Everything you need to know about personal selling. Personal selling is a promotional tool that has been contributing significantly to the sales in organizations since the industrial age.
Earlier, firms used hawkers and peddlers for door-to-door selling, which still stand tall. But, today many more modern approaches of selling are being adopted to bring in speed and effectiveness.
Personal selling is now a matter of academic discourse, research, and profession. It is is an act of exchange of products or services between a buyer and a seller for a certain amount of money or its equivalent kind.
Personal selling is a highly distinctive word and the only form of direct sales promotion involving face-to-face relationship between sellers and potential customers. Personal selling is a two-way communication or mutual communication.
1. Introduction to Personal Selling 2. Definitions of Personal Selling 3. Objectives 4. Features 5. Nature 6. Importance
7. Types 8. Essentials 9. Role 10. Approaches 11. Difference between Personal Selling and Advertising 12. Advantages and Disadvantages.
What is Personal Selling: Definitions, Objectives, Features, Importance, Types, Advantages and Disadvantages
- Introduction to Personal Selling
- Definitions of Personal Selling
- Objectives of Personal Selling
- Features of Personal Selling
- Nature of Personal Selling
- Importance of Personal Selling
- Types of Personal Selling
- Essentials for Effective Personal Selling
- Role of Personal Selling
- Approaches to Personal Selling
- Difference Between Personal Selling and Advertising
- Advantages and Disadvantages of Personal Selling
What is Personal Selling – Introduction to Personal Selling
Personal selling is a promotional tool that has been contributing significantly to the sales in organizations since the industrial age. Earlier, firms used hawkers and peddlers for door-to-door selling, which still stand tall. But, today many more modern approaches of selling are being adopted to bring in speed and effectiveness. Personal selling is now a matter of academic discourse, research, and profession.
An old adage says, “Nothing happens until something is sold.” This means that until a seller and a buyer come to a point of exchange and do a transaction, no selling or buying can take place. The history of personal selling is dated back to 2000 BC. It originated in ancient Greece. Salespeople at that time were referred to as peddlers.
Kurtz and Boone (2006) scripted that during the 1700s. Yankee peddlers pulled their carts full of goods from village to village and farm to farm, and helped to expand trade among the colonies in the US. The industrial revolution that began in the eighteenth century triggered the need of salespeople for the expansion of business.
Personal selling is an act of exchange of products or services between a buyer and a seller for a certain amount of money or its equivalent kind. It involves a one-to-one interaction between the salesperson representing a company and the prospective buyer, wherein the former informs, assists, and/or persuades the latter to engage in the exchange process to consummate the sales. In fact, the exchange warrants five types of flow between the buyer and the seller.
These are as follows:
i. Product flow.
ii. Ownership flow.
iii. Information flow.
iv. Money flow.
v. Feedback that flows from buyer to seller after the use of the product, demanding after-sales service from the seller.
The salesperson communicates information about the features, characteristics, technical know-how, benefits, and conditions of sale of the product to the buyer before or at the time of delivering the product. In return, the buyer pays money to the seller, acquires ownership or title of the product, and apprises them on the experience of the product use.
Therefore, personal selling is a two-way form of communication. Most often, it is face-to-face where a salesperson representing a company makes an attempt to persuade the potential buyer to buy the company’s offer. It is a promotional technique whereby salespeople use their knowledge and skills for engaging them and the buyers in some sort of an exchange relationship such that both the parties derive values.
The value obtained from this transaction for the salespeople is the monetary reward while the customer receives benefits of the product. Personal selling is not manipulation as the salespeople cannot direct people to buy. They can only encourage, persuade, stimulate, influence, and allure people to buy.
But, personal selling is not just a facilitation of exchange. It encompasses identifying prospective customers, understanding their needs, communicating with them, disseminating the information at the pre-transaction phase, following up after-sales, and providing after-sales service and building relationships with the customers for future business at the post-transaction period.
With the advancement in telecommunication, personal selling can also be performed using telephones, through videoconferencing, or the Internet. This interactive nature makes it the most convenient and effective means of promotional method for building relationships with the customers, particularly in business-to-business market. The purpose of personal selling is to facilitate exchange to the mutual advantages of both the buyers and the sellers.
What is Personal Selling – Definitions Provided by Eminent Authors: Ripley, Harold White Head Opines, W. M. Scott, H.W.Horignton, Kotler, Armstrong and a Few Others
Personal selling is flexible and extremely effective but costly form of sales promotion. Selling maybe are of two types personal or impersonal. Personal selling is a highly distinctive word and the only form of direct sales promotion involving face-to-face relationship between sellers and potential customers. Personal selling is a two-way communication or mutual communication.
