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Chapter 1 - Review
Topics Covered Last Week – In-Review:What Is Selling?Personal Selling TodayA New Definition of Personal SellingThe Golden Rule of Personal SellingEverybody Sells!What Salespeople Are Paid to DoWhy Choose a Sales Career? Is a Sales Career Right for You?
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Chapter 1 - Review
Topics Covered Last Week – In-Review:What Is Selling?Personal Selling TodayA New Definition of Personal SellingThe Golden Rule of Personal SellingEverybody Sells!What Salespeople Are Paid to DoWhy Choose a Sales Career? Is a Sales Career Right for You?
Relationship Marketing:Where Personal Selling Fits
Relationship Marketing:Where Personal Selling Fits
Chapter
Chapter
2
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
Chapter
Chapter
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Main TopicsMain TopicsMain TopicsMain Topics
What Is the Purpose of Business?What Is Marketing?
Customer Orientation’s EvolutionMarketing’s Importance in the Firm
Essentials of a Firm’s Marketing EffortRelationship Marketing
Relationship Marketing and the Sales ForceLevels of Relationship Marketing
Chapter
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Main TopicsMain TopicsMain TopicsMain Topics
Partnering with CustomersThe New Consultative Selling
E-Selling: Technology and Information Build RelationshipsWhat’s a Salesperson Worth?
The Key to Success
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Chapter
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In Chapter 2 We Will See What is Meant by the Terms...
Business Marketing Product, Price, Place, Promotion Personal Selling
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The Purpose of Business is to: Increase the general well being of humankind
through the sales of goods and services
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This Requires
Making a profit in order to operate the business and to provide beneficial products to the marketplace
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Profit is a Means to an End
Profit is needed to serve humankind Profit is needed to operate the business Profit is needed to provide products to the
marketplace
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The Two Basic Functionsof Business
Production of goods or creation of services Marketing those goods and services
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What is Marketing? Marketing is a process of planning:
The conception, pricing, promotion, and distribution of goods, services, and ideas
To create exchanges that satisfy individual and organizational objectives
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Customer Orientation’s Evolution The production concept The selling concept The marketing concept
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The Production Concept
Companies were production oriented
We know what people want – they want our product.
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The Selling Concept
Characterized by product demonstrations and unsophisticated sales techniques
Emphasis on the product Product created and then sold Management is sales-volume oriented Stresses needs of the seller
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The Marketing Concept
Emphasis is on customer’s wants Customer’s wants drive production Management is profit-oriented Planning is long-term Stresses wants of buyers
the tree swing the tree swing
A study in understanding what our customer A study in understanding what our customer actually wantsactually wants
the tree swing the tree swing
what marketing suggestedwhat marketing suggested
the tree swing the tree swing
what management approvedwhat management approved
the tree swing the tree swing
as designed by engineeringas designed by engineering
the tree swing the tree swing
what was manufacturedwhat was manufactured
the tree swing the tree swing
as maintenance installed itas maintenance installed it
the tree swing the tree swing
what the customer wantedwhat the customer wanted
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Exhibit 2-1: The Difference Between Selling and Marketing Concepts
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Marketing’s Importance in the Firm
Marketers have four main objectives:Maximize the sales for existing products in
existing marketsDevelop and sell new productsDevelop new markets for existing or new productsProvide quality service to ensure repeat business
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Exhibit 2-2: The Marketing Group is the Link Between Customers and the Organization
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Product: It’s More Than You Think
A good is a physical object that can be purchased
A service is an action or activity performed for a fee
Value-added refers to benefits received that are not included in the purchase price of a good or service
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Exhibit 2-3: Four Elements of the Marketing
Mix and Four Promotion Activities
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Exhibit 2-4: Examples of Business-To-Business Value-Adding
Help customer reduce process costs Improve yieldsReduce waste (through recycling, etc.)Reduce reworkReduce direct laborReduce indirect labor (inspection, handling)Reduce energy costs
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Help customer reduce inventoryConsignmentJust-in-time deliveryReduced cycle time
Exhibit 2-4: Examples of Business-To-Business Value-Adding
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Help customer reduce administrative costsSimplify billing Improve tractabilityUse electronic data interchange
Exhibit 2-4: Examples of Business-To-Business Value-Adding
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What is Meant by the Term “Product?”
