee Iacocca, the CEO of Chrysler. Kearns asked

Iacocca how many cars needed to be sold for the company to stay afloat.

Chrysler, after all, was a good Xerox customer. Iacocca told him, and David responded by placing an order for that

many. The social capital between the two firms saved Chrysler and put both of them to solid footing.

MARKETING STRATEGYSOCIAL CAPITAL

07/06/10 20

Strategy Hierarchy

IILM-GSM


4. What are the detailed objectives and action plan?

One set of criteria for establishing objectives is the SMART format.

For example, an objective to simply ‘increase market share’ is not specific enough. As a manager, you need to ask yourself, by how much do we need to increase market share? If the objective is to increase customer loyalty, you need a way to measure customer loyalty, perhaps by recording the number of repeat customers make. If the objective is to double market share, you need to ask yourself whether such an ambitious goal is achievable or even realistic. Finally, the objective need to be time-based. When will it be met? In the next month, year, or decade?

MARKETING STRATEGY

07/06/10 21

Strategy Hierarchy

IILM-GSM


• Selling Approaches1. Transactional2. Problem solving or Consultative3. Affiliative4. Enterprise Selling

• Types of Selling1. Order taker sales people2. Order creators3. Order getters

• Selling Process

SALES STRATEGY

07/06/10 22

Selling Approaches

IILM-GSM


Transactional– It is designed to get the sales over with as quickly as

easily as possible.

– The key to success is making as many calls as possible; little thought is given to the life-time value of customers.

– Life insurance salespeople who have only one product to sell-once a buyer has bought it there is nothing else to sell so the salesperson moves on.

– The simple product also tend to be sold this way.

07/06/10 23

Selling Approaches

IILM-GSM


Problem solving or Consultative

– It involves identifying and solving a client’s problems; for this reason, it is also called needs-satisfaction selling or problem/solution selling.

– The process typically involves asking prospective clients a number of questions in order to determine their needs and then presenting solutions to those needs.

07/06/10 24

Selling Approaches

IILM-GSM


Affiliative Selling

– It is based on the friendship between the salesperson and the individual buyer.

– Tupperware and Premier Jewellery parties rely heavily on affiliative selling.

– Friendship is also an important component of B2B selling.

– For example, if all products a buyer is considering are the same, but post-sales service is critical, the buyer will be inclined to purchase products sold by a friend who can be counted upon.

07/06/10 25

Selling Approaches

IILM-GSM


Enterprise Selling– It is a B2B concept that reflects, a strategic partnership

between the buying and selling organizations.

– It is called enterprise selling because it is based on not only person-to-person relationships but on company-to-company relationships.

– Moreover, the customer is not just one person but an entire company. When engage in enterprise selling, a salesperson will, at times, utilize affiliative selling, transactional selling and consultative selling all within an enterprise-level selling.

07/06/10 26

Types of Selling

IILM-GSM


Selling is classified as order takers, order creators and

order getters. Order takers respond to the already

committed customers. The order creators do not directly

receive orders since they talk to specifiers rather than

customers. The order getters attempt to persuade

customers to place an order directly.1. Order taker sales people

2. Order creators

3. Order getters

07/06/10 27

Types of Selling

IILM-GSM


1. Order Taker Sales PeopleInside order takers are the retail sales assistants. A customer

choose a variety of products from the range available in a store

without the presence of a salesperson. A sales assistant’s role is

to complete the transaction. He receives payment and passes the

goods to the consumers. This is done in superstores such as

Wal-Mart, Big Bazaar and other chain stores.

In telemarketing, the salespeople take the order over phone and

deliver products at the customer’s addresses. The job is delivery

salespeople is to deliver the products to the customers. The

salespeople that deliver milk, newspapers, magazines and Pizzas

can be called delivery salespeople.

07/06/10 28

Types of Selling

IILM-GSM


1. Order Taker Sales PeopleThey do not try to sell products or increase the consumption level

of existing customers, however, winning and losing of orders is

dependent to a great extent on the reliability and promptness of the

delivery salespeople.

The outside order takers visit the customers regularly and their

primary concern is to respond to the customer calls rather than

seek new customers. They do not deliver anything at the

customer’s place. They make sales call and take orders from the

customers. The salespeople from Eureka Forbes are included in

this category.

07/06/10 29

Types of Selling

IILM-GSM


2. Order Creators

Missionary salespeople are the seller staff who normally

do not close a sale but persuade the customers to promote

a seller’s brand.

Medical representatives, for example, do not make direct sales as the doctors do not buy the medicines personally but prescribe the medicines to the patients. Therefore, Medical representatives are called missionary salespeople. In this kind of selling, the objective is to educate and make the people aware of the product rather than closing a sale.

07/06/10 30

Types of Selling

IILM-GSM


3. Order Getters

These are the set of people whose objective is to persuade the

customers to make a direct purchase. They are the front line

salespeople who go door to door to sell products. The function of

new business salespeople is to persuade new buyers and non-

users to buy a company’s products and services.

The executive in charge of the business development in any

advertising agency come in this category. They always look at

people who have previously not used the services of the agency.

They undertake prospecting and convert the leads to final sales.

07/06/10 31

Types of Selling

IILM-GSM


3. Order GettersThe consumer salespeople comprise the door-to-door salesperson

who sell spices, eatables, encyclopedia, insurance and other

personal products for individual consumption. The second group of

order getters provides sales support to the front line salespeople.

The technical support salespeople support the front line

salespeople when the product is technically complex or it needs

negotiations demanding financial attention of the company. They

go as a part of a key account management team or temporarily for

a particular business deal. The merchandisers provide sales

support in retail and wholesale selling situations.

ssm-lecture-01 & 02 (development and role of selling in marketing)

Documents