Sales Promotion

Sandeep Ghatuary

Semiester - 3

Kolhan University

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Every businessman wants to increase the sale of goods that he deals in. He can adopt several ways for that purpose. You might have heard about lakhpati bano, win a tour to Singapore, 30% extra in a pack of one kg, scratch the card and win a prize etc. You might also have seen gifts like lunch box, pencil box, pen, shampoo pouch etc. offered free with some products. There are also exchange offers, like in exchange of existing model of television you can get a new model at a reduced price. You may have also observed in your neighboring markets notices of winter sale, summer sale, trade fairs, discount upto 50% and many other schemes to attract customers to buy certain products. All these are incentives offered by manufacturers or dealers to increase the sale of their goods. These incentives may be in the form of free samples, gifts, discount coupons, demonstrations, shows, contests etc. All these measures normally motivate the customers to buy more and thus, it increases sales of the product. This approach of selling goods is known as Sales Promotion. You have learnt about advertising and personal selling in the earlier lessons. Personal selling involves face-to-face contact with specific individuals, while advertising is directed towards a large number of potential customers. They also help in increasing sales of goods. Thus, advertising can be used as means of communication to inform potential customers about the incentives offered for sales promotion. Personal selling can as well include communication of the incentives to individual customers. But, sales promotion differs from advertising and personal selling in terms of its approach and technique. Sales promotion adopts short term, non-recurring methods to boost up sales in different ways. These offers are not available to the customers throughout the year. During festivals, end of the seasons, year ending and some other occasions these schemes are generally found in the market. Sales promotion is the process of persuading a potential customer to buy the product. Sales promotion is designed to be used as a short-term tactic to boost sales it is not really designed to build long-term customer loyalty. Some sales promotions are aimed at consumers. Others are targeted at intermediaries (such as agents and wholesalers) or at the firms sales force.

When undertaking a sales promotion, there are several factors that a business must take into account:
What does the promotion cost will the resulting sales boost justify the investment? Is the sales promotion consistent with the brand image? A promotion that heavily discounts a product with a premium price might do some long-term damage to a brand Will the sales promotion attract customers who will continue to buy the product once the promotion ends, or will it simply attract those customers who are always on the look-out for a bargain?

What is sales promotion?

Sales promotion is any initiative undertaken by an organisation to promote an increase in sales, usage or trial of a product or service (i.e. initiatives that are not covered by the other elements of the marketing communications or promotions mix). Sales promotions are varied. Often they are original and creative, and hence a comprehensive list of all available techniques is virtually impossible (since original sales promotions are launched daily!). Here are some examples of popular sales promotions activities: Buy-One-Get-One-Free (BOGOF) - which is an example of a self-liquidating promotion. For example if a loaf of bread is priced at $1, and cost 10 cents to manufacture, if you sell two for $1, you are still in profit - especially if there is a corresponding increase in sales. This is known as a PREMIUM sales promotion tactic. Customer Relationship Management (CRM) incentives such as bonus points or money off coupons. There are many examples of CRM, from banks to supermarkets. New media - Websites and mobile phones that support a sales promotion. For example, in the United Kingdom, Nestle printed individual codes on KIT-KAT packaging, whereby a consumer would enter the code into a dynamic website to see if they had won a prize. Consumers could also text codes via their mobile phones to the same effect. Merchandising additions such as dump bins, point-of-sale materials and product demonstrations.

Objectives of Sales Promotion

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(i) To introduce new products: Have you ever heard about distribution of free samples? Perhaps you know that many companies distribute free samples while introducing new products. The consumers after using these free samples may develop a taste for it and buy the products later for consumption. (ii) To attract new customers and retain the existing ones: Sales promotion measures help to attract or create new customers for the products. While moving in the market, customers are generally attracted towards the product that offers discount, gift, prize, etc on buying. These are some of the tools used to encourage the customers to buy the goods. Thus, it helps to retain the existing customers, and at the same time it also attracts some new customers to buy the product. (iii) To maintain sales of seasonal products: There are some products like air conditioner, fan, refrigerator, cooler, winter clothes, room heater, sunscreen lotion, glycerin soap etc., which are used only in particular seasons. To maintain the sale of these types of products normally the manufacturers and dealers give off-season discount. For example, you can buy air conditioner in winter at a reduced price. Similarly you may get discount on winter clothes during summer. (iv) To meet the challenge of competition: Todays business faces competition all the time. New products frequently come to the market and at the same time improvement also takes place. So sales promotion measures have become essential to retain the market share of the seller or producer in the product-market.

