1. McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Identify the different types of personal selling.
LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 17, YOU SHOULD BE ABLE TO:
Discuss the nature and scope of personal selling and sales management in marketing.
LO1
LO2
Identify the different types of personal selling.
LO3
Explain the stages in the personal selling process.
LO4
Describe the major functions of sales management.
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3. XEROX SUCCEEDS BY DOING WHAT’S RIGHT FOR THE CUSTOMER
 As chairmen of the board and CEO of Xerox, Anne Mulcahy has:
a. Restored its marketing and financial vitality.
b. Stayed in sync with both customers and employees.
 Anne Mulcahy:
a. Began her 35-year Xerox career as a field sales representative.
b. Assumed increasingly responsible management and executive positions.
c. Her sales background played a pivotal role in her career.
 Mulcahy says,
a. “We started winning when we listened to customers.”
b. “We did that by providing greater value than our competitors—and that meant selling the way customers want to buy.”
c. “Doing what’s right for the customer—that’s our guiding principle.”
 Her attention to the customer buying experience has paid huge dividends.
a. Xerox sales revenue and net income have soared during Mulcahy’s tenure.
b. Mulcahy’s customer focus and sales experience bodes well for Xerox’s success.
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4. SCOPE AND SIGNIFICANCE OF PERSONAL SELLING AND SALES MANAGEMENT
LO1
Personal Selling
Sales Management
Selling Happens Almost Everywhere
I. SCOPE AND SIGNIFICANCE OF PERSONAL SELLING AND SALES MANAGEMENT [LO1]
Personal selling is a useful vehicle for communicating with present and potential buyers.
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. c. Via the Internet.
b. Through video teleconferencing.
 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.
 Almost 15 million people are employed in sales positions in the U.S.
 Every occupation involving customer contact has an element of personal selling.
“Everyone Lives by Selling Something”
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5. Salespeople & Relationship Marketing
SCOPE AND SIGNIFICANCE OF PERSONAL SELLING AND SALES MANAGEMENT
CREATING CUSTOMER SOLUTIONS & VALUE
LO1
Salespeople & Relationship Marketing
Identify Creative Solutions to Customer Problems
[ICA 17-1: Students’ Perceptions of Selling]
C. Personal Selling in Marketing
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.
c. Play a dominant role in a firm’s marketing program.
 Arises when a firm uses a push marketing strategy (see Chapter 15).
 Example: Avon.
D. Creating Customer Solutions and Value through Salespeople: Relationship 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.
 Relationship selling is the practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time. It:
a. Involves mutual respect and trust among buyers and sellers.
b. Focuses on creating long-term customers, not one-time sales.
c. Emphasizes the importance of:
 Learning about customer needs and wants.
 Tailoring solutions to customer problems.
Ease the Customer Buying Process
Make the After-the-Sale Follow-Up
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6. FIGURE 17-A Comparing order takers and order getters
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7. FIGURE 17-2 Stages and objectives of the personal selling process
Lead, prospect, qualified prospect
Cold canvassing/cold calling
Customs, gestures
Stimulus-response: Suggestive selling
Formula selling: canned sales
Need-Satisfaction: adaptive, consultative
III. THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS [LO3]
 Selling is a complicated activity that involves building buyer-seller relationships.
 [Figure 17-2] The personal selling process:
a. Involves of sales activities occurring before, during, and after the sale itself.
b. Consists of six stages: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up.
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.
 The three types of prospect are:
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:
 Wants the product.
 Can afford to buy it.
 Is the decision maker.
 Leads and prospects are generated using several sources:
a. Advertising may contain a coupon or a toll-free number.
b. Some companies use exhibits at trade shows, professional meetings, and conferences staffed by salespeople to:
 Meet prospective buyers.
 Disseminate information.
c. The Internet to connect with individuals and companies that may be interested in a firm’s offerings. This is done through:
 Web sites.  Social networks like Facebook.
 s.
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.
 Is criticized by U.S. consumers as an invasion of privacy.
 Is now regulated.
– The Telephone Consumer Protection Act (1991) curbs early morning or late night calling abuses.
– Firms must provide more complete disclosure regarding solicitations.
– Firms may not contact consumers on the Do Not Call Registry.
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.
b. Important buying criteria.
c. The prospect’s receptivity to a formal or informal presentation.
d. The best time to contact a prospect.
