Selling and Purchasing

Whether you are an individual or corporate organization, there will always be the need buy or sell or both. Since a business organization is both a producer/provider and consumer, it is important for a business owner or potential manager to be familiar with the art and science of buying and selling. For a business to perform its production or service provision functions, the organization purchases material inputs including labour services, raw materials, machines and others. This reason makes knowledge of purchasing practice essential to managers of business organisations. On the other hand, an organization is established to satisfy needs of some people in the society. To do this, products have to be sold and delivered to the consumers requiring them. Hence, employees/business owner/business manager of the firm should understand selling skills in order to dispose off the vast quantity of products to consumers. There is the need to grasp marketing knowledge and essential aspects of contract needed to negotiate with various suppliers and consumers to avoid committing errors, which can lead to litigation and payment of damages.

Selling functions

Selling or personal selling refers to presentation of product to customers by stating it quality, uses, usage and other benefits with the intention of making consumers accept an buy the product. It is an aspect of salesmanship which is a direct face-to-face interaction between a seller and buyer to effect exchange of facts for making buying decision. Persona selling can also be done through the telephone,

Importance of selling: Importance of selling was demonstrated by Kotler and Keller (2006) that:

i. It is used to develop permanent business with existing and new consumers.

ii. It helps the producer to contact middlemen to enable them stock and display the product.

iii. It applies objective and interesting sales-talk to influence people to buy the product. In addition, demonstration and persuasion are presented as a form of promotion to convince the buyers.

iv. It improves standard of living of people by moving products from areas of excess to areas of scarcity,

v. Personal selling ensures that the right product is supplied to the buyers.

vi. Pull and push selling strategies are adopted to attract mass consumption.

Selling Objectives and Type of Selling

Selling objectives

Objectives of personal selling vary from one firm to another. However,n they are often expressed in terms of sales volume, market share, profit, expenses and activity controls (Aminu, 2008)

(a) Sales volume: This breaks down performance of salesmen into sales quota (in units or monetary terms).

(b) Market share: The firm aims to capture a stated percentage of the total market for the product.

(c) Profit targets: Specific profit targets or gross margins are set for the salesmen to meet.

(d) Expense controls: The producer sets maximum amount of direct selling expenses for the salesmen. These include salaries, commissions and bonuses. The expenses standards drive the salesmen to make high sales.

(e) Activity controls: The number of times salesmen are expected to perform various selling functions within given period is stated. It may also include making calls, checking inventories and training the sales force of middlemen.

Types of selling

There are unlimited types of selling and these differ among companies. Kotler (2003) and Etzel, Walker and Stanton (2001) give the following forms of selling company products:

Trade selling: The method whereby the salesperson builds up sales volume by assisting middlemen and customers. He expedites and delivers supplies. He also helps buyer to mount/display material.

Missionary selling: The salesman provides information and assistance by persuading indirect customers to buy the product directly from specific salespersons or middlemen. He does not take order.

Technical selling: This involves providing technical advice to consumers. The salesman sells and effects repair and maintenance services. He uses technical knowledge and experience to identify, analyse and solve customer problems.

New business or creative selling: The seller creates new accounts by canvassing for orders for new or existing products in new markets. The producer develops selling skills of salesmen, provides incentives, solves customers’ problems, etc. In turn, the salesman breaks new ground by initiating and stimulating demand.

Cold selling: The salesman contacts potential buyers without previous notification or appointment. He wanders from door to door to sell.

Development selling: Here, the salesman works with the customer for a long time to assist in developing new ways in which the product can fit the needs of prospects. He also creates distribution outlets by finding middlemen for the product.

Team selling: A number of specialties including the salesperson, engineer, production experts and others work together as a team to sell the same product to consumers.

Retail selling: This method requires the salesman to stand or sit behind the store’s counter to sell goods.

System selling: The product and its accessories are sold to the buyer to fully satisfy him. For example, the salesman sells motorcar, jack, extra tyre, set of spanner, fire extinguisher, etc all to the same consumer.

Responsive selling: The salesman observes the mood of the consumer and responds in a suitable manner to effect sale.

A type of selling that does not actually sell but promote positive image about an organization and its products is known as Missionary selling.

Selling Process:

Busari, Taiwo and Olannye (2002) present the process of selling as including eight steps starting from prospecting and ending in follow up.

