Marketing and Sales Class IX PDF - CBSE Exam

Marketing and Sales CLASS IX Study Material Acknowledgements Content Developed By z Dr R.GSaxenxa,Retd.,ProfessoninDeenDayalUpadhyayaCollege,Director inBAProgramme,IGNOU,Delhi-Convener & Author z Dr.(Mrs.) GeetikaJohri,AssociateProf., SchoolofVocationalEducation&Training,IGNOU,NewDelhi- Author z Dr (Mrs.) AnupamaMahajan, Associate Prof Commerce Department Bharati College, Delhi University - Author zDr Anju Batra, Associate Professor, MBA Prograam in Delhi Institute of Advanced Studies - Author Curriculum Unit I: Introduction to Marketing and Sales What is Marketing Importance of Marketing Concepts of utility What is Sales? Role of Sales business Unit II: Concept of Market What is market Type of Markets Types of demand Competition- direct and indirect Unit III: Basic concept of Sales and selling What is selling Types of selling Functions of Sales person Types of sales- Sales agency, Agent, Service, missionary Unit IV: Understanding customer & consumer Selling means buying – consumer & customer Factors affecting buying Buying motivations Business customer & consumers- Types of consumers Differences between business vs individual buyer Unit V: Activities in Sales and Marketing Sales tasks – order taking, delivery, processing Money collection, daily sales report Role of marketing professional Role of sales professional PREFACE India with its increasing youth population, currently 60% are between the age group of 16-29 years, has an unprecedented opportunity to accelerate growth. As per the census 2011, 7.8Million children are forced to earn livelihood even as they attend school while 84 Million children don‘t go to school that is nearly 20% of age group covered under the Right to Education Act. Among students who work 57% are boys, the remaining 43% are girls. At present 9 in 10 Indian joining work force are untrained for its demand. This shows marked unemployment both in organized and unorganized sectors as per the report of world bank, India is one of the few countries in the world where the working age population will be far in excess of those depended on them and this position will continue for at least 3 decades. It is the fact India is facing a sharp shortage of skilled manpower both blue and white colored. India GDP is posed to grow at 7.59 that means severity of the situation is accentuated by many levels when economy is looking up, new jobs are getting generated in various sectors but there are not enough ‗skilled‘ human force available. As per the demand projection, India should aim to train 500 Millions people in various sectors of trade, industry and service by 2020. To achieve this objective the CBSE has started designing vocational courses in various areas such as Retail trade, Financial services, Banking, Insurance, Automobile, Hospitality, Computer, Tourism and Technology etc. Marketing and Sales vocational course can provide readymade trained salesman to thousand of employers operating in hospitality sector which is growing very fast, big malls, large departmental stores, super markets and fast food out-lets chain, bakers, on-line orders as delivery boys and girls. An attempt has been made to design Marketing and Sales course and to develop ―Model Text Book‖ to meet the job requirements of the various employers. After reading the textural material learner can apply his knowledge, understanding, skills acquired and training with confidence. The primary purpose is to create a pool of skilled manpower competent, capable to meet need based vocational courses specially for dropouts (25 Million) between 8 th – 12th class every year, neo-literates and those working in unorganized and organized sectors. Central Board of Secondary Education New Delhi. MARKETING AND SALES Unit I: Introduction to Marketing and Sales Location: DURATION: SESSION- 1: DEFINITION OF MARKETING Learning Knowledge Performance Teaching And Outcome Evaluation Evaluation Training Classroo Method m or Company‘ 1.Definition and 1.The learner The learner Interactive s theMeaning of term would be able would be able lecture premises Marketing. to state the to analyse 2. Concepts definition & importance of Power point associated with meaning of the different presentation Marketing Marketing. concepts of Management 2.The learner marketing would be able management to understand the concepts of marketing management. SESSION 2: IMPORTANCE OF MARKETING IN BUSINESS How is marketing The learner The learner Interactive important in would be able would be able lecture business? to explain the to analyse the importance of importance of Power point marketing in marketing in presentation business. business with relation to consumers / society and organisation SESSION 3: SALES AS A FUNCTION Sales as a function The learner The learner Interactive would be able would be able lecture to explain the to list in the functions to issues of the Power point sell a product/ selling presentation service. activities and explain the concept of the function of sales in business SESSION 4: IMPORTANCE OF SELLING FUNCTION Understand how is The learner The learner Interactive selling important would be able would be able lecture to describe the to analyse the importance of importance of Power point selling function various roles presentation in closing a and functions sale. of selling in business (Note : The location would depend upon the topic under discussion, wherein it will be the classroom for the theoretical interactions and the student will be required to visit the field/ retail outlet or the marketing department of an organization to observe and comprehend the concepts related to marketing and sales) MARKETING AND SALES Unit I: Introduction to Marketing and Sales WHAT IS MARKETING Students shouldunderstand the meaning of the term Marketing. Simply stated the meaning of the term Marketing is ―performance of business activities that direct the flow of goods from producers to consumers or users‘‘. It may be said that marketing includes all those activities which effect changes in the ownership and possession of goods and services. According to the Marketing Guru Philip Kotler, ―Marketing is a social and managerial process by which individuals and organization get what they need and want through creating, offering and exchange products of value with others.‘‘ If we analyze the above definition, the following points will emerge to understand the meaning of marketing: a. discovering and translating consumer needs anddesires into products and services. b. creating demand for these products and services c. serving the customersdemand d. expanding the market even in the face of keen competition Thus, the general aim of marketing is to have a regularflow of goods among customers with a definite target to ensure the optimumsatisfaction of the organization, customers and society. These can be achieved if businesses concerns conduct their marketing activities with responsibility and following the clear-cut concepts which are 1. The product concept 2. The selling concept 3. The marketing concept 4. The societal marketing concept The Product concept The product concept is the oldest concept guidingproducers. It is believed that if the product is good and reasonably priced it will fetch or attract many customers and no special marketingefforts are required to be made. It is the quality of the product that attracts the customers. But product oriented companies often design their product with little or no consumer/ customer inputs. This concept does not remain profitable in the long run and marketers have no choice but to move to the next concept. This concept has failed in operation.Companies having produced quality products have not been able to push up the sales unless other positivesteps to design, attractivelypackage and price the product and place them inproper distribution channelsso as to bring them to the notice of the prospective buyers orpersonsconcerned and convince them that the products have superior quality and fair price. The Selling Concept The second concept is the ‗‘Selling Concept.‘‘ Underthisit is presumed that customer will not normallybuy unless they are approached and convinced which means that consumer satisfaction is considered secondary , selling the product is the prime consideration. This concept is used for goods which customers don‘t buy normally, like vacuum cleaners, insurance etc. These goods are aggressively sold by tracking down the target segment and sold on the virtue of the product benefits. In the words of Kotler―there is littlemeasurement of what the public wants and a lot of selling effort to get the public to accept policies that a few want.‖ The Marketing Concept Under this concept the organization tries its best to determine the needs, wants anddesires of the buyer‘s market and finally takes steps to deliver the desired satisfaction most effectively and efficiently. The organization believes that it can win the loyalty of its customers only by giving them satisfactory services. Winning the confidence of customer is as good as fulfilling the goals of the organization. Thus we can say that marketing concept can be implemented by asking the following three questions to yourself or to your organization: 1) What is the target market? 2) What are the needs, wants and demands of the target market? 3) How best can we deliver a value proposition? The Social Marketing Concept Although marketing concept has been accepted as one of the tools of satisfying customers, it becomes difficult in practice to establish it.It demands proper planning, persuasion skills,communication skills, education and organization. In this concept, the focus is on giving individual satisfaction so far the customer is concerned, by providing quality products at reasonable price, good supply channels and maintain public welfare. This attitude on the part of the organization encourages customers to patronize it and achieve long term profits. For example, if a company produces a vehicle which consumes less petrol but spreads pollution. This will result in only consumer satisfaction and not the social welfare. Primarily two elements are included under social welfare-high-level of human life and pollution free atmosphere. Therefore, the companies believing in this concept direct all their marketing efforts towards the achievement of consumer satisfaction and social welfare. IMPORTANCE OF MARKETING IN BUSINESS The importance of Marketing has been recognized ever since the business came into existence. In the present business scenario without Marketing an enterprise would be unable to fight for its survival in the business world. Thus Marketing is an important tool in the hands of business enterprise. Its importance to business can be understood as under. 1. Importance of marketing for business enterprise – source of revenue 2. Importance of marketing to customers – satisfaction of needs and desires and improvement in standard of living. 3. Importance of marketing to society – to assess the needs, habits and feeling of customers to produce the desirable goods in the market. Figure 1 From the above figure 1, the importance of Marketing can be better understood as under: Marketing and society/ consumers Increase in the standard of living - Our today‘s modern society is divided into three main classes: The Rich Class, the Middle class and the Poor Class. The standard of living of all these classes will depend upon the purchasing power of each class. Better standard of living, fulfillment of various wants is possible through marketing. It facilitates the consumer to choose from the various brands available according to their likes and dislikes at reasonable price. Employment opportunities - Marketing helps in creating employment opportunities to many people. Since the marketing process involves various activities such as buying, selling, warehousing, transportation, finance, risk taking etc,it provides employment for many to improve their income levels. Economic stability –Marketing plays a very important role in the economic stability of the country. The economic stability depends upon the balance between the demand and supply of products/services. For maintaining the balance between the production and consumption(demand and supply), marketing is necessary as it maintains this balance and stabilizes the economy. It ensures stable price in the market and can reduce price fluctuations to a large extent. Creates Utility –Marketingis an economic activity. It creates ownership, place, time utility and demand. The various activities of marketing helps in creating utility. For example:Exchange of goods offered creates ownership, time utility and place utility is created due to transportation and warehousing. Thus marketing provides value to the goods and services by providing them at the right time, right place and reasonable price. Satisfaction of human wants –Marketing plays a significant role in the distribution of goods and services to satisfy the needs and wants of the consumers. Marketing and organization Gain income– The profit of any organization depends upon its income and its future depends upon its profit. Organization can earn profit through various activities. Marketing provides ―Market‖ to goods and services which in turn fulfills the same. Marketing information – Our modern economy is dynamic in nature.Thelikes, dislikes, price, demand are changing rapidly and thus the entrepreneur has to take decision according to the changed environment. The entrepreneurs have to look for new products, new customers, new market, new technology etc. All these information can be collected by the entrepreneur through various marketing sources and thus adopt the same to survive in the competition. Source and channel of new ideas -Marketing is a significant aspect in today‘s dynamic environment. The dynamic changes occurring in marketing have become a source and channel of new ideas and guiding policies. With the rapid change in tastes and preference of people, marketing has to come up with the same. Marketing as an instrument of measurement, gives scope for understanding this new demand pattern and thereby produce and make available the goods accordingly. Decision making –Producers produce goods and services. It is very important for them to know What to produce? Where to produce? How much to produce? All these directly impact on the profit of the organization. All these decision are important and major and hence difficult to take. Marketing helps the producers to take the right decision at the right time. Hence, ―Success‘‘ of any business and proper decision are interdependent and which is possible due to marketing. With the effective market forecasting technique it is possible for the marketers to project the expected demand in advance to facilitate the producers or organization to act accordingly. Assignment 1. A. SHORT QUESTIONS 1. What is Marketing? 2. What is the meaning of selling concept? 3. What is the concept of marketing? 4. What is the product concept of marketing? 5. What is the societal marketing concept? B. Briefly explain the importance of marketing in relation to: customer and society organization C. Distinguish between the selling concept and the Marketing concept? D. Fill in the blanks: a) Marketing helps in ------------------ demand for products and services. b) Fulfilling the goals of the organization is as good as --- -------------- the confidence of the customers. c) ------------------- of any business and ------------------------ ---- are interdependent and possible due to marketing. d) Marketing is a -------------- and -------------- aspect in today‘s dynamic and changing environment. e) Marketing is an -------------------- activity. CONCEPT OF UTILITY Utility is the consumer‘s estimate of the product‘s overall capacity to satisfy his or her needs. In that case the product may be ranked from the most need satisfying to the least need satisfying. How do consumer‘s choose among the products that might satisfy a given need? We can explain this with the help of an example. Suppose, Mr Ravi needs to travel 5 km to & froto work each day.MrRavi can think of a number of products that will satisfy this need; walking, skating, a bicycle, a motorcycle, acar, a taxi cab and a bus. These alternatives will constitute his product choice set. Now if Mr.Ravi wouldlike to satisfy different needs in travelling to work namely speed, safety, ease andeconomy, we will call these his need set. Now each of the above products has a different capacity to satisfy his various needs. Thus a bicycle will be slower, less safe, a more effortful than a car, but it will be more economical. We can ask Mr. Ravi to imagine the characteristic of an ideal product for his task that would get him to his place of work in a split of second with absolute safety, no effort and zero cost. Than the utility of each actual product would depend on how close it can be to this ideal product. To illustrate, suppose Mr. Ravi is primarily interested in the speed and ease of getting to work. The figure 2 below presents a product - space map showing where each actual product stands in its ability to satisfy these two needs. The closer an actual product is to Mr. Ravi‘s ideal product, the greater is its utility to Mr. Ravi. EASE SPEED Figure 2 WHAT IS SALES Sales is a vital sub-system of marketing management. Both sales and marketing are used together as they need to work together. But in fact, they are two very different functions and require very different skills. In simple and general terms, sales is 1) A transaction between two parties where the buyer receives goods (tangible or intangible goods), services and/or assets in exchange for money. 2) An agreement between a buyer and seller on the price of a security. Figure3 Sales = Sell What’s in Stock The job of Sales is to ―sell what‘s in stock‖. The company has theirspecific products or services and the job of Sales is to sell those things which are in stock.Sales develops relationships with customers and/or channel partners. They knock down the doors, overcome any objections raised by the customer on account of the product or services, negotiate prices and terms and often work internally to be sure their customer‘s orders are filled. The Sales is seen from inside the company out towards the customers. Their horizon is focused entirely on sales and the revenue which has to be achieved for this week, this month or thisquarter. Marketing = Align with the Customers, Now and for the Future A key job of Marketing is to understand the marketplace from the perspective of the customer looking back towards the company and helping the company to lead where it should be in the future. Marketing‘s job is to direct the organization toward the segments, or groups of customers and channels where the company can profitably compete. It should help the organization see how it needs to modify its product offerings, pricing and communication so that it meets the needs of the distribution channel or end customers. Without Marketing, Sales Suffers This can be best understood with the help of the following example. The best hunter even cannot bring home dinner if they are shooting blanks at decoys. We know that markets are rapidly changing. The job of marketing is to stay ahead of the changes, and help the hunters see where they should be hunting and provide them with the right ammunition. If Marketing is only focused on delivering the ammunition for today, nobody will see where the industry is moving or where the company needs to hunt next. This limits growth. Sales needs to be focused on the now. You can‘t run a company unless your sales team is focused on bringing in today‘s business. But you can‘t really ask your Sales leaders where the company should go next and to develop the 18 month plan to get there without losing focus on today‘s revenue. IMPORTANCE OF SALES In any business organization, be it medium or large, it is the sales department that generates revenue. No matter how good your manufacturing and production operation are, how latest your technology is, how tight your financial goals are or how progressive your management thinking and techniques are, you must still have a sales mechanism in place, or everything else is useless.The Sales department consists of persons working together for the effective marketing of products manufactured by the firm. It is the sales department which coordinates and provides an efficient, economic and flexible administrative set up to ensure timely movement of products from the buyers to the sellers.A sales organization has a number of departments and performs the functions of planning, organizing and controlling marketing and distribution of products. NEED FOR A SALES ORGANISATION ―Sales are the life blood of business,‖ Sales organization is part and parcel of any business firm. All the departments are carefully placed in a good sales organization to achieve the best results. A small firm does not need any sales organization as the proprietor himself can sell all the products or in certain cases, he is assisted by one or two salesmen, under his direct control. But when the firm or the business expands and diversifies itself which may be due to extension of markets, production in large- scale, competitive market etc., the need for a sales organization is felt. The need arises because of the following factors: 1. When seeing the production in anticipation of demand, which must be sold. 2. To create demand for the products through efficient salesmen. 