 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.
b. Stimulate interest.
c. Build the foundation for the sales presentation and the working relationship.
 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. Depends on the information obtained during the prospecting and preapproach stages.
 This stage is very important in different cultural and international settings.
a. Some societies outside the U.S. spend time:
 Establishing a rapport between buyers and sellers before…
 Discussing business matters.
b. Gestures are also 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:
– In English on one side.
– The language of the prospective customer on the other side.
 Business cards should be handed to Asian customers using both hands, with the name facing the receiver.
D. Presentation: Tailoring a Solution for a Customer’s Needs
The presentation stage:
 Is at the core of the order-getting selling process.
 Converts a prospect into a customer by creating a desire for the offering.
 Uses three major presentation formats.
1. Stimulus-Response Format.
a. The stimulus-response presentation format.
 Assumes that the prospect will buy given the appropriate stimulus by a salesperson.
 The salesperson tries one appeal after another until successful.
b. Suggestive selling.
 Occurs when a clerk encourages an additional purchase.
 Is not always appropriate for many products.
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.
– Used with novice salespeople who:
* Lack product knowledge.
* Are inexperienced regarding the selling process.
– Guarantees a thorough presentation.
 Has these disadvantages:
– Lacks flexibility.
– Lacks spontaneity.
– Does not provide for feedback from prospective buyers, which is:
* Critical in the communication process.
* Necessary when starting relationships.
3. Need-Satisfaction Format.
a. The need-satisfaction presentation format:
 Emphasizes probing and listening by the salesperson to identify needs and interests of prospective buyers.
 Tailors the presentation to the prospect.
 Highlights product benefits.
 Emphasizes problem solving.
 Is consistent with the marketing concept and relationship building.
b. The need-satisfaction format has two selling styles:
 Adaptive selling involves adjusting the presentation to fit the selling situation. Salespeople must know:
– When to offer solutions.
– When to ask for more information.
– The customer and the sales situation.
– Used by:
* Service firms like brokerages.
* Consumer product firms like Gillette.
 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.
* Not from a predetermined set of product or service choices.
– This approach:
* Gives rise to novel solutions.
* Creates unique customer value.
– This style is prominent in business-to-business marketing.
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8. THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS
PRESENTATION
LO3
Handling Objections
Acknowledge and Convert
Acceptance
Denial
Postpone
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. Experienced salespeople know that objections do not put an end to the presentation.
e. The following techniques are used to handle objections in a courteous, ethical, and professional manner:
 Acknowledge and convert the objection. Use the objection as a reason for buying.
 Postpone. Say that the objection will be addressed later in the presentation.
 Agree and neutralize.
– Agree with the objection.
– Then show that it is unimportant.
 Accept the objection.
– If valid, probe for the reasons behind it.
– Then attempt to stimulate further discussion on the objection.
 Denial. When an objection:
– Is based on misinformation and clearly untrue…
– It is wise to meet it head on with a firm denial.
 Ignore the objection. Use when the objection is:
– A stalling mechanism.
– Clearly not important to the prospect.
f. Handling objections requires:
 A calm and professional interaction with the prospect.
 That they be anticipated in the preapproach stage.
 A skill and sense of timing.
 An appreciation for the prospect’s state of mind.
 An adeptness in communication.
g. Objections:
 Should be handled ethically.
 Lying or misrepresenting product or service features is grossly unethical.
Ignore
Agree and Neutralize
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9. THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS
CLOSE
LO3
Forms
Trial Close
Assumptive Close
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.
b. The salesperson must determine when the prospect is ready to buy.
 Telltale signals indicating a readiness to buy include the prospect’s:
a. Body language—reexamines the offering or contract closely.
b. Positive statements about the offering.
c. Questions about the particulars of the contract.
 A salesperson can use one of three closing techniques when a buyer is ready to make a purchase:
a. Trial close. Involves asking the prospect to make a decision on some aspect of the purchase.
b. Assumptive close. Entails asking the prospect to consider choices concerning delivery, warranty, or financing terms under the assumption that a sale has been finalized.
c. Urgency close. Is used to commit the prospect quickly by making reference to the timeliness of the purchase.
 The final close is used when:
a. A prospect is clearly ready to buy.
b. A salesperson asks for the order.
