chapter 16 personal selling and sales...

Copyright©2014 Pearson Education

Chapter 16

PERSONAL SELLING AND SALES PROMOTION

MARKETING STARTER: CHAPTER 16 IBM: A Classic Model for Modern Customer-Focused Selling

Synopsis

Building upon nearly a century of successful product innovation and ―solutions selling,‖ IBM has grown into a $107

billion company. Since 1915, what IBM sells has changed dramatically. But what hasn’t changed is how IBM sells.

IBM salespeople have always been customer relationship developers and solutions providers. Consider Vivek

Gupta, who became IBM’s top salesperson in its fastest-growing industry (telecommunications) and fastest-growing

market (India). When Gupta first joined IBM in 2003, he launched his own extensive investigative effort, getting to

know people, learning about IBM and its customers, and developing a rock-solid knowledge of how the company’s

products and services fit customer needs. Gupta thrives on rooting out customer problems to solve. ―You have to

understand (customers’) pain points,‖ he explains. ―And they are not going to spell them out.‖ Fueled by keen

insights and hard work, Gupta has broken into a number of lucrative new markets for ―Big Blue.‖ IBM’s culture has

always dictated that its salespeople be ―part teacher, part psychologist, and part glad-hander,‖ observes one IBM

watcher. But Gupta’s success demonstrates that to be really good in sales today, they also must be ―part diplomat,

part entrepreneur, and part inventor‖—complete customer problem solvers. Thus, over the past 100 years, many

things have changed as IBM has adapted to the turbulent technological environment. But one thing has remained

constant—IBM salespeople are still inspired by founder Thomas J. Watson’s principles of selling.

Discussion Objective

A brief and focused 10- to 15-minute discussion of IBM’s ―solutions selling‖ approach will give students a clearer

understanding of modern, customer-centered sales. The discussion should also extinguish any lingering,

stereotypical perceptions of salespeople as pushy glad-handers. IBM salespeople are well-educated, well-trained

professionals who succeed by partnering with corporate customers and solving their problems for mutual gain.

Starting the Discussion

After a brief discussion to highlight the differences between ―standard selling‖ and IBM’s ―solutions selling,‖ go

online at http://www-01.ibm.com/software/commerce/selling-solutions/ to give students a glimpse into the

collaborative, professional nature of personal selling at IBM. In fact, it might even significantly boost the number of

students interested in learning more about sales careers with organizations such as IBM. Move along quickly guided

by the following questions.

Discussion Questions

1. What is the history of IBM’s solutions-oriented sales approach? Where does it find its roots? (Founder

Thomas J. Watson hired only top-performing graduates from Ivy League universities, and he insisted that

they wear conservative suits and white dress shirts. He demanded the highest ethical standards. IBM

provided intensive sales training that focused on developing a deep knowledge of the company and its

customers. Above all, Watson stressed, ―be a good listener, observe, study through observation.‖ This

advice became the foundation of what the company later came to call ―solutions selling.‖)

2. Describe IBM’s corporate culture and how it supports a successful customer-focused sales force. (IBM’s

customer-focused sales force has been the model for modern personal selling for nearly a century. IBM

salespeople have always been customer relationship developers and solutions providers. The company’s

Formatted: Space Before: 1.2 line

http://www-01.ibm.com/software/commerce/selling-solutions/


culture has always dictated that its salespeople be ―part teacher, part psychologist, and part glad-hander.‖

However, to be really good in sales today, salespeople also must be ―part diplomat, part entrepreneur, and

part inventor‖—complete customer problem solvers.)

3. How does the IBM story relate to the concepts in Chapter 16 on personal selling? (When it comes to almost

any aspect of managing a sales force, IBM sets the gold standard. It’s a great example of the role sales

forces play in creating and managing customer relationships. Keep the IBM ―solutions selling‖ example in

hand as you discuss various aspects of designing and managing a sales force.)

CHAPTER OVERVIEW Use Power Point Slide 16-1 here

This chapter concentrates on two more IMC elements—personal selling and sales promotion.

Personal selling is the interpersonal arm of marketing communications, in which the sales force

interacts with customers and prospects to build relationships and make sales.

Sales promotion consists of short-term incentives to encourage purchase or sale of a product or

service.

Although this chapter examines personal selling and sales promotion as separate tools, they must

be carefully integrated with other elements of the promotion mix.

CHAPTER OBJECTIVES Use Power Point Slide 16-2 here

1. Discuss the role of a company’s salespeople in creating value for customers and building

customer relationships.

2. Identify and explain the six major sales force management steps.

3. Discuss the personal selling process, distinguishing between transaction-oriented

marketing and relationship marketing.

4. Explain how sales promotion campaigns are developed and implemented.

CHAPTER OUTLINE

p. 460

INTRODUCTION

Building upon nearly a century of successful product

innovation and ―solutions selling,‖ IBM has grown into a

$107 billion company.

Since 1915, what IBM sells has changed dramatically. But

what hasn’t changed is how IBM sells. IBM salespeople

have always been customer relationship developers and

solutions providers. IBM’s culture has always dictated that

p. 461

Ad: IBM


its salespeople be ―part teacher, part psychologist, and part

glad-hander.

However, to be really good in sales today, they also must be

―part diplomat, part entrepreneur, and part inventor‖—

complete customer problem solvers.

Thus, over the past 100 years, many things have changed as

IBM has adapted to the turbulent technological

environment. But one thing has remained constant—IBM

salespeople are still inspired by founder Thomas J.

Watson’s principles of selling.

Assignments, Resources

Use Web Resources 1 and 2 here

Opening Vignette Questions

1. How would you describe the ―solutions selling‖

sales culture at IBM?

2. At its heart, what is fundamentally different

about IBM’s approach compared to competitors?

What makes it work better for customers?

3. In your own words, explain how IBM’s Vivek

Gupta succeeded in India where competitors

may have failed.

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p. 462

PERSONAL SELLING

Robert Louis Stevenson once noted ―everyone lives by

selling something.‖

The Nature of Personal Selling

Personal selling is one of the oldest professions in the

world.

The people who do the selling go by many names:

salespeople, sales representatives, district managers,

account executives, sales consultants, sales engineers,

agents, and account development reps to name just a few.

The term salesperson covers a wide range of positions.

At one extreme, a salesperson might be an order taker, such

as the department store salesperson standing behind the

counter.

At the other extreme are order getters, whose positions

demand creative selling and relationship building for

Chapter Objective 1

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Key Term: Personal

Selling

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Photo: Boeing


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products and services ranging from appliances to industrial

equipment.

The Role of the Sales Force

Personal selling is the interpersonal arm of the promotion

mix.

The role of personal selling varies from company to

company.

