Sales Process
Structure
1.1 Introduction
1.2 Marketing Strategy
1.3 Sales Approach
1.4 Summary
1.5 Keywords
1.6 References
1.1 Introduction
The previous unit deals with the introduction to "Sales Management". He highlighted the marketing and sales functions, described several sales approaches and presented functions of the sales manager.
We will begin the unit by understanding several steps in the marketing strategy and then deal with the skill set of the sales staff and the various steps in the sales process.
In this unit will discuss the activities of the sales process. We will discuss some essential activities that must be carried out by sales personnel in sales process. Sales staff helps create value for the customer and competitive advantage for the product / service.
Regardless of the nature of the sale and the type of customer, the sales staff should follow certain basic activities for the successful closing of a sale. We will discuss the essential activities of sales personnel in general and later discover in depth how The sales process changes for different types of sales, such as direct and indirect sales.
Objectives
After studying this unit, you will be able to:
1) Define the segmentation, the potential buyer and the group of buyers for the product / service
2) Understand the typical customer purchase process
3) Identify essential activities involved in a sales process
4) Explain the critical role played by the salesperson in managing the sales process
2.2 Marketing Strategy
The marketing strategy can be considered as all the activities carried out to use the the limited resources of the company to achieve marketing and sales objectives and achieve competitive advantage.
The first step includes identifying the product / service. The product / service is developed according to the company's objectives and market needs. After identifying the product / service, the next step is to analyze the market. This is where we started identify the customer for the product / service.
2.2.1 Segmentation and Target Marketing
Market segmentation is defined as "the process of dividing the heterogeneous market in homogeneous sub-units. "If we take the population of a country, say India, it would be be around 113 crores. For a consumer product, let's say toothpaste, the market is huge. However, the entire population would not be looking for the same type of characteristics in toothpaste So, we need to turn this heterogeneous group into homogeneous subgroups Let's say, we can divide the whole population into two categories, with a category that prefers Ayurvedic / herbal toothpaste and the other category that you prefer not Ayurvedic toothpaste. This categorization will give an idea of the market segment that you prefer your toothpaste The need for segmentation is that the seller is clear about where to compete and place the product / service.
There are different bases for segmentation, namely:
a) Customer-based segmentation
b) Segmentation based on products and
c) Segmentation based on competition
In general, there are two important factors before selecting the target segment. They are:-
a) Attractiveness of a market segment and
b) The strategic adjustment between the segment and the objectives, resources and capabilities
Market research will play an important role in finding the answers to the previous two factors.
You can get more information about this in the marketing management module.
Once the segmentation has been carried out for the product / service, we can define the strategy using one or a combination of the following approaches:
a) Standardization: - In this strategy, the company maintains the same product, the same price and the same means of communication for all segments.
For example: Cold drinks will have an equal price for rich or poor people.
b) Differentiation: - In this strategy, the company differentiates the product to supply the
needs of different segments. The price would be different in this case.
For example, Indian Railways differentiates its service in several categories such as AC 2 levels, 3 levels, Sleeper and general coaches depending on the different needs segment
c) Focus: - This is the combination of the two previous strategies. In this, the basic product remains the same with additional features for several segments that are added at an additional cost.
For example: a particular laptop model will have the same price for all segments, but if the Segment needs a graduation of the characteristics that would be done at an additional cost.
Then, using the previous approaches, we market the product / service.
2.2.2 Determining Potential Buyer and Buyer group
Determine the potential buyer is more a marketing task than the function of a seller process. The possible buyers of a product / service can arrive by market segmentation.
The group of buyers may be different for the product category and a brand. For example, yes we take the cell phone Each person in the segment is a potential buyer of the cell phone. But buyers are different for high-end mobile phones and low-end mobile phones within the segment. Another example can be considered as a photocopier. Each office is one potential buyer of a photocopier, but when it comes to the brand, offices can go for a Cheaper brand an expensive brand.
This is where the sales team enters the image to determine who the potential is The buyers of the brand are and the products associated with it.
The marketing group or brand management should identify potential buyers. They should give certain marketing inputs in the form of promotions. Help in creating the supplier's awareness and brand for the prospective buyer before the The sales person gets in touch with the buyer. All these activities are part of the marketing policies and company approaches. The company must also provide the support material for sales people in terms of brochures, literature, etc.
This is where the sales team starts its activities. When the sales team takes their responsibilities, the first task is to find the client, a process to which we generally refer as "Suspect perspective through MAN". MAN means money, authority and I need respectively.
Every possible buyer may not be a real buyer of the product. The potential buyer You can not buy the product if you do not have the money, the authority and the need. Is written in this order because it is easier to identify if the person is having the money followed if you have the authority to buy and finally if you have the I need to buy it.
The sales team needs to know how to evaluate if the potential buyer has the money, authority and need One can not simply ask the potential buyer if he / she has the money. Then, some parameters such as education, occupation, family status, etc. they need be analyzed to reach a conclusion if the potential customer has the money to buy the product
Similarly, the seller must assess whether the potential buyer has the authority to buy the product / service and he / she has the need for the same. Marketing would do this work at a macro level and sales would do this work in the micro level. Marketing identifies the target segment or potential buyers of the product / service but at the level of individual potential buyers it is the seller's job to identify the needs and desires of the individual potential buyer.
SAQ 1
1) If you are the sales manager in your city for a company that sells laptops, what method? Would you continue to identify the segments of your product and why?
2) Explain the importance of the MAN approach to identify the real buyer for sell a high-priced product like a luxury car.
2.3 Sales Approach
Once the sales team identifies the potential customer, it is time to decide on the sales approach. The first step in the sales process is the previous approach. The previous approach would include clothing, presentation material, make an appointment and decide what to do in the appointment as opening comments, etc. The objective of the previous approach is often data collection, know more about your perspective, the team involved in purchasing the product, customer history, etc.
The sales team will always be able to sell better if it talks about the customer's needs and not about the characteristics of the product / service. This is known as the term "FABing" which means the conversion of characteristics to attributes and attributes to benefits.
If you are selling the photocopier, it would be advisable to talk about the client Benefits. You can start your discussion by saying "Last year's spending on photocopies is the amount "X", if you install the machine, you would end up saving a "Y" amount year".
Now let us understand the typical purchase process.
2.3.1 Typical Purchasing process
Each purchase has a process that can be understood by the following diagram.
Most customers do not buy a product unless they need it. The problem is that the client often does not know what he needs. Then in the first step of purchase process one has to identify what is the problem or the need. In the second step "Evaluation of options", the client would look for several products or competitive solutions for your problem. There may be a different criterion used by different clients. Some of them could be:
a) Price: - Many customers use the price as a differentiation criterion. customers I could go for a cheaper product instead of an expensive one. This is seen more often in developing countries and less in developed countries. In this, the seller You can be actively negotiating for a better price or give some discounts. Discounts play an important role in the successful closing of the sale. But the seller must have a clear idea of what could be the maximum discount allowed by the company for the product / service. Some customers continue with the higher priced products or some can buy the medium-priced products. The choice would depend on the client's mentality.
b) Quality: - Here the client would be preferring the product of better quality and do not mind paying a little more The quality may be different for different customers. For the client, the quality may be associated with the long life of the product, more features, better designs, better after-sales service, etc. Plus of the clients associate quality with the brand. It's the role of sales person to know what the client wants to say with a quality product and continue with the sales process.
In the third step, the purchase decision will be made by the customer. The role of a The sales person should make the purchase process easy and convenient.
And the last step, "Implementation and evaluation", deals with the installation of product and evaluating the value. If the client's evaluation is positive, it would lead to another sale in the future.