Urgency Close
Final Close
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10. THE PERSONAL SELLING PROCESS: BUILDING RELATIONSHIPS
FOLLOW-UP
LO3
Follow-up Stage
F. Follow-Up: Solidifying the Relationship
 The follow-up stage makes certain that:
a. The customer’s purchase has been properly delivered and installed.
b. Difficulties experienced with the use of the item are addressed.
 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.
 Today’s satisfied customers become tomorrow’s qualified prospects or referrals.
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11. FIGURE The sales management process involves sales plan formulation, implementation, and evaluation
IV. THE SALES MANAGEMENT PROCESS [LO4]
 Selling must be managed if it is going to contribute to a firm’s overall objectives.
 [Figure 17-3] 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 is the most basic of the three sales management functions.
 The sales plan:
a. Is a statement describing:
 What is to be achieved.
 Where and how the selling effort of salespeople is to be deployed.
b. Involves three tasks: (1) setting objectives, (2) organizing the salesforce, and (3) developing account management policies
1. Setting Objectives.
a. Setting objectives:
 Is central to sales management.
 Specifies what is to be achieved for the salesforce and each salesperson.
b. Selling objectives can be:
 Output-related. Focuses on:
– Dollar or unit sales volume.
– Number of new customers.
– Profit.
– Used for the salesforce as a whole and for each salesperson.
 Input-related. Emphasizes:
– The number of sales calls.
– Selling expenses.
– Also used for the salesforce as a whole and for each salesperson.
 Behaviorally-related. Focuses on:
– Product knowledge.
– Customer service satisfaction ratings.
– Selling and communication skills.
– Is typically specific for each salesperson.
c. Objectives should:
 Be precise and measurable.
 Specify the time period over which they are to be achieved.
 Serve as performance standards for the evaluation of the salesforce.
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12. THE SALES MANAGEMENT PROCESS SALES PLAN FORMULATION
LO4
Sales Plan
Setting Objectives
Output-Related
IV. THE SALES MANAGEMENT PROCESS [LO4]
 Selling must be managed if it is going to contribute to a firm’s overall objectives.
 [Figure 17-3] 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 is the most basic of the three sales management functions.
 The sales plan:
a. Is a statement describing:
 What is to be achieved.
 Where and how the selling effort of salespeople is to be deployed.
b. Involves three tasks: (1) setting objectives, (2) organizing the salesforce, and (3) developing account management policies
1. Setting Objectives.
a. Setting objectives:
 Is central to sales management.
 Specifies what is to be achieved for the salesforce and each salesperson.
b. Selling objectives can be:
 Output-related. Focuses on:
– Dollar or unit sales volume.
– Number of new customers.
– Profit.
– Used for the salesforce as a whole and for each salesperson.
 Input-related. Emphasizes:
– The number of sales calls.
– Selling expenses.
– Also used for the salesforce as a whole and for each salesperson.
 Behaviorally-related. Focuses on:
– Product knowledge.
– Customer service satisfaction ratings.
– Selling and communication skills.
– Is typically specific for each salesperson.
c. Objectives should:
 Be precise and measurable.
 Specify the time period over which they are to be achieved.
 Serve as performance standards for the evaluation of the salesforce.
Input-Related
Behaviorally-Related
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13. THE SALES MANAGEMENT PROCESS SALES PLAN FORMULATION
LO4
Organizing the Salesforce
Customer
Product
Geography
2. Organizing the Salesforce.
a. Companies organize their sales force on the basis of (1) geography, (2) customer, or (3) product or service.
b. [Figure 17-B1] Geography.
 Is the simplest organization, where:
– The United States or the world is first divided into regions.
– Each region is then divided into districts or territories.
 Salespeople:
– Are assigned to each district with defined geographical boundaries.
– Call on all customers and represent all products sold by the company.
 The main advantage of this structure is that it can minimize travel time, expenses, and duplication of selling effort.
 If a firm’s products or customers require specialized knowledge, then a geographical structure is not suitable.
c. [Figure 17-B2] Customer.
 Is used when different types of buyers have different needs.
 Means that a different salesforce calls on each separate type of buyer or marketing channel.
 This approach promotes more effective, specialized customer support and knowledge to buyers.
 Because two separate sales forces are used for the same products, this structure often leads to:
– Higher administrative costs.
– Some duplication of selling effort.
 Major account management:
– Is a variation of customer organizational structure.
– Uses team selling to focus on important customers to…
– Build mutually beneficial, long-term, cooperative relationships.
