MKTG 436 Final Exam - FLASHCARDS - Chapter 2
What are examples of attractive aspects of selling careers?
- Autonomy, or the freedom of action and opportunities for personal initiative.
- Multifaceted and challenging activities as part of the job.
- Financial rewards.
- Favorable working conditions, often via telecommuting with a virtual office, and with less minute-to minute direct supervision than most other careers.
- Excellent opportunities for career development and advancement.
What is the top success factor in selling?
Listening skills
What is the key difference between transactional and relationship selling approaches?
The effort devoted by the salesperson to the ongoing maintenance and management of the relationship, especially between actual face-to-face encounters with the customer.
What is the altering of sales behaviors during a customer interaction based on perceived information?
Adaptive selling
True or false: Being adaptive allows the salesperson to better practice relationship selling by understanding customer needs and problems and by providing solutions?
TRUE
What is the level that salespeople are connected to or available to employees or clients?
Connectivity
What is building and maintaining worldwide customers and relationships?
Global
What type of market involves selling goods and services to end-user consumers for their own personal use?
Business-to-consumer (B2C) market
What used to be called industrial selling?
Business to business (B2B) selling
What type of customers does selling in B2B markets involve?
Sales to resellers, Sales to business users, Sales to institutions
What type of customer is involved when a salesperson for Hanes sells underwear to a retail store?
Sales to resellers
What type of customer is involved when a salesperson for General Electric sells materials or parts to Boeing?
Sales to business users
What type of customer is involved when Dell sells a computer to a not-for-profit hospital?
Sales to institutions
True or false: Many of the goods and services sold by B2B salespeople are more expensive and technically complex than those in B2C?
TRUE
What is the primary responsibility of a trade servicer?
To increase business from current and potential customers by providing merchandising and promotional assistance.
Who does a trade servicer primarily interact with?
Retailers or distributors (resellers).
Give an example of a trade servicer in action.
A P&G salesperson selling soap and laundry products to chain-store personnel.
What is the main job of a missionary seller?
To provide product information and personal selling assistance to persuade customers to buy from distributors or wholesale suppliers.
Do missionary sellers take direct orders from customers?
No, they persuade customers to buy from distributors or wholesalers.
Provide an example of missionary selling.
Anheuser-Busch salespeople encourage bar owners to order Budweiser from local distributors.
How do pharmaceutical representatives engage in missionary selling?
They educate doctors about a drug’s benefits and influence them to prescribe it.
What is the primary responsibility of a technical seller?
To provide technical and engineering information and assistance to increase business.
Why are cross-functional selling teams common in technical selling?
Because the complexity of products and services makes it difficult for one salesperson to master all aspects of the sale.
Give an example of technical selling.
A General Electric sales engineer calling on Boeing for jet engines.
What is the main responsibility of a new business seller?
To identify and obtain business from new customers.
How does new business selling relate to relationship selling?
It focuses on securing and building customer relationships.
What are the six steps of the selling process?
(1) prospecting for customers, (2) opening the relationship, (3) qualifying the prospect, (4) presenting the sales message, (5) closing the sale, and (6) servicing the account
Why is prospecting for new customers critical in sales?
It helps identify potential customers and separates successful from unsuccessful salespeople.
What makes prospecting disheartening for beginner salespeople?
It often involves rejection and has minimal immediate payoffs.
What is cold canvassing?
It involves going door-to-door to find potential customers.
What are some sources salespeople use to identify prospects?
Trade association directories, telephone directories, other salespeople, customers, suppliers, nonsales employees, and social/professional contacts.
How do firms use telemarketing for prospecting?
Outbound telemarketing involves calling potential customers, while inbound telemarketing involves customers calling a toll-free number for more information.
How does inbound telemarketing help in prospecting?
It helps qualify prospects by determining their interest and eligibility before passing the information to sales representatives.
How is social media used for prospecting?
Companies track visitors to their pages (e.g., Facebook) and follow up via email.
How does the Internet assist in generating leads?
Companies provide technical product information and follow up on inquiries with sales calls.
What factors determine how much time salespeople should spend on prospecting?
The company’s selling strategy, product type, and customer relationship needs.
In what scenarios should sales reps focus on prospecting for new customers?
When selling transactional products, products in the introductory stage, infrequently purchased durable goods, or products that require minimal service.
Which industries require heavy prospecting efforts?
Insurance and residential construction.
