Chapter 20 – Personal Selling and Sales Management
20-1
CHAPTER CONTENTS
PAGE
POWERPOINT RESOURCES TO USE WITH LECTURES …………………………………… 20-2
LEARNING OBJECTIVES (LO) ……………………………………………………………………………. 20-4
KEY TERMS ………………………………………………………………………………………………………….. 20-4
LECTURE NOTES
• Chapter Opener: Meet Today’s Sales Professional …………………………………………….. 20-5
• Scope and Significance of Personal Selling and Sales Management (LO 20-1) ……… 20-5
• The Many Forms of Personal Selling (LO 20-2)………………………………………………… 20-9
• The Personal Selling Process: Building Relationships (LO 20-3) ……………………….. 20-13
• The Sales Management Process (LO 20-4) ………………………………………………………. 20-20
APPLYING MARKETING KNOWLEDGE …………………………………………………………… 20-34
BUILDING YOUR MARKETING PLAN ………………………………………………………………. 20-38
VIDEO CASE (VC)
• VC-20: Xerox: Building Customer Relationships through Personal Selling………….. 20-39
APPENDIX D CASE (D)
• D-20: Morgantown Furniture: Making Promotion Trade-Offs ……………………………. 20-42
IN-CLASS ACTIVITIES (ICA)
• ICA 20-1: Students’ Perceptions of Selling ………………………………………………………. 20-48
• ICA 20-2: Personal Selling Process: Direct Selling of the Mary Kay®
Lip Protector …………………………………………………………………………………. 20-51
CONNECT APPLICATION EXERCISES ………………………………………………20-56
• Personal Selling Process Case Analysis
• The Many Forms of Personal Selling Click and Drag*
• Sales Management Process Click and Drag*
• Xerox: Building Customer Relationships through Personal Selling Video Case
• iSeeit! Video Case: Business to Business Marketing Strategy Video Case
• Marketing Metrics: Evaluating Sales Force Performance Analytics Exercise
*Note: An alternate version of each Click and Drag exercise is available in Connect for students with
accessibility needs.
Chapter 20 – Personal Selling and Sales Management
20-2
POWERPOINT RESOURCES TO USE WITH LECTURES
PowerPoint
Textbook Figures Slide
Figure 20-1 Personal selling and sales management quiz ………………………………………………………. 20-4
Figure 20-2 How outside order-getting salespeople spend their time each week ……………………… 20-12
Figure 20-3 Stages and objectives of the personal selling process …………………………………………. 20-15
Figure 20-4 The sales management process involves sales plan formulation, implementation,
and evaluation ………………………………………………………………………………………………. 20-25
Figure 20-5 A break-even chart comparing a company salesforce vs. independent agents ………… 20-29
Figure 20-6 Organizing the salesforce by customer, product, and geography …………………………. 20-30
Figure 20–6A Organizing the salesforce by geography ……………………………………………………… 20–31
Figure 20–6B Organizing the salesforce by customer ……………………………………………………….. 20–32
Figure 20–6C Organizing the salesforce by product ………………………………………………………….. 20–33
Figure 20-7 Account management policy grid ……………………………………………………………………. 20-34
Selected Textbook Images (Ads, People, Products, and Websites)
Chapter Opener: Photo of Lindsey Smith of GE Healthcare ……………………………………………………. 20-3
Video Case VC-20: Photo of Xerox logo …………………………………………………………………………….. 20-44
Applying Marketing Metrics
Tracking Sales Performance at Moore Chemical & Sanitation Supply: Various Metrics (p. 552) .. 20-39
Marketing Matters, Making Responsible Decisions, and Marketing Insights About Me
Marketing Matters—Customer Value: Science and Selling: Is Customer Value Creation in
Your Genes?…………………………………………………………………………………………………………………….. 20-9
Marketing Matters—Customer Value: Creating and Sustaining Customer Value Through
Cross-Functional Team Selling ………………………………………………………………………………………….. 20-14
Marketing Matters—Customer Value: Imagine This…Putting the Customer into Customer
Solutions! ………………………………………………………………………………………………………………………. 20-22
Making Responsible Decisions—Ethics: The Ethics of Asking Customers About Competitors ….. 20-27
Marketing Insights About Me: What Is Your Emotional Intelligence? Test Yourself and See ……. 20-36
Chapter 20 – Personal Selling and Sales Management
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POWERPOINT RESOURCES TO USE WITH LECTURES
PowerPoint
Excel Spreadsheets Slide
Break-even calculation for comparing a company salesforce vs. independent agents
[See CH20BEAgentsSalesforce.xls] ……………………………………………………………………………………. 20-28
Figure 20-5 Break-even calculation for comparing a company salesforce vs. independent agents
[See CH20Fig20-05.xls] …………………………………………………………………………………. 20-29
Workload method calculation for determining the size of the salesforce
[See CH20WorkloadMethod.xls]………………………………………………………………………………………… 20-38
Applying Marketing Knowledge Question 5: Workload method
[See CH20AMKQ5.xls]
Applying Marketing Knowledge Question 6: Break-even calculation
[See CH20AMKQ6.xls]
Appendix D Case APP D–20 Morgantown Furniture workload method: Question 4
[See AppD20MorganFurnQ4.xls]
Videos
20-1: Cambridge Sales Video ……………………………………………………………………………………………… 20-4
20-2: Xerox Video Case …………………………………………………………………………………………………….. 20-44
In-Class Activities (ICA)
ICA 20-1: Students’ Perceptions of Selling ………………………………………………………………………….. 20-48
ICA 20-2: Personal Selling Process: Direct Selling of the Mary Kay® Lip Protector …………………. 20-50
Chapter 20 – Personal Selling and Sales Management
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LEARNING OBJECTIVES (LO)
After reading this chapter students should be able to:
LO 20-1: Discuss the nature and scope of personal selling and sales management in marketing.