These are the four steps in a typical purchase process for each sale. The level of the activities involved in each step differ for different types of sales, such as direct and indirect sales For example, more activities could be involved in the first step (recognition of needs) for an industrial sale compared to door-to-door sales. It's very important know the types of activities involved in each of the steps for different types of sales.
2.3.2 Essential Activities of Sales Process
The sales process can be categorized into four main activities. Creation of interests activities, pre-purchase activities, purchase activities and subsequent activities. To convert the suspicious for a prospect, each activity is important and must be performed successfully. These activities aim to better serve the client. The process is called sales process cycle.
Each sale has some essential activities to be carried out by the sales team. Let us Understand those activities with the help of the following chart.
Source: Sales Management, by Andris A. Zoltner , Prabhakant Sinha, Greggor A. Zoltners, page no: 41
2.3.2.1 Interest Creation Activities
The first activity is the creation of interests. Once a potential client is identified, he / she You need to be educated about the product / service you are offering. It's the work of sales person who must be prepared with the necessary literature, brochures and / or presentations. If the product is of a technical nature, the seller's objective should explain the benefits of the product to the client and not his technique characteristics. In this activity, raising awareness about the brand or the product should be the main objective that boost sales. The seller must understand the customer in this phase and identify your problem and provide the necessary information documents that the client can request. Several promotion techniques can be used for creating interests Some of the ways in which companies create interest in the product / service would be: -
Give full access to the features and capabilities of the software for a limited time period as 1 month. During this time, the customer can evaluate the product and then buy it This is often common in companies that sell software products.
The distribution fee test packages are found together with other products. This is the case with companies that sell products such as soaps, shampoo, toothpaste, etc.
Offer a free trial option to the client, so that he / she can buy only if they are satisfied in the case of high-value products such as automobiles.
Coining motivational quotes. "Why do children have fun?" (Hero Honda "s "Pleasure") implies that girls are entitled to the same freedom as men and to lead the scooter is a symbol of freedom and freedom.
2.3.2.2 Pre-purchase Activities
After having created interest in the brand / product in the first activity, it is time to move on to the next activity by the seller. In this process, we assume that the customer is actively considering various product offers and comparing them. This activity aims to describe the characteristics of the product or service as much as possible. Much emphasis is placed on demonstrating the capabilities of the company and / or the product. Here, the seller assumes an active role in assessing the client's needs and solving problems.
2.3.2.3 Purchase Activities
Having presented a solution to the customer's problems, it is time for the seller press to close. Here many activities happen both, from the end of the seller and the end of the client. The role of the sales person lies in negotiating, bidding, finalizing the terms and condition of the sale. The client evaluates several proposals, negotiates and finalize the payment. It is not necessarily required that the same person or company who initiated the activities prior to the purchase would be involved in purchasing activities. Some of the processes can be subcontracted to other agents.
Source: The complete guide to accelerating sales force performance, by Andris A.
Zoltner , Prabhakant Sinha, Greggor A. Zoltners, page no: 31
This table explains how different stages in the sales process are handled by the the sales force of the company and the selling partner. To sell an IBM product, an IBM sale representative is involved in the creation of interests and pre-purchase activities as explained the characteristics, capabilities and benefits of the product and how the product would be a Advantage for the client when solving their problems. In later stages like the purchase activity, the IBM sales person would transfer the leadership to a reseller business partner to complete the purchase and activities after the purchase and technical support can be provided by the IBM team when necessary.
Companies can also decide to manage all activities, from the creation of interests to the subsequent purchase. The majority of companies that adopt the outsourced model have several
advantages and disadvantages.
Advantages of Outsourced selling (Partner, reseller & distributor)
Customer Relationships: if the distributor or partner has good communication and Negotiation skills, the possibility of closing a sale is high.
Financial costs: if the member collects a percentage of the sales made, the financial and the risk of sale of the company is reduced.
Variable capacities: if the demand for a product / service increases, the company can not increase the sales force to sell the products and fire them when the demand decreases. So, In the season of greatest demand, distributors can help you sell your products / services to customers.
Disadvantages of Outsourced selling (Partner, reseller & distributor)
Conflicts: Conflicts may arise when deciding which customers should be served and what territories should be allocated The company can not force the reseller follow your sales strategies.
Control: the outsourced sale can not be controlled like the personal sales team of the company. Companies may not be able to track the performance of the distributor in sell the goods / services. The reseller may be interested in their own benefit and may Encourage the customer to buy other products as they receive more share / benefit / commission selling other products.
2.3.2.4 Post-purchase Activities
Post-purchase activity begins after the successful closing of the sale. This phase includes delivery of the product / service, installation (if necessary), providing more information about the features and finally collect the payment. This phase can also includes after-sales service. The main objective of this phase is to win customers loyalty so that he / she is a regular customer of the brand / product.
As discussed above, some functions at this stage are to provide information, delivery of The product and the installation can be made by the company itself or with the help of a reseller. The after-sales service plays an important role in the creation of customer loyalty. It can be like simple how to approach the customer's problem on the telephone line or it can be a Visiting the client's facilities personally to solve a problem. In B2B offers, after purchase Activities may include the installation of the product or service and then provide training for the uses of the product / service of the company until they understand new product / service.
Understanding post-purchase behavior by the sales team is an important task if The company seeks repeat business for a long-term relationship with the client
Source: Small business management: an entrepreneurial emphasis By Justin Gooderl
Longenecker, Carlos W. Moore, J. William Petty, Leslie E. Palich, page no: 298
This model explains that activities such as post-purchase dissonance is a type of cognitive dissonance that would arise after the purchase decision was made and the customer considers other products as an alternative. This can create a negative effect on the evaluation and level of satisfaction with the product / service. Therefore, marketers should try to find ways to maintain this cognitive dissonance among clients.
SAQ 2
1) If you need an antivirus product, identify the typical purchase process you would follow
2) If you are a sales representative of kitchen fireplaces products, what kind of What interest creation activities would you use if the client is not interested?
2.4 Summary
In the previous unit, we discussed several marketing and sales approaches followed by the companies. In this unit, we have understood the importance of segmenting and focus on the identification of customers. We understood how the client buy the product / service beginning with the recognition of needs, evaluating options, make the purchase decision and finally implement and evaluate the product after being delivered by the sales representative. The seller's job is to help the customer in the management of the customer's purchase process. We study the Essential activities of the sales person in managing the client and making a deal.
We understand how you can create interest in the product / service in several ways. After interest is created, it is time for the sales representative to take care of the pre-purchase activities such as giving enough information about the product / service and describing the Benefits. The next stage would be the purchasing activities in which the sales representative would aim to close the deal successfully by negotiating and finalizing the payment terms. Finally, post-purchase activities would include the delivery of the product / service, collecting the payment according to the terms and providing after the sale Service. Finally, we discussed that for repeat business with clients, it has become extremely important to handle the post-purchase behavior of the customer as more and there are more alternative products / services available to the client.
2.5 Keywords
1) Reseller: Company or a person who buys products / service with the intention of selling to other clients on behalf of the company.
2) Potential Buyer: Buyer who is interested in buying your product / service, but may not necessarily buy it.
2.6 References
1. Andris A. Zoltners, Prabhakant Sinha, Greggor A. Zoltners (2001), “The complete guide to accelerating sales force performance”, Amacon, New York, USA.
2. Justin Gooderl Longenecker, Carlos W. Moore, J. William Petty, Leslie E. Palich (2006), “Small business management: an entrepreneurial emphasis (13th Ed.)”, South Western, USA.
3. Rajan saxena (2006), “Marketing Management (3th Ed.)”, Tata Mcgraw-Hill, New Delhi, India.
4. William L. Cron, Thomas E. Decarlo (2006), “Dalrymple’s Sales Management +-/(9th Ed.)”, John wiley & Sons, New Delhi, India.
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