How do some firms incentivize prospecting for new customers?
They design compensation systems that reward new customer sales more than servicing existing accounts.
When should sales reps focus on servicing existing customers?
When companies have strategic partnerships, large market shares, frequently purchased nondurable products, or products requiring post-sale service.
What industries emphasize servicing existing customers?
Food manufacturers selling to retail supermarkets and firms producing components for manufacturers.
How do some firms divide sales responsibilities?
Some reps focus only on servicing existing accounts, while others prospect for new customers.
What are the two main goals of a sales representative in the initial approach to a prospective customer?
(1) Identify key decision makers and influencers in the organization, and (2) Generate enough interest to qualify the prospect as a potential customer.
Why is it important for a salesperson to identify key decision makers?
Different individuals in an organization play roles in the buying decision, and understanding their influence helps tailor the sales approach effectively.
How do organizational buying centers impact the sales approach?
Buying centers consist of multiple individuals with different roles, so salespeople must identify their desires and levels of influence to navigate the decision-making process.
What factors determine how a salesperson should approach prospective customers?
The complexity and cost of the product influence whether the salesperson deals solely with purchasing departments or engages multiple decision-makers at different levels.
What is a multilevel or team selling approach, and when is it used?
It involves multiple salespeople engaging with different stakeholders in the customer’s organization, used for complex purchase decisions involving many people.
What is the purpose of qualifying a prospect?
To determine if the prospect is a worthwhile potential customer before investing time in relationship-building and sales efforts.
Why is qualification difficult for some salespeople?
It requires them to set aside optimism and make an objective, realistic judgment about the probability of a profitable sale.
What are the three key questions in the qualification process?
- Does the prospect have a need for my product or service? 2. Can I make the buyer aware of that need to close a sale? 3. Will the sale be profitable to my company?
What factors should a salesperson investigate about a prospect’s business?
The prospect’s operations, products, customers, competitors, and future demand for products.
Why is it important to know a prospect’s current suppliers?
To determine if there are special relationships that could make it difficult for the prospect to change suppliers.
Why should a salesperson check a prospect’s financial health and credit rating?
To ensure that the prospect is financially stable and capable of making payments, reducing the risk of bad debt.
What role do nonselling departments play in the qualification process?
Departments like credit and collections may help assess the prospect’s financial stability, especially for large purchases.
When does the credit department usually get involved?
After the prospect has agreed to buy and submitted a credit application.
How can company policies help in the qualification process?
By setting minimum standards for purchase value, credit rating, and order size to ensure efficiency and profitability.
Why do some firms specify a minimum order size?
To avoid dealing with very small customers and improve efficiency in order processing and shipping.
What is the core of the selling process?
The sales presentation.
What are salespeople attempting to do in a sales presentation?
Transmit information about a product or service and persuade the prospect to become a customer.
What percentage of purchasing agents perceive sales presentations as less than good?
40 percent.
Name two common complaints purchasing executives have about sales presentations.
Running down competitors, being too aggressive or abrasive.
What is one decision that must be made when preparing for a sales presentation?
Whether to present to all members of the buying firm as a group or individually.
When is a series of one-to-one presentations recommended?
When members of the buying center have divergent attitudes and concerns that cannot be effectively addressed in a single presentation.
What is the best way to convince prospects of a product’s advantage?
Demonstrating the product, especially if it is technically complex.
What are the two rules for an effective product demonstration?
1) Rehearse the demonstration to avoid malfunctions. 2) Give members of the buying center hands-on experience with the product.
How do Xerox salespeople enhance their product demonstrations?
By learning about their clients’ office operations and demonstrating their products performing relevant tasks.
How do sales presentation policies vary among firms?
Some firms train salespeople to deliver memorized, forceful presentations, while others use low-key selling, providing technical information and advice without aggressive selling.
What has relationship selling led to in terms of sales presentations?
More formal presentations to multiple members of a client organization, such as quarterly or annual account review presentations.
Who is typically involved in formal sales presentations in relationship selling?
The buying team, selling team, and management members from both sides.
Why should a firm’s policy on sales presentations align with its other account management policies?
To ensure consistency and effectiveness in client interactions.
What must a sales manager know to formulate intelligent sales presentation policies?
Alternative presentation methods and their advantages and limitations.
What refers to obtaining a final agreement to purchase?
Closing the sale
True or false: All the salesperson’s efforts are wasted unless the client “signs on the dotted line”; yet this is where many salespeople fail?