Some firms have no salespeople at all—for example,

companies that sell only online or through catalogs, or

companies that sell through manufacturer’s reps, sales

agents, or brokers. In most firms, however, the sales force

plays a major role.

Linking the Company with Its Customers

The sales force serves as a critical link between a company

and its customers.

They represent the company to customers.

They represent customers to the company.

Coordinating Marketing and Sales

A company can take several actions to help bring its

marketing and sales functions closer together.

It can increase communications between the two

groups by arranging joint meetings and by spelling

out when and with whom each group should

communicate.

The company can create joint assignments.

The company can create joint objectives and reward

systems for sales and marketing.

They can appoint marketing-sales liaisons—people

from marketing who ―live with the sales force‖ and

help to coordinate marketing and sales force

programs and efforts.

The firm can appoint a high-level marketing

executive who oversees both marketing and sales.

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Photo: Salesperson

Links to Customer



Use Discussion Question 1 here

Use Additional Project 1 here

Use Individual Assignment 1 here

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MANAGING THE SALES FORCE

Sales force management is defined as the analysis,

planning, implementation, and controlling of sales force

activities. (Figure 16.1)

Designing Sales Force Strategy and Structure

The Sales Force Structure

A company can divide sales responsibilities along any of

several lines.

Territorial Sales Force Structure: Each salesperson is

assigned to an exclusive geographic area and sells the

company’s full line of products or services to all customers

in that territory.

Characteristics:

The organization defines each salesperson’s job and

fixes accountability.

The organization increases the salesperson’s desire

to build local customer relationships.

Because each salesperson travels within a limited

geographic area, travel expenses are relatively

small.

Product Sales Force Structure: The sales force sells along

product lines.

This structure can lead to problems if a single large

customer buys many different company products.

Customer Sales Force Structure: The sales force is

organized along customer or industry lines.

Separate sales forces may be set up for different industries,

for serving current customers versus finding new ones, and

for major accounts versus regular accounts.

Chapter Objective 2

p. 465

Key Terms: Sales

Force Management,

Territorial Sales

Force Structure,

Product Sales Force

Structure, Customer

(or Market) Sales

Force Structure

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Figure 16.1: Major

Steps in Sales Force

Management


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Complex Sales Force Structures: A company often

combines several types of sales force structures when it

sells a wide variety of products to many types of customers

over a broad geographic area.

Sales Force Size

Sales force size may range in size from only a few

salespeople to tens of thousands. Sales people are one of the

company’s most productive and expensive assets.

Therefore, increases in the size of the sales force can

increase sales as well as costs.

Workload approach: A company first groups accounts into

different classes according to size, account status, or other

factors related to the amount of effort required to maintain

them. It then determines the number of salespeople needed

to call on each class of accounts the desired number of

times.

Other Sales Force Strategy and Structure Issues

Outside and Inside Sales Forces

Outside salespeople travel to call on customers in the field.

Inside salespeople conduct business from their offices via

telephone, the Internet, or visits from buyers.

Technical sales support people provide technical

information and answers to customers’ questions.

Sales assistants provide administrative backup for

outside salespeople.

Telemarketers and Internet sellers use the phone and

Internet to find new leads and qualify prospects or to

sell and service accounts directly.

Most companies now use team selling to service large,

complex accounts. Sales teams can unearth problems,

solutions, and sales opportunities that no individual

salesperson could.

Such teams might include experts from any area or level of

the selling firm—sales, marketing, technical and support

services, R&D, engineering, operations, finance, and others.

p. 466

Photo: Whirlpool

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Photo: Climax

Portable Machine

Tools

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Key Terms: Outside

Sales Force (Field

Sales Force), Inside

Sales Force


In team selling situations, the salesperson shifts from

―soloist‖ to ―orchestrator.‖

Shortcomings of team selling:

1. Salespeople who are used to having customers all to

themselves may have trouble learning to work with

and trust others on a team.

2. Selling teams can confuse or overwhelm customers

who are used to working with only one salesperson.

3. Difficulties in evaluating individual contributions to

the team selling effort can create some sticky

compensation issues.

p. 467

Key Term: Team

Selling


Use Real Marketing 16.1 here

Use Marketing by the Numbers here


Use Think-Pair-Share 1 here

Use Web Resource 3 here

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Recruiting and Selecting Salespeople

In a typical sales force, the top 30 percent of the salespeople

might bring in 60 percent of the sales.

The best salespeople possess four key talents:

1. Intrinsic motivation

2. Disciplined work style

3. The ability to close a sale

4. The ability to build relationships with customers

When recruiting, companies should analyze the sales job

itself and the characteristics of its most successful

salespeople to identify the traits needed by a successful

salesperson in their industry.

Sources of new potential hires:

The human resources department gets names from

current salespeople, using employment agencies,

placing classified ads, searching the Internet, and

working through college placement services.

Another source is to attract top salespeople from

other companies.

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Photo: Great

Salespeople


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Training Salespeople

Training programs have several goals.

1. The training program must teach them about

different types of customers and their needs, buying

motives, and buying habits.

2. It must teach them how to sell effectively and train

them in the basics of the selling process.

3. The training program teaches them about the

company’s objectives, organization, and chief

products and markets, and about the strategies of

major competitors.

Many companies are adding e-learning to their sales

training programs.

Most e-learning is Internet-based but many companies now

offer on-demand training via mobile devices.

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Ad: Rep Race



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Compensating Salespeople

Compensation is made up of several elements—a fixed

amount, a variable amount, expenses, and fringe benefits.

Management must decide what mix of compensation

elements makes the most sense for each sales job.

Different combinations of fixed and variable compensation

give rise to four basic types of compensation plans:

1. Straight salary

2. Straight commission

3. Salary plus bonus

4. Salary plus commission

The average salesperson’s pay consists of about 67 percent

salary and 33 percent incentive pay.

Compensation should direct salespeople toward activities

that are consistent with overall sales force and marketing

objectives.


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Supervising and Motivating Salespeople

The goal of supervision is to help salespeople ―work smart‖

by doing the right things in the right ways.

The goal of motivation is to encourage salespeople to ―work

hard‖ and energetically toward sales force goals.

Supervising Salespeople

Companies vary in how closely they supervise their

salespeople.

The annual call plan shows which customers and

prospects to call on and which activities to carry out.

The time-and-duty analysis shows the time the

salesperson spends selling, traveling, waiting, taking

breaks, and doing administrative chores. (Figure

16.2)

On average, active selling time accounts for only 11 percent

of total working time!

Sales force automation systems: Computerized, digitized

sales force operations that let salespeople work more

effectively anytime, anywhere.

Selling and the Internet

Perhaps the fastest-growing technology tool is the Internet.

Sales organizations around the world are now using the

Internet to support their personal selling efforts—not just

for selling but also for everything from training salespeople

to conducting sales meetings and servicing accounts.

