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SDM-Ch.2 1

Chapter 2

Personal Selling:

Preparation and Process

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SDM-Ch.2 2

Learning Objectives

To understand psychology in selling, buying

decision process and buying situations

To learn communication skills, sales knowledge,

and sales related marketing policies

To understand personal selling process

To learn about negotiation

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SDM-Ch.2 3

Psychology in Selling

If a sales person makes a presentation, the

prospect may or may not buy The above buyer behaviour model does not tell

us the reasons of buying or not buying

To understand the psychological aspects of

selling or buying, salespeople should studyconsumer or buyer behaviour, including buying

process and situations

Stimulus(Sales Presentation)

Response(buy or no buy)

Buyers decisionmaking process

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SDM-Ch.2 4

Buying Process of Consumers and Business Buyers

Five stage model for householdcustomers

Eight stage model for businessbuyers

1. Problem / need recognition 1. Problem / need recognition

2. Characteristics and quantity

determination

3. Specification development

2. Information search / collection 4. Supplier search and qualification

5. Obtain and analyse supplier

proposals

3. Evaluate alternatives 6. Evaluation and selection of

suppliers

4. Purchase decision 7. Selection of purchase order routine

5. Post purchase behaviour 8. Performance feedback and post-

purchase evaluation

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SDM-Ch.2 5

Buying Situations Faced By

Household customers Business Buyers

Routine decision-making New task / New purchase

Limited decision-making Modified rebuy / change in

supplier

Extensive decision-making Straight rebuy / Repeat purchase

Buying process and situations differ for household

consumers and business buyers. Consumers / Buyers may skip or reverse some stages in

buying process. E.G.A consumer buying toothpaste

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SDM-Ch.2 6

Knowledge of Sales and Sales-related

Marketing Policies

Sales Knowledge Marketing Policies

Company knowledge Pricing and Payment policies

Product knowledge Product policies

Customer knowledge Distribution policies Competitor knowledge Promotional policies

Major reasons for giving above information / knowledge

through training programmes to salespeople are:

increase their self-confidence Meet customers expectations

Increase sales

Overcome competition

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SDM-Ch.2 7

The Sales Process

As a part of selling activities, if salespeople follow the steps

or phases shown below, their chances of success are far

better.

Prospecting &

QualifyingPreapproach /

Precall planningApproach

Presentation &

Demonstration

Follow-up &

ServiceTrail close /

Closing the sale

Overcoming

Objections

The sequence of above steps may change to meet the

sales situation in hand.

Some of the above steps may not be applicable for selling

to the trade

We now discuss application of above steps to industrial

selling

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SDM-Ch.2 8

Prospecting It is identifying or finding prospects i.e. prospective orpotential customers.

Methods of prospecting or sales lead generation are:(1) referrals from existing customers, (2) company sources(website, ads., tradeshow, teleprospecting), (3) externalsources (suppliers, intermediaries, trade associations), (4)salespersons networking, (5) industrial directories, (6) coldcanvassing

Qualifying

Companies qualify sales leads by contacting them by mailor phone to find their interests (or needs) and financialcapacity.

Leads are categorized as: Hot, Warm, and Cool

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SDM-Ch.2 9

Preapproach

Information gathering about the prospect.Sources of information: the Internet, industrial

directories, government publications,

intermediaries, etc.

Precall planning

Setting call objectives

Tentative planning of sales strategy: which

products, features and benefits may meet thecustomer needs

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SDM-Ch.2 10

Approach

Make an appointment to meet the prospect Make favourable first impression

Select an approach technique:

Introductory Customer benefit

Product

Question

Praise

The approach takes a few minutes of a call,

but it can make or break a sale

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SDM-Ch.2 11

Presentation and Demonstration

There are four components:

Understanding the buyers needs

Knowing sales presentation methods / strategies Developing an effective presentation

Using demonstration as a tool for selling

We will examine each of the above points

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SDM-Ch.2 12

Understanding the buyers needs

Firms and consumers buy products / services to

satisfy needs

To understand buyers needs, ask questions andlisten

In business situations, problem identification andimpact questions are important

E.G.

