Description
It talks about the various types of competitive strategy. It also describes quantitative and qualitative personal selling objectives.
FORMULATING PERSONAL-SELLING STRATEGY
?
Competitive Settings --Pure, Monopolistic, Oligopolistic, No Direct Competition Personal Selling Objectives -- Qualitative & Quantitative Determining the kind of sales personnel --Product Market Analysis, Salesperson’s role in securing orders, choice of basic selling style Determining the size of the sales force --Workload, Sales Potential, Incremental Individualizing selling strategies
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Pure
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Large number of buyers and sellers No one powerful enough to control or influence market prices No buyer or seller is so big which can impact the product’s total demand and supply All products are identical, no differentiation All buyers are aware of all sellers’ prices
Not a real world situation and hence no company concerns itself with a particular personal selling strategy for Pure Competition
Monopolistic
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Many competing producers sell products that are differentiated from one another (ie. the products are substitutes, but are not exactly alike) Easy for additional competitors to enter the market Advertising differentiates the brand in the minds of final buyers and stimulates selective demand Key element in marketing strategy is the ability to differentiate the product ( by both Advertising and Personal Selling) Personal Selling’s role is that of servicing the distribution network and stimulating promotional efforts by the middlemen
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?
Oligopolistic ? Number of competitors are small enough that they are individually identified and known to each other
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Difficult for new competitor to enter the market Successful organizations keep on growing and less successful disappears Oligopoly produces most aggressive competition Strategies of one player has deep impact on the strategies of other players
?
?
?
Personal Selling Strategy plays important role in building and maintaining dealer cooperation, in servicing distribution network and in gathering information on competitor’s activities
?
No Direct Competition Both monopoly or oligopoly have indirect competition They vie sellers in other industries for the same prospects’ interest and buying decisions Even in case of no direct competition, personal selling and advertising plays an important role Both require the effective implementation of personal selling strategy in terms of both kind and number of sales personnel even in case of indirect competition Choosing pricing strategy calls for effective implementation of personal selling strategy
? ?
?
Qualitative ? Vary with competitive setting ? Long Term ? Carried from one operating period to another ? When qualitative objectives change, there are changes in nature of sales jobs and size of the sales force Quantitative ? Vary with competitive setting ? Short Term ? Adjusted from operating period to operating period ? Since short term, they impact more upon the size of the sales force than upon the nature of the sales job
Each company deals with unique set of marketing factors: ? Strengths & Weakness of products ? Motivations and buying practices of its customers and prospects ? Pricing Strategy ? Competitive Setting Different selling jobs require different levels of selling and non selling activities, training, technical and other knowledge
We must understand what is expected of salesperson: ? Job Objectives ? Duties and Responsibilities ? Performance measures
?
Product Specialists When product is highly technical ? Requiring salespersons to advise on uses and applications
?
?
Market Specialists ? Product is non technical ? When different kinds of customers have unique buying problems and require special sales approaches or need special service Combination of both On the basis of Product-Market grid, you can chose whether the sales personnel should be product or market specialist
?
?
Dominant Interdependence ? Dominant Expertise
Between Customers Between Products
Product Technologies
Product Specialists
Full-Line Salespersons (supported by Product Managers)
Customers’ Applications
Customer Specialists Full-Line Salespersons (specialized by kind of customer)
?
Salespersons may be active or passive in securing orders The role influences the decision of kind of staff required
?
?
Salespersons may seek order aggressively
They need only take orders coming their way Salespersons may act as advisors to middlemen or the customer
?
?
?
Trade Selling
? ?
?
? ?
Develops and maintains long term relationships with a stable group of customers Low key selling with little or no pressure Routine job Advertising and other promotions more important than personal selling Help customer build up their volume through promotional assistance
?
Missionary Selling
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Increase sales volume by assisting customers with their selling efforts ? Persuade indirect customers to by from the company’s direct customers ? They also play a role in influencing people who do not purchase the product but who influence its purchase
?
Technical Selling
? ?
?
? ?
Deals primarily with company’s established accounts Increase their volume of purchase by providing technical advice and assistance Performs advisory functions similar to the missionary salesperson In addition, sells direct to industrial users and other buyers In this style, ability to identify, analyze and solve customers’ problem is important
?
New-business Selling
? ? ?