A product is a bundle of tangible and intangible attributes, including package, color, and brand, plus the services and even the reputation of the seller
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The Term “Product” May Refer to a Good or Service
ExamplesGoods - a physical object for sale
AutomobileCell phonePrescription medicine
Services - an action or activity done for others for a fee
Automobile repairWireless phone planHealth insurance
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The Good and the Service:
Automobile - repair services Cell phone - wireless phone plane Prescription medicine - health insurance
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We Will Use the Terms Follow-up and Service. What do They Mean?*
Follow-up refers to maintaining contact with a customer in order to evaluate the effectiveness of the product and the satisfaction of the customer (More on this in Chapter 14)
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The Term “Service” May Refer to A:
Product, as insurance and advertise which is sold by someone
Service, as customer service which is an activity offered by a seller in conjunction with the purchase of a product, such as delivery, repair, credit cards accepted, 800 telephone number, web site, salesperson available to help customer (More on this in Chapter 14)
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Customer Service by the Salesperson Include:
Salesperson goes to customer’s business to help:Resell productsCustomer use productHandling complaintsReturn damaged productsProvide samplesSuggest further business opportunities
(Above discussed in Chapter 1)
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People Buy More Than the Product
People buy want-satisfaction as (More in Chap 4)
Image of owning as aPolo shirt vs. Wal-Mart shirtDodge Viper* vs. Volkswagen Vanagon*
What the product will do Its quality
*products and associated images used for illustrative purposes only
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What is a consumer product? A consumer product is produced for, and
purchased by, households or end consumers for their personal use
What is an example of a consumer product?ToothpasteTelevisionClothes
There Are Two General Types of Products - Consumer and Industrial Products
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There Are Two General Types of Products - Consumer and Industrial Products
What is industrial product? An industrial product is sold primarily for use
in producing other products. Industrial users are profit/nonprofit organizations that buy good and services for one of three purposes*1.To make other goods and services
2.To sell to consumer or other industrial users
3.To conduct the organization’s operations*
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The Key Phrases That Differentiate Between Consumer and Industrial Products are:
Consumer product - personal use Industrial product - producing other products What is an example of an industrial product?
Airlines purchase airplanesBoeing sells their airplanes to airlinesUniversity buys computers
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What Is Another Name for an Industrial Product?*
Business product Organizational product
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Price: It’s Important to Success
Price refers to the value or worth of a product that attracts the buyer to exchange money or something of value for the product
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Distribution Moves Products to Customers
Three Customer GroupsA household refers to a decision-making unit that
buys for personal useA firm is an organization that produces goods and
servicesA government is an organization that has two
functions: The provision of goods and services to households and
firmsThe redistribution of income and wealth
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Consumer and Industrial Products are Often Distributed Through Resellers
What are Resellers? Resellers, such as wholesalers or retailers,
purchase products and then sell to organizations and/or individuals
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What Is a Wholesaler? The Wholesaler (May Be Referred to as a Distributor)
Primarily engaged in buying, taking title to, usually storing and physically handling goods in large quantities, and reselling the goods, usually in smaller quantities toRetailersWholesalersManufacturers
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Exhibit 2-5: Examples of Distribution Channels for Consumer and Industrial Products
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Promotion Tells People
Promotion increases sales by communicating product information to potential customers
The four basic components of a firm’s promotional effort are: (PAPS)Personal sellingAdvertisingPublicitySales promotion
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Exhibit 2-6: Promotion Activities Personal Selling is…
personal communication of information to persuade
Advertising is…non-personal communication of information paid for by an identified sponsor such as an individual or an organization (Methods include TV, newspapers, catalogs and the radio)
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Publicity is…non-personal communication of information that is not paid for by an individual organization. Information appears in media such as television, radio and newspapers
Sales promotion involves…activities or materials used to create sales for goods or services
Exhibit 2-6: Promotion Activities
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Exhibit 2-6
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Exhibit 2-6: Promotion Activities Two types of sales promotion
Consumer - includes free samples, coupons, contests, and demonstrations to consumers
Trade - encourages wholesalers and retailers to purchase and to sell aggressively using devices such as sales contests, displays, special purchase prices, and free merchandise
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Exhibit 2-7: Examples of Each Marketing Mix Element
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Relationship Marketing
Relationship marketing is the creation of customer loyalty
Targets a major customer that it wants to sell to now and in the future
Establishes a long-term collaborative relationship
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Four basic questions used as guidelines in defining the role of the sales force:
1.How much selling effort is necessary to gain and hold customers?
