CHAPTER 1 Personal Selling and the Marketing Concept

CHAPTER 1 Personal Selling and the Marketing Concept Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 1

Learning Objectives • Define personal selling and describe three prescriptions of a personal selling philosophy • Describe contributions of personal selling to the information economy • Discuss personal selling as an extension of the marketing concept • Describe the evolution of consultative selling from the marketing era to the present Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 2

Learning Objectives • Define strategic selling and name four broad strategic areas of the Strategic/Consultative Selling Model • Describe evolution of partnering and the nature of a strategic selling alliance • Explain how value-added strategies enhance personal selling Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 3

Definition of Personal Selling • Person-to-person communication with a prospect • Personal selling is a process of • • Developing relationships Discovering needs Matching products with needs Communicating benefits • Viewed as a process that adds value Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 4

Philosophy of Personal Selling • A strategic resource is information • Salespeople are the eyes/ears of the marketplace • Salespeople can collect wide range of competitive intelligence • Business is defined by customer relationships • Sales success depends on adding value Michael Hammer, consultant and author of The Agenda, says, “The real new economy is the customer economy. ” Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 5

A Shift in Emphasis FIGURE 1. 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 6

Personal Selling in the Information Age • An evolution from the industrial economy to the information economy • Began in the 1950 s • New emphasis is information exchange rather than producing goods • Implications for personal selling Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 7

The Marketing Concept • A principle that holds that achieving organizational goals depends on: • Knowing the needs and wants of target markets • Delivering the desired product • Paths to sales and profits are: • Customer focus • Value Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 8

The Marketing Mix FIGURE 1. 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 9

Important Role of Personal Selling • Often the major promotional method • Firms invest in personal selling • Personal selling has evolved because: • Products and services are more sophisticated and complex • Competition has greatly increased • Customer demand for quality, value, and service has risen sharply Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 10

Evolution of Consultative Selling • Consultative selling era (late 1960 s to early 1970 s) • Mass markets break into target markets • Emphasis on need identification • Information sharing and negotiation replace manipulation Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 11

Evolution of Consultative Selling Transactional selling • Process that serves the buyer primarily interested in price and convenience Consultative selling • Process that developed from the marketing concept, emphasizing need identification Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 12

Evolution of Consultative Selling Features of consultative selling include: • Customer is a person to be served, not a prospect to be sold • Two-way communication identifies (diagnoses) customer’s needs; no high-pressure sales presentation • Emphasis on information giving, problem solving, and negotiation rather than manipulation • Emphasis on service after the sale Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 13

Evolution of Strategic Selling • A strategic market plan • Outlines necessary methods and resources • Considers areas to be coordinated • Finance • Production • Personnel • Marketing • Influences the sale of products • Serves as guide for strategic selling plan Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 14

Evolution of Strategic Selling • Tactics • Specific techniques, practices, and methods used in customer interaction • Strategy • Carefully conceived plan needed to accomplish sales objectives • A prerequisite to tactical success Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 15

Evolution of Strategic Selling • Strategic selling era (early 1980 s) • Market niches require more planning • Equal emphasis on strategy and tactics • Product positioning vital • Partnering era (1990 to present) • Customer, not product, as driving force • Emphasis on strategies that create customer value Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 16

FIGURE Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 17 1. 5

Develop a Relationship Strategy Adopt a win-win philosophy Project a professional image Maintain high ethical standards “People don’t care how much you know until they know how much you care. ” Harvey B. Mackay, founder of Mackay Envelope Corporation Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 18

Develop a Product Strategy Become a product expert Sell benefits, not features Configure value-added solutions “Diagnose before you prescribe. ” Stephen Covey, author of The 7 Habits of Highly Effective People Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 19

Develop a Presentation Strategy Prepare objectives Develop a presentation plan Provide outstanding service Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 20

Develop a Customer Strategy Understand the buying process Understand buyer behavior Develop prospect base Patricia Seyold, best-selling author of The Customer Revolution says, “We are in the midst of a profound revolution: the customer revolution. ” Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 21

Interrelationship of Basic Strategies FIGURE 1. 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 22

Evolution of Partnering • Buzzword of 1990 s, became business reality in 2000 s • “Strategically developed, long-term relationship that solves the customer’s problems” • Relationship selling relies on a customized approach to each client • Enhanced with high ethical standards and Customer Relationship Management Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 23

Strategic Alliances • Formed by companies that have similar business interests and, thus, gain a mutual competitive advantage • The goal is to achieve a marketplace advantage by teaming up with another firm • Highest form of consultative selling required to build win-win alliances Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 24

Strategic Selling Alliances FIGURE 1. 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 25

Example of Partnering: Campbell Food Service, Inc. See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 26

Example of Partnering: Cushman &Wakefield See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 27

Partnering is Enhanced with Customer Relationship Management See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 28

Value Creation • Value-added selling = creative improvements that enhance customer experience • The information economy rewards salespeople who add value at each step • When customer is not aware of value added by salespeople, the focus may shift to price Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 29

Customer Value Model FIGURE 1. 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 30

Value-Added Selling Example: Wisconsin Milk Marketing Board See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 31

Key Concept Discussion Questions • Define personal selling and describe three prescriptions of a personal selling philosophy • Describe the contributions of personal selling to the information economy • Discuss personal selling as an extension of the marketing concept • Describe the evolution of consultative selling from the marketing era to the present Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11 -32 32

Key Concept Discussion Questions • Define strategic selling and name the four broad strategic areas in the Strategic/Consultative Selling Model • Describe the evolution of partnering and the nature of a strategic selling alliance • Explain how value-added selling strategies enhance personal selling Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11 -33 33

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 - 34 34