Some of the main definitions given by experts are given as under:
Ripley defines, “Salesmanship is the power to persuade plenty of people pleasurably and permanently to purchase your product at a profit.”
Harold White Head opines, “The art of presenting and offering that the prospect appreciates the need for it and that a mutually satisfactory sale follows.”
W. M. Scott defines, “It is a part of salesman’s business to create demand by demonstrating that the need does exist although before his visit there was no consciousness of that need.”
H. W. Horignton defines, “Salesmanship is a personal service rendered to the community in connection with the marketing of goods. It is a service which is essential to the producer and distributor of goods as well as to the consumer.”
Personal selling is a distinctive communication form because it is a two-way communication, and includes social interaction with the prospective buyers. Both the parties can communicate with each other and come to a common understanding of the product. This has become a more effective form of promoting sales.
Management thinkers have defined personal selling through various perspectives.
Some of these are mentioned here:
Kotler and Armstrong (2006) defined personal selling as personal presentation by the firm’s sales force for the purpose of making sales and building customer relationship.
Evans and Berman (1988) defined personal selling as the part of promotion that involves an oral presentation in a conversation with one or more prospective buyers for the purpose of making a sale.
Johnson et al. (1994) defined personal selling as the aspect of promotion that brings human elements into marketing transactions.
Belch and Belch (2006) termed personal selling as a form of person-to-person communication in which a seller attempts to assist and/or persuade prospective buyers to purchase the company’s product or service.
Kerin et al. (2007) defined personal selling as a two-way flow of communication between a buyer and a seller, often in a face-to-face encounter, designed to fulfil the purchase decision of a person or a group.
Thus it can be concluded that personal selling is a process of communication, interaction, persuasion, negotiation, and exchange between a seller and a prospective buyer whereby the former delivers something of value to the latter and the latter pays back the former the equivalent value in monetary or related terms. Through this process, both the parties are satisfied.
What is Personal Selling – 4 Major Objectives: Informative Objectives, Persuasive Objectives, Relational Objectives and Image Building Objectives
Personal selling starts with identifying the prospective customers and ascertaining their needs or helping them recognize the existence of needs or arousing a fresh need in case of a new product or a new market situation or both. Estimating the market demand and communicating it to the organization to take a production decision is also part of personal selling.
It further embodies demonstrating the qualified prospects on how the product works and persuades them on how the product would fulfil their demands. Finally, motivating the target customers to take a buying decision in favour of their product is the culminating point of the job of personal selling.
But, selling does not always end with clinching a deal with the target groups. It should also understand the level of satisfaction of the customers and inform the organization of the customer experiences on the use of the product. It further assists the organization to invoke suitable changes to fill the deficient areas where the perceived experience levels of the customers are less than expected. So, following up after the sale, to elicit satisfaction or dissatisfaction levels of the customer is considered as a far-sighted objective of personal selling.
Broadly speaking, personal selling is designed to fulfill four major objectives.
3. Relational, and
4. Image building.
These have been briefly explained as follows:
1. Informative Objectives:
Informative objectives aim to provide information about the product or service attributes, features, benefits, values, and answer all the queries of the customers. It provides an opportunity to create and increase awareness, interest, and the desire of the potential customers towards the firm’s products/services and prompts them to take a buying decision favourable to the organization.
2. Persuasive Objectives:
Persuasive objectives help to generate interest among prospects, instil conviction, and convert them to buyers. Persuasion aids in establishing superiority of the product over competitors.
i. It uses persuasive communication to stimulate target customers to move in for trial purchase of the company’s products or services.
ii. It motivates potential buyers to seek more information about the company and its offers.
iii. It involves salespeople to support the push strategy to encourage intermediaries to buy and distribute the products to the customers. It, also, facilitates pull strategy by inducing the potential customers to tend towards intermediaries to buy the products of the organization.
3. Relational Objectives:
Relational objectives are served by prompt delivery, customer training, installation, lenient credit terms, after-sales service, warranties, etc. Healthy customer relations lead to develop good company image and recognition.
i. It catalyses order getting, order taking, order influencing, order delivery and follow up after sales for the customers.
ii. It aids the company in retaining old customers, creating new customers and achieving a respectable position in the industry and society.
iii. It helps to reinforce the brand image and the reputation of the company – the two major sought after goals of the firm for stability and growth.
iv. Personal selling can be intelligently used for new business development to augment the customer base of the organization.
4. Image-Building Objectives:
Image-building objectives are aimed at creating a company’s favourable image or goodwill in the eyes of the people.
i. It spreads the company’s concern for social well-being.
ii. It consolidates the confidence and trust of the stakeholders of the company.
iii. It becomes a vital promotional tool for salespersons to deal with customers.