3. Orders have to be executed without delay. 4. Satisfactory action to be taken against complaints received from customers. 5. Timely collection of credit sales if any. 6. Keeping stock in hand for the future demand. 7. Maximum contribution to profit. 8. To enforce proper supervision of sales-force. 9. To divide and fix authority among the subordinates. 10. To locate responsibility. IMPORTANCE OF SALES ORGANISATION: A sales organisation is the mechanism through which a sales manager‘s philosophy is translated into action. The sales organisation provides the vehicle for making decisions on planning, organisation, selection and training of salesmen, their motivation, directing and controlling them. It also provides vehicle through which these decisions are implemented. ―A sale organisation is like a power-station sending out energy which is devoted to the advertising and selling of particular lines and there is a tremendous waste of energy between the power station and the points where it reaches the consumers. Therefore, there arises the necessity of organizing the sales department.‖ —Boiling Assignment 2. A. Explain the concept of utility? B. What do you mean by sales? C. How is sales important in business? D. Give reasons why need for sales organization is felt? E.Multiple choice questions: a. The form of business organization that has the maximum sales in terms of volume is the partnership corporation Cooperative multinational b. The simplest form of business ownership is Proprietorship Partnership Corporation Cooperative c. Which is advantageous for a sole proprietor Ease of starting a business Being your own boss Proud of being an owner All of the above. UNIT II: CONCEPT OF MARKET Location Duration: Class SESSIONS Room Concept of Market Learning out Knowledge Performance Teaching and come Evaluations Evaluation Tracing method Define the Learner will - Importance of Interactive meaning of be able to concept of Lectures. concept market. state the exchange in Power-point meaning and market. presentation. definition of Understand the market. importance of - Importance of exchange. segment. Understand the need of Need to segment market place. the market. Understand segmenting of market. Competitions (1) Definition of (1) Importance (1) Understand Interacting lecture competition. of need of sessions competitio competition. n in (2) Need for a marketing competition and selling (2) Understand market in a about the (2) Describe market place. emerging the needs needs of the of customer in innovation the market and place. importance of research in a competitiv e market. Product Market (1) Definition and Understand Understand Interactive Lecture meaning of Impact of effects of rivalry Session. product indirect and of product market. direct market. Visit a market (2) Understanding competition in place like difference in the market. vegetable mandi product market and service market. Role play in class. Service Market (1) Definition and Distinguish Interaction Lecture meaning of between sessions service market tangible services and intangible (2) Understand the services Power-Point features of Presentation service market. (1) Explain service users - individuals or institutions. UNIT-II CONCEPT OF MARKET LEARNING OBJECTIVES After reading this unit the learner would be able to: (a) Understand the concept of market. (b) Know the importance of exchange in a market place. (c) Appreciate the importance of competition in the market. (d) Understand the need of product market and service market. (e) Understand the meaning of market segment. (f) Distinguish between product and service market. INTRODUCTION: Marketing is the most essential activity of any business.concept The success of market. or failure of most enterpri 1. Concept of Market: Market refers to a place where Buyers buyers andand sellers sellers come gather to exchan together in the market place. In simple words, ―A market consists of all potential or prospective customers sharing a particulars need or wants who might be willing and able to engage in exchange to satisfy that needs and wants‖. Thus markets are seen as collection of buyers and sellers – sellers as constituting the industry and buyers as constituting the market. It means the concept of exchange is an important factor that leads into concept of market. What is an Exchange: Exchange is an act of obtaining a desired product or service from someone by offering something in return. However, every business transaction cannot be called Exchange. Following conditions must be fulfilled only then a business transaction can be called an Exchange. (1) At least two persons should be there to undertake a business transaction. (2) Both the parties should be able to communicate and interact freely with each other in order to seek information regarding the deal and delivery. (3) Each party to the transaction must have something of value and utility to offer to the other party. (4) Parties should be free to accept or reject the after. (5) Intention of parties should be to enter into the exchange of goods and services. Market Structure The inner loop shows an exchange of money for goods and the other loop shows an exchange of information about the product from the industry with the feedback from the buyers. Whenever these two exchanges take place, the place is called a Market. Markets are numerous. One can identify a market with a product (whole sale cloth market); a demographic market (children wear and toys market) or a service market (hospitals, schools, tuition centres). These days most of the companies producing products or providing services, instead of targeting the goods to masses, are trying to provide utmost satisfaction to the needs and wants of a well defined group of target customers such as senior citizens or disabled groups or surgical instruments for hospitals or clothes and toys specifically for children etc. For this a marketer needs to understand what will he sell in a market (a product or service) and to whom? At this stage the students should also know in brief about market segment (to whom to sell). Market segment: A market segment is that portion of a larger market which individuals, groups or organization share one or more characteristics that causes them to have relatively similar products needs. ― Market segment is such dividing of a market into homogeneous sub-set of customers where any sub-set may be selected to be reached out, with a distinct marketing mix‖ Take the example of a ―SOAP Industry‘ which provides different types of soaps to be used for different purposes by different customers such as – (1) Laundry Soap: An expensive detergent to wash things i.e. cloths, curtains, bed sheets, cotton carpets etc. Such soaps have larger market and good demand - Rin, Surf, Nirma to mention to few; (2) Low-grade toilet Soap: For washing hands and the body for example lifebuoy – low price, medium quality and for a wider market. (3) High quality body Soap : It is generally required by high income groups preferably among high income customers such as younger girls and women - Lux, Dove, Dettol Soaps to mention a few. (4) Industrial Soap: It is normally used by manual workers for washing hands after working on machines like car engines, turbines, commercial paints etc. Such soaps are specifically produced for the industries where it is required for the workers. Every businessman tries to make money by selling goods or providing a service at the market place. Here is a list of few businesses that one can find in a market. (1) Grocery Stores (2) Clothing Stores (3) Jewellery Stores (4) Discount Stores (5) Drug Stores (6) Car repair shops (7) Hair cutting Saloons (8) Beauty parlor (9) Doctors office/clinic (10) Dentists Office/ Clinic (11) Lawyers office/Chambers (12) Chartered Accountants Office (13) Dry cleaners (14) Automobile dealers (15) Banks (16) Multi-complex theater. (17) Travel and Tourism. Virtual Market/Online Market: A New Market Concept Apart from the physical market that exists in stores and shops, a new type of market has started emerging in the business world. Virtual markets are also known as non- physical markets. Its a market place where buyers purchase goods and services through internet. The basic nature of virtual market is the absence of physical interaction between buyers and sellers i.e. they do not meet or interact physically, instead the transaction is done through internet. The buyer does not move out of his home to buy the product. The product is delivered at home only and the payment can be made either through debit or credit card or cash can be paid on delivery. The products are sold at heavy discounts because of lesser operational costs involved. Of late this type of market is becoming very popular for buying and selling of goods especially amongst the youngsters because of the convenience factor and economy factor. Examples - Rediff shopping, eBay etc. SESSION – 1 Concept of market ASSESSMENT A: Fill in the blanks i. Market is a place where buyer gathers to ……………… ii. Every business transaction cannot be called ________ iii. Concept of _________that leads to concept of _________ iv. A market segment is the parties of ____________ B. True or false: 1. In a business transaction there should be at least these parties. 