LO 20-2: Identify the different types of personal selling.
LO 20-3: Explain the stages in the personal selling process.
LO 20-4: Describe the major functions of sales management.
KEY TERMS
account management policies
personal selling
adaptive selling
personal selling process
consultative selling
relationship selling
emotional intelligence
sales management
formula selling presentation
sales plan
key account management
sales quota
need-satisfaction presentation
salesforce automation (SFA)
order getter
stimulus-response presentation
order taker
team selling
partnership selling
workload method
Chapter 20 – Personal Selling and Sales Management
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LECTURE NOTES
MEET TODAY’S SALES PROFESSIONAL
• Lindsey Smith represents Molecular Imaging Products within the Medical
Diagnostics Division of GE Healthcare.
• Ms. Smith lists a few ingredients necessary for a successful sales career:
a. Integrity. c. Trust and relationship building.
b. Motivation. d. Team orientation.
• To be an effective salesperson, she recognizes the importance of constantly updating
and refining her…
a. Product knowledge. b. Analytical and communication skills.
c. Strategic thinking about opportunities to more fully satisfy each customer’s
clinical, economic, and technical requirements.
• Lindsey Smith’s selling orientation and customer relationship focus rest on four
pillars:
a. A commitment to creating value for clients.
b. Seek to serve clients as a trusted consultant.
c. Reinforce the company’s competitive advantage—its value proposition, product
innovation, solutions, and service.
d. Regard challenges as opportunities—provide solutions and resources to
customers and to build client trust and long-term relationships.
• Lindsey Smith’s approach to selling and customer relationships:
a. Has put her among the top revenue-producers in the company.
b. Has been a recipient of the company’s Commercial Excellence Award in six of
the last eight years.
c. Was promoted to Senior Client Director at GE Healthcare Americas, responsible
for the entire GE Healthcare Americas company portfolio.
I. SCOPE AND SIGNIFICANCE OF PERSONAL SELLING
AND SALES MANAGEMENT [LO 20-1]
• Personal selling is a vehicle for communicating with present and potential buyers.
• [Figure 20-1] Complete the personal selling and sales management quiz.
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A. Nature of Personal Selling and Sales Management
• Personal selling involves:
a. The two-way flow of communication between a buyer and seller…
b. Often in a face-to-face encounter…
c. Designed to influence a person’s or group’s purchase decision.
• Personal selling also occurs between buyers and sellers:
a. By telephone.
b. Through video teleconferencing.
c. Via the Internet.
• Sales management involves:
a. Planning the selling program.
b. Implementing and evaluating the personal selling effort of the firm.
• The tasks involved in managing personal selling include:
a. Setting objectives.
b. Organizing the salesforce.
c. Recruiting, selecting, training, and compensating salespeople.
d. Evaluating the performance of individual salespeople.
B. Selling Happens Almost Everywhere
• “Everyone lives by selling something,” wrote author Robert Louis Stevenson.
• Every occupation involving customer contact has an element of personal selling.
• About 20 percent of the chief executive officers (CEOs) in the largest U.S.
corporations have significant sales and marketing experience in their work
history.
• Selling often serves as a stepping-stone to top management, as well as being a
career path itself.