There are many methods of sales promotion, including:

Money off coupons customers receive coupons, or cut coupons out of newspapers or a products packaging that enables them to buy the product next time at a reduced price Competitions buying the product will allow the customer to take part in a chance to win a prize Discount vouchers a voucher (like a money off coupon) Free gifts a free product when buy another product Point of sale materials e.g. posters, display stands ways of presenting the product in its best way or show the customer that the product is there. Loyalty cards e.g. Nectar and Air Miles; where customers earn points for buying certain goods or shopping at certain retailers that can later be exchanged for money, goods or other offers

Tools of Sales Promotion - To increase the sale of any product manufactures or producers adopt different measures like sample, gift, bonus, and many more. These are known as tools or techniques or methods of sales promotion. Let us know more about some of the commonly used tools of sales promotion.
Free samples: You might have received free samples of shampoo, washing powder, coffee powder, etc. while purchasing various items from the market. Sometimes these free samples are also distributed by the shopkeeper even without purchasing any item from his shop. These are distributed to attract consumers to try out a new product and thereby create new customers. Some businessmen distribute samples among selected persons in order to popularize the product. For example, in the case of medicine free samples are distributed among physicians, in the case of textbooks, specimen copies are distributed among teachers.

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Premium or Bonus offer: A milk shaker along with Nescafe, mug with Bournvita, toothbrush with 500 grams of toothpaste, 30% extra in a pack of one kg. are the examples of premium or bonus given free with the purchase of a product. They are effective in inducing consumers to buy a particular product. This is also useful for encouraging and rewarding existing customers. Exchange schemes: It refers to offering exchange of old product for a new product at a price less than the original price of the product. This is useful for drawing attention to product improvement. Bring your old mixer-cum-juicer and exchange it for a new one just by paying Rs.500 or exchange your black and white television with a colour television are various popular examples of exchange scheme. Price-off offer: Under this offer, products are sold at a price lower than the original price. Rs. 2 off on purchase of a lifebouy soap, Rs. 15 off on a pack of 250 grams of Taj Mahal tea, Rs. 1000 off on cooler etc. are some of the common schemes. This type of scheme is designed to boost up sales in off-season and sometimes while introducing a new product in the market. Coupons: Sometimes, coupons are issued by manufacturers either in the packet of a product or through an advertisement printed in the newspaper or magazine or through mail. These coupons can be presented to the retailer while buying the product. The holder of the coupon gets the product at a discount. For example, you might have come across coupons like, show this and get Rs. 15 off on purchase of 5 kg. of Annapurna Atta. The reduced price under this scheme attracts the attention of the prospective customers towards new or improved products. Fairs and Exhibitions: Fairs and exhibitions may be organised at local, regional, national or international level to introduce new products, demonstrate the products and to explain special features and usefulness of the products. Goods are displayed and demonstrated and their sale is also conducted at a reasonable discount. International Trade Fair in New Delhi at Pragati Maidan, which is held from 14th to 27th November every year, is a well-known example of Fairs and Exhibitions as a tool of sales promotion. Trading stamps: In case of some specific products trading stamps are distributed among the customers according to the value of their purchase. The customers are required to collect these stamps of sufficient value within a particular period in order to avail of some benefits. This tool induces customers to buy that product more frequently to collect the stamps of required value. Scratch and win offer: To induce the customer to buy a particular product scratch and win scheme is also offered. Under this scheme a customer scratch a specific marked area on the package of the product and gets the benefit according to the message written there. In this way customers may get some item free as mentioned on the marked area or may avail of price-off, or sometimes visit different places on special tour arranged by the manufacturers. Money Back offer: Under this scheme customers are given assurance that full value of the product will be returned to them if they are not satisfied after using the product. This creates confidence among the customers with regard to the quality of the product. This technique is particularly useful while introducing new products in the market.

