Principles of Selling Ch. 1-3

AIDA
an acronym for the various mental states the salesperson must lead customers through when using mental states selling: attention, interest, desire, action
Customer value
the customer’s perception of what they get for what they have to give up, for example, benefits from buying a product in exchange for money paid
Personal selling
relies heavily on interpersonal interactions between buyers and sellers to initiate, develop, and enhance customer relationships. The interpersonal communications dimension sets personal selling apart from other marketing communications such as advertising and sales promotion. Personal selling is also distinguished from direct marketing and electronic marketing in that salespeople are talking with buyers before, during, and after the sale. This allows a high degree of immediate customer feedback, which becomes a strong advantage of personal selling over most other forms of marketing communications
Transaction Focused Traditional Selling
goal is to maximize sales in the short run
Trust Based Relationship Selling
focuses on solving customer problems, providing opportunities, and adding value to the customer’s business over an extended period
Sales Dialogue
business conversations between buyers and sellers that occur as salespeople attempt to initiate, develop, and enhance customer relationships. Sales dialogue should be customer focused and have a clear purpose.
5 Alternative Approaches to Selling
stimulus, mental states, needs satisfaction, problem-solving, consultative
Stimulus Response Selling
an approach to selling where the key idea is that various stimuli can elicit predictable responses from customers. Salespeople furnish the stimuli from a repertoire of words and actions designed to produce the desired response.
Mental States Selling
an approach to personal selling that assumes that the buying process for most buyers is essentially identical and that buyers can be led through certain mental states, or steps, in the buying process; also called the formula approach
Needs Satisfaction Selling
an approach to personal selling based on the notion that the customer is buying to satisfy a particular need or set of needs
Problem Solving Selling
an extension of need satisfaction selling that goes beyond identifying needs to developing alternative solutions for satisfying these needs
Consultative Selling
the process of helping customers reach their strategic goals by using the products, services, and expertise of the sales organization
Trust
when an industrial buyer believes that he/she can rely on what the salesperson says or promises to do in a situation where the buyer is dependent on the salesperson’s honesty and reliability; key terms- expertise, compatibility, customer orientation, dependability, candor
Expertise
the ability, knowledge, and resources to meet customer expectations
Compatibility
salesperson’s commonalities with other individuals
Customer Orientation
the act of salespeople placing as much emphasis on the customer’s interests as their own
Dependability
predictability of a person’s actions
Candor
honesty of the spoken word
Why trust is important
today’s more contemporary selling process is embedded within the relationship marketing paradigm; as such, it emphasizes the initiation and nurturing of long-time buyer-seller relationship based on mutual trust and value-added benefits
How the salesperson earns trust
by demonstrating expertise, dependability, candor, customer orientation, competence and compatibility
How knowledge bases help build trust and relationships
if a salesperson can demonstrate expertise in the buyer’s industry, company, marketplace, competitive knowledge, and so on, then the buyer will more likely be willing to listen to that salesperson if he/she brings valued experience to the buyer
3 areas of unethical behavior
deceptive practices, illegal activities, noncustomer-oriented behavior
Deceptive practices
salespeople giving answers they don’t know, exaggerating product benefits, and withholding information may appear only to shade the truth, but when it causes harm to the buyer, the salesperson has jeopardized future dealings with the buyer
Illegal activities
misusing company assets
Noncustomer Oriented Behavior
most buyers will not buy from salespeople who are pushy and practice the hard sell
Primary Types of Buyers
consumer markets, business markets
Consumer Market
a market in which consumers purchase goods and services for their personal use or consumption
Business Market
a market composed of firms, institutions, and governments, which acquire goods and services to use as inputs into their own manufacturing process, for use in their day-to-day operations, or for resale to their own customers
Distinguishing characteristics of business markets
consolidation, which has resulted in buyers being fewer in number but larger in size; demand that is derived from the sales of consumer goods; more volatile demand levels; professional buyers; multiple relationships between buyers; multiple buying influences from a team of buyers; and increased interdependence and relationships between buyers and sellers
Needs Gap
a perceived difference between a buyer’s desired and actual state of being
Steps in the business to business buying process
1) recognition of the problem or need, 2) determination of the characteristics of the item and the quantity needed, 3) description of the characteristics of the item and quantity needed, 4) search for and qualification of potential sources, 5) acquisition and analysis of proposals, 6) evaluation of proposals and selection of suppliers, 7) selection of an order routine, 8) performance feedback and evaluation
Buyer Needs
situational, functional, social, psychological, knowledge
Situational Needs
needs that are related to, or possibly the result of, the buyer’s specific environment, time and place
Functional Needs
the need for a specific core task or function to be performed; the need for a sales offering to do what it is supposed to do
Social Needs
the need for acceptance from and association with others; a desire to belong to some reference group
Psychological Needs
the desire for feelings of assurance and risk reduction, as well as positive emotions and feelings such as success, joy, excitement, and stimulation
Knowledge Needs
the desire for personal development and need for information and knowledge to increase thought and understanding as to how and why things happen
Requests for Proposals (RFP)
a form developed by firms and distributed to qualified potential suppliers that helps suppliers develop an submit proposals to provide products as specified by the firm
2 Factor Model of Evaluation
a postpurchase evaluation process buyers use that evaluates a product purchase using the functional and psychological attributes
Functional Attributes
the features and characteristics that refers to how things are carried out and done between the buyer and seller
Psychological Attributes
a category of product characteristics that refers to how things are carried out and done between the buyer and seller
Straight Rebuy Decision
a purchase decision resulting from an ongoing relationship with a supplier
Modified Rebuy Decision
a purchase decision that occurs when a buyer has experience in purchasing a product in the past but is interested in acquiring additional information regarding alternative products and/or suppliers
New Task Decision
a purchase decision that occurs when a buyer is purchasing a product or service for the first time
4 Communication Styles
amiables are high on responsiveness and low on assertiveness; expressiveness are high on both responsiveness and assertiveness; drivers are low on responsiveness but high on assertiveness, analyticals are low on both assertiveness and responsiveness
Members of the Buying Teams
initiators identify a need; influencers guide the decision process by making recommendations and expressing preferences; users will actually use the product being purchased; deciders have the ultimate responsibility of determining which product or service will be purchased; purchasers negotiate final terms of the purchase and execute the actual purchase; gatekeepers control the flow of information to and between vendors and other buying center members
Current Developments in Purchasing
increasing use of information technology; emphasis on building cooperative and collaborative relationships; increasing use of supply chain management; expanded use of outsourcing by buying organizations; more emphasis on establishing target prices by buyers; greater dependence on salespeople to provide buying organizations creative solutions to unique customer problems