– Is also known as key account management.
– Involves teams from the firm’s:
* Sales. * Technical personnel.
* Service.
– Works with the customer’s personnel in:
* Purchasing. * Logistics.
* Manufacturing. * Finance.
* Engineering.
– Results in “customer specialists” who can provide exceptional service.
d. [Figure 17-B3] Product.
 Is used when specific knowledge is required to sell a product.
 The advantage is that salespeople can develop expertise with:
– Technical characteristics, applications, and selling methods…
– Associated with a particular product or family of products.
 The disadvantage is that it leads to:
– High administrative costs and…
– Duplication of selling effort because…
– Two company salespeople may call on the same customer.
e. There is no one best sales organization for all companies in all situations.
f. The organization’s salesforce should reflect its marketing strategy.
Major Account Management
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14. THE SALES MANAGEMENT PROCESS SALES PLAN FORMULATION
LO4
Account Management Policies
Whom to Contact
Info to Collect
Activities to Perform
3. Developing Account Management Policies.
a. Account management policies specify:
 Whom salespeople should contact.
 What kinds of selling and customer service activities should be done.
 How these activities should be carried out.
b. These policies might state:
 Which individuals in a buying organization should be contacted.
 The sales and service effort that different customers should receive.
 The information salespeople should collect before or during a sales call.
b. Figure 17-4 shows how accounts or customers can be grouped based on:
 Level of opportunity.
 The firm’s competitive sales position.
 When specific account names are placed in each cell, salespeople see:
– Which accounts should be contacted.
– What level of selling and service activity.
– How to deal with them.
 Accounts in cells 1 and 2 might have high frequencies of personal sales calls and increased time spent on a call.
 Cell 3 accounts will have lower call frequencies.
 Cell 4 accounts might be contacted through telemarketing or direct mail rather than in person.
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15. USING MARKETING DASHBOARDS Tracking Salesperson Performance at Moore Chemical & Sanitation Supply, Inc.
LO4
USING MARKETING DASHBOARDS
Tracking Salesperson Performance at Moore Chemical & Sanitation Supply, Inc.
A Variety of Metrics
MooreChem is a large Midwestern supplier of cleaning chemicals and sells to janitorial companies that clean corporate and professional office buildings. MooreChem uses a marketing dashboard for each of its sales representatives to track seven measures—sales revenue, gross margin, selling expense, profit, average order size, new customers, and customer satisfaction. Each measure shows actual salesperson performance relative to target goals.
Your Challenge.
Review a particular salesperson’s performance for the previous quarter.
Your Findings.
The salesperson’s is displayed on the marketing dashboard. He has exceeded targeted goals for sales revenue, selling expenses, and customer satisfaction. All of these measures show an upward trend. He also has met his target for gaining new customers and average order size. But, his gross margin and profit are below targeted goals. These measures evidence a downward trend as well. His mixed performance requires a constructive and positive correction.
Your Action.
Focus attention on the salesperson’s gross margin and selling expense results and trend. He is spending time and money selling lower margin products that produce a targeted average order size. While he is actually expending effort selling more products to his customers, this product mix yields lower gross margins, resulting in a lower profit.
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16. Personal Selling
Personal selling is the two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.
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17. Sales Management
Sales management consists of planning the selling program and implementing and evaluating the personal selling effort of the firm.
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18. Relationship Selling
Relationship selling is the practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time.
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19. Order Taker
An order taker is a salesperson who processes routine orders or reorders for products that were already sold by the company.
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20. Order Getter
An order getter is a salesperson who sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers’ use of a product or service.
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21. Personal Selling Process
The personal selling process consists of sales activities occurring before, during, and after the sale itself, consisting of six stages: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up).
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22. Adaptive Selling
Adaptive selling is a need-satisfaction presentation style that involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information.
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23. Consultative Selling
Consultative selling is a need-satisfaction presentation style that focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution.
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24. Sales Plan
A sales plan is a statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed.
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25. Major Account Management
Major account management is the practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships. Also called key account management.
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26. Account Management Policies
Account management policies specify whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out.
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27. Sales Quota
A sales quota consists of specific goals assigned to a salesperson, sales team, branch sales office, or sales district for a stated time period.
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28. Salesforce Automation (SFA)
Salesforce automation (SFA) is the use of computer, information, communication, and Internet technologies to make the sales function more effective and efficient.
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