2. Parties to the business deal cannot reject the offer. 3. Markets are seen as collection of buyers and sellers. 4. Intention of parties should be to enter into the exchange of goods and services. 5. Both the parties to the deal cannot interact freely. 6. Buyers and prospective buyers are one and the same thing. Answer: 1. False, 2. False, 3. True, 4. True, 5. False, 6. False. C. Do you agree with the following statements? 1. Buyers and sellers create the market place. 2. Persons who pay for goods and services are called purchaser. 3. There is no difference between beauty parlor and hair salon. 4. Sellers earn profit or money by selling goods and services. Answer: 1. Yes, 2. Yes, 3. No, 4. Yes. D. Which one of these are not examples of ‘clinic’. 1. Beauty Parlor. 2. Drug and chemists. 3. All India Institute of Medical Services. 4. None of the above: Answer: 4. COMPETITION A businessman operating in a marketplace should have a clear understanding of the fact that selling goods is not a cakewalk. He will have to face many challenges and one very important being the competition from rival businesses. The producers and the service providers are all fighting amongst themselves to capture the market. A business man should be capable enough to either give competition or to face it. What is a competition? Have you ever run a race? Have you ever entered a painting or an art contest? Races, painting or art contests games are all competition. The, competition is one where people try their best to do something better than other people so they can win. When two or more business sells similar items of goods or services they are called competitors and identifying competing business in their community. Definition: Competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit and market share growth. Competition in the market place: Today market activities are performed under highly competitive situations. It changes as per the changes in consumer‘s attitude, demand, interest or other considerations. For example, fountain pen was in demand at one point of time but now the demand is more for ball pens. Since the demand of ball pen was increasing the focus of the manufactures had also changed to ball pens productions for serving the customers‘ needs and their wants better. They will have to face the competition also from the other manufactures of ball pen in the market. Can you think of two stores that sell candy? These two stores are competitors. They are competing for your money. Both stores want you to buy their candy. When two or more business sells the same goods or services, they are competing for the same market. When businesses compete, they try to find ways to whereby the buyers are attracted to buy their product. This is called competition in the market place. There is competition in communities as well there are competitive businesses all around us. Let us take the example of Burger. (a) Burger King and MC Donald‘s are two hamburger restaurants. (b) Both sell soda, French fries and hamburgers. (c) Both want you to eat in the same restaurants. (d) Both want you to spend your money at their restaurants. Because they sell similar items/ things they are called competitors. Today‘s marketing activities are performed under higher competitive situations. It changes as per the changes in consumer‘s attitude and interest. It focuses on serving consumer‘s needs and wants better than competitors. If you are faced with lot of competition in the market, it is the time to start looking for a unique angle with less competition. Focus on what makes your business unique. For example, change your credit policy or ways to handle orders or even relaunch products. Find out what make your stand out from other competitors. If you want to stay in the competitive market, you should be seriously looking at the viability of your business and how can you promote it better is a good thing. Always remember not everyone is going to have a strong work ethic and be willing to put the time and energy into making the business a success. TYPES OF COMPETITION: Direct competition: A direct competitor is another company that offers the same products and services aimed at the same target market and customer base, with the same goal of profit making and marketing share growth. A direct competitor who comes to our mind is the one when we refer to term ‗competition‘. It is always seen that customers will shop for a variety of price points, locations, product features and service levels when determining their purchases. In comparison, though, customers will not similarly choose the same mix of these options and this is where competition becomes a factor. It is the right time to recognize where your competition is positioned visa vis other competitors in the market. It is a key factor in understanding the potential of your business solution can fulfill the need of the customers. Indirect competitors: Indirect competitors are another company that offers the same products and service much like direct competitors but goals are different. These competitors are in the market to earn revenue with a different strategy. Nearly in every company in our country is involved with some form of indirect competition. For example air lines in our country face indirect competition. The aim of air lines companies is at satisfying customer needs and desires. This can be done by utilizing a different – market mix, (product, place, price and promotions). Find out the best marketing mix or potential ways to mix through which customers needs can be met and you can generate an advantage for your product and services. Benefits: - Competition encourages creativity as the companies evolve and new ideas flourish in the market place. - Competition also benefits the buyers who have the opportunity to choose the product or service from different companies at affordable price. - Customers always gain if there is competition in the market. - Fair and open competition means lower prices and greater choice. - Competition is the critical driver of performance and innovation. Companies set up research and development (R & D) centers to find new methods of production and use latest technology to improve the quality of the product and that too at a reasonable price. - Fair trade and open competition in the market enable vendors and manufactures to deliver a better variety of competitive products to their customers not only in their own country but around the world – (Coca Cola, Pepsi Cola, MacDonald food chains, Sony LCD) and often results in lower prices and higher performance i.e. create the demand of the product to large segment of consumers. - In a competitive market there is no single firm and company cannot dictate prices to the consumers whereas a single company in the market can became a sole judge of the price (determine the price) and quality sets a dangerous precedent. In simple words, limiting consumers‘ freedom of choice stalls innovation. - Impediments to innovations are setback for anyone who wants tomorrow‘s computing technology or any other technology for that matter to be better than it is today. Can you avoid competition? It is often said that explore a new product or untapped market, still you cannot avoid competition in business of that product. Even if no one else is selling or offering you a particular service, you are still, in a sense competing for the same customers. We see advertisement of different travel and tourism agencies and firms offering different prices for the same destination. Travelling agencies organizing group travel, to say to Bangkok or U.K. or Australia or Sri Lanka or Dubai announce different rates for the same/similar destinations. A business man should always remain worried about competition in the market. A new competitor to establish business in market can cut profits, create fewer customers and, at best cause you to have worked harder to promote your own business. If a businessman is struggling with this situation, he has to find some way-out to remain in the business and to face competition. How to deal with this situation in competition in the market; - List the names of the firms who may be targeting your segment of customers or audience – it is always good to be informed. One should gather information and data to analysis what is happening in the market place. Sometimes, your competitors can be helpful to you by highlighting tactics that may work and perhaps that may give you a new sales tactics that a competitor with no luck. Use your observation of your competitor as a learning exercise. - Some business people think rumors will help facilitate more business but such things shall be ignored. Remember not every business men are ethical. These tactics are only to divert the attention. Rumors and gossips eat up your creating time and make you less productive. Ignore such things and show that what they are spreading in the market does not stop your efforts on promoting your business. Such rumours are commonly appreciable to local small business. - One should focus on once business more intensely. Wherever one feels the punch (stress) about the competition or it hits the business, use that energy to put in some extra time working on promoting your business instead. Henry Ford, a successful name in automobile business in the world said it best, ―the competitors to be feared is one who never bothers about you at all but the one making business better all the time‖. The whole idea is – good to know what is going on in your industry, you can change your business strategy, so focus on them. These days companies aim is not targeting goods and services to masses. Instead they are trying to provide utmost satisfaction to the needs and wants of a well defined groups of targets customers needs and wants better that that of competitors. SESSION – II Competition Assessment A. Fill in the blanks: (1) Competition is the rivalry between firm selling_________ (2) Competition encourages limiting consumers ___________ (3) Business competitor‘s in business set up R&D Centre for ________ (4) In competition there are at least_______________ B. True or false. (1). In a competitive market the competitors should remain well informed about the competitor‘s tactics. (2) Rumours and gossips are important component of competition. (3) Henry Ford was in Scooter manufacturing business (4) Coca Cola and Pepsi Cola are not competitors. Answer: 1. True, 2. False, 3. False, 4. False. Assessment: (1) Are these firms‘ competitors? - A B and C firms sell clothing, food and toys. - All these firms offer low prices. (2) Do the following business compete in the market for the same customers? - Pizza Hut selling Pizza and burgers. - Bata shoe sells boots and sneakers. (3) Can you suggest five competitive businesses in your community? How do you know that they are? (4) Do a sweet seller, car repair workshop and chemist shop compete in the same market? If not, who does compete in those markets? (5) A business transaction entered into under threat cannot be called exchange. Why? PRODUCT MARKET Product Market: In order to satisfy their needs and wants, people require products. A product is a set of tangible and intangible attributes that can be offered to someone to satisfy a need or want. For example, if one purchases an orange to satisfy one‘s want, the orange is called a product. Thus product is anything that can be offered to market for attention, acquisition (ownership), use or consumption. A product is the sum of the physical and psychological satisfaction it provides to the buyers. A product market consists of all potential and existing consumers sharing a particulars need or wants who might be willing and able to engage in exchange to satisfy their needs or wants. In simple words, product market is where products produced by business houses are sold to households. The households use the income that they earn from different occupations or vocations to purchase the product they need or want. (1) These products includes (1) the fast moving consumer products and (2) durables products. For example vegetables, groceries, milk and edible oils are consumer goods etc., whereas A.C., Washing Machine, Steel Furniture‘s, and T.V. etc. are called durable products. Product marketing is a sub field of marketing, which can be split into true areas i.e. product market and service market. In contrast services market includes services such as telecommunication services, health care services, car rental services etc. But they do not take, normally ownership of any physical element involved (we shall discuss service market after the product market). Product market is a dynamic exchange system defined by sellers, products and customers. In its simplest form, a product market is a single seller providing a single offering product to a single customer. But, the position will change as the number and diversity of competition increases, as the number of diversity of products/increases and the number and diversity of customers also increase. In such a situation product market is synonymous with industry, with multiple competitors offering diverse portfolios of offering (products) that will satisfy the diverse needs of multiple segment market. It suggests that in such a complex situation, a meaningful product market analysis has to done to know the clear picture of the target market i.e. where our product is sold and that of competitors products are sold. Accordingly, the competition strategy will change. The product has to be designed, developed and priced keeping in mind the diverse competitions and the products offered by the competitors in the market. In the product market there are direct competitors and indirect competitors. - Direct competitors are those who use the same technologies to deliver comparable products i.e. a single product market. - Indirect competitors are those who use different technologies to deliver substitute products. It means product market differently for different level of strategic decisions making. Geographic markets and types of channels used to reach the customers are also considered in defining a product market. For example, soft drink companies like Coca- cola and Pepsi create different products that satisfy the beverage preferences of different global market. In super market large bottles are also available whereas in small retail stores single small bottles also can be purchased. (Sufficient for one time drink). A product market will have to take into consideration Four P‘s i.e. Product, Price, Place or Promotion and several other variables such as quality, availability, brand or trade mark, styling packing and regulations in order to satisfy the needs of the consumers. Take the example of raising excise duty on the production of Cigarettes. The production cost will increase due to this regulation. It will also affect price directly or indirectly. But the existing buyers will not switch over to other product if price rise is not significant or find a next best substitute. A product has great importance also in all other areas of market management. Therefore it is necessary to plan and develop products which meet the specification of the customers. For example, market research is mainly directed to-wards knowing the needs of the customers and increasing the sale of the product. Also the storage and transport activities depend upon the nature of product. For example for poultry products, milk products, and perishable vegetables etc. one has to maintain cold storages facilities. Thus the success of marketing and sales deptt. depend upon the nature of the product offered to the customers in the market. PRODUCT MARKET: Assessment: A. 1. Do you agree that; (yes/no) A product is a set of tangible attributes that can be offered to any person to satisfy a need or wants. 2. Product cannot be stored for a longtime. 3. Transfer of ownership can be done for a product. 4. Products can be mass produced and be homogenous. B. 1. The product concept holds that consumers will favour those products that are widely available at low cost. 2. We are to produce that product which customers wants and not what we can sell. 3. Change in price of the product may shift the customer to other substitutes. SERVICE MARKET Definition and meaning: In the earlier sub-unit we have discussed about the marketing of physical products which are tangible in nature. Basically, services are intangible, irreparable, variable and perishable products. They do not have physical existence. Hence, services cannot be touched tasted or smelt. For example, you purchase a chocolate or buy a banana, you can touch it and eat it because it is tangible in nature whereas you cannot touch or eat services offered by an insurance company or a bank or a post office. Definition: ―A service is an act of performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product‖. According to the American Marking Association - Services are activities, benefits, or satisfactions which are offered for sale or provided in connection with the sale of goods. For example, transportation service by carrier of goods or insurance of goods by an insurance company. Service marketing is an organizational function and a set of process for identifying or creating communication and delivering values to customers and for managing customer‘s relationship in a way that benefits the organization and stake holders. If analysis above definitions then few important characteristics of services market will emerge: Nature and characteristics of services: Intangibilities in Nature: Services are intangible and do not have physical existence. This is the most important feature of a service which primarily differentiates with product. For example, services rendered by a lawyer to client. He may or may not be happy or satisfied with the quality of the services of the lawyers that is a different matter. Similarly a patient may not be satisfy with the performance of the end result of the doctor. Service Variability: Services vary in nature. Each service offering is unique and cannot be exactly repeated even by the same service provider. Their quality and level of satisfaction delivered to customer also varies from one situation to another. For example, these days banks provide various schemes and financial services to customers to mobilize there savings and to attract customers for investment in these schemes. Similarly, travel and tourism agencies firms/operators design tour packages for different customers groups with different objectives or motives. But it is not necessary that every customer or member of the group is satisfied with the package of services. For some group members it may be uncomfortable experience or for some it may be expensive. Service Perishability: Services cannot be stored, (like product saved, returned or re- sold) once they have been used. For example, you go to a hair cutting saloon for your haircut but you are dissatisfied with the services of the saloon. Obviously, the saloon owner cannot return the service of the haircut that was rendered to customer. Similarly during winter season or rainy season most of the seats in aircraft may remain empty – cannot be saved to be used for the next flight. Simultaneous generation of service and its consumption: This characteristic is that services are attached to the service provider. It means that services are generated and consumed by a customer simultaneously. The above example of haircut by a saloon barber shows that service provider (saloon barber) is providing the service to the customer who is always present and the provider (barber) and customer interaction becomes the essential part of service marketing i.e. Barber is necessary a part of the service of a haircut that he or she is delivering to the customer. It raises a very valid question i.e. the efficiency with which the services is going to be delivered depends to a large extent on the degree of satisfaction delivered by the service provider to the customers. Service users: The users of services may be called client (for a lawyer). One engages a lawyer to fight a case in the court of law. It is a relationship between a client and a lawyer. A patient (for Doctors), A Master (for Domestic servant). Users of services may be an individual or an institution or a group. For example, Group Insurance Scheme of LIC for Employees of Central Government or CGHS health scheme for the Employees Central Government through approved Hospitals/ Clinics. The Central Government employees are to be called users of such facilities. Service Payment: Services rendered are paid in the form of fee, charge or rent. The user or client can also pay to the service providers as commissions, premium to an insurance company for insurance policy and salary for hiring the staff. Service charges also depend on the qualities of service and the staff responsible. Alternative View: Services are (usually) intangible economic activities offered by one party to another. Often time based services performed by the service providers bring about desired results to the recipient (customer) for which purchasers have responsibility. In exchange for money, time and efforts, service customers expect value from access to facilities, goods, labour, professional skills and network system etc., but they do not normally take ownership of any physical elements. For example, – take a cab on rent, as customer you obtain temporary ownership right to use the car. Similarly, you can hire a servant for cleaning the house instead of doing yourself as you lack expertise or skills. Sometimes you hire a driver to drive the car as you can‘t drive. This is also an important view that services involve a form of rental through which customers can obtain benefit of services. Here the term rent, can be used as a general term to describe payment made use for something or access to skills and expertise, facilities instead of buying it outright which is not even possible in many insistence. These days service sector is contributing a lot towards the economic growth and development of India. Services have become necessary as they provide in valuable and immense services to people, government and manufacturing sectors. In future demand of service marketing in India will grow if quality services are provided to customers and consumers. Marketing mix for services: In earlier unit we have discussed the marketing mix for goods or products i.e. 4P‘s – Product, Price, Place and Promotion. Now, we talk about the marketing mix for services. Here three more P‘s are added in the list – People, Process, and Physical environment along with 4P‘s. People: Customers always look for efficient service. This can be provided by the people who are employed in the organization. Let us take the example of the hotel where customers are using its services will ultimately form their opinion about the hotel on the basis of services which are provided to them by the hotel staff. If the staff is well trained, efficient and committed they can build a good reputation of the hotel. Process: These days home delivery service system has become popular among the consumers/customers. A large number of restaurants and super markets serve the customers through online orders. They process your order(s) within a specific time frame. For example, well reputed Pizza restaurants deliver pizza or hamburger order to customers within 30-40 minutes only as they have efficient processing mechanism and technology both for processing the preparation and for its timely delivery. Physical Evidence: Taking the above examples of hotels and restaurants, the customers also take into account the physical environment of the place. For example, if you visit a restaurant, besides menu options available, you will be very much concerned and about the hygienic standard, ambience and service by the staff. Types of Service 1. Core Services: A service that is the primary purpose of the transaction. Eg: a haircut or the services of lawyer or teacher. 2. Supplementary Services: Services that are rendered as a corollary to the sale of a tangible product. Eg: Home delivery options offered by restaurants above a minimum bill value. Difference between Goods and Services Given below are the fundamental differences between physical goods and services: Goods/Products Services A physical commodity A process or activity Tangible Intangible Homogenous Heterogeneous Production and distribution are separation Production, distribution and from their consumption consumption are simultaneous process Can be stored Cannot be stored Transfer of ownership is possible Transfer of ownership is not possible REVIEW QUESTION Assessment Answer in four – five lines (1) Explain the concept of service marketing (2) List of few important services available to customers. (3) Under what cases the term rent is used as payment for service. (4) Why are services perishable in nature? SESSION IV Services Marketing A. State whether the following statements are true and false. (a) Services are intangible economic activities offered by one party to another. (b) Services do not have physical existence. (c) Service, can be smelt and touched. (d) Can you separate a service from the service provider? Answer: 1. True, 2. True, 3 False, 4. False. B. Services cannot be - (a) Stored (b) Re-sold (c) Measured (d) Non of the above. C. (i) List three important services offered by Government. (ii) List out two unique feature of services. (iii) Name the various P‘s of service marketing mix. D. i. Define the word ‗service‘ and its features. ii. Marketing of services is different than marketing of product‖. Do you agree? Give suitable examples. iii. Name any two important services by business houses. iv. Why services are perishable in nature. v. State three P‘s in service marketing. UNIT III Basic Concept of Sales and SELLING Learning Objectives (a) Describe the concept of Selling (b) Understand the importance of acquiring selling skills (c) Explain the various types of Selling (d) Identify the various types of Selling tasks (e) Appreciate the role and importance of Selling intermediaries Location: Session 1 Concept of Selling Classroom, Learning Knowledge Performance Teaching and retail store or Outcomes Evaluation Training Method Mall or local Evaluation vendor or Online websites 1. Describe the 1. Describe the 1.Identify a selling Interactive Lecture: concept of Selling importance of selling in 2. Find out the Introduction to Selling marketing requirements of an effective selling Activity: 2. Explain how Make a PowerPoint selling is important presentation on part of marketing selling of product in market Interactive Lecture: Selling 1. Learn to apply 2. Identify the the various features 1. Explain the characteristics of of selling various features of selling Activity: selling 2. Identify the scope of selling in Pick up a product of 2. Understand actual business your choice and broader scope of world identify how the selling product is being sold in the market. Location: Session 2 Types of Selling Classroom, retail Learning Outcomes Knowledge Performance Teaching and store or Mall or local Evaluation Training Method vendor or online Evaluation websites 1.Describe the 1. Explain the 1.Understand Interactive concept of types of importance of application of Lecture: selling different types of different selling types selling Introduction to 2. Analyse how a types of Selling product can be sold using different selling Activity: types Make a presentation on the importance of selling types 1. Comprehend 1. Classify the Interactive 2.State the various the difference in various types of Lecture: types of selling the various selling selling used to sell tasks Selling types products and services in the 2. Understand that Activity: market different types of 2. Differentiate selling techniques between the different Give a list of used by marketer types of selling products to the students and ask them to identify different selling types used is selling the products Location: Session 3 Selling Tasks Classroom, Learning Knowledge Performance Teaching and retail store Outcomes Evaluation Training Method or Mall or Evaluation local vendor or 1.Describe the 1. Explain the 1.Understand Interactive online concept of importance of how to use Lecture: websites Selling tasks selling tasks selling tasks Introduction to 2. Analyse how Selling tasks a product can be sold in the Activity: market through Make a different selling presentation on tasks the importance of selling tasks in selling 1. Comprehend the difference 2.State the 1. Classify the in the various Interactive various selling various selling selling tasks Lecture: tasks tasks 2. Understand Selling Tasks that different types of selling 2. Differentiate Activity: tasks used to between the sell products in Identify a product different selling the market or service from tasks the market and different selling tasks used to sell the product or service in the market Location: Session 4 Intermediaries of Selling Classroom, Learning Knowledge Performance Teaching and retail store Outcomes Evaluation Training Method or Mall or Evaluation local vendor or 1.Explain the 1. Describe the 1.Understand Interactive online concept of importance how Lecture: websites intermediaries intermediaries intermediaries in selling make selling Introduction to possible Intermediaries 2. Analysing Activity: 2.Explain the how a role of selling Make a intermediaries intermediaries presentation on work the concept of intermediaries 1. Explain the 1. Classify the 2.State the various types various various types Interactive of selling intermediaries of selling Lecture: intermediaries intermediaries 2. Understand Types of selling that different 2. Differentiate intermediaries types of between Activity: intermediaries different and how they intermediaries Choose a product interact with according to or service of your each other their functions choice and identify what kind of intermediaries are selling the product in the market Session 1 Introduction Existence of business would be in danger, had there been no sales. It probably wouldn‘t exist for long! If producer has produced the goods but not selling the same then what would be the purpose of producing the goods. Therefore, the common thing among every business is ―selling‖ i.e. goods and services must be sold in order for business to exist. The basic purpose of producing the goods or services would be defeated if no one is ready to buy them. For example, if cars are not demanded then cars will not be produced. If people don‘t need mobile phones then why would companies produce mobile phones? Similarly, if no one ever went to the movies, the theaters would go out of business. The point here is that all goods and services must be sold by businesses otherwise businesses would vanish. Existence If Selling of Goods of Production and Services is done Business Demand of of Goods Goods and Services If Selling of Goods Business and Services is not will not done exist Figure: Why to Sell? Concept of Selling Selling is a one of primary function of marketing that involves determining needs of customers and wants and aims at responding through planned, personalized communication that influences decision making of customers and provides more opportunities of business in future. Selling is planned and sometime customized because in today‘s world of cut throat competition it is necessary to provide customized services to customers. It goes way beyond mere order-taking or customer service. Features/ Characteristics of Selling: 1. Selling enables the buyers and seller to undertake a business transaction. 2. Selling is a form of communication to inform prospective customers about the utility of product and making the product available at the right time at the right place. 3. Selling helps customers to determine their needs. Selling creates two-way communication between customers and salespeople. 4. Process of selling enables customers to receive help with their buying problems. Therefore, it can be said that through selling customers can determine their needs and can select products that are right for them. 5. Selling creates desire for products. Skilled salespeople can create desire for new or established products. They do this by determining clients‘ needs, wants, and buying motives. Then, salespeople explain product features and benefits to clients and heighten their desire through the use of demonstrations. For example, if you know a business is looking for a software program that will help its accounting department manage data and save time, you could talk about how your company‘s easy-to-use software will make the accounting staff‘s lives easier. Since you understand the company‘s buying motives, you would be sure to focus on the time-saving features of your product in your sales presentation. 6. Goods and services are sold for ultimate consumption, for resale, or for use in the operation of a business. Every business has something to sell—either tangible products or intangible services. 7. Selling can occur wherever person-to person contact is made, either directly to the consumer or indirectly through the use of intermediaries. 8. Selling helps in keeping our economy moving, promoting competition, affecting employment, adding utility, helping customers determine needs, and creating a desire for products. Hence, Selling plays an important role in our society and economy. Some people believe that selling is a manipulative process but in reality it is informative process that aims at solving the problems of customers. Scope of Selling Selling is an art that helps in making sales and generate profits for the concern. For that matter the salespersons should have perfect selling skills to be able to handle all types of customers. Selling different types of products to different types of customers require different types of skills. Hence, the scope of selling involves the following activities: i. To generate sales: The main purpose of selling is to generate generic sales for the organization. It involves planning the sales, making presentations, handling objections, closing the sale; deliver the products and collecting the payments. ii. To provide services to customers: Providing services to customers is also an integral part of selling. Providing management consultancies, repairs and maintenance, checking inventories, providing merchandise assistance, shelf- space management and so on. iii. Managing competitors: Gathering information about competitors, equipping one to face competition, having full knowledge about one‘s own product and customers etc. this helps the sellers to manage competition which is a part of their job. iv. Professional development: The art of selling needs to be polished with the change in business environment. For that participation in sales meetings and training programmes is mandatory in order to make selling personnel more knowledgeable and ready to afce challenges. Assessment A. Fill in the blanks: i) Selling is one of ………………………….. function of marketing. ii) Selling creates ………………………… for products. iii) Selling is not a ………………………….. process. B. Multiple Choice i.The scope of selling does not include a. Making sales b. Managing competitors c. Publicizing about the product d. Providing services to customers ii. Selling creates a. Need for product b. Marketing for product c. Desire for product d. None of the above iii. Selling is ………….. form of communication a. Planned b. Coordinated c. Personalized d. All of the above C. True or False a. Selling is same as marketing. b. Selling can be performed by unskilled people also. c. Selling is an informative process. d. Managing competitors is not a part of selling process. Checklist for Assessment Activity Use the following checklist to check whether your students could meet all the requirements for assessment. Part A i. What do you mean by Selling? Explain the characteristics of selling. ii. Explain the concept of selling in detail. iii. Why selling is important for an organization? iv. Explain in detail the scope of selling.? Part B Class Activity Ask the students to pick up a product of their choice and try to sell it in the class by applying the characteristics of selling. Part C Performance Standards The performance standards may include but not limited to: Performance standards Yes No The Ability to comprehend the concept of selling and be able to actually understand the characteristics or features of selling. Session 2 Types of Selling Selling is a process by which one person guides other people's purchase behaviour along a path in a desired direction, leading in the purchase of a product or service. Keeping in view the wide variety of selling activities, one can categorise the various selling activities into the following broad categories- i. Selling in local markets: The selling done at the local shops in a local or community markets. The local retailers sell the variety of products to the local public residing in a particular locality. Selling by vendors and pheriwallas also come under this category. Products sold are daily routine products like grocery, vegetables and toiletries. ii. Selling in Malls and Markets: This type of selling is done by the salespersons at various shops and malls. They possess better selling skills to convince the customers as people from far and wide places to come and buy from the markets and malls. Products sold are clothes, household products, shoes etc. iii. Selling through selected distribution outlets: Some products are sold through selected distribution outlets e.g. Cars, electronics. The salespersons selling in these outlets should have complete and thorough knowledge of the product being sold. Customers do a lot of research before buying such products. iv. Selling at customer’s workplace: For selling highly technical products, the salespersons have to reach out to the professionals and their organisations at their workplaces. This type of selling requires a lot of hard work and knowledge about the technical products being sold. This type of selling is targeted to the professionals like, doctors, teachers etc. Based on the above mentioned various types of activities; following types of selling can be identified: Types of Selling Direct Relationship Partnership Team Selling Selling Selling Selling Figure: Types of Selling 1. Direct Selling Direct selling is a commercial practice where products and services are sold by the producers directly to the consumers. Online selling, Network marketing, selling through televisions and direct mail are the examples of direct selling. 2. Relationship Selling Relationship selling is the practice of building ties to customers based on a salesperson‘s attention and commitment to customer needs over time. This type of selling may or may not lead to a sale as the purpose is to build relationships with the customers and nothing else. 3. Partnership Selling Partnership selling is where buyers and sellers combine their expertise and resources to create customized solutions; commit to joint planning; and share customer, competitive, and company information for their mutual benefit, and ultimately the customer. 4. Team Selling Team selling is a group of people representing the sales department and other areas in a firm, all sharing a common goal of increased sales. They do the selling job together. Assessment A. Fill in the blanks: i) Selling through a group of people is called…………………... ii) The products of daily use are sold in…………………... markets. iii) ………………….. selling refers to convince the customer to buy the product.. B. Multiple Choice i. Online selling is a form of a. Partnership selling b. Relationship Selling c. Direct Selling d. None of the above ii. Partnership selling is used to find e. Customised Solutions f. New customers g. New market h. All of the above iii.Which of the following type of products are generally sold at customer‘s workplace? a. Groceries b. Toiletries c. Highly technical products d. Bikes C. True or False a. Direct selling means face to face communication between seller and customers. b. Team selling refers to selling to a team of buyers. c. Selling guides the behaviour of customers. d. Cars and electronics can be sold through selected distribution outlets. Checklist for Assessment Activity Use the following checklist to check whether your students could meet all the requirements for assessment. Part A i. What do you mean by selling types? ii. Explain different types of selling types. iii. Explain difference between relationship selling and partnership selling. iv. Explain direct selling.. Part B Class Activity a. Ask the students to select a product and identify the selling type of the product. Part C Performance Standards 1. The performance standards may include but not limited to: Performance standards Yes No Able to understand the concepts of selling types and its application Session 3 Selling Tasks After understanding the various types of selling, one needs to understand the various selling tasks that a sales person might have to undertake for selling a product. The type of selling task they will have to undertake would depend on the type of product being sold and the amount of money involved in buying that product. Following are the various types of selling tasks: Selling Tasks Missionary Technical Creative Trade Consultative Developmental Selling Selling Selling Selling Selling Selling Figure: Types of Selling Tasks 1. Missionary Selling The missionary selling refers to build goodwill, educate and ultimately influence the actual or potential customer rather than focusing on sales only. Sales personnel who undertake this task just keep visiting the customers and keep them updated about the product besides taking up promotional activities. For example, a sales person occasionally visits doctors informing them about the new CT scan machine or simply to exchange greetings. 2. Technical Selling The technical selling refers to explaining the function of a product to a customer and adapting it to individual customer needs. 'Sales engineers' use their expert knowledge of product capabilities and design during selling process. Their customers on the buying side are also often technically very strong and hence getting an order is a major task. For example, a team of sales persons showing a presentation on the new CT scan Machine. In fact, missionary selling builds the base for technical selling. 3. Creative Selling Creative selling tends to require the greatest sales 'skills'. Customers often do not realise that they have a 'need' for certain product or service. The creative salespersons are expected to demonstrate their creative side and convince the customers. The need is aroused through effective communications. 4. Trade Selling In this type of selling, mostly found in the case of consumer products, the products are sold through channels of distribution/ intermediaries, such as, wholesalers and retailers. The intermediaries handle their products and sell them. They also offer promotional and merchandising support to the producers. 5. Consultative Selling The salesperson learns about customer needs before talking product. Product knowledge is transformed into a tailored solution when the solution is delivered and positioned based on the customer‘s needs and language. This is done where product customization is required. For example, a tailor making a suit for a customer or a barber giving a customized haircut to his customer or a car manufacturer making a car for his customer according personal needs. Houses are also built on consultative basis. 6. Developmental Selling The developmental selling aims to convert prospects into customers i.e. seeks to create customers out of people who don‘t currently like the product of the company. Here, the salesperson has to try hard to convert non-users of the products into users. They have to do competitive selling, that is, to use selling tactics that will portray his product better than the competitors‘ in all respects. Assessment A. Fill in the blanks: i) …………………..selling refers to explaining functions of the product ii) …………………... selling refers to building goodwill of the product iii) …………………… requires the use of creative skills of a salesperson. iv) ………………….. selling refers to convincing the customer to buy the product.. B. Multiple Choice i. Missionary selling is used to a. Educate build b. goodwill c. Influence customer d. All of the above ii. Consultative selling is used to e. Personalised solution f. Convert non-user to user g. Sell through channels of distribution h. All of the above C. True or False a. Developmental selling aims to convert prospects into customers b. Service selling refers to obtain sales from existing customers whose habits are already known to producer c. Trade selling refers to offering promotional and merchandising support. Checklist for Assessment Activity Use the following checklist to check whether your students could meet all the requirements for assessment. Part A i) What do you mean by selling tasks? ii) Explain different types of selling tasks. iii) Explain difference between missionary and technical selling tasks. iv) Give three differences between developmental and consultative selling. Part B Class Activity b. Ask the students to select a product and identify the selling tasks related to the product. Part C Performance Standards 2. The performance standards may include but not limited to: Performance standards Yes No Able to understand the concepts of selling tasks and its application Session 4 Intermediaries/Channels of Distributions Producers of products have two choices when selling their products – either they sell directly to the customers or through an intermediary. For a producer, it may be more appropriate to focus on manufacturing the products than to do selling himself. Selling to the customers requires specialized selling skills and a complex distribution network to deliver small quantities to customers in every nook and corner of a country. The intermediary charges a fee -- usually a commission based on the amount of the order. The advantage of selling through intermediaries is to tap into their already established network of customers Hence, it is wiser to assign the task of distribution to intermediaries. But it is equally important to choose the most appropriate intermediary or sales channel for the business to be successful so that the products reach the customers at right place and at right time. Intermediaries, also known as distribution intermediaries, marketing intermediaries, or middlemen, are an extremely crucial element of a company's product distribution channel. Without intermediaries, it would be impossible for the business to function at all. This is because intermediaries make it possible for the company to deliver their products to the customers who are residing over a vast geographical area. For examples, retailers sell the products in the local markets while the products are produced in the industries and factories located far away from the local markets. To make these products available, the services of retailers are used by the producers. Types of Intermediaries There are four generally recognized broad categories of intermediaries: agents, wholesalers, distributors and retailers. Figure: Types of Intermediaries 1. Agents/Brokers Agents or brokers are individuals or companies that act as agents of the manufacturing company. Their main job is to represent the producer to the customers in selling a product. They do not own (or take title of) the product directly but they take possession of the product in the selling process. They make their profits through fees or commissions. 2. Wholesalers Unlike agents, wholesalers take title (ownership) of the goods and services that they are selling. That means that they own the products that they sell. Wholesalers do not work with small numbers of product: they buy in bulk, and store the products in their own warehouses and storage places until it is time to resell them. Wholesalers rarely sell to the final customer; rather, they sell the products to other intermediaries such as retailers, at a profit. Thus, they do not operate on a commission system, as agents do but on profit basis. 3. Distributors Distributors function similarly to wholesalers in that they take ownership of the product, store it, and sell it off at a profit to retailers or other intermediaries. However, the key difference is that distributors ally themselves to complementary products. For example, distributors of Coca Cola will not distribute Pepsi products, and vice versa. In this way, they can maintain a closer relationship with their suppliers than wholesalers do. 4. Retailers Retailers come in a variety of shapes and sizes: from the corner grocery store, to large chains like Wal-Mart and Target. Whatever their size, retailers purchase products from market intermediaries and sell them directly to the end user for a profit. The following figure shows the various levels/chains of distribution that a producer can opt for to make the product available to the customers. The producer can opt for any one of the following chain depending upon the nature of the product and the customers. Producers Producers

Marketing and Sales Class IX PDF - CBSE Exam

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