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1 Chapter 14
2 Personal Selling and Direct Marketing
1.1 ETHICAL DIMENSION 14
1. Sales Manager – Should a sales manager hire the most qualified candidate for a sales position
or apply different criteria such as gender or ethnicity?
2. Customer – Should it make a difference if the salesperson is very different from you in terms
of ethnicity, gender or some other characteristic?
3. HR Department – What training should sales managers receive about the importance of
diversity in the workplace, particularly as it relates the relationship between the salesperson
and customer?
1.2 KEY TERMS
personal selling A two-way communication process between salesperson and buyer with the
goal of securing, building, and maintaining long-term relationships with profi table customers.
adaptive selling Being able to adjust the sales style from one sales situation to another in real
time based on customer feedback.
trade servicer Resellers such as retailers or distributors with whom the sales force does
business.
missionary salespeople Salespeople who do not take orders from customers directly but
persuade customers to buy their firm’s product from distributors or other suppliers.
technical selling Selling that requires a salesperson to have technical understanding of the
product or service.
key account salespeople Salespeople responsible for the firm’s largest customers.
outbound telemarketing Calling potential customers at their home or office, either to make a
sales call via telephone or to set up an appointment for a field salesperson.
inbound telemarketing When a prospective customer contacts a company for more information.
sales presentation The delivery of information relevant to meet the customer’s needs.
FAB (Features, Advantages, Benefits) A selling approach designed to make the company’s
products more relevant for customers by explaining the products features, advantages, and
benefits.
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features Any product attribute or performance characteristic.
advantages The particular product/service characteristic that helps meet the customer’s needs.
change conflict A customer’s reluctance to choose change by selecting a company’s product.
closing the sale Obtaining commitment from the customer to make the purchase.
follow-up A company’s actions after the customer has decided to purchase the product.
outsourcing the sales force Using independent sales agents to sell a company’s products.
transactional cost analysis (TCA) A tool that measures cost of using different types of selling
agents.
workload method A method for determining the correct size of a company’s sales force based
on the premise that all salespeople should undertake an equal amount of work.
sales skill levels The individual’s learned proficiency at performing necessary sales tasks.
motivation The stimulating power that induces and then directs an individual’s behavior.
extrinsic rewards Rewards controlled and given by people other than the salesperson such as
managers and customers.
intrinsic rewards Rewards salespeople primarily attain for themselves and include feelings of
accomplishment, personal growth, and self-worth.
salary A fixed sum of money paid at regular intervals.
incentive pay Generally, commissions tied to sales volume or profitability, or bonuses for
meeting or exceeding specific performance targets.
commission Payment based on short-term results.
nonfinancial incentives Sales force motivators beyond financial compensation.
objective measures Statistics the sales manager gathers from the firm’s internal data.
subjective measures Personal evaluations by someone connected to the salesperson’s sales
process.
output measures The results of the efforts expended by the salesperson.
input measures The efforts of salespeople during the sales process.
direct marketing An interactive marketing system that uses one or more advertising media to
affect a measurable response and/or transaction at any location.
1.3 APPLICATION QUESTIONS
1 You are the Vice President of Sales for a $30 million manufacturer of home building
materials. The company employs 50 salespeople around the country to market the
company’s products to hardware stores and major building contractors. The CEO believes
the company needs to cut costs and wants to reduce the sales force by 50%. You have been
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asked to come in and explain why that is a bad long term strategy for company. Discuss why
sales people are critical to the success of the company.
4. Identify three important personal characteristics that a key account sales person for a global
manufacturer of networking hardware would need to be successful. The company sells
multi-million dollar product solutions to telecommunications companies and Fortune 100
global organizations.
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5. You are marketing manager for Samsung electronics and have been asked to create a sales
brochure for a new Samsung 55-inch LED TV. Pick one model and identify the features,
advantages, and benefits for the product.
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6. You are vice president of Sales for a medium sized technology firm and have been asked to
design a new compensation package for the company’s national sales force of 50 people.
Currently, they are paid solely on commission with average compensation of $75,000 -
$100,000. The CEO is concerned about customer service and wants the salespeople to focus
more on servicing existing customers. What compensation plan would you suggest?
MANAGEMENT DECISION CASE: Pharmaceutical Sales: Pressure Is On to Change the
Selling Process
Questions for Consideration
1 Pharmaceutical companies historically encouraged their salespeople to take lunch into
doctors’ offices, the idea being that by providing lunch for doctors and their staff, the
salesperson would get more than the standard two minutes of selling time. In addition,
companies provide salespeople with freebies, ranging from pens and notepads to microwave
popcorn, to leave at doctors’ offices. What do you think of such practices? Are they ethical
and do they assist with providing better patient care?
7. Now that GlaxoSmithKline has decided not to pay its salespeople based on number of
prescriptions written, how do you propose they motivate their salespeople? What
motivational approaches do you recommend and why do you think they are appropriate?
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8. Many doctors do not work individually but instead are part of a group practice often
connected to a local hospital. How would the sales process change for a pharmaceutical
salesperson selling to a hospital? Be specific with your description.
1.4 SUGGESTED VIDEO
GPI Procurement Services (5:25 minutes)
Description: GPI Procurement Services maintains its customer relationships by having excellent
salespeople. Their main focus is communicating, listening, knowing their product, installing
trust, and providing the best for their client.
1. What are the benefits of a sales career?
2. How can GPI Procurement Services sales representatives add value for customers?
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