Prospecting: This is the first stage in the selling process, which deals with planning and identifying potential customers and to know non-buyers. It helps to economise selling time and eliminates fruitless journey by locating and separating actual buyers.

Prospecting is done in four ways:

Prospect definition: The salesman defines the people to contact as those that have willingness, financial power and authority to buy and who are accessible to the salesperson. The prospects must have attributes of profitable accounts and can be located in business directories. The company’s sales and analysis data can be used to state the characteristics of prospects to contact and to classify them into related groups based on their size of purchase.

Searching for the potential accounts (prospects or suspects). Prospects‘ list is developed from many sources of information such as business directories, trade publications, mass media, credit reports and membership list of trade associations. Other sources include advertising, sales force of competitors, salesmen observation of their territories, lead from prospects, cold canvassing, use of m telephone and mail to contact prospects and referral method (prospect gives letter of recommendation to salesman to deliver to another prospect.).

Qualifying prospects and determining their probable level of purchase: Further investigation is conducted to know the true or worthy prospects based on their size of purchase. Small buyers are not profitable and are therefore dropped from the list of required prospects.

Relating the product to each prospects’ unique requirements: Knowledge about the product and prospects helps the salesman to develop the most suitable sales talk or selling propositions such as product features, uses, application and associated product services. The propositions assist the salesman to have strong influence on prospect, to prepare for objections and they are well equipped to make appointment and meet the prospects.

Pre-approach: The salesman makes adequate preparation to present his sales talk favourably to the prospects. He learns more about his prospects, their location and expectations from the product, people involved in the buying decision making units (DMU), their personal qualities, behaviour and names, age, titles, education, social clubs, hobbies and address. This information is gathered from present and former customers, prospects, trade association, social contact, trade publication and directories, political and religious organizations, acquaintances, salesmen and gatekeepers.

Approach: The salesperson secures interview appointments by sending business cards or letters to the prospects for confirmation. In another way, cold canvassing repeats contact and visits based on calls suggested by an associate, relative or acquaintances who can help to approach the prospects

Approach is the stage whereby the salesman and prospect meet each other face-to-face and the salesman can interview the prospect. It covers greeting, opening, dressing, mannerism and display of the product sample.

Presentation and demonstration: After gaining a prospect’s attention, the salesman starts to deliver his already prepared sales talk. The product is related to the buyer’s situation through stating the product’s features, uses, usage and benefits. The salesperson talks and listens to the prospect’s questions, comments and observes his brochure. Presentation is the real life or heart of selling process. It demonstrates the product and arouses the desire to purchase it. It creates inescapable feeling of need to what the salesman has to sell.

Handling customers’ objections: These consist impact and psychological resistance of prospect to salesperson’s presentation. They show that the prospect is attentive and interested in the product. All salesmen have to investigate the buyer’s motive for buying or not buying and know how to overcome such resistance.

Buyer’s resistance can be caused by one or more of the following reasons:

i. The buyer is unwilling to change from existing product to a new product for fear of risk of failure.

ii. Where he has had sad experience with a product or its substitute, the buyer is not ready to make another mistake.

iii. The buyer is not interested because his needs are already satisfied with existing products

iv. If the salesperson uses a wrong method of approaching the buyer, he can fail to stimulate their interest.

v. Where the salesman is trying to apply high pressure selling tactics, this can make the buyers suspicious and lead to their unfavourable reactions.

vi. The buyer is not the final decider in the buying decision-making process.

vii.Too high price on the product can discourage buyers.

viii. Problems relating to product quality, package, features, late delivery, damage and omission can cause objections.

Close: This occurs when a salesperson has thoroughly presented his product and overcome objections. He observes the mood of the prospect to judge whether it is time to wrap up the sales talk. He asks the prospect to buy by calling for order to supply on reaching the right psychological moment (closing signals), which appears in physical actions, comments and questions of the prospect.

Many closing techniques are available to ease the salesman in obtaining customer’s order. These include:

Direct order or trial balloon: Believing that objective of his selling interaction is achieved after overcoming all complaints and objections, the salesman specifies the number of product to supply the prospect. It can take the form of how many shall I bring? Which colour do you prefer?

Summary or summative close: He highlights the selling points and makes the buyer agree and order is called for.