The main advantages and disadvantages of sales promotion are:

Advantages Effective at achieving a quick boost to sales Encourages customers to trial a product or switch brands Disadvantages Sales effect may only be short-term Customers may come to expect or anticipate further promotions May damage brand image

Sales promotion basically belongs to strategies which are push and pull
Push - A push strategy involves convincing trade intermediary channel members to "push" the product through the distribution channels to the ultimate consumer via promotions and personal selling efforts. Pull - A pull strategy attempts to get consumers to "pull" the product from the manufacturer through the marketing channel. The company focuses its marketing communications efforts on consumers in the hope that it stimulates interest and demand for the product at the end-user level. Sales promotions are essential to the proper marketing of products and companies. There are many variations of sales promotions and listed below are the 3 kinds of Sales Promos based on target market. By identifying these types of sales promotions, you can develop a more defined campaign with higher chances of success.

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(a) Consumer Market Directed - Possibly the most common and popular of sales promotions, consumer marketing directed sales promos are those intended to appeal to the end consumer. Consumers are exposed to sales promotions nearly every day. Recent studies have shown that sales promos do play a conscious role in the buying decision process. (b) Business Market Directed - This type of sales promotion marketing is targeted at other business entities. It is a sales promo that may propose a certain level of distributorship and other trade functions to companies. Often formal and less creative than a Consumer Market Directed Sales Promo, it works well in Business-to-business dealings. This type of sales promo can also be limiting due to the marketers personal network. (c) Government Market Directed - Due to the wide nature of marketing communications target market, sales promos can span the identification of the Government as part of our market. Dealings with government agencies and other state related offices will require a separate marketing plan and a government market directed communications campaign for your sales promotion will best suit the project.

Marketing Mix
What is the marketing mix?
The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion. The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar! It is the same with the marketing mix. The offer you make to you customer can be altered by varying the mix elements. So for a high profile brand, increase the focus on promotion and desensitize the weight given to price. Another way to think about the marketing mix is to use the image of an artist's palette. The marketer mixes the prime colours (mix elements) in different quantities to deliver a particular final colour. Every hand painted picture is original in some way, as is every marketing mix. Some commentators will increase the marketing mix to the Five P's, to include people. Others will increase the mix to Seven P's, to include physical evidence (such as uniforms, facilities, or livery) and process (i.e. the whole customer experience e.g. a visit the Disney World). The term was coined by Neil H. Borden in his article The Concept of the Marketing Mix in 1965.

Characteristics of Marketing Mix

Marketing-mix is the crux of marketing process: Marketing mix involves many crucial decisions relating to each element of the mix. The impact of the mix would be the best when proper weightage is assigned to each element and they are integrated so that the combined effect leads to the best results. Marketing mix has to be reviewed constantly in order to meet the changing requirements: The marketing manager is required to constantly review the mix and conditions of the market, and make necessary changes in the marketing mix according to changes in the conditions and complexion of the market. Changes in external environment necessitate alterations in the mix: Changes keep on taking place in the external environment. For many industries, customer is the most fluctuating variable of environment. Customers tastes and preferences change very fast. Brand loyalty and purchasing power to change over a period of time the marketing manager has to carry out market analysis constantly to make necessary changes in the marketing mix. Changes taking place within the firm too necessitate changes in marketing mix: Changes within the firm may take place due to technological changes, or changes in the product line, or changes in the size and scale of operation. Such changes call for correspondent changes in the marketing mix.

The major marketing management decisions can be classified in one of the following four categories:
Product Price Place (distribution) Promotion

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These variables are known as the marketing mix or the 4 P's of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The marketing mix is portrayed in the following diagram:

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Product - The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc. Product Decisions - The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made: Brand name Functionality Styling Quality Safety Packaging Repairs and Support Warranty Accessories and services Price - Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing. Price Decisions - Some examples of pricing decisions to be made include: Pricing strategy (skim, penetration, etc.) Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling Price flexibility Price discrimination Place - Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics, and levels of service. Distribution (Place) Decisions - Distribution is about getting the products to the customer. Some examples of distribution decisions include: Distribution channels Market coverage (inclusive, selective, or exclusive distribution)

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Specific channel members Inventory management Warehousing Distribution centers Order processing Transportation Reverse logistics Promotion - Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in proportion to the product price, a break-even analysis should be performed when making promotion decisions. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them. Promotion decisions involve advertising, public relations, media types, etc. Promotion Decisions - In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include: Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions Public relations & publicity Marketing communications budget

Summary of Marketing Mix Decisions

Product Functionality Appearance Quality Packaging Brand Warranty Service/Support Price List price Discounts Allowances Financing Leasing options Place Channel members Channel motivation Market coverage Locations Logistics Service levels Promotion Advertising Personal selling Public relations Message Media Budget

Limitations of the Marketing Mix Framework

The marketing mix framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products and markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as packaging, people, process, etc. Today however, the marketing mix most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong and many marketing textbooks have been organized around it.

Meaning and Purpose of Sales Promotion

Meaning - Sales promotion consists of all promotional activities other than advertising, personal selling and publicity
that help to increase sales through non repetitive and one time communication. In other words, it includes marketing activities other than personal selling, advertising, and publicity that stimulate consumer purchasing and dealer effectiveness, such as point of purchase displays, shows and exhibitions, demonstrations and various non-recurring selling efforts not in the ordinary routine.

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Purpose: The ultimate aim or purpose of sales promotion is that of increasing the volume of sales and profits but it differs from advertising and personal selling both in approach and techniques. Personal selling involve face to face contact with specific individuals, while advertising is directed at a large number of potential customers. Sales promotion Serves as a link between two by focusing selling efforts on selected small groups of people Sales promotion usually involves non-recurring and no-routine methods, in contrast with the routine and recurring nature of advertising and personal selling. Under advertising, the media is not owned and controlled by the advertiser except in direct mail advertisings. But sales promotion methods are controlled by the advertiser. Sales promotion covers various stimulants directed to the consumers and dealers that is why it is of two typesconsumers sales promotion and dealers sales promotion. The former stimulates consumers buying at the point of sale, and latter improves dealers effectiveness at the retail outlets. How Sales Promotion Objectives are set: Sales promotion has dual objective: (A) Basic objectives and (B) Other
objectives. (A) Basic objectives of sales promotion are: Increasing the buying response of ultimate consumers. Increasing the selling efforts and intensity by dealers as well as by sales personnel. Supplementing and coordinating the efforts of advertising and personal selling (B) The other objectives are: Calling attention to new products and product improvements. Informing buyers of new brand and new packaging. Improving market share. Obtaining dealer outlets. Meeting competition.

These objectives are set on the basis of following criteria.

Cost of reaching an audience member. Acceptability of the tools to be used.

These criteria are developed taking into consideration the following variables/factors:
1. Kinds of product: The product is one of the factors determing the form of promotion. Toys, toilet soaps and cosmetics are effectively shown on television. Mass selling consumer goods can be easily promoted through radio and television. Industrial and specialty goods should be promoted through technical journals and through sales engineers. The buyer: If the marketers are to provide realistic solutions to the problem of buyers, they must know their customers, their needs and desires, their attitude, values, aspirations and expectations. Hence marketers must have up-to-date information about customer demand and customer behaviour. If the buyers are educated then demonstrations or instructions can be used as sales promotion technique. Similarly, contests and quizzes can be used if buyers are of young age and educated. Nature and size of market: The number, geographical location and purchasing power of potential customers exercise a significant impact on the sales promotion. Sampling, coupon, money refund orders, premium offer, price-off and trading stamps etc., are suitable for sales promotion in local markets. On the other hand, fairs, exhibitions and fashion shows are more appropriate for sales promotion on the national level particularly for garments, books and electronic items. Stages in product life cycle: This is an important managerial tool in sales promotion. Product life cycles consist of four stages. Introduction of the product requires lot of energy to create awareness, acceptance and demand for the Product. Introducing a new product for most companies is a costly and difficult exercise that is why they mostly depend on middlemen, Growth. It includes a fast growth both in sales volume and profit.

2.

3.

4.

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Maturity (Saturation).This stage is longer. But the speed in achieving sales volume reduces during this stage. Profit also starts declining much faster than the sales. Declining. This is the last stage in product life cycle. After a period of stability; the buyers loose interest on the product, and sales start falling more quickly. At this stage either high cost sales promotion technique may be used or existing product may be improved. Management policy: In the management policy, first of all, sales promotion objectives are set, then communication tools required to achieve these objectives are designed, and the third step is to determine the cost required to execute promotional activities and programmes. In short sales promotion expenditure is directly related to the objectives to be achieved. Budget allocation available: The decision on how much to spend on promotion is externally difficult on account of multitude of promotion tools, on the one hand, and varieties of products and markets on the other. For example, the greater the geographical dispersion of a target market, the greater the communication expenditure required. Similarly, if an offering is in its early life cycle, there is a greater need of expenditure. But promotion budget should always justify the tasks to be undertaken. A basic principle would be the cost and returns of sales promotion tools to be adopted. Hindustan Lever has its well drawn up sales promotion budget. If any business house does not have its promotion budget fixed, then promotion programmes will have to be designed to support the marketing plan. Government regulations: Government has passed various laws and made rules to protect the consumer interest, such as the prevention of Food Adulteration Act, the Drugs and Magic Remedies (Objectionable Advertisements) Act, and Drugs and Cosmetics Act etc. Sales promotion policy must take into consideration the government regulations relating to the particular product, e.g. the commodity rates must be specified on the package and in case of medicines drug contents and date of manufacturing, date of expire, and price must be specified.

Sales Promotion Tools Tools and Programmes: Sales promotion techniques are known as promotion tools
and the mode of their application is known as sales programme. These tools and programmes are divided under two heads: Tools and programmes for consumers sales promotion. Tools and programmes for dealer / distributor sales promotion 1. Tools and programmes for consumers sales promotion: These tools and programmes are as follow: Sample: Usually called consumer sample, free samples and given to consumers to introduce a new product or to expand the market. The consumers can try the product. Demonstrations or instructions: These are instructions given to educate the consumers about using the product. This method may be used in products like Vacuum cleaner. Coupon: It is a certificate that reduces the price. When a buyer gives a coupon to the dealer or retailer he gets the product at lower price. For example in DCM coupon system if regular price is Rs.20, with a coupon it is Rs.18. These are also known as discount coupons. Coupons are also accepted as cash by retailers. Money-refund orders: The technique indicates refund of full purchase price if the buyer so wants. It is helpful in the introduction of a new product. Refund offer creates additional interest and increases sales considerably. It is a good device for creating new user and to strengthen the brand loyalty. Premium (gift) offers: These are temporary price reductions, which appeal to bargain instinct, e.g., instant coffee sold in carafes by one company was very successful. Towels, dinner ware, hair-brushes, keychains, artificial flowers, ball pens, toilet soaps, blades, were given as in pack premiums. Attractive reusable jars costing separately say Rs. 12 may be given as at an extra charge of Rs. 4 only. Liril gave a soap box almost free with two soap cakes. Price-off: The price off label is printed on the package, e.g.,Rs. 4 offer a BrookeBond tea pack of 500 grams. It gives a temporary discount to the consumers. Contests or quizzes: These are held to stimulate consumers interest in the product. In these contests, and quizzers, participants compete for prizes on the basis of their skill or creative ideas. In Sweepstakes, they

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submit their names to be included in a draw of prize winners. This type of sales promotion is not a lottery because there is chance or luck, prizes are offered and a payment to participant is there. Trading stamps: Trading or Bonus stamps are issued by retailers to customers who buy goods from there. The number of stamp given to a buyer depends upon the amount of purchases made by him. For instance, in India Roman Bonus Stamps are issued at the rate of 2-1/2 percent of the purchase amount. These stamps are given free of charge and the customers can redeem them to obtain products out of the specified list. This technique induces customer to buy their requirements from the retailers who offer such stamps. The purpose is to increase customer loyalty. Fairs and exhibitions: Trade shows, fashion shows or parades, fairs and exhibitions are important technique/tools of sales promotion. They provide a forum for the exhibitions or demonstration of products. Free literature can be distributed to introduce the firm and its products to the public. Fairs and exhibitions are organized usually by big firms or trade associations. At these fairs and exhibitions, business firms are allotted stalls where in they display their products. Fairs and exhibitions have wide appeal as several people visit there. Customer can be attracted through gifts, special concessions and free demonstrations of technical and speciality products. They provide an opportunity to the visitors to observe the competing products and help to promote sales. For instance, the Trade Fair Authority of India organises Trade Fairs of various types in New Delhi. The National Book Trust organises World Book Fair, where publishers of all over the world are invited to display their publications. Sometimes sales conventions or conferences of dealers are held. Producers of garments often organise fashion shows to promote their products. Public relations activities: These include greetings or thanks in newspapers, donating space for noble causes, offer of Privileged Citizen Card, etc. Their purpose is not to create immediate demand or to increase sales. They are designed to create a good image of the firm in the society. Exchange scheme: This technique offers to exchange the old product with new in payment of a fixed amount which is less than the original price for example, exchange of old Black & White Television for Colour Television by paying rupees 8000 only (original price is rupees 10000) was offered by a particular producer of colour TV sets. 2. Tools and programmes for dealers/distributors sales promotion: These tools and programmes are: Free display: There is provision of free display of material either at the point of purchase (POP) or at the point of sale (POS), depending on ones view point. Display reaches consumers when they are buying and actually spending their money. Retail demonstrations: These are arranged by manufactures for preparing and distributing the products as a retail sample, for example, Nescafe Instant Coffee was served to consumers for trying the sample on the spot of demonstration regarding the method of using the product. Trade deals: These are offered to encourage retailers to give additional selling support to the product, e.g., tooth paste sold with 30% to 40% margin. Buying allowance: Sellers give buying allowance of a certain amount of money for a product bought. Buy-back allowance: It is offered to encourage repurchase of a product immediately after another trade deal. A buy back is sale opportunity. Free goods: Seller gives free goods, e.g., one piece free with two, or two pieces free with 10, are common free deals. Advertising and display allowance: These are also offered to retailers to popularise the product and brand name of the manufacturer. Contents: Sales contests are held for salesmen. Dealer loader: A gift for an order is a premium given to the retailer for buying certain quantities of goods or for special display done by the retailer. Training for salesmen: Dealer and distributor training for salesmen, which may be provided to give them a better knowledge of a product and how to use it. Dealer sales promotion provides the selling devices. Sales promotion devices at the point of purchase inform, remind, and stimulate buyers to purchase products. People who see these devices are in a buying mood and thus they can be easily persuaded to buy those products. Tell tags are informative labels affixed on the product, describing in detail the features of the

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product and its unique selling points. Counter, top racks, posters, mechanised signs are other point-of purchase displays.

PERSONAL SELLING
In contrast to advertising and publicity, which use impersonal methods of communication, personal selling makes use of direct personal communications to influence the target customers. Personal selling is a highly distinctive method of promotion, and makes use of oral presentation in conversation with existing and potential customers, for the purpose of making a sale. It is one of the oldest methods of business promotion. The contributions made by personal selling in making the promotion function more effective have earned the distinction of being the most reliable promotion method. Though, it is the most expensive method of promotion, yet we see an increasing number of firms making use of it, and a good number of them realize that they cannot, perhaps, live without it. Increasing competition, growing sophistication of the buyer and his buying process, are making personal selling more or less indispensable.

ROLE OF PERSONAL SELLING

Personal selling, as the name implies, is an individual to individual selling. It, therefore, carries the distinctive advantage of flexibility in terms of tailoring the sales presentation to the needs of the buyer. Another unique advantage comes from its two-way communication, and human interaction thereby providing instant feedback. These two unique advantages make personal selling the most result-oriented promotion method. Generally speaking, the nature of goods marketed, as well as the distribution system adopted; determine the role of personal selling in a firm. Therefore, personal selling is used extensively in the case of industrial goods, where the salesperson performs functions such as assisting the customer in designing the product specifications, product installation, product commissioning, solving technical problems through providing service after sales and helping customer to have optimal utilization of the product. In the case of consumer goods, on the other hand, the role of personal selling gets usually restricted to the dealer level. The scope of the tasks performed include obtaining periodic orders, ensuring supplies, offering tips to dealers on product display and attaining desired levels of stock movement. Similarly, the role played by personal selling is more in a firm which uses door-to-door selling method through its sales force than in the firm which sells through large stockiest, distributors or sole-selling agents. Notwithstanding the varying role of personal selling in the strategies followed by different companies, the nature of the selling function requires that the following tasks be performed: Sales generation Feedback and market information collection Provision of customer service covering aspects such as delivery of goods, warranty administration, timely availability of repair and spares etc. performance of sales support activities such as monitoring distribution function, credit collection, improving manufacturer-dealer relations, implementing the promotional programmes, etc.

