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MKT 504 Midterm 1 review.docx

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Ryerson University
MKT 504
Harvey Mc Phaden

MKT 504 Midterm 1 review CH1 Value-added Selling Improving the sales process to create value for the customer:  offer better advice and product solutions,  carefully manage customer relationships, and  provide better service after the sale. Personal Selling in the Information Age Major Developments (1960-2020) 1) Major advances in information technology 2) Information is a strategic resource 3) Business is defined by customer relationships 4) Sales success depends on creating and adding value for the customer Industrial economy 1860 – 1960 tangible product Informational economy 1960 – 2020 intangible product Evolution of Personal Selling Marketing Era (Middle 1950s-1960s) Organizations determine needs and wants of target markets and adapt themselves to delivering desired satisfaction. Product orientation is replaced by a customer orientation. Consultative Selling Era (Late 1960s-1970s) Salespeople are becoming diagnosticians of customers’ needs as well as consultants offering well- considered recommendations. Mass markets are breaking into target markets. Strategic Selling Era (1980s) The evolution of a more complex selling environment and greater emphasis on market niches creates the need for greater structure and more emphasis on planning. Partnering Era (1990s – present) Salespeople are encouraged to think of everything they say or do in the context of their long-term, high- quality partnership with individual customers. Sales force automation provides specific customer information. "Marketing is not the art of finding clever ways to dispose of what you make. It is the art of creating genuine customer value." Philip Kotler Marketing Concept Three aspects of the marketing concept are: 1) Co-ordination of marketing activities throughout the company, 2) Focused to create customer satisfaction, 3) While achieving the firm’s goals Marketing Mix  Product  Price  Place  Promotion Combination of elements based on the marketing concept o Set of controllable, tactical marketing tools used to influence demand Integrated Marketing Communications Customer – Personal selling, sales promotion, direct marketing, advertising, public relations.  Attempt to provide a consistent, persuasive message to customers regardless of their source Consultative Selling Complex process that is an extension of the marketing concept: 1) Looks at a customer as a person to be served 2) Needs identified through two-way communication 3) Emphasizes need identification, problem solving, and negotiation 4) Emphasizes service at every phase Adaptive Selling  Altering sales behaviours during a customer interaction in order to improve communication  Key element of the problem-solver stage Strategic/Consultative Selling Model Creating customer value Strategic step: Develop a personal selling philosophy Prescription: Value personal selling. Adopt Marketing concept. Become a problem solver/partner Relationship Strategy – is a well thought-out plan for establishing, building, and maintaining long-term quality relationships Strategic step: Develop a relationship strategy Prescription: Project positive, professional image. Practise communication-style flexing. Behave ethically. Product Strategy – is a well-conceived plan that emphasizes extensive product knowledge, learning to select and communicate appropriate product benefits that will appeal to the customer, and configuring value-added solutions Strategic Step: Develop a product strategy Prescription: Become a product expert. Sell specific benefits. Configure value-added solutions. Customer Strategy – a carefully conceived plan that will result in maximum responsiveness to the customer’s needs Strategic step: Develop a customer strategy Prescription: understand customer buying process. Understand customer buying behavior. Develop prospect base. Presentation strategy – is a well-developed plan that includes preparing the sales presentation objectives, preparing a presentation plan, and renewing one’s commitment to providing outstanding customer service Strategic step: Develop a presentation strategy Prescription: Understand buying process. Prepare objectives. Provide outstanding service. Value Creation model 1. Understanding customer’s value needs 2. Creating the value proposition 3. Communicating the value proposition 4. Delivering the value proposition Strategic Selling Alliance  Goal is to achieve a marketplace advantage by teaming up with another company whose products or services fit well with your own  Often formed by companies with similar business interests to gain a mutual competitive advantage Consultative Selling 1. Need discovery 2. Selection of the solution 3. Need satisfaction presentation 4. Servicing the sale Quiz 1. Jerry uses strategy to ensure tactical success. He feels that strategic planning helps him a. make his sales presentation to the right people at the right time. 2. Geoff is trying to develop a product strategy. One of the prescriptions he will have to follow is a. to configure value-added solutions. 3. In today's era of limitless data, one role of salespeople is to help customers a. decide what information has value and what should be ignored. 4. Gina is trying to develop a customer strategy. One of the prescriptions she will have to follow is to a. develop a prospect base. 5. Value-added selling a. is a series of creative improvements designed to enhance the customer experience. 6. The marketing concept a. is something a company adopts when its efforts are completely focused on satisfying consumers while achieving its own goals. 7. Consultative selling emphasizes all of the following except a. sales transactions. 