Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
CHAPTER 14
Personal Selling and Sales Management
PPT 14-1
KEY TERMS
personal selling
customer relationship
management (CRM)
order taking
creative selling
team selling
seminar selling
system selling
missionary salesperson
detail salesperson
canned presentation
attention-interest-desire-
action (AIDA)
need satisfaction
consultative selling
sales force automation
(SFA)
sales management
SUMMARY
PPT 14-2
LO1 Explain why personal selling is important in brand promotion.
Household consumers and business buyers are frequently confronted with purchase
LO2 Describe the activities besides selling performed by salespeople.
The modern salesperson resembles a one-person marketing strategy program. Aside from
LO3 Summarize the role of setting objectives for personal selling.
A salesperson in a contemporary selling environment doesn’t just sell but rather manages
a set of buying-selling relationships between the buyer and seller for mutual benefit. One
Chapter 14: Personal Selling and Sales Management ❖ 2
LO4 Outline the steps involved in personal selling.
LO5 Describe factors that contribute to a new environment for personal selling.
The key factors that have contributed to a new environment for personal selling are more
sophisticated marketing planning techniques, information technologies (both hardware
LO6 Define the responsibilities of sales force management.
Sales force management includes the following areas of responsibility: conducting a
CHAPTER OUTLINE
INTRODUCTORY SCENARIO: Selling to Salespeople
Invite students to consider how difficult it is to choose a pair of jeans. Some students may
be eager to tell personal horror stories of hours-long efforts to find just the right pair.
Invite them to consider that business-buying efforts can be far more complicated. This
scenario describes how personal selling can help business buyers through the process.
Sant Corporation, founded by Tom Sant, a former English professor and writing
consultant, offers computer software that helps sales teams create more effective
presentations. That product itself needs to be sold to its corporate customers.
Dozens of employees at the Cincinnati-based company contact leads, applying the
company’s own expertise to explain how Sant can help clients close sales. They also
follow up to make sure clients are satisfied.
Sant’s salespeople keep up with all this information by using customer relationship
management (CRM) software from Salesforce.com. The software provides an easy way
to retrieve data such as details about prospects, data about customers, results of customer
surveys, and details about how salespeople resolved past problems.
Since Sant Corporation began using the Salesforce.com software, it has shrunk the time
needed to provide customer support and has enjoyed dramatic growth in revenues and
customer satisfaction.
Chapter 14: Personal Selling and Sales Management ❖ 3
This case introduces a variety of themes to be explored in the chapter, including the
important role of personal selling, the qualities of effective sales presentations, and the
improvement of effectiveness through use of CRM.
I. Personal Selling
PPT 14-3, 14-4
Personal selling is the face-to-face communication and persuasion process. It will
dominate the promotional mix when a brand has the following qualities:
• Higher priced
• Complicated to use
• Requires demonstration
• Tailored to users’ needs
• Involves a trade-in with purchase
• Judged primarily at the point-of-purchase
II. What Salespeople Do
PPT 14-5, 14-6, 14-7, 14-8
The sales force doesn’t just sell. It acts like a marketing program and fulfills these roles
to implement marketing strategy:
• Market analysis: Salespeople may provide feedback to the firm on trends
in overall demand and competitor activities detectable through regular
contact with buyers who also buy competitors’ products.
• Sales forecast: These sales force estimates are based on the
competitiveness of the firm’s brand as well as overall conditions in
customers’ industries.
• New-product ideas: The sales force is well suited to do an environmental
scan. Customers often will offer new product ideas.
• Buyer behavior analysis: In negotiating sales, the salesperson learns the
criteria upon which different buyers are basing their decisions.
• Communications: Salespeople must be expert in communications
methods. No matter how well the marketing mix is conceived, it is up to
the sales force to effectively deliver the message to customers regarding
the satisfaction to be gained from buying from the firm.
• Sales coordination: The salesperson must act as the coordinator between
the firm’s many marketing and sales activities and the buyer. The
salesperson is often the leader of team selling efforts.
• Customer service: Salespeople can coordinate postpurchase customer
service, including product delivery, installation, training, and financing.