TRUE
Why do buyers often delay making purchase decisions?
It is natural for buyers to try to delay making purchase decisions.
What happens when the time to close a sale increases?
The profit may go down, and the risk of losing the sale increases.
What is the salesperson’s task in the sales process?
To facilitate the client in making a timely final decision.
What is a simple and effective way to close a sale?
Simply asking for the order, such as, “May I write that order up for you?” or “When do you want it delivered?”
Why must salespeople be careful when closing a sale in B2B transactions?
Organizational buyers and decision-makers have extensive training and can identify manipulative closing techniques.
Why is the salesperson’s job not finished after the sale is made?
Because they must provide service and assistance to ensure customer satisfaction and repeat business.
How does excellent service after the sale benefit a company?
It bolsters customer loyalty and fosters long-term relationships.
What is a common reason customers stop buying from a company?
They feel that salespeople became indifferent after the product was delivered.
What are some key aspects of post-sale follow-up?
Checking for problems with delivery, product quality, and billing.
What additional services might salespeople or sales teams provide after a sale?
Supervising installation, training employees, and ensuring proper maintenance.
Why must salespeople be skilled at both customer acquisition and retention?
These are complementary skills that require different approaches but are both necessary for long-term success.
How does a buyer’s relationship with a salesperson influence sales strategies?
It impacts the type of sales strategies used, such as offering service contracts and replacement parts.
Why are service contracts, supplies, and replacement parts important in some industries?
They often generate greater sales revenue and higher profit margins than the original equipment.
Who are the people who perceive a problem or opportunity that may require the purchase of a new product or service?
Initiators
True or false: the initiator can be almost anyone at any level in the firm?
TRUE
What is this an example of: Complaints from maintenance workers at American Airlines about outmoded and inefficient equipment?
Initiation
True or false: The decision to replace the equipment might be initiated through top management’s strategic planning deliberations?
TRUE
Who are the people in the organization who must use or work with the product or service?
Users
True or false: the people in the organization who must use or work with the product or service often influence the purchase decision?
TRUE
How might people in the organization who must use or work with the product or service influence the purchase decision?
For example, drill-press operators at American Airlines might request that the purchasing agent buy drill bits from a particular supplier because they stay sharp longer and reduce downtime in the plant.
True or false: Users often volunteer to initiate a purchase, so it is possible that the same people may play more than one role?
TRUE
Who provide information for evaluating alternative products and suppliers?
Influencers
Can influencers include users?
Yes
Who controls the flow of information to other people involved in the purchasing process?
Gatekeepers
True or false: A gatekeeper may control information going to the organization’s purchasing agents?
TRUE
How do gatekeepers influence a purchase?
By controlling the kind and amount of information that reaches the decision makers.
True or false: Information technology people are frequent gatekeepers because they often hold the information that is key to decision making in a firm?
TRUE
What are the two types of gatekeepers?
Screens and filters
What type of gatekeeper would be a secretary at American Airlines?
Screen
What type of gatekeeper would be an American Airlines purchasing agent who gathers proposals from three different companies?
Filter
In a buying center, who is the person who actually contacts the selling organization and places the order?
Buyer
In most organizations, do buyers have the authority to negotiate purchases?
Yes
In a buying center, who has the final authority to make a purchase decision?
Decider
In a buying center, who determines the budget for the purchase?
Controller
Who might act as a controller in a specific department?
An engineer or line manager may act as a controller by keeping the cost of a new maintenance procedure within budget.
How many people typically make up the buying center for a purchase?
Estimates range from 3 to 12 people.
At what stages do different members of the buying center exert influence?
Engineers, quality control, and R&D influence specification development, while the purchasing manager has more influence in choosing among suppliers.
How does perceived risk affect the size of the buying center?
A higher perceived risk leads to a larger buying center with more participants, while lower risk results in a smaller buying center with more influence from the purchasing manager.
What factors contribute to perceived risk in purchasing decisions?
Complexity of the product, importance of the purchase, time pressure, and uncertainty about the product’s efficacy.
When is a buying center more likely to involve a wider variety of participants?
When purchasing a technically complex or expensive product, such as a computer system.
When does the purchasing manager have greater influence?
When reordering familiar products with low perceived risk.
Why do engineering, quality control, and R&D often have influence in purchasing?
They help develop the specifications and criteria for a new product.
