A ppt on Personal selling:meaning, process, theories. Methods of sales forecasting

2. MEANING
Personal selling is also known 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.

4. PERSONAL SELLING
PROCESS

5. THEORIES OF PERSONAL
SELLING
▸AIDAS

6. ▸“BUYING FORMULA” THEORY:
▸This theory purports to answer the question: What thinking process goes
on in the prospects’s mind that causes the decision to buy or not to buy?
▸The theory is based on the fact that there is a need or a problem for which
a solution must be found which would lead to purchase decision, as
shown below:

7. ▸“RIGHT SET OF CIRCUMSTANCES” THEORY:
It is also called the “situation-response” theory. It has its
psychological origin in experiments with animals. The
major emphasis of the theory is that a particular
circumstance prevailing in a given selling situation will
cause the prospect to respond in a predictable way. The
set of circumstances can be both internal and external to
the prospect. This is essentially a seller-oriented theory
and it stresses that the salesman must control the
situation in such a way as to produce a sale ultimately.

8. ▸ “BEHAVIOUR EQUATION” THEORY:
Was proposed by Howard, using a stimulus response model and large number of findings from
behavioural research.
Howard believed that selling effort and buying action variables are multiplicative rather than additive.
Therefore, Howard incorporated these four elements into a behavioural equation that is:
B = P × D × K × V
P = Response or internal response tendency, i.e. the act of purchasing a brand or a particular supplier.
D = Present drive or motivation level
K = “Incentive potential” that is, the value of product or brand or its perceived potential value to the buyer.
V = Intensity of all cues: triggering, product or informational.

9. SPIN MODEL
‣ This model was first developed by Neil Rackham of the Huthwaite
Organisation in his best-selling book of 1978, "SPIN Selling".
‣ Rackham and his team analysed more than 35,000 sales calls.
‣ Neil Rackham trained a group of sales professionals in the SPIN selling
model.
‣ 17% increase in their sales.

10. THERE ARE 4 TYPES OF QUESTIONS ASKED
UNDER THIS SALES MODEL:
4 STEPS IN THE SPIN SELLING MODEL
1. SITUATION QUESTIONS THAT ASK ABOUT THE BUYER'S CURRENT
SITUATION WITH A VIEW TO IDENTIFYING THE PROBLEM THAT THE
CURRENT SITUATION HAS GIVEN RISE TO, EG "WHAT HAPPENED WHEN
YOUR LAPTOP BROKE DOWN?"
2. PROBLEM QUESTIONS THAT ASK ABOUT THE BUYER'S PAIN AND FOCUS
THE BUYER ON THIS PAIN WHILE CLARIFYING THE PROBLEM, EG "IT
MUST HAVE BEEN DIFFICULT TRYING TO KEEP IN TOUCH WITH YOUR
CUSTOMERS WHEN YOU HAD NO EMAIL CONNECTION?".
3. IMPLICATION QUESTIONS THAT ASK ABOUT THE EFFECTS OF THE
PROBLEM, EG "WHAT WOULD BE THE WORST SCENARIO IF YOU HAD NO
INTERNET CONNECTION FOR A WEEK OR MORE?"
4. NEED-PAYOFF QUESTIONS THAT ASK THE BUYER TO TELL YOU ABOUT THEIR
EXPLICIT NEEDS AND THE BENEFITS YOUR SOLUTIONS OFFERS, EG "SO
WHAT YOU REALLY NEED IS SOME KIND OF 24/7 SERVICE THAT CAN
PROVIDE YOU WITH AN INSTANT BACKUP IF THE SAME THING HAPPENS
AGAIN?"
THESE QUESTIONS TAKE THE BUYER THROUGH THE STEPS OF
IDENTIFYING THEIR PROBLEM, THEIR PAIN, AND A SOLUTION THAT
YOUR PRODUCT OR SERVICE OFFERS.

12. Types of Selling
1) Relationship Selling
Emphasis is placed on the whole relationship between suppliers and customers. The aim is to provide the
best possible customer service and build customer loyalty.
Relationship selling is effective when the following requirements are met:
1. You have to like the people you want to sell your service or product to. You need to truly enjoy
their company–this isn’t something you can fake.
2. You must care about their problems. When you tell them how your product will solve those
problems, you are helping them, not selling to them.
3. You have to believe in your product or service 100%. You want your customers to trust you, so
that means you have to be honest with them.
4. You must be patient. Relationships take time to grow, and can’t be rushed. You will make sales by
building relationships, but you won’t get it tomorrow.
5. You need to have a plan. Building the right relationships won’t happen by accident. If the idea of
relationship selling appeals to you, but you don’t meet the first three requirements, there’s only one
way to solve the problem. You need to find a different target market, or a different product to sell.

13. Relationship selling and Restaurants: Restaurants use
relationship selling to keep their repeat customers.

14. Transactional Selling
Transactional selling is a common method of sales in which a sales representative seeks out prospects,
develops a relationship and then tries to close a sale. The sales rep finds out what the customer needs
and then tries to provide it for that specific sale. According to the Wiglaf Journal, "Revenues are
increased by making more sales calls and taking more orders." With this approach, the sales
representative is not necessarily concerned with the long-term relationship with the customer.
This strategy is all about short-term solutions. The sales rep is primarily concerned with the promotion and
selling of the product with little or no emphasis on customer needs.
This strategy, also known as traditional selling, is all about the
single sale.

16. Value-Added Selling

17. A. Sales Technique that relies on building on the inherent value of a product or service.
B. More flexible and customized selling approach that requires input from a defined range of
average customers.
C. Customer feedback helps sales and marketing professionals to outline value
propositions that are likely to benefit the largest number of customers.
E. The utility of the product or service, ease of integration into the customers' business
operations or time saving benefits are just a few areas that may be capitalized on when
focusing on value add.
Eg:
•Food sold in a plastic box or a glass that can be used after its content is
consumed.
• Camera sold with converter to old type of photographic lens.
• One of the more recent examples of value-added selling is hybrid cars.

18. SALES FORECASTING
• Sales forecasting is defined as,
“An estimate of sales in terms of money or physical units for a specified future
period under a proposed marketing plan or programme and under an assumed set
of economic and other forces outside the unit for which the forecast is made”
Goal for the sales department is decided on the basis of this forecast and these
forecasts also help in planning future development of the concern.
The sales forecast forms a basis for production targets.

19. IMPORTANCE OF SALES FORECASTING
(i) It helps to determine production volumes considering availability of facilities, like
equipment, capital, manpower, space etc.
(ii) It forms a basis of sales budget, production budget natural budget etc.
(iii) It helps in taking decision about the plant expansion and changes in production mix
or should it divert its resource for manufacturing other products.
(iv) It helps in deciding policies.
(v) It facilitates in deciding the extent of advertising etc.
(vi) The sales forecast is a commitment on the part of the sales department and it must be
achieved during the given period.
(vii) Sales forecast helps in preparing production and purchasing schedules.
(viii) Accurate sales forecasting is a very good aid for the purpose of decision making.
(ix) It helps in guiding marketing, production and other business activities for achieving
these targets.

24. QUALITATIVE METHODS
1) EXECUTIVE OPINION
METHOD/JURY METHOD:
In the Jury of executive opinion method of Sales Forecasting, appropriate managers within
the organization assemble to discuss their opinions on what will happen to sales in the
future.
Since these discussion sessions usually resolve around hunches or experienced guesses, the
resulting forecast is a blend of informed opinions.

33. Test marketing is an experiment
conducted in a field laboratory
(the test market) comprising of
actual stores and real-life buying
situations, without the buyers
knowing they are participating in
an evaluation exercise. It
simulates the eventual market-
mix to ascertain consumer
reaction. Depending on the
quality and quantity of sales
data required for the final
decision, test marketing may
last from few weeks to several
months.

36. QUALITATIVE METHODS

38. Exponential smoothing is a rule of thumb technique for smoothing time series data using the
exponential window function. Whereas in the simple moving average the past observations are
weighted equally, exponential functions are used to assign exponentially decreasing weights over
time. It is an easily learned and easily applied procedure for making some determination based on
prior assumptions by the user, such as seasonality. Exponential smoothing is often used for analysis
of time-series data.
Exponential smoothing