2017

Personal Selling
STUDY OF STRATEGIES ADOPTED BY SCHNEIDER ELECTRIC
K062 SAURABH GUPTA
K063 NIHAAR KEDIA
K067 TANMAY NIJHAWAN
K089 ANAND VAIDYA
K092 PARESH PATEL
 Executive Summary

Personal selling is defined as face-to-face selling in which one person who is the salesman tries to
convince the customer in buying a product. It is a promotional method by which the salesperson uses
his or her skills and abilities in an attempt to make a sale.

Schneider Electric is a French multinational corporation that specializes in energy

management and automation solutions, spanning hardware, software, and services. Native of France,
the company is headquartered in Rueil-Malmaison and is also based at the World Trade Centre of
Grenoble with offices throughout the world. A Fortune Global 500 company, Schneider Electric is
publicly traded on the Euronext Exchange and is a component of the Euro Stoxx 50 stock market
index. In FY2015 the company posted revenues of 26.6 billion.
The major product lines:

Industrial Automation and Control

Access to Energy
Medium Voltage Distribution and Grid Automation
Critical Power, Cooling and Racks
Low Voltage Products and Systems
Solar and Energy Storage
Building Automation and Control
Residential and Small Business

As we are already aware that personal selling is used to sell highly specialized products that require
customization and variations as per the needs of every customer, personal selling gives the company
higher profit margin as compared to commodative/ retail sales. The customers are generally
institutional clients. In our interaction with Mr. Deepak Vaidya of Schneider Electric, we discovered
that the personal selling market is less transparent and hence the vendors have a greater bargaining
power. The pricing varies from customer to customer. The same product might be sold at different
prices to two different customers. This is highly unlikely in the retail markets. Personal selling is
dependent upon lead generation and not on commercial advertisements. The sales force not only has
to be aware about the competition in the market, it has to be sure about the product as well. The
consumer is highly knowledgeable about the product and will not make the purchase based on
sentiments. Mr. Vaidya also stated that the sales force is not only responsible for selling but also are
the point of contact with the customers. They are the ones who hold the relationship with the
customers and they are the ones who get the feedback about the products performance. The sales
force also a huge help in forecasting the feasibility of a new product or project as they have an
excellent knowledge about the probable acceptability of the product. Also the sales personnel are the
first ones to sift out in which stage of its life cycle is the product in.

The person contacting the customer is the voice of the company and hence the commitments made
by him/her must be met. It is an utmost necessity for the sales personnel to be aware about the
constraints in production before making any commitments. Generally, the customers acquired
through personal selling give repeat orders. But a company will receive repeat order only if the
customers are satisfied with the service they receive. Mr. Vaidya told that apart from selling the core
product the sales personnels are free to bundle the product with complements if required. Mr. Vaidya
also shared that personal selling is not done to the users of the product, but also to those who send
complements of the underlying or to those companies where the underlying product is a complement
to their product.

It has also been observed that sales personnel overcommit to acquire an order or many times escalate
their commitments just to retain the account. This either affects the bottom line of the company or it
affects the reputation of the company, neither of which are desirable. Hence the flow of information
within the organization is as important as selling the product.

Schneider has divided the product into 2 market categories: commodative and consultative. Although
both the product categories are sold via personal selling, the commodative products have a very high
frequency of repeat orders eg. switchgears. The consultative products are sold at extremely low
frequency eg. transformers. The sales force is divided on the basis of geography for commodative
products and on the basis of specialization for the consultative products.

The recruitment for consultative sales ensures that the prospective employee has sound knowledge
about the product. It is also necessary for such personnels to have a good understanding of the
market and the trends. On the other hand commodative sales requires persistence, field work and
relatively less knowledge about the market as compared to consultative selling. Training programs are
designed such that the commodative the employees become well aware about the product and the
market. For the consultative recruits, as they are highly experienced, training is not required. They
merely go through a small induction to adapt to their new organization.

Clover leaf routing is preferred by Schneider. Both monetary incentives and recognition is provided to
a good performer. The employees are rewarded by board inclusion, awards, or dinner with higher
officials. Performance is measured on sales volume in specified period of time price Realisation,
payments, customer satisfaction, customers contacted, product Dependent Hit ratio. Other issues
such as performance issues are tackled on case to case basis.