8. The transaction-based buyer is likely to focus more on a. the lowest price available. 9. In the information economy, business is defined by a. customer relationships. 10. The main goal of a customer strategy is to a. maximize responsiveness to customer needs. 1. Personal selling involves person-to-person communication with prospects and customers. a. True 2. Value-added selling today involves providing tangible product features and benefits that meet customer needs. a. False 3. The marketing concept focuses more on products than customers. a. False 4. Salespeople who want to excel at consultative selling need to develop two-way communication with customers. a. True 5. Consultative selling is essentially easy, and simply involves good negotiating skills. a. False 6. An example of a strategy would be using PowerPoint during a group presentation. a. False 7. If someone can really sell, her ability to build good interpersonal relationships becomes less important. a. False 8. Another name for a strategic account program is a national account program. a. True 9. Integrated marketing communications improves effectiveness by giving target customers consistent messages across communications media. a. True 10. Salespeople who have adopted relationship selling rely on a personal, customized approach to each customer. a. True 1. How do salespeople create value with customers? a. They develop quality relationships, identify needs, and offer the best possible solutions. 2. When a company develops the business philosophy that customer satisfaction is of primary importance, they have adopted a. the marketing concept. 3. When the marketing era began in the 1950s, more organizations recognized a. that salespeople were in an ideal position to gather important information about buyers' needs. 4. Strategies are a. a prerequisite for tactical success. 5. Relationship strategies are important because a. they help develop rapport with customers. b. they help maintain quality relationships. c. they help develop trust and mutual respect between buyers and sellers. d. they ensure long-term partnerships with customers. e. All of the above. 6. The purpose of a product strategy is a. to help salespeople make correct decisions on positioning of products to meet customer needs. 7. The important elements of a customer strategy include a. understanding the customer buying process, behaviour, and the development of a prospect base. 8. The marketing concept is best described as a. a business philosophy. 9. Stan Davis, author of Blur: The Speed of Change in the Connected Economy, said that a. today the computer is used more for connecting and less for data crunching. 10. Integrated marketing communications a. gives target customers consistent messages across communications media. CH2 Personal Selling in the Age of Information  The new economy is about the growing value of knowledge (replacing tangible goods)  One way to add value to information is to: o Collect it, …… the right data o Clarify it, ……. do your homework, interpret it o Present it in a convincing manner. (WI:IFM) Data – information – intelligence Knowledge Workers - someone whose work effort is centred around creating, using, sharing, and applying knowledge.  Four major groups are: 1. Managerial Personnel  Found under such titles as: i. Executive, ii. Manager, or iii. Administrator  This group understands the importance of “executive selling” and that the most valuable information is acquired from internal and external customers 2. Professionals  Technical skills are not enough as customers seek expert diagnosticians who are truly interested in their needs.  accountants, computer programmers, consultants, dentists, doctors, engineers 3. Entrepreneurs  Entrepreneurs understand the importance of relationships but do not see it as “selling” (CPSA survey)  “ENTREPRENEUR = SALESPERSON” 4. Customer Service Representatives  Knowledge workers who process reservations, accept orders by phone or other means, deliver products, handle complaints, provide technical assistance, and assist full-time sales representatives  CCO – Chief Customer Officer  CEO – Customer Experience Officer  CSM – Customer Success Mgr. 5. You as students One salesperson creates enough sales revenue to pay for nine other jobs within the company More than 1,000,000 people in sales positions across Canada Nearly 10% of workforce Recession Proof Two factors contribute to new titles: 1. Shift from “selling” to “consulting”/”advising” 2. Reflects difference in education and skill needed – increased client/sol’n complexity Rewarding Aspects of Selling Careers  Above-average income - study  Above-average psychic income o Factors that provide psychological rewards; o Helps to satisfy the need for recognition and security, and motivates us to achieve higher levels of performance  Opportunity for advancement  Opportunities for women – “Why women can outsell men” Inside Salesperson – performs selling activities at the employer’s location, typically using the telephone handling inbound and outbound calls (telemarketing)  Take orders  Make calls on smaller customers  Provide support for field salespeople Outside Salesperson – travels to meet prospects and customers in their place of business or residence  a.k.a. Field Salesperson Field Salesperson – regularly visits face-to-face with new customers and current customers  Works for manufacturers and wholesalers Channel of Distribution – includes all of the intermediaries that exist between the manufacturer and the end user  Trade Selling – refers to the sale of a product or service to another member of the channel of distribution  Detail (or Missionary) Salesperson – attempts to generate goodwill and stimulate demand for the manufacturer’s product among channel members Manufacturers employ sales and sales support personnel in a variety of different positions in outside and inside sales:  Industrial salespeople  Sales engineer or applications engineer o A salesperson who must possess a detailed and thorough knowledge of their products as well as competing products  Field salespeople  Detail salespeople The principles of selling can be learned and applied by people whose personal characteristics are quite different  Corporate-sponsored training  Commercial vendor training  Certification studies (CPSA)  Courses in colleges and universities Typical salesperson completes 38 hrs/yr Quiz 1. Salespeople typically complete __________________ training a year than senior executives. a. 10 more hours 2. Clients who purchase professional services expect a. the professional to be an expert, and truly interested in their needs. 3. Brenda Fisher, with Janssen-Ortho Inc., said she likes her work as a sales professional because a. she likes the time flexibility it offers. 4. "Executive selling" by leaders and managers can be described as a. efforts managers make with salespeople to capture information from customers and assist in the selling process. 5. Sales may not be an early career choice for some college graduates because a. some may believe a sales career will require them to engage in unethical and dishonest behaviour. 6. Advancement opportunities often come to top-performing salespeople because a. They generally work in high-visibility positions and have been recognized for their accomplishments. 7. Diverse clients, demographics, and diverse market segments mean a. a diverse sales force is needed to match diverse customer needs. 8. Because of the growth of online sales, traditional retailers a. need to create a compelling value-added shopping experience. 9. Telemarketing can be an effective sales channel for the following activity(ies): a. selling to smaller accounts b. providing technical assistance and support to salespeople c. qualifying sales leads d. providing technical assistance and support to customers e. All of the above. 10. What type of salesperson is rewarded for indirectly selling goods? a. a detail salesperson 1. Salespeople, on average, spend nearly 12 hours per week on the telephone. a. True 2. If a salesperson has knowledge of a new technology, but fails to effectively communicate it, there is little value to the information. a. True 3. Because CSRs deal with so many customers, it is unlikely that they will gain any valuable knowledge about them. a. False 4. Technical skills in the information age are really sufficient. Keeping customers satisfied is the most important requirement. a. False 5. When thinking about sales, there is really only one true selling occupation. a. False 6. The financial, advancement, and recognition opportunities associated with selling are really quite unique. a. True 7. Firms have recognized that gender is really not a barrier to sales success and are hiring women in growing numbers. a. True 8. Selling a desktop computer network to a large financial institution is an example of inside sales. a. False 9. Research shows that only one personality type is likely to be successful in a sales career. a. False 10. The trend to a higher level of professionalism is prompting some salespeople to return to the classroom for additional training and education. a. True 1. The average salesperson works 46.9 hours per week. Approximately how much of this time does the salesperson spend in actual face-to-face selling? a. 15 hours 2. Which of the following is not one of the major employment settings for personal selling? a. information processing 3. Some of the customary duties of a customer service representative may include a. accepting phone orders, providing technical assistance, and supporting sales representatives. 4. Which of the following statements is false? a. Men are more people-oriented than women. 5. One reason new sales titles have been created is because a. there has been a shift from selling to consulting. 6. _______________ is one of the hottest areas of sales growth. a. Banks and financial services 7. Women are enjoying expanding sales opportunities in areas such as a. All of the above. 8. Selling Internet advertising is an example of a. selling a service. 9. Maintaining inventory and extending credit are services typically provided by a. wholesalers. 10. A detail salesperson is sometimes referred to as a. a missionary salesperson. 1. Detail salespeople make calls specifically on retailers to help them improve their marketing strategies. a. False 2. Professionals such as lawyers, accountants, and architects are realizing personal selling is an important activity. a. True 3. A career in sales will require people to engage in behaviour likely considered unethical. a. False 4. In a typical week, a sales professional may spend less than 15 hours in face-to-face selling. a. True 5. A sales manager will always make more than the salespeople she manages. a. False 6. In bad economic times, salespeople need to be very concerned about job security. a. False 7. Many firms today have recognized that it is good business to provide opportunities in sales for minorities. a. True 8. Selling for a manufacturer usually means the sales process is less complex. a. False 9. Salespeople are made, not born. a. True 10. In major corporations, salespeople rarely receive any specific job training. a. False CH3  Many forms of intelligence influence our actions throughout life  One form is emotional intelligence o Emotional Intelligence – the capacity for recognizing our own feelings and those of others, for motivating ourselves, and for managing emotions effectively in ourselves and in our relationships. Emotional Intelligence “Social” Intelligence  People with a high level of top performer attributes display many of the qualities needed in sales work: o Self-confidence o