What is Personal Selling – 10 Important Characteristics
Following are some important characteristics of personal selling:
1. Personal Selling is a method of sales communication.
2. Personal Selling includes commercial and social behaviour.
3. Personal Selling includes both selling function and non-selling functions.
4. Personal Selling involves persuasion of customers.
5. Personal Selling involves winning buyer’s confidence.
6. Personal Selling aims at providing information and services to buyers.
7. Personal Selling is a two way process and benefits both buyers and sellers.
8. Personal Selling helps in solving the problems of the buyers and satisfying their needs.
9. Personal Selling is an educative process. It tells consumers the ways in which they can satisfy their needs.
10. Personal Selling is more flexible and adaptable. Because of face to face communication, salesman adjusts himself and his sales talks according to need, desire and behaviour of the consumers.
What is Personal Selling – Nature: Personal Interaction, Personal Attributes of Sales Person, Persuasive Nature and Salesmanship is an Art
1. Personal Interaction:
Personal selling involves one to one personal communication between the sales personnel and the customer. The sales personnel establish a link between the company and the buyer.
2. Personal Attributes of Sales Person:
Salesmanship is based on the personal attributes of the salesman. The voice, appearance, self-confidence, patience, ability to convince the customers determines the success of salesmanship. The sales person with his personal attitude, behaviour creates a favourable impression in the mind of the customer that leads to positive buying decision.
Salesmanship is based on persuasion. The sales person ascertains the prospective customer and creates the need in the minds of the consumer and persuades the consumer to buy the product.
Salesmanship is an act of winning confidence of the consumer .The salesperson creates a need in the mind of the consumer and presents the product according to the needs and wants of consumer. The salesperson with his impressive behaviour and attitude wins the confidence of the consumer.
What is Personal Selling – Importance
Personal selling is one of the major elements in the communication mix (also called promotion mix). It is a more direct, immediate, and personalized form of communication unlike other forms of communication, namely advertising, sales promotion, and publicity which constitute the other elements of promotion mix.
Nowadays, the boundary of promotion mix has extended to include a wide range of promotional activities, such as – trade show, point-of-purchase (POP) display and demonstration, direct mail, word of mouth communication, event marketing, etc.
In a communication programme, a firm can use one, two, three, or a combination of all the four basic types of promotion mix, including personal selling, advertising, sales promotion, and publicity. Different communication tools vary in their utilities and applications. Unlike personal selling, advertising is a non- personal communication. For mass promotion and mass distribution of a product, advertising is extremely useful. But it is believed that for certain customized products and where the number of potential customers is less; personal selling is a viable tool.
Advertising is effective in pre- and post-transaction phases of selling. In pre-transaction phase, it arouses the demands of the consumer and in post-transaction phase it reduces the post-purchase doubts. On the other hand, personal selling involves customers who are active during the transaction phase. In post-purchase phase, selling assumes the responsibility of handling customer complaints or the need for after-sales service. This is because, advertising is a one-way communication but personal selling is a two-way communication process.
There is no scope for receiving any immediate opinion of people in case of advertisements, when they reach mass audience. But since personal selling is a one-on-one interaction between a buyer and a seller, there is more scope for getting first-hand opinion of the prospective users. Actual demonstration of the product in case of advertising is impossible. But, it is possible for the salespeople to show samples of the product, live demonstration, and performance.
So, personal selling gives marketers the highest freedom to convey a message in their style and to satisfy the needs of the customer in comparison to other promotional tools. While personal selling is aimed at prospective customers, other forms of communication may or may not be targeted at prospective customers. Moreover, the results of personal selling can be measured easily. Sales managers can easily compare the performance of the salespeople.
What is Personal Selling – Top 4 Types: Negotiations, Selling Strategy, AIDAS Approach and Stimulus-Response Model
Personal selling may be by negotiation, selling strategy, AIDAS approach and stimulus response approach. The process of personal selling is adopted in the light of the objective of personal selling and sales promotion. These types of personal selling have their respective utilities and are adopted in a situation most suitable to the technique.
Type # 1. Negotiations:
Personal selling is effected through negotiation to arrive at an agreement on the price and other terms arid conditions of sale. Negotiation skills are applied to customers, suppliers, and middlemen. A negotiated exchange is different from a routinised exchange where the terms are established by administered programmes.
In the negotiated exchange, the terms are decided by agreement. This process has become very common these days. Two or more parties negotiate long-term binding agreements. The agreement may cover the quality of goods, the volume of goods, and the time of completing the contract, and so on. In negotiation, two or more parties join together on a particular issue to exchange specific resources.
Negotiation may be used by marketers, economists and social psychologists. The marketers, while negotiating the terms of sale, aim to achieve profits or minimise loss. Economists are interested in bilateral monopolies. “The psychologist believes in the structural context of the agreement, the behavioural pre-dispositions of agreement, interdependence of agreement and use of social-influence strategies.”
The salesman should know when and how to negotiate the terms. He has to build and manage strong relationships with key customers. He should believe in relationship-management because it affects the future sales of the company. Customers are influenced by their cordial relationships with the salesman who is ready to visit them on significant social occasions.
He should be ready to understand the problems and difficulties of his customers. Even nonbusiness problems are shared with customers by an efficient salesman. Lunch, picnic or dinner may be offered by the salesman to influence and develop personal relationships with customers.
Negotiation or bargaining should be guided by an effective strategy. The bargaining strategy is a commitment to achieve objectives. The strategy may be hard or soft. Some authors believe in principled strategy, which is hard on merits and soft on people. A principled negotiation involves the separation of the people from the problem, a focus on interests, on finding options for mutual gain and on insistence on objectives.
Bargaining tactics may be used to attain selling objectives. To acting crazy or as a big shot, or as a prestigiously, or as one having limited authority; to divide and conquer, stall for time, be patient, etc., these are some of the important tactics employed by the salesman to gain the customer’s willingness to purchase his product.
Type # 2. Selling Strategy:
Personal selling operations involve selling strategy and planning. Selling strategy is more effective than negotiation, for it involves determining personal selling objectives, sales policies, formulation of sales strategies, determining the personal selling appropriation and management of the sales force.
Personal selling should have short and long-term objectives. Short- term objectives are specific. They are related to promotional programme and marketing strategy. The long-term objectives are broad and general. They are related to the overall objectives of the company.
The selling strategy should be concerned with the entire selling job-searching out new customers, maintaining customers’ co-operation, providing technical advice and assistance to customers. The objectives of personal selling strategy should be clearly laid down so that they might be systematically attained within the prescribed time.
Sales policies are framed to guide sales management in the formulation of sales strategies, definition of sales jobs and decisions on the size of the sales force. They should be consistent with personal selling objectives. Sales policies describe the method of achieving these objectives.
The personal selling strategy is formulated for the attainment of objectives; that is, it is an adaptation of sales policies and personal selling decisions in a particular marketing situation. Although sales people in different companies perform similar duties and have similar responsibilities, they have to adopt different strategies and policies for their varied selling objectives.
The complexity of the product or product line is another important factor determining the sales strategy. The order-giving or order- taking procedure also differs from company to company. The types of customer, viz., industrial users and consumer users, have different needs.
Therefore, the sales person has to adopt different sales strategies. The sales management may fix the number of persons required to meet the sales needs on the basis of the present capability of the sales force. Sales potential and work load are evaluated to estimate the number of persons required for sales purposes.
The sales persons are estimated to determine the present and future workload. Quantitative objectives are decided by the sales management; and these have to be achieved by the sales force.
Type # 3. AIDAS Approach:
The AIDAS approach has become very popular in sales. It includes attention, interest, desire, action and satisfaction. It is a buyer-oriented formula because it emphasises the customers’ needs and problems. “Attention” makes customers aware of the product as well as the image of the company.
“Interest” refers to the prospects, or the customers’ interest in the product. “Arousing desire” refers to the preferences or likings of the customers. “Action” means building conviction or obtaining a trial order. Promotion insures continuing action. Different promotion blends are required for different segments of the market. Many customers are motivated by a continuous AIDAS approach to purchase the product of the company.
The AIDAS approach is mainly concerned with the problem-solving technique. It solves the problems of the customers. Thus, the sale is made in the mind of the buyer. The need-problem, its solution, the purchase of the product and the satisfaction flowing from the purchase are the basic elements in this approach.
The solution, i.e., the company’s product, should satisfy the needs of the customer, should be adequate enough. It should create a pleasant feeling in the buyer’s mind. The sales presentation should be made in such a way as to ensure that the customers willingly purchase the company’s product because the product is considered adequate by the buyer.
Consumers can develop pleasant feelings for the product which lead to consumer loyalty to it. In this way, repeat sales are ensured. The salesman has to convince his customer that his product offers the real solution to his need-problem.
Type # 4. Stimulus-Response Model:
The stimulus-response model has four components-Drive, Cues, Response, and Reinforcement. The term “drive” refers to the strong stimuli which impel the buyer to purchase the product. The salesman should know that there are certain needs which stimulate the buyer to purchase a particular product.
The need may be dictated by hunger, thirst, safety or self-esteem. The drive may be primary or learned. The primary drive is felt by all persons; and may be for food, clothing and shelter. The learned drives are felt by economically advanced people. The self-esteem, ego-recognition and status-symbol are some of the learned drives.
A salesman should be aware of these various drives if he is to motivate successfully the different classes of people. Cues indicate when the prospect or customer will respond to a stimulus. They are subsidiary to the main drive. The salesman should be able to recognise the cues and motivate the buyer accordingly to purchase the product.
There may be different types of cues stimulating the buyers. They may be product cues, informational cues, activator-cues and non-activator cues. Non-activator cues are dormant cues which influence the buyer at a later stage. The triggering cues influence the purchase decision. Price, package and service may be the triggering cues.
When the salesman has administered the drive and cues, the buyer may respond positively or negatively. Negative responses are evaluated and assessed to convert them into positive responses. The salesman has to reinforce the decisions of the buyers to continue to buy his products. The drive should be effectively utilised to motivate the buyer.
What is Personal Selling – Essentials for Effective Personal Selling: Knowing the Company, Knowledge of Competition, Knowledge of Selling Process and a Few Others
Personal selling is an essential promotional tool to communicate with the customers and achieve sales. An organization may have sound resources, well laid out corporate and marketing strategies, but ineffective and inefficient personal selling practices do not produce desired results for it. How the target customers are approached and dealt with, how their needs and demands are met, and how their problems are resolved are the fundamentals to link organizational goals and objectives with its performance.
Indeed, the following factors are central for effective selling by the salespeople of a company:
Understanding one’s company, its products or services, intermediaries, and customers are crucial for successful selling. A salesperson should know the corporate objective(s), marketing objective(s), sales objective(s), intermediaries handled, customers and their needs and demands, demographic, psychographic, and behavioural characteristics in-depth before moving on to the selling process. Therefore, knowing these objectives, the buying process, key decision makers in buying, and even the corporate culture and climate precisely are important adjuncts to effective selling.
It is seen that competition comes in the way of selling. Ignorance of competition is a threat to the organization. A salesperson should be aware of competitive climate surrounding the environment.
Knowledge of competition means having an idea about the products and services of the competitors, their strengths and weaknesses, the superiority of their products against those of the competitors, relationship of the intermediaries with the competitors, including their terms and conditions, the future plans of the competitors, etc. This further helps a salesperson to defend and establish a product before prospective customers.
3. Knowledge of Selling Process:
A salesperson should know the stages of the selling process before dealing with the prospects. Each stage is important for successful selling. Starting from prospecting to pre-approach, approach, presentation, and demonstration to closing the sale and follow-up after-sales, a salesperson should meticulously go through to convert a prospect to a customer. Similarly, getting the order, processing, and fulfilling orders without procedural expertise will prove a salesperson ineffective.
Knowledgeable salespeople cannot perform their task of selling effectively unless they skilfully handle their customers. Selling skill implies adept variation and manifestation of selling behaviour depending on the type of prospect, selling situation, buying procedures, and strategies of target groups. Salesmanship, here, decides the ability of the salespeople to draw the prospective customer in their favour.
Sales motivation is also a precondition for successful selling. Salespeople, however informative and competent, if lack motivation can jeopardize their selling abilities and ruin the chances of winning the prospects. Indeed, a less motivated salesperson cannot participate in business interaction with the buyer and may frustrate the team effort in selling.
What is Personal Selling – Role of Personal Selling in Product Strategy, Pricing Strategy, Distribution Strategy and Promotional Strategy
Marketing research assumes the responsibility of identifying customers’ needs and problems, while firm marketing mix provides the solutions. Marketing mix is a set of different strategies that a company utilises to implement its marketing plan and pursue its marketing objectives. It is composed of four major strategies i.e., Product strategy, Price strategy, Distribution strategy and Promotion strategy. Personal selling plays important roles in different strategies.
1. Role of Personal Selling in Product Strategy:
A firm’s product is a bundle of benefits offered to the customers. This benefit bundle contains both tangible and intangible components. There are two types of benefits attached to the product-core or primary benefits and peripheral benefit. The core benefit provided by the company is typically the same as offered by other competitors. However, the peripheral benefits attached to the product act as a differentiating device that can create competitive edge. These are peripheral benefits which induce a customer to favour a particular product and personal selling plays a dominant role in it.
The management makes the decision about the features and benefits to be incorporated in the product and the compensation of the product mix. The product can be described in terms of its two dimensions. The number of product lines included (width) and the number of products within each line, (depth).
The Sales management generally does not take any part in making decisions regarding product design and product mix. But under marketing concept, Sales managers help specify desirable product features and benefits provide guidance during the product development phase.
They participate in product testing and test marketing (testing the product in one segment of the market). They offer their valuable advice in making decisions of product mix because they are familiar with the market place. Sales management can also advise with respect to product sourcing i.e., pointing out the source from where the product can be obtained by the company without its production in its own plants.
2. Role of Personal Selling in Pricing Strategy:
The sales managers’ role in Pricing. The product is gaining importance. Price is a value that the seller asks for his product or it is the amount of money for which the ‘seller is willing to transfer the title of his product or service. A price is of little consequence unless it coincides with the value conceptions of prospective buyers i.e., at what price the buyer is willing to purchase the product.
The value conception determines the demand. According to the law of demand, the demand of product increases if price of that product goes down and vice versa. Elasticity of demand (level of change in demand in consequence of the change in the level of price) is another factor that decides the price of a product. Thus company can increase its sales volume by reducing the price but the level of price change depends upon the elasticity of demand.
But companies may have another option to increase its sales volume besides price manipulation. That option is non-price competition i.e., selling the product at higher price but by creating a difference in the minds of prospective buyers about the company’s product in relation to competitors’ products. This permits the seller to gain pricing flexibility and get a premium over the current marketing rate.
Various techniques of non-price competition may be innovative product and package design, distinctive positioning, selecting and aggressively promoting a brand name, offering superior service capability in case of durable consumer goods, providing widespread distribution network etc., which can create product differentiation.
By creating a meaningful difference in the minds of buyers, the company avails of certain freedom in pricing, the product and the Sales management can assist the management in a number of ways – (i) it can ascertain competitors’ pricing strategies and gauge market reactions to alternative price levels, (ii) it can advise senior management in pricing decisions, or (iii) it can be granted discretion in adjusting the prices according to market conditions.
In making individual product pricing decisions one of the two approaches is followed- (1) Cost based methods; and (2) Market oriented pricing method. In cost-based methods price of the product is fixed by adding something for the profit to the cost. The sales managers are involved not only in setting prices by advising the senior management but also in keeping selling costs under control so that the mark-up not put the product at a price disadvantage.
Market oriented pricing, by contrast relies on the market response to alternative price levels. Market oriented pricing may be demand oriented and competition oriented. Demand oriented pricing basically means ‘charge what the traffic can bear.’ i.e., on the basis of elasticity of demand.
Sales managers play a major role in making assessment of consumers’ response because they are familiar with the consumers response as well as competitive pricing behaviour. If the firm chooses to adopt competitive oriented strategy; the sales persons provide the information of competitive pricing behaviour. The knowledge assists in fixing the price of the product at, above below the competitive prices.
3. Role of Personal Selling in Distribution Strategy:
Distribution is another component of marketing mix, which is concerned with the channel of distribution through which the product passes on to the ultimate consumers. The ownership of the product can be transferred in two ways — direct or indirect. In case of direct distribution, the ultimate buyer acquires the title direct from the producer whereas in indirect distribution, the transfer takes place through various middlemen in the distribution channel. In direct selling the organisation has full control over the distribution whereas in indirect selling, the producer has less control over the marketing process.
In both instances — direct and indirect distribution, sales management plays significant role in the distribution process. The sales management would be responsible for maintaining the supply line and making the goods readily available to the consumers otherwise production and selling efforts (mainly advertisement) might prove meaningless.
In direct selling, the sales force has to contact the consumers of the product to convince them to buy the product. In case of indirect distribution, the sales management has to secure the support of Trade-jargon used to describe dealings with middlemen. Selling to the trade also requires a great deal of work with distributor’s customers and prospects.
4. Role of Personal Selling in Promotional Strategy:
The final element of the marketing mix is the promotion that means the presentation of the persuasive message to the firm’s target market in an attempt to stimulate sales. Personal selling is important in this task and plays significant role in conjunction with advertising and sales promotion. Advertisement is a long term tool designed to create awareness among the prospective buyers about the company’s product and their major benefits. It creates positive attitude or interest among the message recipients. Sales promotion techniques support the other aspect of Promotional Strategy.
Advertisement and sales promotion activities are irrelevant unless order-getting function is not under taken by the sales force of the company. They pave the way for personal selling. Unless sales management procures the orders, other functions in the organisation are irrelevant. Sales management is a part of the team effort and must act in concert not only with the other components of the marketing mix but also with the various other non-marketing units.
Thus, sales management or personal selling plays significant role in the marketing mix.
What is Personal Selling – Approaches: Traditional Selling and Modern Selling Approaches
In the following sections, we will read about the traditional and modern selling approaches.
1. Traditional Selling Approach:
The history of selling is rooted in the aftermath of industrial revolution when producers themselves sold the products whatever they produced. As the numbers of production units were less, sellers did not require much effort to deliver the merchandises in the hands of the consumers. Output was limited and the producers devoted their efforts to the physical distribution of the products.
So, organizations were, basically, production and distribution oriented. But, as competition crept in and many manufacturers started producing identical products, the need for some persuasive effort was felt before getting the consumers to agree to purchase their product.
Earlier, understanding the needs of the consumers was not a necessity and selling was primarily a one-sided communication. Sellers dictated the terms of purchase and the buyers simply accepted them without any objection. After World War II, industrial production gained momentum and spearheaded subtle modifications in traditional selling. This was because the demands for consumer goods shot up unexpectedly and thus, triggered high industrial production.
Sellers realized that production planning should start from the consumers’ end and the consumer needs should be given due importance in product innovations and designs. At the same time, apart from the demands of the consumers that was becoming the major focus of production volumes, delivering the right products in the right quantity to the right consumers also turned into a crucial factor to confront competition. Consumers emphasized on the ready availability and the low price of the products.
Indeed, economic theory suggests that when supply exceeds demand, consumers begin to show buying inertia and an organization undertakes some persuasive promotional efforts to coax the consumers to buy. Some aggressive promotions are also resorted to lure target groups particularly for unsought goods. In fact, sales orientation underscores the need for increasing sales volume without delving into consumer expectations and satisfactions. Here, comes the utility of marketing concept.
Organizations understood that to do effective selling, it should operate within the gambit of marketing. Marketing focuses on the consumer-need assessment, formulate appropriate product, price and promotional policies, and develop suitable distribution networks to reach target consumers.
Thus, marketing concepts paved its way to mend loopholes in the selling process. Short-term gains from selling gradually lost its sheen with marketing as an emerging means to build long term relationship with customers along with profit generation. Marketing plans, therefore, featured substantively in the corporate planning process.
Under the traditional selling approach, the situation of overcapacity in production and competitive clout in the market required the salespeople to interact and convince prospective customers with company-instructed canned sales pitch. The objective was to transform as many prospects as possible to being their customers. But during those days, the salespeople did not show any urge to gather detailed information from prospects about their needs or provide them with company and product information.
They used to be mere narrators of product features and benefits. These sales conversations were lopsided where salespeople did the bulk of talking treating prospective customers as mere receivers of information. Talk and transaction were the art of business. Traditional salespeople were made to believe in selling a product and not serving the customers.
They were need creators rather than need soothers. They, even, took manipulative ways if prospects showed inertia or resistance in buying. Following up after the sale was non-existent. Building professional relationship with customers was ante-culture to the organization.
2. Modern Selling Approach:
Connie (2007) noted that modern personal selling got its start during the first part of the twentieth century. Selling has experienced a major turnaround in conceptualization and application particularly in recent times. Economy, today, is characterized by global marketing environment, sizzling competition among market players, both domestic and multinational, changing tastes and preferences of customers by the grace of media explosion and deregulation of economic barriers of nations.
‘Customer focus’ has become the nerve centre of present day selling. Understanding customer needs, translating them to offers, assisting customers in acquiring these offers, and putting a major thrust on post- sell alliance with customers are the seeds of win-win selling for both – sellers and buyers.
Modern selling basically hinges on serving the customers with the best possible solutions of their purchasing problems in a much efficient manner than its competitors. In fact, it is seen that, today customer problems find a route of redress by getting optimal benefits from the product/service if not maximum, at a minimum of their sacrifice including the cost.
Today’s customers are far more informative and discerning unlike the ones in earlier years. Their ability to contrast and compare identical or similar products of different companies cannot be underestimated. Therefore, salespeople of the day should have an in-depth knowledge and the expertise to persuade customers to ascent their offers. Modern selling distinguishes the customers of the same product and focuses on individual transaction approach rather than on approach for all customers.
So, customerization, and not customization, is the benchmark of modern selling. It gives total attention to individual requirement of the customer, need fulfilment, commitment to serve in future because holding a customer for an infinite time period is the core of the success in selling. Also, building customer loyalty is central to establish long-term and never ending relationship with customers.
Today, competition among organizations is not based on core or tangible features but on augmented or peripheral benefits. The more a company can differentiate its products on augmented features, the more attractive will be its offer and the possibility of customer acquisition. For example, usually some companies marketing refrigerators do not focus on providing any different cooling solutions, other than simply providing frost free facility, but focus more on presenting their products in different sizes and colours.
This acts as the USP of the product. Product differentiation followed by most organizations is strategically made based on the warranty on the component parts, follow up after-sales, etc. For machines, helping the customer in installation, educating the customer and adaptation may give an edge to the company in reaching its sales goals. Johnson et al. (1994) termed it as value-added selling. It implies provisioning of customer services that exceeds the expectations of the customers.
Now, telephonic selling, teleshopping, web-based selling, teleconferencing with customers are some of the major changeovers in contemporary selling. Information technology has come to fore to take a lead role in customer interaction management (CIM). Use of electronic data interchange (EDI) system has made the access of interacting with customers easier and quicker.
Automated order placing and processing replenishment, inventory management, sales forecasting, etc., are being done at ease. Doubts and uncertainties of customers are sorted through customer information systems. Customer complaints are easily addressed through SAP solutions or e-CRM (Electronic Customer Relationship Management) system.
Modern selling directs salespeople to act as consultants, problem solvers, partners, and collaborators to customers. Customers are treated as insiders of the business today. Often the advice of loyal customers for the development of marketing mix and associated services are sought for the improvement in the product quality or service characteristics or customer relationship.
What is Personal Selling – Difference between Personal Selling and Advertising
Advertising and personal selling are two most important methods of creating and increasing demand for goods and services. These are widely used throughout the world to introduce the products to the prospective buyers and pushing the sales. But the two are different from each other in many ways.
The points of difference between the two are as follows:
1. Personal selling involves direct interaction of salesmen with individuals. Advertising is non-personal and is addressed to the customers in general.
2. Personal selling is confined to a particular area; advertisement is generally found to cover a larger number of people.
3. In personal selling, there is a two way communication. The salesman explains his viewpoint to the potential buyer and knows about his/her reaction. In advertisement there is one way communication; the targeted persons’ reactions cannot be known immediately.
4. In personal selling, there is only one channel of transmission of messages i.e., personal talk of the salesman with the potential buyers; advertisement offers a wide choice of channels, visual, audio such as – radio and audio visual such as television.
Personal Selling – Advantages and Disadvantages of Personal Selling
After discussions on the objectives and essentials of personal selling, it is important to note the advantages and limitations of personal selling. This will help to understand why a salesperson goes through repeated training sessions to get his act of personal selling right. Understanding the pros and cons of personal selling is also important for a firm because it helps in achieving organizational objectives.
Though it is an expensive mode of promotion and involves setting up of special establishments under marketing department, but if properly planned and executed, it is incomparable to other promotional components. Advertising, sales promotion or publicity can spearhead the promotional campaigns but a company cannot turn promotional plans to its realization without personal selling.
Let us now look at the advantages and disadvantages of personal selling:
Following are the advantages of personal selling:
1. Personal selling is an indistinguishable type of direct, personalized, and persuasive communication that helps to come in close proximity with the potential customers and prepares a one-to-one interactive platform. Therefore, communicating information and getting immediate feedback happens almost simultaneously.
2. Personal selling has the flexibility of adjusting the sales message by inducting subtle modifications of the selling proposition in course of conversation with the prospect, depending on the trend of discussion and mental mapping of the prospect. For example, a price sensitive customer likes to listen more on the value for less money from a product. Orientation on quality may discourage him to cooperate in participative discussion.
3. Demonstrating the product and handling objections on the spot is a genuine advantage of personal selling. In some situations, salespeople find opportunity to give hands-on exhibition and demonstration of the product before the prospect to familiarize them with the product features and operations. At the same time, salespeople can answer the queries and remove doubts or suspicions of the prospects regarding the product or its allied features.
4. Person-to-person interaction assists in creating a personal relationship between the two and continuous nurturing of such relations provides ample commercial benefits to both. Personal selling is irreplaceable in developing a collaborative partnering with the customer and helps promoting a healthy business-to-business relationship.
5. Personal selling is often undertaken in a team or group where each member has a specific task to handle; for instance to solve different problems of the customer. Secondly, many a times, a sales manager accompanies a young salesperson to visit a customer, particularly when the customer is a major account. These team efforts build interpersonal relationships and bolster the morale of the sales force.
Following are the disadvantages of personal selling:
1. Personal selling takes away a large pie of funds from the promotional budget because of the ‘individualized’ nature of communication. Cost per prospect is, therefore, extremely high. Travelling and dearness allowances are expenditure items in the cost of selling and in some selling situations these are quite high.
2. Even if the company spends huge sum of money for personal selling there is no assurance that the sales will be picked up and profitable accounts will emerge. So, the risk of selling is very high.
3. Recruiting, selecting, training, and development costs for salespeople are of extremely high order. However, even with the requisite expenditures and efforts all salespeople may not turn out to be competent.
4. The risk of turnover of a good salesperson is a serious threat to personal selling. Competitors are always on the prowl to draw away skilled salespeople and once it happens, the organization suffers badly.
5. Good and competent salespeople are difficult to find. For the lack of good presentation and problem-handling ineptitude, an organization fails to impress potential customers despite a well-designed product, reasonable price, and smooth distribution policies.