Find and obtain new customers Convert prospects into customers Usually salespersons are creative and ingenious and posses high degree of resourcefulness Sometimes salesperson doing trade selling engages themselves in new-business selling also
?
?
Workload Method
1. Classify customers, both present and prospective into sales volume potential categories
2. Decide on the length of time per sales call and desired call frequencies on each class
3. Calculate the total work load involved in covering the entire market 4. Determining the total work time available per salesperson 5. Divide the total work time available per salesperson by task 6. Calculate the total number of salespeople needed
?
Sales Potential Method
? ?
Concept of Sales Personnel Unit A salesperson may represent more or less than one sales personnel unit depending upon his/her skills and expertise Sales job descriptions are constructed on management assumption that they describe what the average salesperson with average performance will accomplish With above information, we can derive amount of sales volume each salesperson should produce Dividing the above amount into forecasted sales volume and allowing for sales force turnover results in an estimated number of salespeople needed
?
?
?
N = S/P (1 + T) Where N = Number of sales personnel unit S = Forecasted sales volume P = Estimated sales productivity of one sales personnel unit T = allowance for rate of sales force turnover
?
Incremental Model
?
Company develops a sales response function (a quantitative function that’s describes the relationship between the amount of personal selling effort and the resulting sales volume Based on the proposition: Net profits will increase when additional sales personnel are added if the incremental sales revenue exceed the incremental costs incurred Information required: Incremental costs and Incremental revenue
Calculate the net profit contribution resulting from the addition of each salesperson
?
? ?
? ?
Although conceptually correct, it is difficult to apply Not suited where personal selling is not the primary means of making sales (where advertising and other promotions play an important role) Fails to account for possible competitive reactions
?
?
?
?
?
Each salesperson must individualize his or her dealings with the customer Regardless of the basic selling style or the role of order getter or order taker, the salespersons’ success depends upon the outcome of interaction with the customers Behavior and sales pitch of the salesperson varies from customer to customer Selling skills is a function of both ? preplanning of each sales call ? performance on the call itself Individual salesperson’s performance ultimately determine the success or failure of company’s overall personal-selling strategy, sales management has a very important role in helping them develop and improve selling skills
doc_935298327.ppt
It talks about the various types of competitive strategy. It also describes quantitative and qualitative personal selling objectives.
FORMULATING PERSONAL-SELLING STRATEGY
?
Competitive Settings --Pure, Monopolistic, Oligopolistic, No Direct Competition Personal Selling Objectives -- Qualitative & Quantitative Determining the kind of sales personnel --Product Market Analysis, Salesperson’s role in securing orders, choice of basic selling style Determining the size of the sales force --Workload, Sales Potential, Incremental Individualizing selling strategies
?
?
?
?
Pure
?
? ?
?
?
Large number of buyers and sellers No one powerful enough to control or influence market prices No buyer or seller is so big which can impact the product’s total demand and supply All products are identical, no differentiation All buyers are aware of all sellers’ prices
Not a real world situation and hence no company concerns itself with a particular personal selling strategy for Pure Competition
Monopolistic
?
Many competing producers sell products that are differentiated from one another (ie. the products are substitutes, but are not exactly alike) Easy for additional competitors to enter the market Advertising differentiates the brand in the minds of final buyers and stimulates selective demand Key element in marketing strategy is the ability to differentiate the product ( by both Advertising and Personal Selling) Personal Selling’s role is that of servicing the distribution network and stimulating promotional efforts by the middlemen
?
?
Oligopolistic ? Number of competitors are small enough that they are individually identified and known to each other
?
Difficult for new competitor to enter the market Successful organizations keep on growing and less successful disappears Oligopoly produces most aggressive competition Strategies of one player has deep impact on the strategies of other players
?
?
?
Personal Selling Strategy plays important role in building and maintaining dealer cooperation, in servicing distribution network and in gathering information on competitor’s activities
?
No Direct Competition Both monopoly or oligopoly have indirect competition They vie sellers in other industries for the same prospects’ interest and buying decisions Even in case of no direct competition, personal selling and advertising plays an important role Both require the effective implementation of personal selling strategy in terms of both kind and number of sales personnel even in case of indirect competition Choosing pricing strategy calls for effective implementation of personal selling strategy
? ?
?