TYPES OF SELLING JOBS

From the foregoing discussion we understand that while sales as a function has a common purpose, that is, to effect sales, the selling situations differs due to interplay of various factors. These factors are nature of goods sold, type of distribution system used, nature of demand and the type of sales strategy followed by the firm. These factors require the sales force to possess different traits and abilities suitable to the selling situation with which they are associated. To underscore the differences, Robert N.McCurry in "The Mystique of Super-salesmanship" classifies individual sales position based on the degree of creativity required into seven categories. These seven categories are described below: Merchandise Deliveries: The sales person, whose primary job is to deliver the product usually against routine orders-popularly called sales and delivery boys. Inside Order-taker: Working inside a store the primary job of such a sales person is to service the customer's request or suggest appropriate product to meet customer wants; such type of salespersons are popularly called retail salesman. Outside Order-taker: The salespersons engaged in the task of taking orders from the resellers. They normally do not use hard selling approach for making orders.

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Missionary Salesperson: The salesperson whose primary job is to educate, give product detailing, build goodwill or create primary demand for the product. Strictly speaking, missionary salespersons are not permitted to take orders. Sales Engineer: The salesperson who acts as a technical consultant to the client and as per the need helps him to design products or production system for the client. This type of salesperson is popularly called Technical Salesperson. Tangible Product Seller: The salesperson whose job is to sell tangible products such as furniture, appliances, automobiles, etc. The job involves abilities to persuade and convince the customer. Intangible Product Seller: Here the salesperson is associated with selling intangible products or services such as advertising services, insurance, education, etc., the common factor being difficulty in immediate demonstration of the perceived benefits of the product. This selling job requires perhaps the greatest degree of a creativity in the salesperson.

THE SELLING PROCESS

Step 1 (Preparation): Before starting the selling job, a salesperson should make a valuable investment of time and resources to know the products he will be selling, know the customers (i.e. customer types, buying motives and buying process) to whom he will be selling; know the competitors against whom he will be selling, and finally know the philosophy, policies and range of products of his company, In short, he should be well equipped with the fundamentals of selling. Step 2 (Prospecting): This step of the selling process deals with locating and preparing a list of prospective customers. Prospects can be located through 1. Identifying the potential of buying more in the existing customers, 2. Recommendations of existing customers, 3. Winning back lost customers,
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4. Attracting competitor s customers,

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5. Customers information request from advertisement,

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6. Newspaper announcements, 7. Public records, 8. Directories like telephone, trade association etc., 9. Other salesmen, 10. References from friends, neighbours and business associates, and 11. Cold canvassing that is, going from door-to-door. The located prospects should first he qualified broadly in terms of (i) Whether they want the product and how intense their want is, Whether they have the adequate purchasing power, and (ii) (iii) Whether and who possesses the power or authorization to purchase and spend the required money. The qualifying of prospects is the process of separating the prospects from the suspects. It is worth-mentioning here that the ability to prospect is the most essential ability of a successful salesperson. A good salesperson keeps examining, weeding out the already tapped prospects and updating his lists of prospects, and remains in constant search of new prospects. Step 3 (Pre approach): The qualifying process of separating prospects from suspects further requires that the salesperson should possess detailed information relating to the prospects in terms of existing products consumed, their scale of operation, product range, their buying size, frequency, budget and the process, etc. In short, obtain customer orientation. The sources of information for the purpose include company annual reports, other salespersons, other suppliers to the prospects, census of manufacturers, professional journals, newspapers and market intelligence, The availability of the above information in as detailed a manner as possible will help the salesperson in ranking the prospect in terms of their priority to the company. Good salespersons use the above information in classifying the prospects in A, B and C categories in terms of the immediacy of the attention to be given to them. Step 4 (Approach): `First impression counts'. As such, this step needs to be carefully planned. This step has two distinct parts. One, of meeting the customer with a positive set of mind, and the second, is make an impact on him. For the former, referrals of reliable persons known to prospects, canine after fixing an appointment, use of door openers, help. For the latter the salesperson should equip him with the key benefit to be emphasized, samples or new literature to be handed over, etc. Step 5 (Sales Presentation): Through advance information relating to the prospect every effort should be made to match the product offered to the needs/problems faced by the customer. The sales presentation should generally go according to the AIDA-attention, interest, desire, and action approach. How can this be done? Use of key benefit or a problem solver, or a unique act of the salesperson results in gaining attention. When used attentively this part also provides opportunity to get the main point of the initial statements made by the prospect. The presentation should proceed in a straightforward manner to help the prospect know that you understand his problem and that is the reason of your being there. To convince the prospect as early as possible, the salesperson should offer evidence through demonstration of the product, use of exhibits, models, sharing Of acts, citing examples of its successful applications/usage, showing testimonials, etc. The overall approach should be to build credibility and confidence in the supplying company, its products, and also in its competence to render specialized type of service to the, complete satisfaction of its customers. The flexibility of the sales presentations can range from the `Canned' or previously
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prepared presentation, to those allowing the salesperson complete freedom in the presentation. Though both the extremes, and even the hybrid of the two, have their own situational suitability, the important point to note is that salesmanship, being a showmanship function, must arouse active participation of the prospect in the presentation process. This can be done by introducing some action which would keep the prospect captivated. One possible way would be a joint review of the problem faced by the prospect. Another is helping the prospect imagine the projected benefits of owning the product. Step 6 (Handling Objections): It is in the last phase of the sates presentation step that the prospects start expressing doubts, or raising objections whether relating to price, need for more time to think, satisfied with the existing product/supplier or product quality claims. These doubts or objections should be welcome and they should be

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answered with confidence. There is certainly no doubt that the prospect has to be thoroughly, convinced that the product would satisfy his need. The ability of the salesperson of mind reading of the prospects enables him to anticipate the prospect's objections and reactions. The golden rules for handling objections are: (1) Welcome the objection and show respect to the prospect, and (2) Do not argue with the prospect. Even when the objections raised are half-backed or trivial in nature, the salesperson should handle the situation tactfully. Only in extreme necessity, should a salesperson ask the prospect to adequately explain his problem faced. Even under these circumstances courtesy should not be lost sight of, and while the discussion is on, the salesperson should start recounting the benefits of the product agreed upon, and lead the prospect to make a favourable decision. It should be remembered that handling objections sharpens the selling skills of the salespersons. Step 7 (Closing the Sale): Closing is that aspect of the selling process in which the salesperson asks the prospect to buy the product. There is a critical point during each presentation when the salesperson should ask for the order. Pending the location of the critical point, as the objections are being met, the salesperson should help reduce the choice of options, summarizes the benefits of buying, and the consequences of not buying, and if need be, make use of the big idea appeal of buying `now' at that moment. The salesperson should have the ability of catching the buying signals given by the prospect and should act on them fast. Some such signals are changing the sitting/standing position and moving closer to the product; reading the instructions on the product; perusing the testimonials; showing hesitation in being able to afford; asking for another demonstration, if applicable; checking the warranty or asking questions relating to warranty terms. These signals show that the time is ripe to start taking the order. Step 8 (Post-sale Follow-up): The selling process does not come to an end by writing the order. A few repetitions reassuring the benefits of the product keep the customer sold. Follow-up provides an opportunity to ensure that the product is being rightly used, and if necessary to re-explain the method of using, handling, and storing of the product when not in use. This builds favourable feelings and nurtures strong buyer-seller relationships. Post-sale follow-up not only reinforces the customer's confidence in the salesperson and his company but also tends to keep competition out. This also helps generate repeat business and valuable word-of-mouth publicity. The follow-up is a good source of feedback too. Let us conclude this section by stating that although the eight steps of the selling process are essential in spirit, these may not always be followed. This could be partly the 1. The selling situation involved (e.g., in the case of insider order-taker or retail salesperson) the first three steps of the selling process are generally not applicable as the customer walks into the store for buying a product, 2. The expertise of the salesperson (such that he can ignore or assume some information), or 3. The seller's market of the product where customers generally queue up for the product. Let us also look at the findings of a study by Robertson and Chase on the subject. They point out that: 1. The more closely matched the physical, social and personal characteristics of the customer and salesperson, the more likely is the sale. 2. The more believable and trustworthy the customer, perceives a salesperson to be, the more likely is the sale. 3. The more persuadable a customer is, the more likely is a sale. 4. The more a salesperson can make prospective buyers view themselves favourably, the more likely a sale is.