Trustworthiness o Adaptability o Initiative o Optimism o Empathy o Social skills  In the field of personal selling and most other business occupations, emotional intelligence (EI) (Feelings) is considered a much greater predictor of success than a high intelligence quotient (IQ) (Facts)  The good news is that one can enhance EI with various self-development activities Challenges Selling in the Information Age  Building new relationships  Transforming relationships from the personal level to the business level  Management of relationships Relationships Add Value  A salesperson should have an ongoing goal of developing a relationship strategy that adds value  Salespeople who feel a professional responsibility (attitude) to create as much value for customers as possible exhibit:  Customers perceive that value is added when they feel comfortable with the relationship they have with a salesperson  Major players in the future will be the empathizer o Empathizer – someone who has the ability to imagine themselves in someone else’s position and understand what that person is feeling Value Creation  The information economy will reward those salespeople who have the skills, the knowledge, and the motivation to determine how to create value at every step of the sales process Partnering – a strategically developed, high-quality long-term relationship that focuses on solving the customer’s business problem  Involves establishing, re-establishing, and maintaining relationships  Three keys to a partnering relationship: o The relationship is built on shared values o Everyone needs to clearly understand the purpose of the partnership and be committed to the vision o The role of the salesperson must move from selling to supporting Relationship Strategies Focus on Four Key Groups – 4 Levels Salesperson 1. Customers 2. Secondary decision makers 3. Company support staff 4. Management personnel Adapting the Relationship Strategy  Should be tailored to the type of customer: o Transactional buyer – relationship strategy is secondary to price, convenience, and delivery o Consultative buyer – effective communication, relationship built on mutual trust and respect o Strategic alliance buyer – building relationships with several representatives in the seller’s and buyer’s organization  Most challenging 3 Thought Processes That Enhance Your Relationship Strategy &Emotional Intelligence 1. Self- Concept – is the bundle of facts, opinions, beliefs, and perceptions about yourself that are present in your life every moment of every day  Consciously aware of some things  Many are processed unconsciously  Improve self-concept 1. Focus on the future and stop being overly concerned with past mistakes and failures 2. Develop expertise in selected areas 3. Learn to develop a positive mental attitude 2. Empathy and Ego-drive  Top salespeople have both the motivation to make the sale and the empathy that gives them the connecting tool with which to do it  Ego Drive – inner force that makes the salesperson want and need to make the sale  Lack of Motivation has been cited in projects 3. Character & Integrity  Character – your personal standards of behaviour, including your honesty and integrity  Based on internal values and the resulting judgments you make about what is right and what is wrong  Integrity – what you have when your behaviour is in accordance with your professed standards and personal code of moral values Win-Win Philosophy  The first step in developing a relationship strategy  Both the buyer and seller come out of the sale understanding both their respective best interests have been served o Profited personally and professionally from the transaction Quiz 1. Which of the following statements about self-image is false? a) Self-image is resistant to change. 2. Salespeople with emotional intelligence display the following trait(s): a) Trustworthiness b) Optimism c) Initiative d) self-confidence e) All of the above. 3. When you enter a room, you can communicate confidence with a) a strong stride, good posture, and a friendly smile. 4. Four key ideas that should govern our clothing decisions as salespeople include a) simplicity, quality, appropriateness, and visual integrity. 5. According to Larry Wilson, one of the keys to partnering relationships is a) the role of the salesperson, which must move from selling to supporting. 6. Key groups that salespeople should develop partnership relationships with are a) customers and secondary decision makers. 7. One way to develop a more positive self-image discussed in the textbook is to a) focus on the future rather than be concerned with past mistakes. 8. People exhibit integrity when a) there is consistency in what they know, what they say, and what they do. 9. During a first contact with a customer, impressions are made a) during the first few minutes or even seconds of the meeting. 10. One conversational strategy that can enhance relationships is a) to be a good listener and encourage others to talk about themselves. 1. Emotional intelligence refers only to someone's IQ. a) False 2. Salespeople today are recognizing that the quality of the relationships they build is as important as the quality of the product they sell. a) True 3. Personal selling is an event, not a process. a) False 4. Building a partnering relationship with company support staff has little value for a salesperson. a) False 5. People with emotional intelligence display many of the qualities needed in sales. a) True 6. If behaviour is wrong, but everyone is doing it, then it's acceptable to follow the crowd. a) False 7. The verbal messages we send always have more impact than nonverbal messages. a) False 8. A good, firm handshake is important in establishing a good first impression. a) True 9. In today's society it is generally acceptable to always dress "business casual." a) False 10. Salespeople should avoid offering compliments so customers do not think them insincere. a) False 1. The three major relationship challenges of selling in the information age are a) building new relationships; transforming relationships from personal to business levels; managing relationships. 2. Today's customers are demanding a) quality products and quality relationships. 3. What did Larry Wilson identify as one of the most important strategic thought processes needed by salespeople? a) partnering strategy 4. Salespeople who abandon short-term thinking and invest in long-term relationship building are rewarded with a) greater earning potential. b) the satisfaction of working with repeat customers. c) more customer referrals. d) All of the above. 5. Salespeople with a high level of emotional intelligence display all of the following qualities needed for sales success except: a) superior verbal skills 6. In a win-win selling environment, buyers and sellers both come to understand a) that the respective best interests of both parties have been served. b) the salesperson wins the deal and earns commissions. 7. Every salesperson makes an impression on customers, which is a) the sum total of many verbal and nonverbal factors. 8. According to Peter Urs Bender, approximately _____ percent of presenters begin their presentations by speaking too fast. a) 85 9. Which of the following is not a rule of etiquette appropriate for salespeople? a) Do not express personal views on religion or politics until clients have expressed their views. 10. Good manners are essential for successful selling. An important thing to remember is a) make sure your cell phone is always turned off during meetings. b) be clear and concise when using voice mail. c) when taking a customer to lunch, wait to discuss business until after ordering. d) always be on time. e) All of the above. 1. In the consultative sale, the opportunity to uncover hidden needs is greatly enhanced by a well- conceived relationship strategy. a) True 2. Salespeople who strive to create value for customers display traits such as a strong work ethic and high energy levels. a) True 3. High-performance salespeople have recognized that it is not a good use of their time to focus on secondary decision makers. a) False 4. With a transactional sale, the relationship strategy is often of tertiary importance. a) False 5. Nonverbal messages are those we send by means of hand and facial gestures, posture, and appearance. a) True 6. Offering a smile to a new customer may help you develop trust and rapport. a) True 7. A salesperson with superior selling skills doesn't need to worry much about dress and appearance. a) False 8. Salespeople should really avoid small talk with customers. It is best to get right down to business. a) False 9. You can build relationships by sending articles or reports of interest to your contacts. a) True 10. To continue improving, it is essential that a salesperson have a self-initiated program of self- improvement. a) True CH4 Communication Styles – An Introduction to Managing Selling Relationships  Personality – the thoughts, feelings, and actions that characterize someone o Communication style is an important aspect of your personality o Communication Style – patterns of behaviour that others observe; the “you” on display every day  Voice patterns, eye movement, facial expression, and posture  Adaptive selling – altering sales behaviours in order to improve communication with the customer o Ability to collect information regarding the customer’s needs and responding appropriately o Requires complex behavioural adjustments Communication-style bias – a state of mind we often experience when we have contact with another person whose communication style is different from our own o Makes building rapport difficult 5 Communication Style Principles 1) Individual differences exist and are important 2) A communication style is a way of thinking and behaving 3) Individual style differences tend to be stable – it is our comfort zone 4) There are a finite number of styles 5) To create the most productive relationships, it is necessary to get in sync with the communication styles of the people you work with Improving Your Relationship Selling Skills  Style flexing – the deliberate adjustment of one’s communication style to accommodate the needs of the other person o Can afford you a crucial advantage in dealing with people o Can reduce possibility of tension during a call Four basic communication styles are based on two important dimensions of human behaviour: o Dominance – the tendency to influence or exert one’s will over others in a relationship o Sociability – reflects the amount of control one exerts over emotional expressiveness o Self ratings can be misleading High Dominance Continuum - Like to control things. Frequently initiate demands. More aggressive Low Dominance Continuum - Quite cooperative. Let others control things. Low in assertiveness High Sociability Continuum – Outgoing. Seeks interaction. Less formal Low Sociability Continuum – Reserved. Likes to be alone. More formal Emotive Style (high dominance, high sociability)  Some of the verbal and nonverbal characteristics: o Appears quite active o Takes the social initiative in most cases o Likes to encourage informality o Expresses emotional opinions  They are outspoken, enthusiastic, and stimulating Director Style (high dominance, low sociability)  Some of the verbal and nonverbal characteristics: o Appears to be quite busy o May give the impression of not listening o Displays a serious attitude o Likes to maintain control  They are frank, demanding, assertive, and determined Reflective Style (low dominance, low sociability)  Some of the verbal and nonverbal characte
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