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Principles of Marketing

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Principles of Marketing ­ MGT301
VU
Lesson ­ 36
Lesson overview and learning objectives:
Today, most companies use salespeople to bring their company's offering to the consuming or
business publics. The salesperson's role is a key one in the organization. The high cost of
maintaining a sales force means that management is especially interested in how to efficiently
organize this vital element.
Six basic steps or decisions are important to the sales management process. These are:
(a) Designing sales force strategy and structure.
(b) Recruiting and selecting salespeople.
(c) Training salespeople.
(d) Compensating salespeople.
(e) Supervising salespeople.
(f) Evaluating salespeople.
This Lesson thoroughly explains some of these steps and remaining steps will be discussed in
coming Lesson.
SALES FORCE MANAGEMENT
A. The Role of the Sales Force
Advertising consists of one-way, non personal communication with target consumer groups.
Personal selling involves two-way, personal communication between
salespeople and
individual consumers. Personal selling can be more effective than advertising in more complex
selling situations. The role of personal selling varies from company to company. Some firms have
no  salespeople at all. The sales force serves as a critical link between a company and its
customers. The salesperson can represent both buyer and seller. They represent company to the
customer and customers to the company. Salespeople are becoming more market-focused and
customer-oriented. The old view was that salespeople should be concerned with sales and the
company should be concerned with profit. The new view is that salespeople should be concerned
with more than just producing sales--they must know how to achieve customer satisfaction and
company profit.
B. The Personal Selling Process
The selling process consists of several steps that the salesperson must master. These steps focus on
the goal of getting new customers and obtaining orders  from them. Most salespeople spend
much of their time in maintaining existing accounts and building long-term customer relationship.
These steps are:
1). Prospecting and qualifying. In this step the salesperson identifies qualified potential
customers.
2). Qualifying lead is the process of identifying good ones and screening out poor ones.
Prospects can be qualified by:
a) Financial ability.
b) Volume of business.
c) Special needs.
d) Location.
e) Possibilities for growth.
3). Reproach is the step in which the salesperson learns as much as possible about a
prospective customer before making a sales call.
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Principles of Marketing ­ MGT301
VU
a). Set call objectives.
Desiigniing Salles fforrce Sttrrattegy and Sttrructturre
Des gn ng Sa es o ce S a egy and S uc u e
b). Consider timing.
c) Have a sales strategy.
4)  During the approach step, the
Recrruiittiing and Sellecttiing Sallespeoplle
Rec u ng and Se ec ng Sa espeop e
salesperson should know how to meet  the
buyer, make him satisfied and get the
relationship off to a good start.
Trraiiniing Sallespeoplle
T a n ng Sa espeop e
5)
The
presentation
and
demonstration is the step in which the
salesperson tells the product "story" to the
Compensattiing Sallespeoplle
Compensa ng Sa espeop e
buyer, showing how the product will make
or save money for the buyer. A need-
satisfaction approach where the salesperson
Superrv iisiing Sallespeoplle
Supe v s ng Sa espeop e
investigates the buyer's needs and then
matches the product to those needs is
advised.
Ev alluattiing Sallespeoplle
Ev a ua ng Sa espeop e
6) Handling objections is the step in
the selling process in which the salesperson seeks out, clarifies, and overcomes customer
objections regarding buying.
7) Closing occurs when the salesperson asks the customer for an order. The techniques for
closing include:
a). Ask for the order.
b). Review points of agreement.
c). Offer to help in writing up the order.
d). Ask whether the buyer wants this model or that one.
e). Note that the buyer will lose out if the order is not placed now.
8). The follow-up occurs after the sale and ensures customer satisfaction.
C.
Managing the Sales Force
Sales force management is the analysis, planning, implementation, and control of sales force
activities.
It includes:
1. Designing sales force strategy and structure,
2. Recruiting, selecting
3. Training
4. Compensating
5. Supervising
6. Evaluating the firm's salespeople
a. Designing Sales Force Strategy and Structure
Marketing managers face several sales force strategy and design questions.
