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2-1
Chapter 2
EVOLUTION OF SELLING MODELS THAT COMPLEMENT THE
MARKETING CONCEPT
Chapter 2, in response to the developments associated with the information economy,
presents the evolution of contemporary selling models that complement the marketing concept.
Chapter 2 also introduces the major themes that connect all of the chapters.
EXTENDED PRESENTATION OUTLINE
Personal selling is an important force in maintaining the economic vitality of a nation.
Many productive salespeople are using the strategic consultative-selling approach to determine
and fulfill consumers’ product and service needs.
As part of the Reality Selling Today Video Series, this chapter features Marcus Smith
from Liberty Mutual, selling financial services.
I. Marketing Concept Requires New Selling Models
A. Evolution of the marketing concept.
1. Sweeping change in personal-selling models, from peddling to long-term consultative
problem solving and value-added partnering, was prompted by the emergence of the
marketing concept.
2. The marketing concept is a principle that holds that achieving organizational goals
depends on knowing the needs and wants of target markets and delivering the desired
products.
3. The foundation for the marketing concept is a business philosophy that leaves no
doubt in the mind of every employee that customer satisfaction is of primary
importance.
4. The era of marketing and the age of information began in the 1950s (discuss Table
2.1).
5. The foundation for the marketing concept is a business philosophy that leaves no
doubt in the mind of every employee that customer satisfaction is of primary
importance.
B. Marketing concept yields marketing mix.
1. The combination of elements making up a program based on the marketing concept is
known as the marketing mix (Figure 2.1).
2. The marketing mix is a set of controllable, tactical marketing tools that consists of
everything the firm can do to influence the demand for its product.
3. Elements of the marketing mix:
a. Product
b. Promotion
c. Place
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d. Price
4. Promotion—can be further subdivided into:
a. Advertising
b. Public relations
c. Sales promotion
d. Personal selling
C. Important role of personal selling.
1. Personal selling is often the major promotional method used in—whether measured by
people employed, by total expenditures, or by expenses as a percentage of sales.
2. Firms make investments in personal selling in response to several major trends:
a. Products and services are becoming increasingly sophisticated and complex.
b. Competition has greatly increased in most product areas.
c. Demand for quality, value, and service by customers has sharply risen.
3. Since beginning of information age, personal selling has evolved through three distinct
developmental periods:
a. Consultative-selling era
b. Strategic-selling era
c. Partnering era
II. Evolution of Consultative Selling
A. Consultative selling emerged in the late 1960s and early 1970s (see Table 2.1) and is an
extension of the marketing concept.
B. Transactional selling is the sale process that serves the buyer primarily interested in
price and convenience.
1. The transaction-based buyer tends to focus primarily on low price; some marketers
are adopting lower-cost selling channels.
2. Transactional selling usually used by marketers who do not see the need to spend
very much time on:
a. Customer need assessment
b. Problem solving
c. Relationship building
d. Sales follow-up.
C. Major features of consultative selling:
1. The customer is seen as a person to be served, not a prospect to be sold.
2. The salesperson doesn’t use a high-pressure sales presentation; two-way
communication identifies (diagnoses) customer’s needs.
3. Consultative selling emphasizes need identification, problem solving, and negotiation
rather than manipulation.
4. Consultative selling emphasizes service at every phase of the personal selling process.
D. Consultative selling practices are not easily mastered
1. Requires an understanding of concepts and principles borrowed from the fields of
psychology, communications, and sociology.
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III. Evolution of Strategic Selling
A. Strategic selling began receiving considerable attention during the 1980s (see Table 2.1).
B. During the 1980s we witnessed the beginning of several trends that resulted in a more
complex selling environment.
C. Strategic planning is the managerial process that matches the firm’s resources to its
market opportunities.
1. It takes into consideration the various functional areas of business that must be
coordinated.
2. Areas include financial assets, workforce, production capabilities, and marketing.
3. Strategic plan should be a guide for a strategic-selling plan.
D. The strategic market plan is often the guide for a strategic selling plan.
1. Tactics are techniques, practices, or methods you use when you are face-to-face with
a customer.
2. A strategy is a prerequisite to tactical success. If you develop the correct strategies,
you are more likely to make your sales presentation to the right person, at the right
time, and in a manner most likely to achieve positive results.
3. A selling strategy is a carefully conceived plan that is needed to accomplish a sales
objective.
4. Strategic planning: an important element of the “problem-solver stage.”
5. Strategic planning sets the stage for a valued-added form of consultative selling that
is more structured, more focused, and more efficient.
6. Adaptive selling is another key element of the “problem-solver stage.”
a. Defined as altering sales behaviors during a customer interaction in order to
improve communication.
b. Relates to a salesperson’s ability to collect information regarding the customer’s
needs and responding appropriately
c. Adaptive selling frequently requires complex behavioral adjustments.