What consists of individuals from different functional areas within a customer organization who influence or make purchasing decisions?
Buying center
What is a team within a selling organization that brings together individuals from various departments to support the salesperson in addressing customer needs?
Selling center
Why is team selling important?
Team selling helps present a unified, well-coordinated effort to the customer and effectively addresses the concerns of different members of a buying center.
Who typically leads a selling team?
A salesperson, often an account manager or key account manager, is responsible for managing the customer relationship and coordinating the selling team.
What functional departments might be involved in a selling center?
Departments such as marketing, customer service, sales, engineering, R&D, operations, and finance may be involved.
What are some challenges of team selling?
Challenges include coordination, motivation, compensation, and performance management due to the high costs and human resource commitment involved.
What is a major customer whose potential business and cross-functional interactions justify the high cost of a dedicated sales team?
Key account
When is a team-based sales approach most appropriate?
It is most suitable for the largest customers with buying centers, where long-term business potential and cross-functional collaboration justify the investment.
What is the role of a key account manager?
A key account manager leads a dedicated team to serve a key customer, ensuring strong relationship management and tailored solutions.
What are the stages of organizational buying decisions?
- Anticipation or recognition of a problem or need
- Determination and description of the characteristics and the quantity of the needed item
- Search for and qualification of potential suppliers
- Acquisition and analysis of proposals or bids
- Evaluation of proposals and selection of suppliers
- Selection of an order routine
- Performance evaluation and feedback
What refers to the demand for a product or service that arises from the demand for another related good or service?
Derived demand
How does derived demand impact organizational markets?
It makes them volatile because small changes in customer demand can lead to significant changes in the organization’s sales.
What is an example of derived demand in the travel industry?
The demand for luggage depends on the demand for air travel; if people travel less, luggage sales decline.
What factors dictate the types and quantities of goods and services purchased in an organizational buying setting?
The demand for the firm’s outputs and the requirements of its production process and operations.
Why must the criteria for specifying needed materials and equipment be technically precise?
To ensure the correct materials are procured, avoid excessive inventories, and prevent downtime caused by a lack of necessary materials.
Who is commonly involved in determining and describing the needed materials or equipment?
Technical experts and the people who will use the materials or equipment.
Besides developing a detailed set of specifications, what else must be done?
A clear and precise description of what is needed, how much is needed, and when it is needed must be communicated to the buying center and potential suppliers.
How does Ford communicate specification changes to its suppliers?
Ford’s design and marketing teams inform purchasing, which then relays the changes to vendors like Lear Corporation.
What happens after the type of item needed is clearly defined?
A search for potential suppliers begins.
When might an organization search for multiple suppliers instead of using a single-source supplier?
When the purchase involves a new item, a complex or expensive item, or a product representing a risky decision.
What is the next step after identifying potential suppliers?
The buyer may request specific proposals or bids from each supplier.
How are suppliers chosen for more complex and expensive products?
Through detailed sales presentations and written proposals from potential vendors.
Who is primarily responsible for evaluating offerings and selecting the supplier?
The purchasing department (buyers) typically leads the evaluation and selection process, though technical and administrative personnel may also be involved in complex and costly purchases.
What factors influence the selection of a supplier?
Rational factors such as product value-added aspects, service quality, and cost, as well as social and emotional influences, can play a role.
Why might social and emotional factors impact supplier selection?
Organizational buyers are human, and like B2C buyers, they may develop preferences based on trust, relationships, and personal experiences with suppliers.
What begins after the order routine has been selected and goods have been delivered?
The evaluation by the customer begins.
What aspects does the evaluation focus on?
It focuses on both the product and the supplier’s service performance.
Why is follow-up by the salesperson important at this stage?
To ensure customer satisfaction and address any issues with the product or service.
What is the purpose of inspecting the delivered goods?
To determine whether they meet the specifications described in the purchase agreement.
What type of purchases are where a customer is buying a relatively complex and expensive product or service for the first time?
New task purchases
What type of purchasing is where a customer is reordering an item he has purchased many times (e.g., office supplies, bulk chemicals)?
Straight rebuy
What type of purchasing is where a customer is interested in modifying the product specifications, prices, or other terms it has been receiving from existing suppliers and is willing to consider dealing with new suppliers to make these things happen?
Modified rebuy
True or false: repeat purchases tend to be much more routine than the new-task situation or the modified rebuy?
TRUE