Chapter 14: Personal Selling and Sales Management ❖ 4
• Customer relationship management: Customer relationship
management (CRM) involves building long-term relationships with
customers. Salespeople play a major mole in building long-term
relationships.
A. Types of Personal Selling
Every salesperson is engaged in personal communication, but there are quite different
types of selling.
1. Order Taking. The least complex form of personal selling is order taking—
accepting orders for merchandise and scheduling services in written or verbal
form.
• A retail clerk taking payment for products or services is an inside order
taker.
• Outside order takers make calls on business buyers or members of
trade channels for inventory replenishment or catalog orders.
2. Creative Selling. When customers rely heavily on the salesperson for technical
information, advice, and services, the salesperson engages in creative selling.
Three types of creative selling in the business market merit attention:
a. Team selling: A group of people within the organization from different
3. Supportive Communications. When the sales force is engaged in supportive
communications, it is deployed not to sell but rather to provide information to
customers, offer services, and generally to create goodwill.
a. A missionary salesperson calls on accounts with the purpose of
Chapter 14: Personal Selling and Sales Management ❖ 5
voice mail) communications as part of the supportive activities of missionary
sales.
b. A detail salesperson introduces new products and gives prospects product
III. Personal-Selling Objectives
PPT 14-9
The appropriate overall objective for any element of the promotional mix, including
personal selling, is to communicate. Because a salesperson is typically present when a
contract is signed or an order is placed, the direct effect of personal selling on sales is
more identifiable than the effect of other elements of the promotional mix.
A. Create a Competitive Advantage
• The salesperson must identify what customers value and then pursue
the objective of demonstrating the firm’s products and services match
the buyer’s needs more closely than competitors’ offerings do.
• A differential competitive advantage can be created as the buyer learns
how the firm’s products and services are superior to those of the
competition.
B. Treat Each Buyer as Unique
• The salesperson does this by managing the communication process in
such a way that a buyer does not feel like he or she is being “sold.”
• A potential buyer must come away from the contact feeling as if he or
she has made a decision to “buy.”
• An important part of accomplishing this objective is for the
salesperson to listen attentively and learn from the buyer what criteria
are most valued.
C. Manage Relationships for Mutual Benefit
• Determine how the firm is uniquely capable of satisfying customer
needs.
• Matching what the firm is capable of doing with what a buyer desires
allows both parties to enter a buying-selling relationship that is
mutually beneficial.
• The salesperson must determine the basis for providing satisfaction to
individual buyers:
Chapter 14: Personal Selling and Sales Management ❖ 6
• Product superiority
• Service superiority
• Price superiority
• Source (company) superiority
• People superiority
D. Control the Communication
This effort may seem contrary to the spirit of the effective communication, but the
buyer and seller benefit if the communication process is managed efficiently.
IV. The Selling Process
PPT 14-10, 14-11
Objectives for personal selling are achievable only in the context of a well-conceived and
well-executed sales effort. Generally, a well-conceived process involves the following
activities.
A. Preparation
• Preparation includes a focused environmental analysis resembling one
a firm would do in developing its overall marketing strategy.
• It involves gathering relevant information about current customers,
potential customers, product characteristics and applications, product
choice criteria, corporate support activities (such as advertising and
trade channel support), and competitors’ products and activities.
• The firm that maintains an effective marketing information system
(MkIS) provides salespeople an effective way to prepare.
B. Prospecting
• Current customers are an excellent source of leads, since the
salesperson benefits from a personal introduction to a potential
customer.
• Advertising can create leads for the sales force with mail-in coupons
placed in trade magazines.
• Telemarketing has increased the efficiency of using leads.
• The newest source of leads is from companies that specialize in
creating databases of firms in different industries. The advantages of
purchased database lists are that they can be a good way to get data on
potential customers in well-defined target areas, and existing lists offer
time and cost savings.
• Cold calls can be used but are highly inefficient.
Chapter 14: Personal Selling and Sales Management ❖ 7
C. Initial Contact
• The initial contact begins the process of creating a profitable
differential advantage, according uniqueness to each buyer, and
developing the buying-selling relationship.
• Initial calls should be brief and can include:
• Leaving comprehensive information about the firm and its
products
• Introducing the buyer to corporate selling programs
• Gathering information about the buyer’s organization and
product needs.
o D. Presentation
• The presentation is an important focal point of the personal-selling
process. On rare occasions, it will occur during the initial contact.
Normally, it is a separately scheduled phase in the process.
• There are several ways in which a presentation can be carried out:
• In a canned presentation, the salesperson recites, nearly
verbatim, a prepared sales pitch. It ensures that important
considers three need states:
• Need development: Customers are beginning to
recognize the types of problems that exist in their
organizations. The salesperson does very little talking at
Chapter 14: Personal Selling and Sales Management ❖ 8
• Need awareness: Buyers are able to articulate specific
needs. The salesperson that encounters this type of
buyer can help define the buyer’s needs relative to
which of the firm’s products and services address those
needs.
• Need fulfillment: This buyer is fully aware of what
products and services are needed, and the salesperson
assumes a dominant communication role by
demonstrating how the firm and its products can fulfill
the needs.
• Besides choosing presentation content, salespeople can use either of
two basic presentation formats:
• Consultative selling is a face-to-face sale presentation that can
be used by the sales force to create significant value for
customers by helping them define their problems and design
E. Handling Objections
• Objections cannot be met with defensiveness or brushed aside as
insignificant or irrational. The buyer must be accorded uniqueness, so
every objection is legitimate and reasonable.
• The best method for handling objections is to probe for the exact
nature of the obstacle and try to lead buyers to proposing a solution.
F. Closing the Sale
• After the presentation (or several presentations), the salesperson must
try to close the sale—generally regarded as the most difficult part of
G. Follow-Up
Two distinct and important activities occur after a sale has been made.
• A salesperson must ensure that all commitments of the negotiated sale
are fulfilled, including shipping dates, installation, financing, and any
training required.
Chapter 14: Personal Selling and Sales Management ❖ 9
V. Selling in a New Environment
PPT 14-12
Changes in the broad business environment have created a significantly new environment
for personal selling.
A. Better Planning
• With more precise means of segmenting markets, efforts of the sales
force are more tightly focused on very specific types of customers and
enable a faster response.
B. Sales Force Automation (SFA)
• Sales force automation (SFA) is the integration of computers,
communication technology, and the Internet to improve the efficiency
and effectiveness of personal selling.
• SFA has made the personal selling process is now database driven.
• Communication technology provides salespeople with an arsenal of
tools that greatly enhance the ability to manage information. The
Internet brings value to personal selling in several areas:
C. More Demanding Buyers
• Competitive pressures to satisfy customers have escalated the average
level of product performance and service.
• Sellers have to perform to higher standards than in years past.
VI. Sales Management
PPT 14-13, 14-14, 14-15, 14-16
Chapter 14: Personal Selling and Sales Management ❖ 10
Sales management involves responsibility for the many activities related to the personal
selling effort, from analyzing needs, through hiring and motivating salespeople, to
evaluating their work.
A. Situation Analysis
Managers of the sales process must engage in a comprehensive situation analysis of
the conditions in which the sales effort will take place. This analysis has two parts:
• An external situation analysis identifies trends in the industry, technological
B. Sales Objectives
• At the broadest level, total sales serve as a statement of sales objectives. The
sales objective is determined by sales forecasts drawn on projections of total
industry sales and the firm’s estimate of its share of those sales.
• The next level of specificity is to estimate sales by territory or product
category. Different geographic territories or product groups are evaluated for
conditions that may effect the firm’s ability to generate sales over a given time
period.
• The most specific level of setting objectives is by individual salesperson. The
most common method is to use sales quotas.
C. Budgets
• Sales budgets include several types of expenses:
• Recruiting costs
• Training costs
• Travel expenses
• Methods for setting the sales budget are detailed in Exhibit 14.5 of the text.
Chapter 14: Personal Selling and Sales Management ❖ 11
• Competitive-parity approach: Matches competitors’ spending (usually
relative to market share) but fails to account for differences among
firms.
• Objective-and-task method: Management assesses the objectives
D. Sales Force Structure
The structure of a sales force uses some form of three basic options:
• Structured by product lines: The most common reason for structuring the
sales force around product lines has to do with the nature of the product.
• For products that are technologically complex, individual salespeople
• Structured by type of customers: Customer groups can be segmented based on
order size, position in the channel, or product use characteristics. Some firms
E. Hiring Salespeople
The hiring process includes defining job requirements, recruiting candidates, and
making selections.
1. Job Requirements
Sales managers must prepare complete job descriptions and identify the
qualifications an individual must have for each sales job.
• A job description identifies all the selling and nonselling tasks to be
performed by the salesperson. Nonselling tasks include paperwork and
service activities such as maintaining point-of-purchase displays,
coordinating and monitoring delivery, and arranging financing or
training for the customer.
• The tasks included in a job description translate directly into the
qualifications of the individuals needed to fill positions—the
combination of skills and training that relate to effective performance.
Chapter 14: Personal Selling and Sales Management ❖ 12
• In determining what qualifications are most related to success,
many firms draw on their experience with current sales
2. Recruiting
• The recruiting effort should be a continuous process.
• Sources of applicants:
• College and university campuses
• Employment agencies
• Advertisements online and in newspapers and trade publications
• Recruiting within the firm to find sales talent in other divisions or
departments
• According to Development Dimensions International, a recruiting
research firm, employers say that successful recruiting depends on
corporate reputation, benefits package, potential for advancement,
corporate culture, salary scale, and stock options, in that order.
3. Screening and Evaluation
• A résumé is valuable for assessing an individual’s qualifications, such
as educational background, work experience, and references.
• Psychological tests can also be used to screen applicants. These tests
are designed to identify personality and motivation characteristics that
may be related to job success.
• A personal interview can be invaluable for discovering attributes of an
individual that a résumé or tests cannot identify.
F. Training
Because the selling effort is integral to achieving corporate revenue objectives, the
firm must have a well-planned training program.
1. Content and Methods
• Every salesperson needs to learn product knowledge and choice
criteria used by customers.
• Industry trends and economic conditions affecting the firm’s market
may also be included.
• The training techniques to be used may include role playing,
classroom lectures, videotaping of presentations, computer
Chapter 14: Personal Selling and Sales Management ❖ 13
simulations, and tours of corporate facilities, among many
possibilities.
2. Duration
• The complexity of the selling task and the company’s product line is
the overriding influence.
• The individual trainee’s background and experience also dictate how
long it will take for training to be completed.
• Big firms are taking 12 to 18 months.
3. Personnel
• Many firms rely on experts outside the firm to conduct some or all of
4. Location
• Laboratory/classroom training has the advantage of being offered in a
low-pressure environment where there are few consequences of the
trainees’ activities.
• Field training has the advantage of allowing the salesperson to
encounter actual selling situations under the tutelage of an experienced
salesperson.
G. Motivation
The motivation effort includes decisions about how to compensate salespeople, but
money is far from the only motivator that matters.
1. Compensation. Three basic compensation alternatives are available:
• Straight salary is appropriate when the sales staff is highly skilled, the
selling effort is drawn out over a long period of time, there are time-
Chapter 14: Personal Selling and Sales Management ❖ 15
2. If support communications as a type of personal selling does not specifically identify
sales as an objective, what purpose does such selling serve? Do you think it is worth
deploying salespeople to engage in supportive communication?
3. Discussions in this chapter argue that both the buyer and the seller benefit if the
salesperson “controls the communication” in a sales encounter. Discuss why you agree
or disagree with this position.
4. What areas of information constitute proper preparation for the personal-selling
process?
5. What are the limitations of the AIDA approach as a presentation technique? What
approach is considered far superior, and why?
The reason this approach is considered marginally effective is that it grants the buyer
6. In following up a successful sales effort, what two factors should a salesperson
concentrate on to take advantage of opportunities at this stage of the selling process?
Two distinct and very important activities occur after a sale has been made. First, a
7. What changes in the past several years have created a “new environment” for
personal selling?
Chapter 14: Personal Selling and Sales Management ❖ 16
Three changes in the broad business environment have created a significantly new
8. In sales force management, what are the three alternatives for sales force structure?
In what situations might each alternative be most appropriate?
The three alternatives for sales force structure are by product lines, types of customer,
or geographic territory.
The most common reason for structuring the sales force around product lines has to
SOLUTIONS TO EXPERIENTIAL EXERCISES
1. Visit three businesses where salespeople are integral to the promotional process. Pick
at least one business that is not household consumer oriented (for example, office
equipment or business services organizations). Rate the salespeople you encountered as
to their professionalism and skill level.
Responses will vary considerably, depending on students’ experiences. Encourage
2. One method of generating sales leads is to mine current customers. You’ve doubtless
seen the “send this (article, photo, joke of the day) to a friend” option on various
Chapter 14: Personal Selling and Sales Management ❖ 17
websites—this is a clever means to have people who frequent your website invite others
to join in, and to collect email addresses for marketing. And certain websites collect
email addresses by their very nature.
Blue Mountain was the Web’s most popular site for online greeting cards and messages,
where visitors could select from a range of graphical cards, add their own message, and
have them delivered to friends, family, whomever, on birthdays, anniversaries, or other
occasions. Although Blue Mountain never charged for the service, the site was snapped
up by Excite.com, a search site company, in a billion-dollar stock deal. Excite wasn’t
after online card creation technology—they wanted the vast community of Blue Mountain
users and recipients, to blend into their own online communities. And when Excite later
sold Blue Mountain to American Greetings, the company saw the acquisition as a way to
build relationships with consumers who go online to connect with their friends, as well as
a way to boost traffic to its retail partners by posting coupons that encourage consumers
to buy their paper cards in stores selling American Greetings cards.
Visit the Blue Mountain website (http://www.bluemountain.com), and research current
news about the brand. Prepare a one-page report detailing the volume of visitors to the
website and its potential for generating sales leads.
3. Tupperware is a case study in the issues surrounding personal selling’s collision with
World Wide Web technology. The company, which has been in existence for six decades,
is based on direct selling, as a small army of consultants corrals homemakers for
“Tupperware parties,” working locally and profiting, if not globally, at least nationally.
For those consultants, the Internet seemed to present every opportunity for them to
expand their reach to customers around the world. But allowing each Tupperware
consultant to create his or her own website could wreak havoc in the organization, raise
issues of consultants poaching on each other’s territory, or dilute the national brand’s
image if the websites are poorly executed. Tupperware frowned on this sort of chaos,
discouraging individual Web page creation.
Then in 1999, the company launched a corporate site through which it could make direct
sales to consumers, to the detriment of its own field force—many of whom were highly
critical of what looked like a play to gobble up the benefits those “high-touch”
consultants had created in the market. Perhaps as a result of the backlash, Tupperware
in 2000 launched a website at http://www.my.tupperware.com to enable the 75,000
members of its U.S. direct sales force to create their own sites, tied into the corporate site
to execute online sales (and presumably crediting the particular consultant who brought
the sale).
Using an Internet search engine, query on the phrase “tupperware consultant.” What
sorts of pages do you turn up? What do you think of Tupperware’s compromise between
its traditional strategy of relying solely on its field force and the other extreme of selling
only online at a corporate website? Do you think Tupperware’s compromise position
Chapter 14: Personal Selling and Sales Management ❖ 18
supports or undermines its sales force? Why?
Notwithstanding Tupperware’s not wanting to see “rogue” websites by its
consultants, you can still find them.
POWERPOINT PRESENTATIONS
Use the Instructor PowerPoint files to pace your instruction and provide class notes on
key ideas and themes. Each presentation provides a slide-by-slide coordination with the
chapter’s learning outcomes, definitions, and visuals. Encourage students to use the
accompanying Student PowerPoint presentation to align and reinforce classroom
instruction with studying outside of the classroom.
VIDEOS
To view the two videos for this chapter, go to the PROMO book companion website,
www.cengage.com/login.
(*) Indicates the correct answer in the multiple-choice video questions.
Bogusky: On Creativity
1. In the video Bogusky “On Creativity,” he talks about “fragmented media.” How might
this have an effect on sales management and the need for situation analysis as discussed
in the book?
2. In the video Bogusky “On Creativity,” he talks about how some people have described
his agency as “being able to function without fear.” Does he say that he functions without
fear?
Chapter 14: Personal Selling and Sales Management ❖ 20
4. The Porsche “911” website features which of the following engagement device?
5. The Porsche “911” website features which of the following themes?