E. Strategic/Consultative-Selling Model.
1. The model is divided into five steps. Each step is based on three prescriptions:
a. Relationship strategy: A well thought-out plan for establishing, building, and
maintaining quality relationships.
1) Must encompass every aspect of selling from the first contact with a prospect
to servicing the sale once this prospect becomes an established customer.
2) Integral dimension of relationship selling.
3) Relationship selling is a form of personal selling that involves securing,
developing, and maintaining long-term relationships with customers
b. Product strategy: A plan that helps salespeople make correct decisions regarding
the selection and positioning of products to meet identified customer needs.
1) The three prescriptions for the product strategy are (1) become a product
expert, (2) sell benefits, and (3) configure value-added solutions.
2) Development of a product strategy begins with a thorough study of one’s
product (see Figure 2.3) using a feature–benefit analysis approach.
3) Development of a product strategy often requires thoughtful decision making
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c. Customer strategy: A carefully conceived plan that will result in maximum
responsiveness to the customer’s needs. It involves the collection and analysis of
specific information on each customer.
1) Customers have become increasingly sophisticated in their buying strategies.
2) Customers expect value-added products and services and long-term
commitments.
3) When developing a customer strategy, the salesperson should:
i. Develop an understanding of the customer’s buying process
ii. Understand buyer behavior
iii. Develop a prospect base.
d. Presentation strategy: A well-developed plan that includes preparation of the
sales presentation objectives, understanding the buying process, and renewing
one’s commitment to provide outstanding customer service.
1) Presale presentation plans give salespeople the opportunity to consider those
activities that take place during the sales presentation.
2) Presale planning ensures that salespeople are well organized during the sales
presentation and prepared to offer outstanding service.
2. Interrelationship of basic strategies—the relationship, product, and customer
strategies all influence development of the presentation strategy.
IV. Evolution of Partnering
A. The partnering concept emerged in the early 1990s (see Table 2.1) and in 2000s became a
business reality.
B. Partnering has been driven by several economic forces.
1. Demise of the product solution in several industries.
2. Partnerships grow out of the need for customized products or services.
3. Today’s customer wants a quality product and a quality relationship.
4. Even small increases in customer retention can result in major increases in profits.
C. Partnering is a strategically developed, long-term relationship that solves the customer’s
problems.
D. Today’s customer wants a quality product and a quality relationship. Partnering requires
that salespeople continuously search for ways to add value to their selling relationships.
E. Partnering is the key to building repeat business and referrals.
Note: The partnering concept is covered in more detail in Chapter 3.
F. Strategic Alliances – The Highest Form of Partnering.
1. The goal of strategic alliances is to achieve a marketplace advantage by teaming up
with another company.
2. Strategic account management is usually led by a Strategic Account Manager,
(SAM).
a. Execute an enterprise-wide sales strategy for growth, profitability, customer
loyalty, and customer-driven innovation.
b. Key element of strategic account management is involving senior level
management on the sales and buying teams in relationship development, product
configuration, and service after the sale.
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c. Technical sales-support personnel are also an important part of the strategic
account management team.
3. Other strategic account management roles and titles are:
a. Regional Account Manager (RAM): part of a larger sales team and acts as the
direct client contact and manager of a number of business accounts.
b. Key Account Manager (KAM): responsible for the coordination and
management of a company’s prioritized accounts.
c. National Account Manager (NAM): responsible for recruiting and negotiating
various business transactions and sign on new regional and national retailers.
d. Global Account Manager (GAM): key account manager specialized on a
specific product portfolio not on a given customer or geography.
4. Partnering is enhanced with high ethical standards.
5. Partnering is enhanced with customer relationship management (CRM).
a. Sometimes referred to as “sales automation”
b. System used for building and maintaining strong customer relationships while
adding customer value.
V. Value Creation – The New Selling Imperative
A. The information economy will reward salespeople who can create value at every step of
the sales process.
B. Traditional selling has too often emphasized communicating value that lies in the product
rather than creating value for the customer.
C. Creating and delivering customer value model:
1. Understanding customer’s value needs.
2. Creating the value proposition.
3. Communicating the value proposition.
4. Delivering the value proposition.
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END-OF-CHAPTER ACTIVITES
Included in this section are answers to selected end-of-chapter exercises. Answers are
provided for all review questions, application exercises, and case problems. Also, a brief
description of each role-play is provided.
Not included in this section are answers to the Regional Accounts Management Case
Study. The answers are found in the Instructor’s Manual for Appendix 2: Answers to the
Regional Accounts Management Case Study.
Also not included in this section are answers to exercises related to Appendix 3:
“Partnership Selling: A Role-Play/Simulation.” Answers, forms, and instructions related to
Appendix 3 will be found in Instructor’s Manual for Appendix 3 and the Instructor’s Manual
titled Traditional Role Play Exercises and Forms.
Key Terms
Marketing concept, p. 31: The marketing concept is the belief that a firm should dedicate all its
policies, planning, and operations to the satisfaction of the customer.
Marketing mix, p. 32: The marketing mix is a set of controllable, tactical marketing tools that
consists of everything the firm can do to influence the demand for its product. The many
possibilities can be organized into four groups of variables: product, price, place, and
promotion.
Consultative selling, p. 33: Consultative selling, which emerged in the late 1960s and early
1970s, is an extension of the marketing concept. This approach emphasizes need
identification, which is achieved through effective communication between the salesperson
and the customer.
Transactional selling, p. 33: Transactional selling is a sales process that most effectively
matches the needs of the value-conscious buyer who is primarily interested in price and
convenience.
Strategic planning, p. 35: Strategic planning is the process that matches the firm’s resources to
its market opportunities.
Tactics, p. 35: Tactics are techniques, practices, or methods you use when you are face-to-face
with a customer.
Strategy, p. 35: A strategy, on the other hand, is a prerequisite to tactical success.
Adaptive selling, p. 35: Adaptive selling is another key element of the “problem-solver stage.”
Adaptive selling can be defined as altering sales behaviors during a customer interaction in
order to improve communication.
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Relationship strategy, p. 37: A relationship strategy is a well-thought-out plan for establishing,
building, and maintaining quality relationships.
Relationship selling, p. 37: Relationship selling is a form of personal selling that involves
securing, developing, and maintaining long-term relationships with customers.
Product strategy, p. 38: The product strategy is a plan that helps salespeople make correct
decisions concerning the selection and positioning of products to meet identified customer
needs.
Customer strategy, p. 38: A customer strategy is a carefully conceived plan that results in
maximum responsiveness to the customer’s needs.
Presentation strategy, p. 39: The presentation strategy is a well-developed plan that includes
preparing the sales presentation objectives, preparing a presentation plan that is needed to
meet these objectives, and renewing one’s commitment to provide outstanding customer
service.
Partnering, p. 40: Partnering is a strategically developed, long-term relationship that solves the
customer’s problems.
Strategic Account Management, p. 40: A strategic selling alliance also called strategic account
management is usually led by a Strategic Account Manager (SAM).
Information economy, p. 43: The information economy will reward those salespeople who have
the skills, the knowledge, and the motivation to determine how to create value at every step of
the sales process.
MyMarketingLab
To complete the problems with the * in your MyLab, go to the EOC Discussion Questions.
ANSWERS TO REVIEW QUESTIONS
2-2 Describe how new models of selling emerged in response to the marketing concept.
The marketing concept sparked development in marketers’ fundamental understanding of
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2-3 Describe the importance of personal selling as a part of the marketing concept.
2-4 What is consultative selling? Give examples.
Consultative selling emphasizes need identification that is achieved through effective
2-6 List and briefly explain the four broad strategic areas that make up the selling process.
The four broad strategic areas that make up the selling processes are (1) developing a
relationship strategy – success in selling depends heavily on the salesperson’s ability to
2-7 Briefly describe the evolution of partnering. Discuss the forces that contributed to this
2-8 Provide a brief description of value-added selling. What economic forces have motivated
companies to adopt value-added selling?
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SUGGESTED ANSWERS FOR APPLICATION EXERCISES
2-10. Assume that you are an experienced professional salesperson. A professor who teaches at a
nearby university has asked you to speak to a consumer economics class about the benefits of
2-11. A friend of yours has invented a unique and useful new product. This friend, an engineer
by profession, understands little about marketing and selling this new product. She does
understand, however, that “nothing happens until somebody sells the product.” She has asked
you to describe the general factors that need to be considered when you market a product.
2-12. Sharon Alvarez has been teaching college biology courses. She is offered a position
selling pharmaceutical products. This position requires that she call on doctors and
pharmacists to explain her product line. Describe the similarities and the differences between
2-13. To learn more about industry-based, global, sales-training programs, access
www.wilsonlearning.com. Click on the “Sales Effectiveness” link and examine the content of
2-10
ROLE-PLAY EXERCISE
Provide students with a brief introduction to the wide variety of pens and pencils
available. A nice gold pen, for example, might sell for $100 or more.
SOLUTION FOR THE CASE PROBLEM
2-16. Smith can create value for his customers by helping them understand complicated
insurance terms, comparing terms across policies (and even competitors), bundling policies
2-17. It is imperative that Liberty Mutual employees in the marketing research and advertising
departments understand personal selling because of the cross-functional demands placed on