Have you experienced any problems on qualityand delivery from the existing supplies?

What impact the quality and delivery problemswill have on your costs and customer satisfaction?

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SDM-Ch.2 13

Knowing Sales Presentation Methods/Strategies

Firms have developed different methods / styles / strategies of

sales presentation

Stimulus response method / canned approach.

It is a memorised sales talk or a prepared sales presentation.

The sales person talks without knowing the prospects needs.

E.G. Used by tele-marketing people

Formula method / formulated approach. It is also based on stimulus response thinking that all

prospects are similar.

The salesperson uses a standard formula AIDA (attention,

interest, desire, and action).

It is used if time is short and prospects are similar.

Shortcomings are: prospects needs are not uncovered and

uses same standard formula for different prospects.

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SDM-Ch.2 14

Sales Presentation Methods (Continued)

Need satisfaction method Interactive sales presentation

First find prospects needs, by asking questions andlistening

Use FAB approach: Features, Advantages, Benefits Effective method, as it focuses on customers

Consultative selling method / Problem-solvingapproach

Salespeople use cross-functional expertise Firms adopt team selling approach

It is used by software / consulting firms

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SDM-Ch.2 15

Developing an Effective Presentation

Some of the guidelines are:

Plan the sales call

Adopt presentation to the situation and person

Communicate the benefits of the purchase

Present relevant and limited information at atime

Use the prospects language

Make the presentation convincing give

evidence Use technology like multi-media presentation

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SDM-Ch.2 16

Using Demonstration

Sales presentation can be improved bydemonstration

Demonstration is one of the important selling

tools EGs: Test drive of cars; demonstration of

industrial products in use

Benefits of using demonstration for selling are:

Buyers objections are cleared

Improves the buyers purchasing interest Helps to find specific benefits of the prospect

The prospect can experience the benefit

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SDM-Ch.2 17

Overcoming Sales Objections / Resistances

Objections take place during presentations /when the order is asked

Two types of sales objections:

Psychological / hidden

Logical (real or practical)

Methods for handling and overcoming

objections: (a) ask questions, (b) turn an

objection into a benefit, (c) deny objections

tactfully, (d) third-party certificate, (e)

compensation

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SDM-Ch.2 18

Trial close and Closing the sale

Trial close checks the attitude or opinion of theprospect, before closing the sale (or asking for

the order)

If the response to trial close question is

favourable, then the salesperson should closethe sale

Some of the techniques used for closing the

sale are: (a) alternative-choice, (b) minor points,

(c) assumptive, (d) summary-of-benefits, (e) T-

account, (f) special-offer, (g) probability, and (h)

negotiation

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SDM-Ch.2 19

Follow-up and Service

Necessary for customer satisfaction

Successful salespeople follow-up in different

ways: For example,

Check order details

Follow through delivery schedule

Visit when the product is delivered

Build long-term relationship

Arrange warranty service

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SDM-Ch.2 20

Negotiation

Salespeople, particularly in business to business selling,

need negotiating skills

When to negotiate?

(a) When the buyer puts certain conditions for buying to

the seller, (b) When agreement between the buyer and

the seller is needed on several factors, (c) When theproduct is customised, (d) When the final price is to be

decided

How to prepare for negotiation?

(a) planning, (b) building relationship, (c) purpose Styles of negotiation

(a) I win, you lose, (b) Both of us win (or win-win style),

(c) You win, I lose, and (d) Both of us lose

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SDM-Ch.2 21

Key Learnings

For understanding psychology in selling, study

consumer or buyer behaviour, buying process andsituations

Salespeople are given knowledge of sales and relevant

marketing policies in order to increase their self-

confidence and sales, and meet customersexpectations

Typical steps in the sales process include prospecting

and qualifying, preapproach, approach, presentation

and demonstration, overcoming objections, trial close /

closing the sale, follow-up and service

Salespeople should know when to negotiate, how to

prepare for negotiation and which style of negotiation to

use