[ICA 20-1: Students’ Perceptions of Selling]
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C. Personal Selling in Marketing and Entrepreneurship
Personal selling serves three major roles in a firm’s overall marketing effort.
• Salespeople:
a. Are the critical link between the firm and its customers. They:
• Match company interests with customer needs to…
• Satisfy both parties in the exchange process.
b. Are the company in consumers’ eyes. They:
• Represent what the company is or attempts to be.
• Are often the only personal contact a customer has with the firm.
• Personal selling:
a. May play a dominant role in a firm’s marketing program.
b. Arises when a firm uses a push marketing strategy (see Chapter 17).
c. Example: Avon—Pays 40 percent of its total sales dollars for selling
expenses.
[Video 20-1: Cambridge Sales Video]
D. Creating Customer Solutions and Value through Salespeople: Relationship and
Partnership Selling
Because salespeople are close to customers, they can create value by:
• Identifying creative solutions to customer problems.
• Easing the customer buying process.
• Following through after the sale.
1. Relationship selling.
a. Is the practice of building ties to customers based on a salesperson’s attention
and commitment to customer needs over time.
b. Involves mutual respect and trust among buyers and sellers.
c. Focuses on creating long-term customers, not one-time sales.
2. Partnership selling (or enterprise selling).
a. Is the practice where buyers and sellers combine their expertise and resources.
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b. Creates customized solutions.
c. Commits to joint planning.
d. Shares customer, competitive, and company data for their mutual benefit.
e. Relies on cross-functional business specialists who:
• Apply their knowledge and expertise to…
• Achieve higher productivity, lower cost, and greater customer value.
f. Complements supplier and channel partnering.
g. Relationship and partnership selling represent another dimension of customer
relationship management. Both emphasize the importance of:
• Learning about customer needs and wants.
• Tailoring solutions to customer problems as a means to customer value
creation.
MARKETING MATTERS
Customer Value: Science and Selling: Is Customer Value Creation in Your Genes?
Is a predisposition to create customer value in your genes? Are you a born
salesperson? Research by University of Michigan Marketing Professor Richard P. Bagozzi
and his colleagues offers a novel insight into this question may surprise you.
LEARNING REVIEW
20-1. What is personal selling?
Chapter 20 – Personal Selling and Sales Management
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LEARNING REVIEW CONTINUED
20-2. What is involved in sales management?
II. THE MANY FORMS OF PERSONAL SELLING [LO 20–2]
Personal selling assumes many forms based on:
• The amount of selling done.
• The amount of creativity required to perform the sales task.
A. Order-Taking Salespeople
• An order taker:
a. Processes routine orders or reorders for products already sold by the firm.
b. Is responsible for:
• Preserving an ongoing relationship with existing customers.
• Maintaining sales.
• Two types of order takers exist:
a. Outside order takers.
• Visit customers.
• Replenish inventory stocks of resellers (wholesalers and retailers).
b. Inside order takers, order clerks, or salesclerks.
• Typically answer simple questions.
• Take orders.
• Complete transactions with customers.
• Are employed by firms that use inbound telemarketing.
– Is the use of toll-free telephone numbers that customers can call to…
– Obtain information about products or services and make purchases.
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– Is an essential selling activity for “customer service” driven firms.
• Are used in straight rebuy situations in business-to-business settings.
• Order takers:
a. Do little selling in a conventional sense.
b. Engage in only modest problem solving with customers.
c. Represent products that:
d. Undergo training to better assist callers with their purchase decisions.
B. Order-Getting Salespeople
• An order getter:
a. Sells in a conventional sense. d. Persuades customers to buy.
b. Identifies prospective customers. e. Closes sales.
c. Provides customers with information. f. Follows up on customers.
• Like order takers, order getters can be inside or outside.
• Order getting:
a. Involves creativity, empathy, product knowledge, and sales training.
b. Is required to sell complex or technical products that gave many options.
• Order getters are problem solvers who:
b. Modified rebuy or new-buy purchases in business-to-business selling.
• Outside order getters or field service representatives:
a. Often work over 50 hours per week.
b. [Figure 20-2] Spend:
• 36 percent selling.
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• Outside order getting is expensive:
a. A single field sales call costs about $500.
b. Affects salespeople’s compensation, benefits, travel, etc. expenses.
• Outbound telemarketing.
a. Uses the telephone rather than personal visits to contact customers.
C. Customer Sales Support Personnel
• Augment the selling efforts of order getters by performing a variety of services.
• Missionary salespeople.
a. Do not directly solicit orders.
b. Concentrate on:
c. Are used extensively in the pharmaceutical industry.
