Basic Concept of Sales and Selling Class 9
You have studied about selling topic in class 7 also.
Concept of Selling
Selling is one of the primary functions of marketing concerned with determining needs and wants of the customers and responding through planned, personalized communication that influences decision making of customers.
Features/ Characteristics of Selling:
- Existence of business:
Selling enables the buyers and seller to undertake a business transaction.
Demand – Production – Selling – Satisfaction of Consumers – Existence of business.
- Information to prospective customers:
About the utility of product and making the product available at the right time at the right place.
- Helps customers to determine their needs:
Selling creates two-way communication between customers and salespeople.
- Solution to buying problems of the customers:
Through selling customers can determine their needs and can select products that are right for them.
- Selling creates desire for products:
Skilled salespeople can create desire for new or established products.
- Purpose of selling:
Goods and services are sold for ultimate consumption, for resale, or for use in the operation of a business.
- Selling can be direct or indirect:
Selling can occur wherever person-to person contact is made, either directly to the consumer or indirectly through the use of intermediaries.
- Economic development:
Selling helps in keeping our economy moving, promoting competition, affecting employment, adding utility, helping customers determine needs, and creating a desire for products.
Scope of Selling
The scope of selling involves the following activities:
- Generate sales: It involves planning the sales, making presentations, handling objections, closing the sale; deliver the products and collecting the payments.
- Services to customers: Providing management consultancies, repairs and maintenance, checking inventories, providing merchandise assistance, shelf space management and so on.
- Managing competitors: Gathering and using information about competitors to face competition, having full knowledge about one‘s own product and customers etc. helps the sellers to manage competition.
- Professional development: The art of selling involves participation in sales meetings and training programmes and be ready to face challenges.
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Types of Selling
On the basis of variety of selling Activities, Selling activities can be classified into 4 categories:
- Selling in local markets: The selling done at the local shops. The local retailers sell the variety of products to the local public living in a particular locality. Selling by vendors and pheriwallas, daily routine products like grocery, vegetables and toiletries come under this category.
- Selling in Malls and Markets: Goods are sold by the salespersons at various shops and malls who have better selling skills to convince the customers. Products sold are clothes, household products, shoes etc.
- Selling through selected distribution outlets: In this case products are sold through selected distribution outlets e.g. Cars, electronics. The salespersons here are skilled in their job. Customers do a lot of research before buying such products.
- Selling at customer’s workplace: In this case highly technical products are sold by the professionals and their organisations at their workplaces. This type of selling requires a lot of hard work and knowledge.
Types of Selling
Based on the above categories of activities; following types of selling can be identified:
- Direct Selling
Where products and services are sold by the producers directly to the consumers e.g. Online selling, Network marketing, selling through televisions and direct mail.
- Relationship Selling
Relationship selling means building ties to customers based on a salesman’ s attention and commitment to customer needs over time. There may or may not be a sale as the purpose is to build relationships with the customers and nothing else.
- Partnership Selling
Partnership selling is where buyers and sellers combine their expertise and resources for their mutual benefit, and ultimately the customer.
- Team Selling
Team selling is a group of people representing the sales department, sharing a common goal of increased sales. They do the selling job together.
Basic Concept of Sales and Selling Class 9
Types of Selling Tasks:
The type of selling task would depend on the type of product being sold and the amount of money involved in buying that product.
- Missionary Selling
The missionary selling refers to build goodwill, educate and ultimately influence the actual or potential customer rather than focusing on sales only.
- Technical Selling
It means explaining the function of a product to a customer and adapting it to individual customer needs. Missionary selling builds the base for technical selling.
- Creative Selling
It is the greatest of sales 'skills'. Customers often do not realise that they have a 'need' for certain product or service. The need is aroused through effective communications and creative skills of the salesman to convince the customers.
- Trade Selling
Mostly found in case of consumer products, the products are sold through channels of distribution/ intermediaries, such as, wholesalers and retailers. They also offer promotional and merchandising support to the producers.
- Consultative Selling
Consultative Selling is done where product customization is required. The salesperson learns about customer needs before the product is delivered based on the customers' needs and language.
- Developmental Selling
The developmental selling aims to convert prospective customers into customers. Salesperson has to do competitive selling, that is, to use selling tactics that will portray his product better than the competitors in all respects.
Basic Concept of Sales and Selling Class 9
Intermediaries/Channels of Distributions
Producers can sell their products directly to the customers or through an intermediary.
The intermediary charges 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 and products reach the customers at right place and at right time.
Intermediaries make it possible for the company to deliver their products to the customers who are residing over a vast geographical area. Without intermediaries, it would be impossible for the business to function at all.
Types of Intermediaries
Broad categories of intermediaries are agents, wholesalers, distributors and retailers.
- Agents/Brokers
Agents or brokers are individuals or companies that act as agents of the manufacturing company to represent the producer to the customers in selling a product. They do not own the product directly, but they only take possession of the product till sale. They earn commission.
- Wholesalers
Wholesalers 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 till sale. Wholesalers rarely sell to the final customer. Normally, they sell the products to other intermediaries such as retailers, at a profit.
- Distributors
Distributors are similar to wholesalers in the matter of ownership, storage and sale of products at a profit to retailers or other intermediaries. But the main difference is that distributors limit themselves to complementary products.
- Retailers
Retailers are of various types: 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.
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Levels/Chains of Distribution
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.
Find Mind Map for Channels of Distribution and Factors affecting Channel of Distribution.
Functions of Intermediaries
The intermediaries perform a variety of specialized functions.
- Specialized services like transportation, storage and other customer support services.
- Help in providing economies of scale through specialization and division of labour.
- Help in creating time, place, and possession utilities.
- Facilitate exchange processes.
- