Principles of Marketing

Principles of Marketing


Importance of Marketing to business

•  It sells products and services to consumers at a profit to understand consumer behavior and market trends.

What is marketing

• The process of continuously and profitably satisfying the target consumer needs, wants and expectations superior to competition.
• Social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with other.

Strategic 3c’s of marketing plus the input and output of marketing

       

Inputs and outputs of marketing

INPUT OUTPUT

Customer Sales

Company Profit

Competition Market Share


Different terms used in the definition of marketing

• Needs – it is the state of self deprivation. It is the basic reason/s or quality dimensions in a purchase.
• Wants – It is the form taken from by human needs as they are shaped by culture and individual personality.
• Demands – Human wants that are backed by buying power. It is also called expectation.
• Product – It is anything that can be offered to a market to satisfy a need or want.
• Exchange – It is an act of obtaining a desired object from someone by offering something in return.
• Value/customer Value – It is the consumer’s assessment of the overall capacity of the product or service in order to satisfy his total needs.
• Customer satisfaction – It refers to the extent to which customer are happy with the product offered.
• Market – It is the set of actual and potential buyers of a product.

Development of Marketing

• Production Era/ Production Concept – This Era focused on the mass production of goods by companies in order to satisfy the needs of other people.
• Product Era/ Product Concept – It holds that consumers will favor products that offer the most quality, performance and innovative features.
• Sales Era / Concept – The company emphasized selling because of increased competition.
• Marketing Department Era – Progressive companies adapted the idea that all marketing activities within the firm must be under a control of a single department.
• Marketing Company Era – Marketing was recognized as the concern not only of a single department but of the whole company.
• Marketing Company with Social concern Era – company begun to consider social issues as a factor in the formulation of marketing strategies.

Business function diagram
(Peter Drucker)




Goal of the Marketing system

• Maximize Consumption
• Maximize Consumer Satisfaction
• Maximize Choice
• Maximize Life Quality
• Maximize Relationships

Trends Marketers will face in the 21st century

• Globalization
• Digital Age or information Age
• Call for more Ethics and Social Responsibility
• Growth of not for Profit Marketing 

PROFESSIONAL SALESMANSHIP

PROFFESSIONAL SALESMANSHIP

Mktg. 3

Salesmanship: it’s nature and rewards

Personal Selling 

• It is the employment of men and women who determine the needs of potential buyers and attempt to persuade these prospects to satisfy their needs through the purchase of products and services.
• It is the direct face to face interaction between a buyer and a seller with the objective of making a sale and satisfying the needs of the buyer.
• It is an oral presentation through conversation with the buyers with the aim of making a sale.

Salesmanship

• It is an art of convincing and persuading people to buy the product.
• It is the ability or skill in selling

Forms of selling

• Personal Selling 
• it can be called as direct selling, hard selling or pressure selling.
• Non-Personal Selling
• This is selling through the aid of some form of media like advertising, sampling, window display and other forms of promotion.
• It is also called as soft selling.

TYPES OF NON-PERSONAL SELLING

• Advertising
• Sales Promotion
• Telemarketing
• Online Selling
• Direct Mail

The selling process (p’s of selling)

• Preparation
• Promotion
• Pre-approach
• Presentation (AIDA)
• Awareness
• Interest
• Desire
• Action
• Purchase
• Post-Sales Activities

Professional sales requirements

• It fully satisfies the needs and wants of a customer.
• The salesman earned profit from the sale.
• The producer gained profit from the sale.
• There is continued patronage from the customer.

Salesman in different names

• Salesman/ Saleswoman
• Sales Executives
• Sales Associate
• Sales Representative
• Sales Clerk
• Sales Engineer
• Sales Representative
• Sales Staff
• Medical Representative
• Account Executive

Advantages of selling as a career

• Relatively high income
• Travelling
• Satisfaction of rendering service
• Chance for advancement
• Managing one self
• More chances to meet and interact with people
• Meet challenges
• More fun
• No need for academic laurels

Disadvantages of selling as a career

• Long hours work
• Compensation is not on a regular basis
• Lots of frustration
• Limited reach
• Expensive

Different compensation plans (for sales people)

• Straight Salary Plan – It is considered as the simplest  compensation plan. The salesmen receive a fixed amount at regular intervals usually every 15th or end of the month
• Straight Commission Plan – the theory of the plan is that the performance of the salesmen will have to be measured according to their productivity.
• Combination Salary And Commission Plan – The salesmen receives a base salary, but he gets also a percentage on commission 

Fringe benefits of a salesman

• Bonuses
• Allowances (transportation, food, communication)
• Trip Packages (Local or Overseas)
• Vehicle
• Gifts
• Membership clubs (Gym, Golf Club, etc.)
• Other benefits

Salesmanship NOT by a Salesman

• Politicians
• Priest or Ministers
• Professionals
• Job Applicants seeking employment
• Lover offering his love and affection to his/her sweetheart
• Organizations for a cause (Charitable Institutions)

Salesman’s responsibilities, duties and qualification

Salesman’s Job

• To get orders
• To interpret the people’s need and selling them goods and services which they are willing to buy
• To permit the establishment of a permanent business relationship
• To serve prospects by giving advice on selling, merchandising, advertising and management problems

Different types of job for salesman

• Salesman as a communicator
• Salesman as a problem solver
• Salesman as an educator
• Salesman as a human relations expert
• Salesman’s aim
• To sell himself
• To sell the company
• To sell the product

Duties and responsibilities of a salesman

• Selling
• Direct Selling
• Advising and Counseling
• Handling Complaints
• Attending Sales Meetings
• Non-selling
• Reporting
• Collecting
• Assisting the credit department
• Organizing
• Travelling
• Studying 

Qualifications of successful sales career

• Education
• Personal Characteristics
• Personality factors
• Work habits and experiences
• Physical health

Mental characteristics of sales people

• Honesty
• Responsibility
• Courage
• Loyalty
• Resourcefulness
• Confidence
• Imagination
• Showmanship

Human Relations

• It is usually involves the proper communication and exchange of ideas among individuals.

Famous 5 p’s of successful selling

1. Product
2. Personality
3. Perseverance
4. Prospect
5. Picturesque Presentation

Ten commandments in selling

1. Speak to people
2. Smile at people
3. Call people by name
4. Be friendly and helpful
5. Be cordial
6. Be genuinely interested in people
7. Be generous with praise
8. Be considerate of the feelings of others
9. Be thoughtful of the opinions of others
10. Be alert to give service

Manners that a salesman ought to observe

• Look pleasant and neat
• Wear simple clothes
• Good voice and diction
• Have a firm handshake
• Avoid tapping the desk with the finger or a pencil
• Buttoning or unbuttoning one’s coat, and annoying physical movements such as crossing and uncrossing one’s legs or nervous tapping on the floor with one’s foot
• Avoid the repetitions of such phrases as “see what I mean” and “you know” or starting every sentence with “Now” or “And”
• Remember the names and surnames of individuals you deal with
• Do not argue with the customers
• Avoid stepping on sentences
• Keep your promises
• Smile
• Keep physically fit

The New salesperson

• A techie
• Computer Literate
• A master of the Internet and of online selling
• An intelligence agent – S/He can get all the information required in a sales transaction, including the needs and wants of his target market and the activities of the competition and other major players in the industry
• Customer-oriented
• Master Strategist – He can draw up and execute a well-balanced sales plan designed to help him achieve maximum market growth, market share and profit

Characteristics and behavior patterns of customers

(part 1)

TYPES OF BUYERS:

1. The Cold Critical Buyer – The salesperson should keep his poise or self-confidence, and give a very businesslike sales talk full of facts.
2. The Self-important Buyer Or Egoist – The salesperson should flatter this type
3. The Easy Going And Goo-natured Buyer – The salesperson should establish friendly relations
4. The Nervous and Irritable Buyer – The salesperson should be calm and polite
5. The Forgetful Buyer – The salesman must go slowly and repeat often.
6. The Opinionated Buyer – The salesperson should keep on the subject and direct the buyer’s mind to his product
7. The Impolite Buyer – The salesman should keep his temper, no matter how impolite the buyer becomes.
8. Cultivated And Rough Buyer – The Salesman must dress better, better manner and use better language.

Eighteen different classifications of buyer

1. The Competitive prospects – one who presumes that he can have more products for less money and enjoy comparing one product from the other.
2. The Technical prospect – one who possesses a scientific type of method.
3. The Friendly prospect – talkative type of buyer who tries to monopolize the conversation of topics related to his family, friends and social circles.
4. The Argumentative prospects – he is very fond of arguments, of using his reasoning power.
5. The Hot-headed prospects – he is the temperamental type who easily got angry with the slightest provocation.
6. The Silent prospect – One who talks little, making it hard for the salesperson to know and serve him.
7. The Hesitant prospect – The prospect cannot decided whether to buy or not the product.
8. The Big-time prospect – One who suggests that he can exert pressures to the buying decisions of top management ranks.
9. The Shopping prospects – One who is very fond of shopping around.
10. The no money in the budget prospect – He likes the product very much but he does not have the money.
11. The Thrifty prospect – He is one who is price conscious.
12. The Self-important prospect – The one with so called “high hat” attitude.
13. The Curious prospect – The prospect is very inquisitive.
14. The Timid prospect – He is considered to be a problem prospect.
15. The Undecided prospect – He thinks too slowly and needs to be pushed by a third party to convince him to buy the product.
16.  The Wavering prospects – One who cannot make up his mind to do one thing or the other.
17. The Slow-thinking prospect – Never to be hurried or pushed.
18. The Open-minded prospect – He is the finest type of prospect. Easy to get along with and fairly consider every facts presented to him.

Characteristics of an extrovert buyer

• He laughs frequently and readily
• He usually likes to talk
• He may be a rather fluent talker
• He is cordial and pleasant in manner
• He enjoys being called by his first name
• He will make an attempt to be liked personality
• He tries not to hurt anyone’s feelings
• He probably will not want to argue
• He may like to talk about social activities
• He may be interested in a minimum of details
• He may often act upon matters impulsively

Characteristics of an introvert buyer

• He is reserved
• He seldom laughs
• He questions the salesperson’s motives
• He wants reasons, facts, and details
• He speaks infrequently of social activities
• He does not want to be rushed into action
• He is sensitive
• He puts relatively little weight on the salesperson’s personality
• He does more listening than talking
• He likes to make up his mind at his own pace
• He defends his conviction rather strongly
• He rarely offers his opinion when in a group
• He terminates the interview abruptly

Characteristics and behavior patterns of consumers

(part 2)

Internal Behavior Factors:

• Perception – it is the process by which an individual thinks, believes, acts and interprets information though the various senses.
• Motives – it is the force that activates behavior
• Learning 
• it may be described as the variations in the behavior of the individual based upon past experiences in similar situations. 
•  it refers to the result of direct and indirect experiences on the future behavior
• Attitudes 
•  defined as the predisposition to behave in a consistent way toward a person or class. 
• it is the sum or total of an individual’s feelings, inclinations, prejudices, preconceived notion and convictions which tend to create a disposition
• Personality – it the sum or total of a person’s characteristics.

Social influences on buying behavior

• Role and Family influences
• Role – set of actions or functions performed by an individual in a particular position supposed to be performed.
• Reference Group influences – it is an identification mark of an individual as to what group he or she belongs.
• Social Classes – a group to which they aspire and normally have common patterns of behavior.
• Culture 
• it embraces the ideas, values, attitudes, artifacts and symbols governing the behavior of a member of the group. 
•  it is also includes concepts, values and behavior that are learned and are passed on from one generation to the next

Consumer motivation

• Selling requires motivation. We can say that people have reasons for their action. Therefore, people do not just buy things without reasons. A good salesman tries to discover what really motivates his prospects and then base his presentations around it.
• Need – is the state of the felt deprivation. It is a lack of something which is necessary.
• Wants – these are individual desires that are not too important to life itself, although they are also desired for creating a more satisfying and abundant life.
• Motivation – it is the amount of effort the salesman desires to extend on each of the activities or tasks associated with his job.

Motivation process

      Need             →         goal    →            goal        →        reduced

(TENSIONS)               directed              achievement                   tension

Why managers need to motivate salespeople?

• Keep the salesman’s morale high in the face of adversities.
• Motivate the salesman to exploit his potentials to the fullest.

Internal forces

1. Rational Motives – these are motives that involve conscious reasoning about a course of action. Reason or intelligence is involved in the purchase decision.

• TYPES:
• Economy
• Desire for quality
• Convenience

2. Emotional Buying Motives – these are irrational motives which prompt the buyers to buy acertain product.

• TYPES:
• Ease and convenience
• Profit and thrift
• Safety and protection
• Play and relaxation
• Pride and prestige
• Love and affection
• Sex and romance
• Adventure and excitement
• Other random and emotional buying motives

Reasons why people buy industrial and commercial products

• Profit
• Economy
• Uniformity of output (uniform sizes, quality or color)
• Flexibility
• Saleable
• Protection
• Utility

Motives why people buy from a certain store

• Convenience of location
• Price
• Service of merchandise
• Sales personnel
• Reciprocity (you scratch my back and I’ll scratch your back)
• Quality

Theories of motivation

• Maslow’s Hierarchy of needs theory – this was advocated by Abraham H. Maslow, clinical psychologist. It has two premises: First, human behavior are motivated by their own desire to satisfy certain needs. Second, the needs of individuals are universal. As the lower needs are satisfied, behavior is motivated to satisfy the next level of need.
• Achievement Motivation Theory – It was advocated by Henry A. Murray and David C. McClelland. This is also known as Need Achievement theory which states that the major portion of an individual’s will perform can be explained by the intensity of his or her need for achievement.
• Motivation-hygiene Theory – This theory was researched by Frederic Herzberg and his associates. It is also known as the two factors theory and dual factor theory. The factors involved in producing job satisfaction and motivation are quite different from the factors involved in producing job dissatisfaction.
• Expectancy/ Valence Theory – Expounded by Victor H. Vroom. It is more concentrated in understanding the processes or dynamic relationships among the variables as they affect the individual behavior
• Reinforcement Theory – B.F. Skinner was the one who advocated this theory and also known as operant conditioning. This theory presupposes that human behavior can be subjected to change, can be molded or conditioned, by controlling the reward structures of various forms of behavior better known as the “positive reinforcement.”

Direct selling companies vs. Mlm companies

• Direct Selling Companies – face-to-face selling to the companies through independent distributors or sales people. It is legitimate marketing medium that is used to sell practically anything.
• Multilevel Marketing (MLM) 
•  It is also called as Network Marketing. One builds an organization by using a network through which to channel the products.
• It is an approach of distributing products sold directly to the final users through a network of independent distributors or dealers through which it channels the products, sharing with relatives, neighbors or business associates.

• Pyramiding – it is an illegal money scam often confused with legitimate network marketing plans, where people are convinced to pay money for a chance to profit from the payments of others who might join later.

Terminologies related to multilevel marketing

• Sponsor – the person who introduces another into the business of a multilevel marketing company.
• Upline – It includes the sponsor of a distributor, the sponsor and all the way up.
• Downline – includes all the recruits (or distributors) directly sponsored by a distributor, his recruits and all the way down.
• Incentive – A reward system given to executive distributors to entice them to sell and push the products
• Binary plan – It is a network or multilevel marketing compensation plan, which allows distributors to have only two direct or first-level distributors. Any additional distributors sponsored have a ‘spillover’ effect, meaning; they are placed at levels below the sponsoring distributors’ first level.
• Proselytizing – It is an act of recruiting co-distributors to join other companies to the detriment of the upline and network marketing company. In short, it’s about a distributor or distributors raiding a company’s sales force another company for personal gain.

ADVANTAGES OF JOINING A DIRECT SELLING COMPANY

• Real potential for personal and financial rewards
• Easy access to training and support
• Low startup cost
• Independence and flexibility
• A person that joined a direct selling company is considered as an employee of the company
• Anyone can join regardless of educational attainment
• Develop interpersonal and selling skills
• There are no penalties in leaving the industry

Disadvantage of joining a direct selling company

• Cost per contact
• Time
• Customer intrusion
• Professionalism and credibility
• Continuity of the message
• Potential for scams

Advantages of joining a multilevel marketing (MLM)

• Manpower labor cost is nil and insignificant, because the distributors recruited are not employees of the network company
• The distributors are free from the usual business risk because capital is very minimal
• Network marketing relies heavily on the word-of-mouth communication
• The distributors are not required to work full time
• Network marketing provides unlimited income to distributors who are energetic and leader in motivating its network of members to sell and share their experiences to others
• Transaction are not purely done at cash basis
• Fast turnover of products
• Triggers high loyalty from users

Disadvantages of joining a multilevel marketing (MLM)

• Getting attached to a disreputable MLM company
• Creating a network or downlines may be more expensive than the distributor realized
• There may be a lot of money spent on outside meals, fuels, accommodation, etc.
• Actual success in sales is hard to come by.
• They will depend on their downlines for their sale and NOT on his/her personal sales
• The products may be overpriced discourage people to buy them
• Your family and friends may not understand what you are trying to do

Truth about legitimate marketing companies

(DSAP)

• Low entry barriers
• Fair market value/regular retail requirement
• No inventory loading – committing to a substantial investment that may cause financial distress to the distributor subsequently
• Low exit barrier

Success factors in Mlm or network companies

• Recruiting (or sharing) as many distributors as possible to have more consumers, sales and profit.
• Distributors to teach their downlines
• Attitude and leadership of the sponsor
• Products sold must be affordable, of good quality, and satisfy a want
• Viability of the marketing (or business) plan
• Integrity of the network company
• Training and business opportunity meetings with distributors on a periodic basis, providing guidance and directions, motivations, and product knowledge and testimonials from distributors.

How to differentiate a legitimate direct selling company from pyramiding?

The 8-Point Test

1. Is there a product?
2. Are commissions paid on sales of products and not on registration/entry fees?
3. Is the intent to sell a product not a position
4. Is there no direct correlation between the number of recruits and compensation?
5. If recruitment were to be stopped today, will the participants still make money?
6. Is there a reasonable product return policy?
7. Do products have fair market value?
8. Is there a compelling reason to buy?

Four (4) basic expectations of each distributor

1. Use the products personally
2. Share the products with FRAN (friends, relatives, associates, neighbors)
3. Sponsor people into the network
4. Build and maintain an organization of leaders

Seven (7) stages of a recruit in an mlm company

1. Visitors – This individual signs up as a distributor but has not done anything yet other than attend a business opportunity meeting.
2. Participants – This type of distributor shows up at the office or during meetings and trainings. They have the desire to be active but have not made a purchase for personal use or resale.
3. User – This type of distributor has signed up and consumes the product for personal use.
4. Recruiter – This type of distributor has invited visitors and participants and signed up some as users or downlines.
5. Motivator – He/ she goes for the hype.
6. Trainer – He/she is interested in helping his recruits to attain knowledge and skills in the shortest possible time using the best-proven method that he knows.
7. Leader – He has not only developed himself to be great motivator and trainer but he is also conscious to be a role model for others to emulate.

Why do people stays in the mlm business

• Good products
• Good leadership
• Good company
• The company’s purpose/ vision
• Competitive Earnings
• Personal and financial success