Qualitative ? Vary with competitive setting ? Long Term ? Carried from one operating period to another ? When qualitative objectives change, there are changes in nature of sales jobs and size of the sales force Quantitative ? Vary with competitive setting ? Short Term ? Adjusted from operating period to operating period ? Since short term, they impact more upon the size of the sales force than upon the nature of the sales job
Each company deals with unique set of marketing factors: ? Strengths & Weakness of products ? Motivations and buying practices of its customers and prospects ? Pricing Strategy ? Competitive Setting Different selling jobs require different levels of selling and non selling activities, training, technical and other knowledge
We must understand what is expected of salesperson: ? Job Objectives ? Duties and Responsibilities ? Performance measures
?
Product Specialists When product is highly technical ? Requiring salespersons to advise on uses and applications
?
?
Market Specialists ? Product is non technical ? When different kinds of customers have unique buying problems and require special sales approaches or need special service Combination of both On the basis of Product-Market grid, you can chose whether the sales personnel should be product or market specialist
?
?
Dominant Interdependence ? Dominant Expertise
Between Customers Between Products
Product Technologies
Product Specialists
Full-Line Salespersons (supported by Product Managers)
Customers’ Applications
Customer Specialists Full-Line Salespersons (specialized by kind of customer)
?
Salespersons may be active or passive in securing orders The role influences the decision of kind of staff required
?
?
Salespersons may seek order aggressively
They need only take orders coming their way Salespersons may act as advisors to middlemen or the customer
?
?
?
Trade Selling
? ?
?
? ?
Develops and maintains long term relationships with a stable group of customers Low key selling with little or no pressure Routine job Advertising and other promotions more important than personal selling Help customer build up their volume through promotional assistance
?
Missionary Selling
?
Increase sales volume by assisting customers with their selling efforts ? Persuade indirect customers to by from the company’s direct customers ? They also play a role in influencing people who do not purchase the product but who influence its purchase
?
Technical Selling
? ?
?
? ?
Deals primarily with company’s established accounts Increase their volume of purchase by providing technical advice and assistance Performs advisory functions similar to the missionary salesperson In addition, sells direct to industrial users and other buyers In this style, ability to identify, analyze and solve customers’ problem is important
?
New-business Selling
? ? ?
Find and obtain new customers Convert prospects into customers Usually salespersons are creative and ingenious and posses high degree of resourcefulness Sometimes salesperson doing trade selling engages themselves in new-business selling also
?
?
Workload Method
1. Classify customers, both present and prospective into sales volume potential categories
2. Decide on the length of time per sales call and desired call frequencies on each class
3. Calculate the total work load involved in covering the entire market 4. Determining the total work time available per salesperson 5. Divide the total work time available per salesperson by task 6. Calculate the total number of salespeople needed
?
Sales Potential Method
? ?
Concept of Sales Personnel Unit A salesperson may represent more or less than one sales personnel unit depending upon his/her skills and expertise Sales job descriptions are constructed on management assumption that they describe what the average salesperson with average performance will accomplish With above information, we can derive amount of sales volume each salesperson should produce Dividing the above amount into forecasted sales volume and allowing for sales force turnover results in an estimated number of salespeople needed
?
?
?
N = S/P (1 + T) Where N = Number of sales personnel unit S = Forecasted sales volume P = Estimated sales productivity of one sales personnel unit T = allowance for rate of sales force turnover
?
Incremental Model
?
Company develops a sales response function (a quantitative function that’s describes the relationship between the amount of personal selling effort and the resulting sales volume Based on the proposition: Net profits will increase when additional sales personnel are added if the incremental sales revenue exceed the incremental costs incurred Information required: Incremental costs and Incremental revenue
Calculate the net profit contribution resulting from the addition of each salesperson
?
? ?
? ?
Although conceptually correct, it is difficult to apply Not suited where personal selling is not the primary means of making sales (where advertising and other promotions play an important role) Fails to account for possible competitive reactions
?
?
?
?
?
Each salesperson must individualize his or her dealings with the customer Regardless of the basic selling style or the role of order getter or order taker, the salespersons’ success depends upon the outcome of interaction with the customers Behavior and sales pitch of the salesperson varies from customer to customer Selling skills is a function of both ? preplanning of each sales call ? performance on the call itself Individual salesperson’s performance ultimately determine the success or failure of company’s overall personal-selling strategy, sales management has a very important role in helping them develop and improve selling skills
doc_935298327.ppt