Motivating Salespeople

Salespeople often need special encouragement to do their

best.

Organizational climate describes the feeling that

salespeople have about their opportunities, value, and

rewards for a good performance.

Sales Quotas are Standards stating the amount they should

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Figure 16.2: How

Salespeople Spend

Their Time

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Photo: SAP

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Photo: Cisco

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sell and how sales should be divided among the company’s

products.

Compensation is often related to how well salespeople meet

their quotas.

Companies use various positive incentives to increase sales

force effort:

Sales meetings provide social occasions, breaks

from routine, chances to meet and talk with

―company brass,‖ and opportunities to air feelings

and to identify with a larger group.

Companies also sponsor sales contests to spur the

sales force to make a selling effort above what

would normally be expected.

Other incentives include honors, merchandise and

cash awards, trips, and profit-sharing plans.

Key Term: Sales

Quota


Use Discussion Questions 2 and 3 here


Use Web Resource 4 here

Troubleshooting Tip The issues surrounding managing the sales force can

be difficult for some students. Individually, each of

the decisions a sales manager needs to make seem

reasonable enough, but bringing them all together to

actually plan how to develop and manage the sales

force appears complicated to most undergraduates.

These issues can be made simpler by going through

each of the concepts carefully and thoroughly. You

may also want to have students design their own

sales force for a product or service idea they have.

This will really drive home the concepts of how you

design the sales force, as well as all the management

processes.

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Evaluating Salespeople and Sales Force Performance

Management sources of salesperson information:

Sales reports

Call reports


Expense reports

Formal evaluation forces management to develop and

communicate clear standards for judging performance and

provides salespeople with constructive feedback and

motivates them to perform well.

As with other marketing activities, the company wants to

measure its return on sales investment.

Troubleshooting Tip Sales to most students equate to retail sales, a field

that many people dislike. Therefore, many students

will not be planning on going into sales as a career,

and this could cause them to ―tune out‖ during this

section. You can bring them back by talking about

the nature of selling in various kinds of service firms

(e.g., accounting firms) that many students may be

heading toward after graduation. Also, a discussion

of the sophistication and professionalism of the

salespeople in companies such as IBM and other

business-to-business companies can generate some

enthusiasm for this important field.

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THE PERSONAL SELLING PROCESS

Steps in the Selling Process (Figure 16.3)

The selling process consists of seven steps:

1. Prospecting and qualifying

2. Preapproach

3. Approach

4. Presentation and demonstration

5. Handling objections

6. Closing

7. Follow-Up

Prospecting and Qualifying

Prospecting is identifying qualified potential customers.

The best source of prospects is referrals.

Sources of referrals:

Current customers

Chapter Objective 3

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Figure 16.3: Steps

in the Selling

Process

p. 475

Key Terms: Selling

Process,

Prospecting,

Qualifying


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Suppliers and dealers

Noncompeting sales-people

The Web or other social networks

Dropping in unannounced on various offices (a

practice known as “cold calling”)

Qualifying a lead is learning how to identify the good ones

and screen out the poor ones.

Prospects can be qualified by:

Their financial ability

Volume of business

Special needs

Location

Possibilities for growth

Preapproach

Preapproach is the stage in which the salesperson learns as

much as possible about the organization (what it needs, who

is involved in the buying) and its buyers (their

characteristics and buying styles).

Call objectives is the task of qualifying the prospect,

gathering information, or making an immediate sale.

Other call objectives include deciding on the best approach,

the best timing, and a determination of the overall sales

strategy for the account.

Approach

During the approach step, the salesperson should know

how to meet and greet the buyer and get the relationship off

to a good start.

Presentation and Demonstration

When presenting, the salesperson tells the ―value story‖ to

the buyer, showing how the company’s offer solves the

customer’s problems.

The customer-solution approach fits better with a

relationship marketing focus.

p. 476

Key Terms:

Preapproach,

Approach,

Presentation


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But before salespeople can present customer solutions, they

must develop solutions to present.

The qualities that buyers dislike most in salespeople include

being:

Pushy

Late

Deceitful

Unprepared or disorganized

Overly talkative

The qualities that buyers value most in salespeople include:

Good listening

Empathy

Honesty

Dependability

Thoroughness

Follow-through

Handling Objections

In handling objections, the salesperson should:

Use a positive approach

Seek out hidden objections

Ask the buyer to clarify any objections

Take objections as opportunities

Turn the objections into reasons for buying

Every salesperson needs training in the skills of handling

objections.

Closing

Salespeople can use one of several closing techniques:

Ask for the order

Review points of agreement

Offer to help write up the order

Ask whether the buyer wants this model or that one

Note that the buyer will lose out if the order is not

placed now

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Ad: Boise

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Key Terms:

Handling

Objections, Closing,


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Follow-Up

Follow-up is necessary if the salesperson wants to ensure

customer satisfaction and repeat business.

Follow-Up



Use Think-Pair-Share 3 and 4 here

Use Outside Examples 1 and 2 here

Troubleshooting Tip The personal selling process will be a surprise to

many students, again because they typically think of

retail sales, if they’ve thought about sales at all. The

importance of all of these steps in the sales process

can be highlighted in the discussion of business-to-

business sales.

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Personal Selling and Managing Customer Relationships

Transaction orientation: The purpose is to help salespeople

close a specific sale with a customer.

Relationship orientation: The purpose is to serve the

customer over the long haul in a mutually profitable

relationship.

Today’s large customers favor suppliers who can sell and

deliver a coordinated set of products and services to many

locations, and who can work closely with customer teams to

improve products and processes.

p. 478

Photo: P&G


Use Real Marketing 16.2 here

Use Video Case here

Use Small Group Project 1 here


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SALES PROMOTION

Sales promotion consists of short-term incentives to

encourage purchase or sale of a product or service now.

Rapid Growth of Sales Promotion

Sales promotion tools are targeted toward final buyers

(consumer promotions), retailers and wholesalers (trade

promotions), business customers (business promotions), and

Chapter Objective 4

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Key Term: Sales

Promotion

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Ad: Bed Bath &

Beyond


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members of the sales force (sales force promotions).

Today, in the average consumer packaged-goods company,

sales promotion accounts for 77 percent of all marketing

expenditures.

Several factors have contributed to the rapid growth of sales

promotion:

1. Product managers face greater pressures to increase

their current sales.

2. The company faces more competition and

competing brands are less differentiated.

3. Advertising efficiency has declined.

4. Consumers have become more deal oriented.

The growing use of sales promotion has resulted in

promotion clutter. Consumers are increasingly tuning out

promotions, weakening their ability to trigger immediate

purchase.

Sales Promotion Objectives

Sales promotion objectives vary widely.

Consumer promotions: Urge short-term customer

buying or to enhance customer brand involvement.

Trade promotions: Get retailers to carry new items

and more inventory, buy ahead, or promote the

company’s products and give them more shelf space.

Business promotions are used to generate business

leads, stimulate purchases, reward customers, and

motivate salespeople.

Sales force: Get more sales force support for current

or new products or getting salespeople to sign up

new accounts.

Sales promotions should help to reinforce the product’s

position and build long-term customer relationships.


Use Discussing the Concepts 4 here

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Major Sales Promotion Tools

Many tools can be used to accomplish sales promotion

p. 481


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objectives. Descriptions of the main consumer, trade, and

business promotion tools follow.

Consumer Promotions

Consumer promotions include a wide range of tools.

Samples are offers of a trial amount of a product.

Sampling is the most effective—but most expensive—way

to introduce a new product or to create new excitement for

an existing one.

Coupons are certificates that give buyers a savings when

they purchase specified products.

Most major consumer goods companies are issuing fewer

coupons and targeting them more carefully.

Rebates (or cash refunds are like coupons except that the

price reduction occurs after the purchase rather than at the

retail outlet.

Price packs (also called cents-off deals) offer consumers

savings off the regular price of a product.

Premiums are goods offered either free or at low cost as an

incentive to buy a product.

Advertising specialties, also called promotional products,

are useful articles imprinted with an advertiser’s name,

logo, or message that are given as gifts to consumers.

Point-of-purchase (POP) promotions include displays and

demonstrations that take place at the point of sale.

Contests, sweepstakes, and games give consumers the

chance to win something.

A contest calls for consumers to submit an entry to

be judged.

A sweepstakes calls for consumers to submit their

names for a drawing.

A game presents consumers with something every

Photo: Kroger

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Key Term:

Consumer

Promotions

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Ad: Walgreens

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time they buy.

Event marketing (or event sponsorships) allows companies

to create their own brand marketing events or serve as sole

or participating sponsors of events created by others.

Trade Promotions

Trade promotions persuade resellers to carry a brand, give

it shelf space, promote it in advertising, and push it to

consumers.

Manufacturers use several trade promotion tools:

A straight discount (also called a price-off, off-

invoice, or off-list)

An allowance (usually so much off per case)

Free goods

Push money

Free specialty advertising items

Business Promotions

Business promotions are used to generate business leads,

stimulate purchases, reward customers, and motivate

salespeople.

Conventions and trade shows: Firms selling to the industry

show their products at the trade show.

Vendors receive many benefits:

Opportunities to find new sales leads

Contact customers

Introduce new products

Meet new customers

Sell more to present customers

Educate customers with publications and audio-

visual materials

Reach many prospects not reached through their

sales forces

Sales contests: Contests for salespeople or dealers to

motivate them to increase their sales performance over a

given period.

Photo: Red Bull

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Key Term: Event

Marketing (Event

Sponsorship)

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Key Term: Trade

Promotions

p. 483

Key Term: Business

Promotions

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Photo: Trade Show


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Developing the Sales Promotion Program

Marketers must decide:

1. Size of the incentive

2. Conditions for participation

3. Promotion and distribution

4. Length of the promotion

5. Evaluation


Use Discussion Questions 4 and 5 here

Use Critical Thinking Exercise 3 here

Use Marketing Technology here

Use Marketing Ethics here

Use Additional Projects 4 and 5 here


Use Web Resource 5 here Use Company Case here

END OF CHAPTER MATERIAL


1. Discuss how the salesperson is a critical link between the company and the customer.

(AASCB: Communication; Reflective Thinking)

Answer:

Salespeople serve as a critical link between a company and its customers. First, they

represent the company to customers. They find and develop new customers and

communicate information about the company’s products and services. At the same time,

salespeople represent customers to the company, acting inside the firm as ―champions‖ of

customers’ interests and managing the buyer-seller relationship. Salespeople relay customer

concerns about company products and actions back inside to those who can handle them.

They learn about customer needs and work with other marketing and nonmarketing people in

the company to develop greater customer value.

In fact, to many customers, the salesperson is the company—the only tangible manifestation

of the company that they see. Hence, customers may become loyal to salespeople as well as

to the companies and products they represent. This concept of ―salesperson-owned loyalty‖

lends even more importance to the salesperson’s customer relationship building abilities.

Strong relationships with the salesperson will result in strong relationships with the company

and its products. Conversely, poor relationships will probably result in poor company and


product relationships.

2. Compare the three sales force structures outlined in the chapter. Which structure is most

effective? (AACSB: Communication; Reflective Thinking)

Answer:

In the territorial sales force structure, each salesperson is assigned to an exclusive

geographic area and sells the company’s full line of products or services to all customers in

that territory. With a product sales force structure, the sales force sells along product

lines. More and more companies are now using a customer sales force structure, in

which they organize the sales force along customer or industry lines. Separate sales forces

may be set up for different industries, for serving current customers versus finding new ones,

and for major accounts versus regular accounts.

One structure is not necessarily better than the others. A company must develop one that is

appropriate for its needs. A good sales structure can mean the difference between success and

failure. Over time, sales force structures can grow complex, inefficient, and unresponsive to

customers’ needs. Companies should periodically review their sales force organizations to be

certain that they serve the needs of the company and its customers.

3. Discuss the activities involved in sales force management. (AACSB: Communication)

Answer:

Sales force management is the analysis, planning, implementation, and control of sales

force activities. It includes designing sales force strategy and structure and recruiting,

selecting, training, compensating, supervising, and evaluating the firm’s salespeople. These

major sales force management decisions are shown in Figure 16.1. Marketing managers face

several sales force strategy and design questions. How should salespeople and their tasks be

structured? How big should the sales force be? Should salespeople sell alone or work in

teams with other people in the company? Should they sell in the field or by telephone or on

the Internet? At the heart of any successful sales force operation is the recruitment and

selection of good salespeople who must be given proper training. To attract good

salespeople, a company must have an appealing compensation plan. Compensation is made

up of several elements—a fixed amount, a variable amount, expenses, and fringe benefits.

New salespeople need more than a territory, compensation, and training—they need

supervision and motivation. This process requires good feedback. And good feedback

means getting regular information, from sales reports, call reports, and expense reports, about

salespeople to evaluate their performance. The company can also monitor the sales and

profit performance data in the salesperson’s territory. Additional information comes from

personal observation, customer surveys, and talks with other salespeople.

4. Define sales promotion and discuss its objectives. (AACSB: Communication)

Answer:


Sales promotion consists of short-term incentives to encourage purchase or sales of a

product or service and includes tools such as coupons, sweepstakes, premiums, and trade

allowances. Sales promotion objectives vary widely. Sellers may use consumer promotions

to urge short-term customer buying or to enhance customer brand involvement. Objectives

for trade promotions include getting retailers to carry new items and more inventory, buy

ahead, or promote the company’s products and give them more shelf space. For the sales

force, objectives include getting more sales force support for current or new products or

getting salespeople to sign up new accounts.

5. Name and describe the types of consumer promotions. (AACSB: Communication;

Reflective Thinking)

Answer:

Consumer promotions include a wide range of tools—from samples, coupons, refunds,

premiums, and point-of-purchase displays to contests, sweepstakes, and event sponsorships.

Samples are offers of a trial amount of a product. Coupons are certificates that give buyers a

saving when they purchase specified products. Cash refunds (or rebates) are like coupons

except that the price reduction occurs after the purchase rather than at the retail outlet. The

consumer sends a ―proof of purchase‖ to the manufacturer, who then refunds part of the

purchase price by mail. Price packs (also called cents-off deals) offer consumers savings off

the regular price of a product. The producer marks the reduced prices directly on the label or

package. Price packs can be single packages sold at a reduced price (such as two for the

price of one), or two related products banded together (such as a toothbrush and toothpaste).

Premiums are goods offered either free or at low cost as an incentive to buy a product. A

premium may come inside the package (in-pack), outside the package (on-pack), or through

the mail. Advertising specialties, also called promotional products, are useful articles

imprinted with an advertiser’s name, logo, or message that are given as gifts to consumers.

Typical items include T-shirts and other apparel, pens, coffee mugs, calendars, key rings,

mouse pads, matches, tote bags, coolers, golf balls, and caps. Point-of-purchase (POP)

promotions include displays and demonstrations that take place at the point of sale. Contests,

sweepstakes, and games give consumers the chance to win something, such as cash, trips, or

goods, by luck or through extra effort. A contest calls for consumers to submit an entry to be

judged by a panel that will select the best entries. A sweepstakes calls for consumers to

submit their names for a drawing. A game presents consumers with something every time

they buy, which may or may not help them win a prize. Finally, marketers can promote their

brands through event marketing (or event sponsorships). They can create their own brand

marketing events or serve as sole or participating sponsors of events created by others. The

events might include anything from mobile brand tours to festivals, reunions, marathons,

concerts, or other sponsored gatherings.

6. Discuss the different types of trade sales promotions and distinguish these types of

promotions from business promotions. (AACSB: Communication)

Answer:


Trade promotions can persuade resellers to carry a brand, give it shelf space, promote it in

advertising, and push it to consumers. Shelf space is so scarce these days that manufacturers

often have to offer price-offs, allowances, buy-back guarantees, or free goods to retailers and

wholesalers to get products on the shelf and, once there, to keep them on it. Manufacturers

use several trade promotion tools. Many of the tools used for consumer promotions—

contests, premiums, displays—can also be used as trade promotions. Or the manufacturer

may offer a straight discount off the list price on each case purchased during a stated period

of time (also called a price-off, off-invoice, or off-list). Manufacturers also may offer an

allowance (usually so much off per case) in return for the retailer’s agreement to feature the

manufacturer’s products in some way. An advertising allowance compensates retailers for

advertising the product. A display allowance compensates them for using special displays.

Manufacturers may offer free goods, which are extra cases of merchandise, to resellers who

buy a certain quantity or who feature a certain flavor or size. They may offer push money—

cash or gifts to dealers or their sales forces to ―push‖ the manufacturer’s goods.

Manufacturers may give retailers free specialty advertising items that carry the company’s

name, such as pens, pencils, calendars, paperweights, matchbooks, memo pads, and

yardsticks.

Business promotions are used to generate business leads, stimulate purchases, reward

customers, and motivate salespeople. Business promotions include many of the same tools

used for consumer or trade promotions, but there are two additional major business

promotion tools—conventions and trade shows, and sales contests.

Critical Thinking Exercises

1. Suppose you are the marketing coordinator responsible for recommending a sales promotion

plan for the market launch of new brand of energy drink sold in supermarkets. What

promotional tools would you consider for this task and what decisions must be made?

(AACSB: Communications; Reflective Thinking)

Answer:

There is a long list of consumer promotional tools: samples, coupons, cash refunds, price

packs, premiums, advertising specialties, patronage rewards, point-of-purchase displays and

demonstrations, contests, sweepstakes, and games. The likely choices for an intensively

distributed consumer product are samples and point-of-purchase displays and

demonstrations. Samples are often used when introducing new products. POPs include POP

signs and demonstrations (samples) that take place at the point of sale. They can be useful in

breaking down resistance to new and different products. A coupon that provides an incentive

to buy the product is usually given at the POP site. Trade promotions should also be

considered including price-offs, allowances, buy-back guarantees, or free goods.


Beyond selecting the types of promotions to use, marketers must make several other

decisions in designing the full sales promotion program. First, they must decide on the size

of the incentive. A certain minimum incentive is necessary if the promotion is to succeed; a

larger incentive will produce more sales response. The marketer also must set conditions for

participation. Incentives might be offered to everyone or only to select groups. Marketers

must decide how to promote and distribute the promotion program itself. A $2-off coupon

could be given out in a package, at the store, via the Internet, or in an advertisement. Each

distribution method involves a different level of reach and cost. Increasingly, marketers are

blending several media into a total campaign concept. The length of the promotion is also

important. If the sales promotion period is too short, many prospects (who may not be

buying during that time) will miss it. If the promotion runs too long, the deal will lose some

of its ―act now‖ force. Evaluation is also very important. The most common evaluation

method is to compare sales before, during, and after a promotion.

Marketing Technology: Another Day, Another Deal

The humble coupon has gotten a boost from social media. Groupon, the group deal-of-the-day

coupon service that started in late 2008, is exceeding even Google’s and Facebook’s phenomenal

early growth rates. It now offers about 1,000 deals every day to more than 70 million subscribers

in almost 50 countries. The business model is simple. A business sets up a deal through

Groupon, such as offering $50 worth of merchandise for $25, but the deal is only honored if

enough people sign up for it. Groupon typically takes a 50 percent cut of all the revenue

generated on the deal (that is, $12.50 of the $25 the consumer pays for the groupon). In return,

the business gets a lot of store traffic from the deal. Because the business model is so simple and

the entry barriers so small, there are now more than 600 of these digital daily-deal online sites.

1. Debate the pros and cons of offering coupons through digital deal-of-the-day Internet sites

such as Groupon from the perspective of businesses offering the deal. (AACSB:

Communication; Use of IT; Reflective Thinking)

Answer:

Students will be able to find ample information regarding how these types of sites operate

and the pros and cons for businesses using them. While some retailers report great success,

others point out that they only receive $12.50 on a $25-for-$50-worth-of- merchandise deal.

More importantly, most customers do not return and many businesses are overwhelmed by

the response and cannot fulfill the demand generated by the offer. Several useful articles are

listed below:

―Is Groupon a Good Business Deal?‖ Entrepreneur, (March 2011), p. 61.

―Sometimes Groupon Coupons Work Too Well,‖ Bloomberg Businessweek, (June 14, 2011),

p. 33-34.

Charlotte McEleny, ―Groupon Uses High Reach to Show Retailers It’s Better Than TV and


Print,‖ New Media Age, (March 17, 2011), pp. 4-5.

Brent Burkey, ―Social Coupon Service Groupon Yields High Returns If Used Tactically,

Local Clients Said,‖ Central Penn Business Journal, (April 29, 2011), pp. 19-21.

―Have Your Drawn New Customers With Deals From Groupon or Living Social?‖ Bicycle

Retailer & Industry News, (July 1, 2011), p. 22.

Utpal Dholakia, ―Why Employees Can Wreck Promotional Offers,‖ Harvard Business

Review, (Jan/Feb 2011), p. 28.

Utpal Dholakia, ―How Businesses Fare With Daily Deals As They Gain Experience: A

Multi-Time Period Study of Daily Deal Performance,‖ available at http://news.rice.edu/wp-

content/uploads/2012/07/2012-07-05-DailyDeals.pdf.

2. Create an idea for a local group-buying promotional service based on Groupon’s model as a

class project or as a fundraiser for a student organization at your school. Students will be the

target market of this digital deal online site. Develop a sales plan to recruit local businesses

to offer deals as well as the promotion plan to attract students to the site. Present your plans

to the class. (AACSB: Communication; Reflective Thinking)

Answer:

Students’ answers will vary, but they should be expected to apply the steps in the selling

process for recruiting businesses to offer deals and for attracting students as customers.

Students should also be prepared to counter many of the ―cons‖ they discussed in the

previous question when developing their sales presentation.

Marketing Ethics: Off Label Marketing

Johnson & Johnson agreed to a $2.2 billion settlement over the marketing of its antipsychotic

drug, Risperdal. Pfizer agreed to a $2.3 billion settlement and Eli Lilly paid $1.4 billion to settle

disputes with the U.S. government. Glaxo recently agreed to a $3 million settlement—its fourth

settlement with the government over the marketing of its products. By law, pharmaceutical

companies are allowed to market their drugs only for uses approved by the Food and Drug

Administration, but doctors may prescribe any approved drug as they see fit. Drug

manufacturers have been training their sales forces to educate doctors on non-approved uses and

dosages, called ―off-label‖ marketing. Almost 75 percent of the largest pharmaceutical

settlements with the government are for off-label marketing. Glaxo even went so far as to have a

questionable article ghost-written by a company and later published in a medical journal under

the names of academic authors to convince doctors that Paxil was proven effective in treating

depression in children, a use that the FDA has not approved. The reported clinical trial was later

criticized by the medical community, but doctors probably are not aware of that because a

majority of them rely on pharmaceutical companies for information on drugs. Most unlawful

http://news.rice.edu/wp-content/uploads/2012/07/2012-07-05-DailyDeals.pdf

http://news.rice.edu/wp-content/uploads/2012/07/2012-07-05-DailyDeals.pdf


practices by the pharmaceutical industry come to light only because an insider—someone in

management or a sales rep—blows the whistle. Fortunately, the Federal False Claim Act

provides protection and even incentive for employees to come forward. Pharmaceutical

companies settle these types of investigations because, even if they plead guilty to criminal

charges, which J&J and Glaxo did, they don’t lose the ability to sell drugs to the government as

they would if found guilty after a trial.

1. What would you do if you were a pharmaceutical sales rep and were told to promote a drug

for off-label use? What protections and incentives are available under the Federal False

Claim Act to encourage employees to report illegal behavior? (AACSB: Communication;

Ethical Reasoning; Reflective Thinking)

Answer:

Students’ answers will vary. Some useful sources are:

Description of off-label marketing:

http://www.whistleblowerfirm.com/pharmaceutical-fraud/off-label-marketing/

Study finding that doctors receive most drug information from pharmaceutical companies:

http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1000431

List of the top 20 pharmaceutical settlements, 14 of which are the result of off-label

marketing:

http://en.wikipedia.org/wiki/List_of_Largest_Pharmaceutical_Settlements

Information on the False Claims Act:

http://www.whistleblowerlaws.com/false-claims-act/federal-false-claims-act/. This law was

enacted during the Civil War and is also referred to as the ―Lincoln Law.‖ Its intent is to

reduce the amount of fraud when selling to the government. Since pharmaceutical

companies sell to government programs such as Medicare, the law has been used to

prosecute companies. Under this act, whistleblowers are given the incentive of earning a

percentage of the government’s settlement.

2. What traits and behaviors should an ethical salesperson possess? What role does the sales

manager play in ethical selling behavior? (AACSB: Communication; Ethical Reasoning;

Reflective Thinking)

Answer:

The sales manager is important in selecting and training the salesforce. Thus, ensuring

individuals possess ethical traits is important in the hiring decision, but also training is

important to make salespeople aware of ethical behavior.

An interesting article discussing characteristics of an ethical sales person can be found at:

http://ewweb.com/mag/electric_sales_ethics/. This article discusses factors, such as trust,

http://www.whistleblowerfirm.com/pharmaceutical-fraud/off-label-marketing/

http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1000431

http://en.wikipedia.org/wiki/List_of_Largest_Pharmaceutical_Settlements

http://www.whistleblowerlaws.com/false-claims-act/federal-false-claims-act/

http://ewweb.com/mag/electric_sales_ethics/


credibility, anticipate problems, set high standards from the beginning, avoid legalism, and

facing up to your mistakes.

National and international trade associations have defined codes of ethics. For example, the

pharmaceuticals industry, which is under fire from regulatory groups and others, has codes of

conduct regarding interactions with healthcare professionals. Visit the Web sites of the

Pharmaceutical Research and Manufacturers of America (PhRMA) (www.phrma.org) and

the International Federation of Pharmaceutical Manufacturers Association (IFPMA)

(http://ifpma.org/) to see their codes of ethics regarding sales activities. The IFPMA enacted

new codes that went into effect in 2007 but PhRMA has had a code in place for several years.

Pharmaceutical marketers are restricted through self-regulation to providing educational

activities and that meals must be reasonable. Thus, bringing lunch to the workers in doctors’

offices is fine as long as there is some educational component. Also, paying for trips to

educational seminars is still acceptable, but providing travel for guests, such as spouses, and

entertainment are not allowed. Companies violating the code will be publically named.

Marketing by the Numbers: Sales Force Analysis

Brown, Inc. is a manufacturer of furniture sold through retail furniture outlets in the southeastern

United States. The company has two salespeople that do more than just sell the products—they

manage relationships with retail customers to enable them to better meet consumers’ needs. The

company’s sales reps visit retail customers several times per year, often for hours at a time.

Brown is considering expanding to other regions of the country and would like to have

distribution through 1,000 retail customer accounts. To do so, however, the company would

have to hire more salespeople. Each salesperson earns $50,000 plus 2 percent commission on all

sales. Another alternative is to use the services of sales agents instead of its own salesforce.

Sales agents would be paid 10 percent of sales.

1. Refer to Appendix 2 to answer this question. Determine the number of salespeople Brown

needs if it has 1,000 retail customer accounts that need to be called on five times per year.

Each sales call lasts approximately 2.5 hours, and each sales rep has approximately 1,250

hours per year to devote to customers. (AACSB: Communication; Analytical Reasoning)

Answer:

The workload method uses the following formula to determine the sales force size:

NC FC LC

NS = ———————— TA

where,

NS = number of salespeople

NC = number of customers

http://ifpma.org/


FC = average frequency of customer calls per customer

LC = average length of customer call

TA = time an average salesperson has available for selling per year

so,

1,000 5 2.5

NS = ——————— = 10 salespeople 1,250

2. At what level of sales would it be more cost efficient for Brown to use its own sales force

compared to sales agents? To determine this, consider the fixed and variable costs for each

alternative. What are the pros and cons of using a company’s own sales force over

independent sales agents? (AACSB: Communication; Analytical Reasoning; Reflective

Thinking)

Answer:

To determine the level of sales at which one alternative would be as efficient as the other, we

must set the costs equal to each other. Because variable costs are a function of sales, we can

solve for the sales level at which the two would be equal:

Total Costssalesforce = Total Costssales agents

Total costs consist of fixed costs and variable costs, so for the salesforce option, total costs

would equal the total salaries for the 10 salespeople (fixed costs) plus the commissions on

sales (variable costs). Total costs for the sales agent option are just variables costs.

Therefore:

Total costssalesforce = ($50,000 x 10 salespeople) + (0.02 x sales)

Total costssales agents = (0.10 x sales)

Set the two equations equal to each other and solve for sales:

Total Costssaleforce = Total Costssales agents

($50,000 x 10) + (0.02 x sales) = (0.10 x sales)

$500,000 + (0.02 x sales) = (0.10 x sales)

$500,000 = (0.10 x sales) – (0.02 x sales)

$500,000 = (0.08 x sales)

Therefore,


$500,000 Sales = ——————— = $6,250,000 0.08

If Brown expects sales to be greater than $6,250,000, then using its own salesforce will be more efficient than using sales agents. If sales are less than this level, then it would be more efficient to use sales agents because the company would not incur the fixed costs associated with maintaining a salesforce.

Sales agents are independent of the manufacturer’s organization and typically are paid on

commission, so a manufacturer does not have the fixed costs that are necessary to maintain a

full-time sales force. A manufacturer’s selling costs are based on the amount the sales agent

sells for the manufacturer. On the downside, however, sales agents typically sell multiple

products from different manufacturers, although agents don’t normally sell a competitor’s

product. However, they cannot devote all of their selling efforts on a given manufacturer’s

products nor are they as knowledgeable about a specific product as a manufacturer’s sales

representative. Sales agents might be a smart choice if the manufacturer does not have the

resources to maintain its own salesforce.

A manufacturer’s sales representative is an employee of the company, and the company

incurs all the costs of employment. Even if a sales representative only receives compensation

based on commission, there are still other employment costs involved, such as benefits.

Unlike sales agents, however, a manufacturer’s sales force devotes all of its effort to selling

the manufacturer’s products and are more knowledgeable about the products.

Company Case Notes

Salesforce.com: Helping Companies Super-Charge The Selling Process

Synopsis

When Salesforce.com launched in 1999, its model for providing CRM software to businesses

was ahead of its time. In a field of providers that created customer proprietary software installed

on client desktop computers and servers, Salesforce.com’s big thing was ―no software‖. It

focused on creating standardized and semi-custom products made available to customers via the

Internet. With no software to install and a more simple interface, Salesforce.com was easier to

use, faster to get up and running, and less expensive. Salesforce.com has since remained ahead of

the pack by focusing on innovation. It now has various CRM products that are available to

clients large and small. It is a market leader that appears to have revolutionized its market and

shows no signs of slowing down.

Teaching Objectives

The teaching objectives for this case are to:

1. Allow students to consider the role of a company’s salespeople in creating value for and

building relationships with customers.


2. Help students understand how companies make sales force strategy decisions.

3. Give students exposure to the different steps in the sales process.

4. To consider the dynamics of the marketing environment and their impact on sales

organizations.


1. When Salesforce.com launched as an Internet-based service, how did that innovation help

sales reps to interact better with customers?

With no software to install, companies could have the salesforce.com tools up and

running in very little time with less investment. SF was ahead of its time in using an

online and “cloud” model for this kind of service. This method also gave sales reps easy

access to the system from any location with Internet access. This was also not common at

the time. With quicker, easier, and more convenient access, this gave sales reps plenty of

benefits for servicing customers.

2. Describe the differences that Salesforce.com has made for customers NBCU and GE

Capital.

Integrating customers – sales forces can be integrated across customers. All sales reps

in every department and division can access client activity across all different touch

points for the company.

Collaboration – sales forces can distribute the right social information to account execs

and the right time, improving customer relationships.

Cross-selling – As these companies are big and complex with many different divisions,

the above-mentioned benefits have resulted in more opportunities for cross-selling. That

not only improves revenues, it makes for stronger customer relationships.

3. Consider the selling process. How might any of the Salesforce.com tools described in this

case facilitate each step?

Data.com – prospecting and qualifying.

Database.com – prospecting and qualifying, handling objections, closing, follow-up.

Site.com – preapproach, approach, presentation and demonstration, handling objections,

closing, follow-up.

Desk.com – preapproach, approach, presentation and demonstration, handling

objections, closing, follow-up.

Sales Cloud – presentation and demonstration, handling objections, closing, follow-up.

4. Looking forward, what products will Salesforce.com have to develop in order to remain

on the cutting edge of supporting sales staffs with information and collaboration?

Push students to consider and speculate on the direction they think social media and

mobile devices are headed. That should provide direction on what they think

Salesforce.com will need to develop in order to remain ahead of the market. Answers will

vary.


Teaching Suggestions

Have students break out into groups. Have them visit www.salesforce.com. Assign each one of

them a Salesforce.com product. Give them 10-15 minutes and have them report on what that

product is, the benefits that it provides to client users, and the stages of the selling process it

facilitates.

This case can also be used with the chapter on competitive advantage (Chapter 18).

ADDITIONAL PROJECTS, ASSIGNMENTS, AND EXAMPLES

Projects

1. Take a look at Microsoft (www.microsoft.com). What is the role of the personal sales

force in that company? (Objective 1)

2. Examine Dell (www.dell.com). How is Dell’s sales force structured? (Objective 2)

3. List and describe each step of the personal selling process. Analyze your own potential as

a salesperson at each step of the process. What steps of the process would be the easiest

for you to handle and what steps the most difficult? Why? (Objective 3)

4. Consider your college/university. How could they effectively use sales promotion as a

recruiting tool? (Objective 4)

5. Think about the popular Web-based travel site, Kayak (www.kayak.com). How could

Kayak use event marketing to effectively promote its business? (Objective 4)

Small Group Assignments

1. Form students into groups of three to five. Each group should read the opening vignette

to the chapter on IBM. Each group should then answer the following questions and share

their answers with the class. (Objective 1, 2, and 3)

a. How would you describe the ―solutions selling‖ sales culture at IBM?

b. At its heart, what is fundamentally different about IBM’s approach compared to

competitors? What makes it work better for customers?

c. In your own words, explain how IBM’s Vivek Gupta succeeded in India where

competitors may have failed.

2. Form students into groups of three to five. Each group should read Real Marketing 16.2:

―P&G: It’s Not Sales, It’s Customer Business Development.‖ Each group should then

answer the following questions and share their answers with the class. (Objective 3)

a. What does ―Customer Business Development‖ mean at P&G? How does it differ

from the standard sales approach?

b. How do P&G salespeople deal with large, complex accounts?

c. Why do customers allow P&G to advise them on the stocking and placement of

competitors’ brands as well as its own?

http://www.salesforce.com/

http://www.microsoft.com/

http://www.dell.com/

http://www.kayak.com/


Individual Assignments

1. The sales force serves as a critical link between a company and its customers. They

represent the company to customers and they represent customers to the company.

Explain how this would work for a company such as CDW. (Objective 1)

2. Recruiting qualified sales applicants is a difficult job for a sales manager. Review the

position openings for sales people at Boeing (https://jobs.boeing.com/), IBM

(www.ibm.com/us/) and Mars (www.mars.com/global/home.htm). See the requirements

for a sales position with each of these companies. (Objective 2)

Think-Pair-Share

Consider the following questions, formulate an answer, pair with the student on your right, share

your thoughts with one another, and respond to questions from the instructor:

1. What do you believe to be the major advantages and disadvantages of team selling?

(Objective 2)

2. What are the major forms of sales force compensation? Which do you believe to be

superior? Why? (Objective 2)

3. List and briefly describe the stages of the personal selling process. (Objective 3)

4. In the personal selling process, when would you consider the sell over? Why?

(Objective 3)

5. In the past, pharmaceutical companies have provided and paid for educational seminars

in exotic locations for physicians to which they were promoting a specific drug. The hope

was that the physician would then prescribe their medication. Do you believe this is

ethical? Why or why not?

Outside Examples

1. Consider that you are a salesperson for the local Toyota dealership. A young, newly

married couple enters the lot. Walk us through the personal selling process, using this

couple as your target. (Objective 3)

Possible Solution:

Step 1: Prospecting and Qualifying. In this case, there is no prospecting involved. The

potential customer comes to you. It becomes your job to qualify them as potentials as

quickly as possible. However, the qualification will have to wait until the actual

approach.

Step 2: Preapproach. The salesperson has the responsibility of preparing his/her initial

greeting and direction he/she believes the presentation should take.

https://jobs.boeing.com/

http://www.ibm.com/us/

http://www.mars.com/global/home.htm


Step 3: Approach. The opening lines are important. It is necessary not only to build an

immediate rapport with the couple, it is important to learn their needs, wants, and abilities

as quickly as possible.

Step 4: Presentation and Demonstration. The salesperson should have their method of

presentation decided at this point. Here the salesperson tells the ―value story.‖ This is

where the buyers see how this product fits their requirements.

Step 5: Handling Objections. If the (potential) buyers believe the price is too much, the

salesperson can demonstrate how their financing options can get the monthly amounts to

a reasonable level. If they want to ―think about it,‖ the salesperson may offer an incentive

to purchase now. Whatever the objection may be, the well-informed salesperson will

already have the information and skills to overcome.

Step 6: Closing. This is the moment where it is important for our salesperson to ask for

the sale. In many cases, it becomes necessary for the salesperson to take the lead and

direct the buyer to ―come on inside and let’s write this up.‖ At this point, the majority of

significant objections should have been met.

Step 7: Follow-Up. The sale is never over. It is important to remain in contact with the

buyer as time goes by. They may come back to you for their next vehicle or they may

refer their friends to you.

2. Rent the classic movie Death of a Salesman. This was originally a play on Broadway

authored by Arthur Miller, in 1949. It was later made into a successful movie. Watch it

and review the approach to selling discussed. (Objective 3)

Possible Solution:

Death of a Salesman deals only tangentially with sales and the selling process. But it does

so enough to drive home the points.

Willy Loman, a salesman based in New York City, returns home from a trip to Yonkers

where his sons, Biff and Happy, and his wife, Linda, greet him.

Willy is reminded of his brother Ben. Through flashbacks, Ben begins a dialogue with

Willy, who contemplates why he can never seem to become successful.

Throughout the play, Willy has these imaginary conversations with Ben, during most of

which he asks Ben how he made his millions. Ben had tried to go to Alaska to get

involved in logging but ended up in Africa. In Africa, he ―stumbled‖ upon the diamond

business and become wealthy by the time Willy was old enough to care about his own

career.

Willy feels that he can also become successful by luck alone.


Whenever Willy asks Ben (in his flashbacks) how he made his millions, Ben only

answers ―When I walked into the jungle, I was 17. When I walked out, I was 21, and by

God I was rich.‖

In addition, Willy worked for a man who only had to wake up in the morning, put his

slippers on, and make phone calls, and had made millions of dollars. Willy assumes that

one does not need to work hard or have ambition; that all these men needed was a ―smile

and a shoeshine‖ to be successful.

This philosophy does not work out for Willy.

The primary point to drive home is that success in selling does not come by accident.

Professional salespeople succeed through thorough research and planning for

contingencies.

Web Resources

1. http://247.prenhall.com

This is the link to the Prentice Hall support link.

2. www.IBM.com

Information here will be helpful as you read the opening vignette.

3. www.hp.com/hpinfo/

This is Hewlett-Packard’s corporate homepage.

4. www.proudfootconsulting.com/

Proudfoot Consulting maintains useful information on sales force management

5. www.bestbuy.com

Check out Best Buy’s weekly newspaper insert for an example of sales promotion.

http://247.prenhall.com/

http://www.ibm.com/

http://www.hp.com/hpinfo/

http://www.proudfootconsulting.com/

http://www.bestbuy.com/

chapter 16 personal selling and sales...

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