2.Is the sales force the best marketing tool?
3.What type of sales activity will be necessary?
4.Can the firm gain strength relative to its competition with its sales force?
Relationship Marketing andthe Sales Force
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Personal selling builds relationships! Two main functions of personal selling are to:
Generate revenueProvide services to satisfy customers
Flexible in operation Focused on prospective customers Results in actual sales
Relationship Marketing andthe Sales Force
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implement relationship marketing
Relationship Marketing andthe Sales Force
Salespeople
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Summary of Relationship Marketingand the Sales Force
What is the role of the sales force in the marketing effort?
Personal selling builds relationships Salespeople implement relationship marketing
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Exhibit 2-8: Examples of Various Marketing and Sales Methods Used to Sell Mid-Sized Computers Business-To-Business
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Three Levels of Relationship Marketing
Transaction selling Relationship selling Partnering
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Three Levels of Relationship Marketing
Transaction selling: customers are sold to and not contacted again
Relationship selling: the seller contacts customers after the purchase to determine if they are satisfied and have future needs
Partnering: the seller works continually to improve its customers’ operations, sales, and profits
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Exhibit 2-9: Dependence Increases as Relationships become More Important
Trans
actio
nal
High
Low
Rel
atio
nshi
ps
HighLow Dependence
Relatio
nship
Partn
ersh
ip
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Partnering with Customers
Encourages both the buyer and seller to share information
Two companies work toward the same objective
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Partnering, cont…
Components of partnering include: Individual excellence Importance Interdependence Investment Information Integration Institutionalization Integrity
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Exhibit 2-10
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Consultative Selling
The process of helping the customer achieve strategic short and long-term goals through the use of the seller’s goods and/or servicesA highly interactive dialogue between a
salesperson and a customerA balanced exchange of information
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Three Consultative Selling Roles for the 21st Century
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Three Roles of Consultative Selling
The Team LeaderCoordinates all of the information, resources, and
activities needed to support customers before, during, and after the sale
The Business ConsultantGives advice and service. Uses internal and
external resources to gain an understanding of the customer’s business and marketplace
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The Long-Term AllyCreates a “win–win” situation. As the customer’s
sales and profits grow, so do the salesperson’sThe ability of a salesperson to fulfill the role of
long-term ally is a pivotal factor in determining whether a sales transaction is just a transaction or the beginning of a relationship
Three Roles of Consultative Selling
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The Customer-Seller Relationship Gap
May occur when the salesperson’s interest in the customer declines
Usually after the sale Yet the customer’s interest increases after
the sale This is one reason why service after the
sales is so important
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What’s a Salesperson Worth?
“Worth” is dependent upon at least three factors:What the salesperson costsHow much he/she sellsThe profit margin
Salespeople make a valuable contribution to the success of their employer
Selling closes deals and generates the revenue to keep the organization in business
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The Key to Success
Knowing and satisfying target customers with competitively superior products and service
Marketing is the company function that defines customer targets and the best way to satisfy their needs and wants competitively and profitably
Marketing’s main customer contacts are salespeople
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Exhibit 2-13: Marketing and Personal Selling Provide Service to Customers
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Summary
Selling is only one part of the overall marketing activities of the firm
Marketing is an exchange process between buyers and sellers
The marketing concept is based upon a firm’s desire to increase sales while anticipating and satisfying consumer needs
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The marketing mix is comprised of four variables:ProductPriceDistributionPromotion
The role of the salesperson is considered carefully in the firm’s determination of the promotional aspect of its marketing mix
Summary, cont…
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Consultative selling focuses on the salesperson’s ability to provide customer satisfaction by adding value to the sales transaction
Summary, cont…