• Sales engineers.
a. Specialize in identifying, analyzing, and solving customer problems.
b. Bring know-how and technical expertise to the selling situation.
• Team selling.
a. Uses a team of professionals in selling to and servicing major customers.
b. Is used when specialized knowledge is needed to satisfy the different interests
of individuals in a customer’s buying center.
c. May consist of the following people who would deal with a counterpart in the
customer’s firm:
• A salesperson. • A service representative.
• A sales engineer. • A financial executive.
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d. Takes two forms:
• Conference selling.
– A salesperson and other company resource people …
– Meet with buyers to discuss problems and opportunities.
• Seminar selling.
– Consists of a company team.
e. IBM and Xerox pioneered cross-functional team selling in working with
prospective buyers.
MARKETING MATTERS
Customer Value: Creating and Sustaining Customer Value
through Cross-Functional Team Selling
The day of the lone salesperson calling on a customer is becoming history. Today, 75
percent of companies employ cross-functional teams to work with customers to improve
relationships, find better ways of doing things, and create and sustain customer value.
Xerox and IBM pioneered cross-functional team selling, but other firms were quick to
follow as they spotted the potential to create and sustain customer value. DuPont uses a team
of chemists, sales and marketing executives, and regulatory specialists. Procter & Gamble
uses teams of marketing, sales, advertising, computer systems, and supply chain personnel to
work with its major retailers. Cross-functional team selling has become a necessity as
customers seek greater value for their money.
LEARNING REVIEW
20-3. What is the principal difference between an order taker and an order getter?
20-4. What is team selling?
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III. THE PERSONAL SELLING PROCESS:
BUILDING RELATIONSHIPS [LO 20-3]
• Although the salesperson-customer interaction is essential to personal selling, much
of a salesperson’s work occurs before and continues after the sale itself.
• [Figure 20-3] The personal selling process.
a. Consists of sales activities occurring before, during, and after the sale itself.
A. Prospecting: Identifying and Qualifying Prospective Customers
• The prospecting stage.
a. Begins the personal selling process.
b. Is the search for and qualification of potential customers.
• There are three types of prospects:
a. A lead is the name of a person who may be a possible customer.
b. A prospect is a customer who wants or needs the product.
c. A qualified prospect is an individual who:
• Leads and prospects are generated using several sources:
a. Advertising may contain a coupon or a toll-free number.
b. Exhibits at trade shows, professional meetings, and conferences staffed by
salespeople to:
• Meet prospective buyers.
• Disseminate information.
c. The Internet:
Chapter 20 – Personal Selling and Sales Management
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d. Cold canvassing or cold calling.
• Occurs either in person or by telephone.
• A salesperson may open a directory, pick a name, and visit or call that
individual or business.
• Can be successful even though the refusal rate is high.
B. Preapproach: Preparing for the Sales Call
• The preapproach stage involves:
a. Obtaining further information on the prospect.
b. Deciding on the best method of approach.
• Regardless of the industry or cultural setting, it is essential to know:
a. How the prospect prefers to be approached.
b. What the prospect is looking for in a product or service.
• For business product firms, preapproach involves identifying:
a. The buying role of a prospect.
• This stage is very important in international selling:
a. Customs dictate appropriate protocol.
b. In many South American countries, buyers:
• Expect salespeople to be punctual for appointments.
• Prefer straightforward, not hard-sell presentations.
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• Successful salespeople don’t shortchange the preapproach stage.
• Failure to learn as much as possible about the prospect:
a. Is unprofessional.
b. Can ruin a sales call.
C. Approach: Making the First Impression
• The approach stage involves the initial meeting between the salesperson and a
prospect.
• The objectives of the approach stage are to:
a. Gain the prospect’s attention.
• First impressions are critical. It is common to begin the conversation with:
a. A reference to common acquaintances.
b. A referral.
c. The product or service itself.
d. The tactic depends on the information obtained in the prospecting and
preapproach stages.
• This stage is very important in international settings.
a. Some societies spend time:
• Establishing a rapport between buyers and sellers before…
• Discussing business matters.
b. Gestures are very important, particularly whether, when, and how to use a
handshake, a bow, etc.
c. Knowing how to exchange business cards is important.
• Business cards should be printed:
D. Presentation: Tailoring a Solution for a Customer’s Needs
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The presentation stage:
• Is at the core of the order-getting selling process.
1. Stimulus-Response Format.
a. Given the appropriate stimulus by a salesperson, the prospect will buy.
2. Formula Selling Format.
a. Formula selling presentation format.
• Consists of information that…
• Must be provided in an accurate, thorough, and step-by-step manner to…
• Inform the prospect.
b. Canned sales presentation format.
• Is a memorized, standardized message conveyed to every prospect.
• Is popular.
• Is used in the telephone and door-to-door selling of consumer products.
• Treats prospects the same regardless of differences in needs or information
preferences.
• Has these advantages:
– Used when the differences between prospects are unknown.
• Has these disadvantages:
– Lacks flexibility.
– Lacks spontaneity.
– Does not provide for feedback from prospective buyers, which is:
20–17
3. Need-Satisfaction Format.
a. The salesperson:
• Emphasizes probing and listening to identify needs and interests of
prospective buyers.
• Tailors the presentation to the prospect.
b. Has two selling styles:
• Adaptive selling.
– Involves adjusting the presentation to fit the selling situation.
– Salespeople must know:
* When to offer solutions.
– Service firms and consumer product firms use this selling style.
• Consultative selling.
– Focuses on problem identification, where the salesperson serves as an
expert on problem recognition and resolution.
– Solutions to problems:
* Often arise from the interaction.
MARKETING MATTERS
Customer Value: Imagine This…Putting the Customer into Customer Solutions!
Solutions to problems are what companies are looking for from suppliers. At the same
time, suppliers focus on customer solutions to differentiate themselves from competitors.
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MARKETING MATTERS CONTINUED
Sellers view a solution as a customized and integrated combination of products and services for
meeting a customer’s business needs. But what do buyers think? From a buyer’s perspective, a
solution is one that (1) meets their requirements, (2) is designed to uniquely solve their problem,
(3) can be implemented, and (4) ensures follow-up.
So what does putting the customer into customer solutions have to do with selling? Three things
4. Handling Objections.
a. Objections. Are excuses for not making a purchase commitment or decision.
b. Some valid objections are based on the offering’s characteristics or its price.
c. However, many objections reflect prospect skepticism or indifference.
d. These techniques are used to handle objections:
• Acknowledge and convert the objection. Use the objection as a reason for
buying.
• Postpone. Say the objection will be addressed later in the presentation.
• Agree and neutralize.
• Accept the objection.
– If valid, probe for the reasons behind it.
– Then attempt to stimulate further discussion on the objection.
• Denial. When an objection:
• Ignore the objection. Use when the objection is:
– A stalling mechanism.
– Clearly not important to the prospect.
e. Handling objections requires:
• A calm and professional interaction with the prospect.
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• That they be anticipated in the preapproach stage.
• A skill and a sense of timing.
f. Objections:
• Should be handled ethically.
• Lying or misrepresenting product or service features is grossly unethical.
E. Close: Asking for the Customer’s Order or Business
• The closing stage involves obtaining a purchase commitment from the prospect.
• This stage is:
a. The most important and most difficult.
• Telltale signals indicating a readiness to buy include:
a. Body language—reexamines the offering or contract closely.
b. Positive statements about the offering.
• Salespeople use 1 of 3 techniques when a buyer is ready to make a purchase:
a. Trial close. Asks the prospect to decide on some aspect of the purchase.
b. Assumptive close. Asks the prospect to consider choices concerning delivery,
warranty, or financing terms—assuming that a sale will be finalized.
c. Urgency close. Asks the prospect to quickly commit to the purchase.
• The final close is used when:
F. Follow-Up: Solidifying the Relationship
• The follow-up stage includes making certain:
a. The customer’s purchase has been properly delivered and installed.
b. Difficulties experienced with the use of the item are addressed.
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• It is during this stage that the buyer-seller relationship is solidified.
• The cost and effort to obtain repeat sales from a satisfied customer are half of
those incurred when acquiring a new customer.
[ICA 20-2: Personal Selling Process:
Direct Selling of the Mary Kay® Lip Protector]
LEARNING REVIEW
20-5. What are the six stages in the personal selling process?
20-6. What is the distinction between a lead and a qualified prospect?
20-7. Which presentation format is most consistent with the marketing concept? Why?
IV. THE SALES MANAGEMENT PROCESS [LO 20-4]
• Selling must be managed if it is going to contribute to a firm’s overall objectives.
• [Figure 20-4] Sales management consists of three interrelated functions: (1) sales
plan formulation, (2) sales plan implementation, and (3) salesforce evaluation.
A. Sales Plan Formulation: Setting Direction
• Sales plan formulation the is the most basic of the 3 sales management functions.
• The sales plan: