chap02RelationshipMarketing：WherePersonalSellingFits.ppt

Relationship Marketing:Relationship Marketing:Where Personal Selling FitsWhere Personal Selling FitsChapterChapter2ChapterChapter2Main TopicsMain TopicsWhat Is the Purpose of Business?What Is Marketing?Customer Orientations EvolutionMarketings Importance in the FirmEssentials of a Firms Marketing EffortRelationship MarketingRelationship Marketing and the Sales ForceLevels of Relationship MarketingChapterChapter2Main TopicsMain TopicsPartnering with CustomersThe New Consultative SellingE-Selling:Technology and Information Build RelationshipsWhats a Salesperson Worth?The Key to SuccessChapterChapter2In Chapter 2 We Will See What is Meant by the Terms:BusinessMarketingProduct,Price,Place,PromotionPersonal SellingThe Purpose of Business is to:Increase the general well being of humankind through the sale of goods and servicesProfit is a Means to an EndProfit is needed to serve humankindProfit is needed to operate a businessProfit is needed to provide beneficial products to the marketplaceThe Two Basic Functionsof BusinessProduction of goods or creation of servicesMarketing those goods and servicesWhat is Marketing?Marketing is a process of planning:The conception,pricing,promotion,and distribution of goods,services,and ideasTo create exchanges that satisfy individual and organizational objectives=Customer Orientations EvolutionThe production conceptThe selling conceptThe marketing concept The Production ConceptCompanies were production orientedWe know what people want they want our product.The Selling ConceptCharacterized by product demonstrations and unsophisticated sales techniquesEmphasis on the productProduct created and then soldManagement is sales-volume orientedStresses needs of the sellerThe Marketing ConceptEmphasis is on customers wantsCustomers wants drive productionManagement is profit-orientedPlanning is long-termStresses wants of buyersExhibit 2-1:The Difference Between Selling and Marketing ConceptsSelling Concept1.Emphasis is on the product.2.Company first makes the product and then figures out how to sell it.3.Management is sales-volume-oriented.4.Planning is short-run,in terms of todays products and markets.5.Stresses needs of seller.Marketing Concept1.Emphasis is on customers wants.2.Company first determines customers wants and then figures out how to make and deliver a product to satisfy those wants.3.Management is profit-oriented.4.Planning is long-run,in terms of new products,tomorrows markets,and future growth.5.Stresses wants of buyers.Marketings Importance in the FirmMarketers have four main objectives:Maximize the sales for existing products in existing marketsDevelop and sell new productsDevelop new markets for existing or new productsProvide quality service to ensure repeat businessExhibit 2-2:The Marketing Group is the Link Between Customers and the OrganizationProduct:Its More Than You ThinkA good is a physical object that can be purchasedA service is an action or activity performed for a feeValue-added refers to benefits received that are not included in the purchase price of a good or serviceExhibit 2-3:Four Elements of the Marketing Mix and Four Promotion ActivitiesExhibit 2-4:Examples of Business-To-Business Value-AddingHelp customer reduce process costsImprove yieldsReduce waste(through recycling,etc.)Reduce reworkReduce direct laborReduce indirect labor(inspection,handling)Reduce energy costsHelp customer reduce inventoryConsignmentJust-in-time deliveryReduced cycle timeExhibit 2-4:Examples of Business-To-Business Value-AddingHelp customer reduce administrative costsSimplify billingImprove tractabilityUse electronic data interchangeExhibit 2-4:Examples of Business-To-Business Value-AddingImprove safety for customer and his employeesReduce price to the customerSubstitute certain product componentsImprove company processes and supplier processesExhibit 2-4:Examples of Business-To-Business Value-AddingWhat is Meant by the Term“Product?”A product is a bundle of tangible and intangible attributes,including package,color,and brand,plus the services and even the reputation of the sellerThe Term“Product”May Refer to a Good or ServiceExamplesGood a physical object for saleAutomobileCell phonePrescription medicineService an action or activity done for others for a feeAutomobile repairWireless phone planHealth insuranceThe Good and the Service:Automobile-repair servicesCell phone-wireless phone planePrescription medicine-health insuranceWe Will Use the Terms Follow-up and Service.What do They Mean?*Follow-up refers to maintaining contact with a customer in order to evaluate the effectiveness of the product and the satisfaction of the customer(More on this in Chapter 14)The Term“Service”May Refer to A:Product,such as insurance or advertising which is sold by someoneService,such as customer service which is an activity offered by a seller in conjunction with the purchase of a product,such as delivery,repair,credit cards accepted,800 telephone number,web site,salesperson available to help customer(More on this in Chapter 14)Customer Service by the SalespersonSalesperson goes to customers business to help:Resell productsCustomer use productHandle complaintsReturn damaged productsProvide samplesSuggest further business opportunities(Above discussed in Chapter 1)People Buy More Than the ProductPeople buy want-satisfaction such as:Image of owning a:Wal-Mart shirt vs.Polo shirt Dodge Viper*vs.Volkswagen Vanagon*What the product will doIts quality*products and associated images used for illustrative purposes onlyWhat is a consumer product?A consumer product is produced for,and purchased by,households or end consumers for their personal useWhat is an example of a consumer product?ToothpasteTelevisionClothesThere Are Two General Types of ProductsConsumer and Industrial ProductsThere Are Two General Types of ProductsConsumer and Industrial Products,contWhat is industrial product?An industrial product is sold primarily for use in producing other productsIndustrial users are profit or nonprofit organizations that buy good and services for one of three purposes*1.To make other goods and services2.To sell to consumer or other industrial users3.To conduct the organizations operations*The Key Difference Between Consumer and Industrial ProductsConsumer product-personal useIndustrial product primarily for producing other productsWhat are examples of an industrial products?Airlines purchase airplanesUniversities buy computersWhat Is Another Name for an Industrial Product?*Business productOrganizational product Price:Its Important to SuccessPrice refers to the value or worth of a product that attracts the buyer to exchange money or something of value for the productDistribution Moves Products to CustomersThree Customer GroupsA household refers to a decision-making unit that buys for personal useA firm is an organization that produces goods and servicesA government is an organization that has two functions:The provision of goods and services to households and firmsThe redistribution of income and wealthConsumer and Industrial Products are Often Distributed Through ResellersWhat are Resellers?Resellers,such as wholesalers or retailers,purchase products and then sell to organizations and/or individualsWhat Does a Wholesaler(or Distributor)Do?Buys,takes title to,stores,and physically handles goods in large quantitiesResells the goods(usually in smaller quantities)to:RetailersWholesalersManufacturersExhibit 2-5:Examples of Distribution Channels for Consumer and Industrial ProductsConsumer ProductsIndustrial ProductsPromotion Tells PeoplePromotion increases sales by communicating product information to potential customersThe four basic components of a firms promotional effort are:(PAPS)Personal sellingAdvertisingPublicitySales promotion Exhibit 2-6:Promotion ActivitiesPersonal Selling ispersonal communication of information to persuadeAdvertising isnon-personal communication of information paid for by an identified sponsor such as an individual or an organization(Methods include TV,newspapers,catalogs and the radio)Publicity isnon-personal communication of information that is not paid for by an individual organization.Information appears in media such as television,radio and newspapersSales promotion involvesactivities or materials used to create sales for goods or services Exhibit 2-6:Promotion ActivitiesExhibit 2-6 Exhibit 2-6:Promotion ActivitiesTwo types of sales promotionConsumer-includes free samples,coupons,contests,and demonstrations to consumersTrade-encourages wholesalers and retailers to purchase and to sell aggressively using devices such as sales contests,displays,special purchase prices,and free merchandiseExhibit 2-7:Examples of Each Marketing Mix Element Relationship MarketingRelationship marketing is the creation of customer loyaltyTargets a major customer that it wants to sell to now and in the futureEstablishes a long-term collaborative relationshipFour basic questions used as guidelines in defining the role of the sales force:1.How much selling effort is necessary to gain and hold customers?2.Is the sales force the best marketing tool?3.What type of sales activity will be necessary?4.Can the firm gain strength relative to its competition with its sales force?Relationship Marketing and the Sales ForcePersonal selling builds relationships!Two main functions of personal selling are to:Generate revenueProvide services to satisfy customersFlexible in operationFocused on prospective customersResults in actual salesRelationship Marketing and the Sales Force,contRelationship Marketing and the Sales ForceSalespeople implement relationship marketingSummary of Relationship Marketingand the Sales ForceWhat is the role of the sales force in the marketing effort?Personal selling builds relationshipsSalespeople implement relationship marketingExhibit 2-8:Examples of Various Marketing and Sales Methods Used to Sell Mid-Sized Computers Business-To-BusinessThree Levels of Relationship MarketingTransaction sellingRelationship sellingPartnering Three Levels of Relationship Marketing,cont.Transaction selling:customers are sold to and not contacted againRelationship selling:the seller contacts customers after the purchase to determine if they are satisfied and have future needsPartnering:the seller works continually to improve its customers operations,sales,and profitsExhibit 2-9:Dependence Increases as Relationships become More ImportantTransactionalHighLowRelationshipsHighLowDependenceRelationshipPartnership Partnering with CustomersEncourages both the buyer and seller to share informationTwo companies work toward the same objectivePartnering with Customers,contComponents of partnering include:Individual excellenceImportanceInterdependenceInvestmentInformationIntegrationInstitutionalizationIntegrityExhibit 2-10 Consultative SellingThe process of helping the customer achieve strategic short and long-term goals through the use of the sellers goods and/or servicesA highly interactive dialogue between a salesperson and a customerA balanced exchange of informationThree Consultative Selling Roles for the 21st CenturyThree Roles of Consultative SellingThe Team LeaderCoordinates all of the information,resources,and activities needed to support customers before,during,and after the saleThe Business ConsultantGives advice and service.Uses internal and external resources to gain an understanding of the customers business and marketplaceThe Long-Term AllyCreates a“winwin”situation.As the customers sales and profits grow,so do the salespersonsThe ability of a salesperson to fulfill the role of long-term ally is a pivotal factor in determining whether a sales transaction is just a transaction or the beginning of a relationshipThree Roles of Consultative Selling,contThe Customer-Seller Relationship GapMay occur when the salespersons interest in the customer declinesUsually after the saleYet the customers interest increases after the saleThis is one reason why service after the sales is so importantWhats a Salesperson Worth?“Worth”is dependent upon at least three factors:What the salesperson costsHow much he/she sellsThe profit marginSalespeople make a valuable contribution to the success of their employersSelling closes deals and generates the revenue to keep the organization in business The Key to SuccessKnowing and satisfying target customers with competitively superior products and serviceMarketing is the company function that defines customer targets and the best way to satisfy their needs and wants competitively and profitablyMarketings main customer contacts are salespeople Exhibit 2-13:Marketing and Personal Selling Provide Service to Customers Summary of Major Selling IssuesSelling is only one part of the overall marketing activities of the firmMarketing is an exchange process between buyers and sellersThe marketing concept is based upon a firms desire to increase sales while anticipating and satisfying consumer needsThe marketing mix is comprised of four variables:ProductPriceDistribution or placePromotionThe role of the salesperson is considered carefully in the firms determination of the promotional aspect of its marketing mix Summary of Major Selling Issues,contConsultative selling focuses on the salespersons ability to provide customer satisfaction by adding value to the sales transaction Summary of Major Selling Issues,cont