Assumption close: He offers to help the prospect to write up the order.

Alternative or positive choice decision: He asks the prospect to choose a product out of many alternatives. e.g. Do you like the big or small one?

Minor decision: The salesman assists the buyer to choose or make minor choice of colour, size, etc.

Scare method or standing room technique: The buyer is informed about what he is likely to lose if he does not buy the product now. This encourages the prospect to decide quickly.

Concession close: This method is commonly used for large-scale buyers who aim to buy the product below the stated price. To strike the deal, the salesman agrees to give a discount or general trade-in allowance in return for a specific order.

Silence or hidden close: The salesman agrees within himself that silence of the means consent. Alternatively, he pauses to allow the prospect time to decide.

Departure: Immediately after close, the salesman thanks the prospect for his attention and kindness in listening to him. No time should be wasted, as any little delay is meaningless. Therefore, he gives promise to deliver the goods speedily or call back in a short time.

Follow up: A salesman has to ensure that customers who have purchased the product are fully satisfied with its claims in order to have repeat purchase. The visit of the salesman is to determine whether the order was delivered on time, to understand the prospect’s problems and questions with the product. It also helps to reveal future needs and to complete details on delivery time and terms of purchase.

Follow up helps the salesman to replenish stock, show interest and care in how the customer is using the product and to do everything needed to reduce cognitive dissonance or post-purchase frustration/doubt.

Discuss any five techniques you can use to close a sales presentation

Closing sales occur when a salesperson has thoroughly presented his product and overcome objections. He observes the mood of the prospect to judge whether it is time to wrap up the sales talk. He asks the prospect to buy by calling for order to supply on reaching the right psychological moment (closing signals), which appears in physical actions, comments and questions of the prospect Theories of selling

1. The want satisfying theory (WST): The salesperson conducts research into his product lines to know what buyers want before he meets them. He asks the prospects and listens to them to identify their real needs before presentation of the product.

2. AIDA theory: (Meaning?) Attention: This is applied to gain attention or concentration of the prospects and to introduce short rapport It contains attention, interest, desire and action to make sales.

Attention: Introduction, short rapport, general discussion and familiarisation remarks are carefully prepared to meet and gain the listening or concentration of prospects (attention).

Interest: Attention of the buyer is shifted from general discussion to presentation of the product with proof. Demonstration and strongest product benefits and appeals are delivered to the buyer.

Desire: Objections are overcome; interruptions and customer’s remarks are monitored by the salesmen to gain control of the discussion.

Action: The seller works on the prospect to decide by applying suitable closing techniques to call for order.

3. AIDCAS Theory: (Attention, Interest, Desire, Confidence, Action and Satisfaction).

Attention: Ability of a salesman to arrest the listening audience of the prospect depends on his first impression. Good greeting, introduction and opening statements are needed to make the prospect ready to accommodate his visitor.

Interest: The prospect develops willingness or motivation to what the salesman has to offer if the product primary and secondary benefits are stated. Also, interest is at its peak should the product relate closely to the needs of the prospect.

Desire: The interest transforms to desire after the visual aids and demonstration and price have been justified.

Confidence: The prospect believes in the salesman when all his objections or complaints have been satisfactorily answered.

Action: Favourable disposition to purchase the product arises when the salesman identifies all buying signals and applies relevant closing techniques to make the prospect decide and order for the product.

Satisfaction: The consumer is fully satisfied with the product when the salesman provides post-purchase services like customer visit to solve their problems and complaints, to refill order, spare parts, repair, etc.

4. DIPADA Theory: (Definition, Identification, Proof, Acceptance, Desire and Action).

AIDA and AIDCAS methods are most suitable to sell products to new customers while DIPADA approach is better used for existing customers.

Definition: The salesman identifies customer’s problem or need by asking him relevant questions. Through the prospect’s response, his needs are known.

Identification: Products that can satisfy the needs are presented in form of its features, demonstration, uses, usage and unique advantage over substitutes.

Proof: Evidence to support the product’s performance is provided to convince the customer.

Acceptance: The customer is made to agree with the proposal.

Desire: Other problems, complaints or objections are monitored and solved to enable the customer develop and maintain his willingness to buy the product.

Action: The desire turns to intention which leads to ultimate purchase by using good closing techniques.

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