How should
salespeople and their tasks be structured? Territorial sales force structure is a sales force
organization that assigns each salesperson to an exclusive geographic area and sells the company's
full line products and services to all customers in that territory. Advantages include:
It defines the salesperson's job.
The person gets credit for what they accomplish
person works in a territory
Increases the salesperson's desire to build local business.
Traveling expenses are low (because of reduced territorial size).
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Principles of Marketing ­ MGT301
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This form is often supported at various levels by managerial structure. Product sales force structure
is a sales force organization under which salespeople specialize in selling only a portion of the
company's products or lines. Problems can occur if a single customer buys many different
products from the company. Extra costs of this method must be compared with the more
specialized product knowledge and extra attention to individual products. Customer sales force
structure is a sales force organization under which sales people specialize in selling only to certain
customers or industries. This form can help to become more customer focused. This form
carefully consider primary customers. Complex sales-force structure forms are usually deviations
of the basic three mentioned above where combinations occur. Each company should select a sales
force structure that best serves the needs of its customers and fits its overall marketing strategy.
Salespeople constitute one of the most productive and most expensive assets of the company.
Most companies use some form of workload approach to determine sales force size. The workload
approach is an approach of setting sales force size, whereby the company groups count into
different sizes and classes (or status) and then determines how many salespeople are needed to call.
The company may have an outside sales force (field sales-force) that travels to call on customers or
they can have an inside sales force which conducts business from their offices via telephone or
visits t the prospective buyers. To reduce time demands on their outside sales forces, many
companies have increased the size of their inside sales forces and have added:
1). Technical support people.
2). S ales assistants.
3). Telemarketers (using the telephone to sell directly to consumers).
The days when a single salesperson handled large and important customers are vanishing. Today,
team selling, using teams of people from sales, marketing, engineering, finance, technical support,
and even upper management to service large, complex accounts, is being used. A structure has to
be established that considers rewards and compensation if this method is to be effective.
In team selling situations, Pitfalls include:
a). Selling teams can confuse or overwhelm customers.
b). Salespeople may have trouble in learning to work with and trust others on a team.
c). There may be difficulties in evaluating individual contributions to the team selling effort.
b.
Recruiting and Selecting Salespeople
At the heart of any successful sales force operation is the recruitment and
selection of good
salespeople. Careful salesperson selection can greatly increase overall sales force performance.
There is no magic list of traits, however, that makes for a good salesperson.
These are the factors which should consider:
1). Enthusiasm.
2). Persistence.
3). Initiative.
4). Self-confidence.
5). Job commitment.
To recruit salespeople the organization can begin by getting recommendations
from: current
salespeople, using employment agencies, placing ads in classified newspaper, contacting college
students.
The selection process usually evaluates:
1). Sales aptitude.
2). Analytical and organizational skills.
3). Personality traits.
4). And other characteristics.
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Principles of Marketing ­ MGT301
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c.
Training Salespeople
Many companies ignore the importance of training. Today, however, sales- people may spend
anywhere from a few weeks to many months in training. The average training period is four
months. Training programs usually have the following goals:
1). Help salespeople to know and identify with the company.
2).To knows how products are produced and how they work.
3) Knows about the competitor's strategies and customer's characteristics.
4). Learn how to make effective presentations.
5). Understand field procedures and responsibilities.
d.
Compensating Salespeople
To  attract  salespeople,  a  company  must  have  an  appealing  compensation  plan.
Compensation is made up of the several elements:
1). A fixed amount, usually a salary, gives the salesperson a more stable income.
2). A variable amount, which might be commissions or bonuses, rewards a sales- person for
greater effort.
3). Expense allowances (which repay salespeople for job-related expenses) let salespeople
undertake needed and desirable selling efforts.
4). Fringe benefits provide job security and satisfaction.
Management must decide which of these elements (and which combination or amount) makes the
most sense for each sales job. The compensation plan can
both motivate and direct a
salesperson's work.
Basic methods include:
1) Straight salary
2) Straight commission
3) Salary plus bonus
4) Salary plus commission.
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Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Companyís Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five Mís of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE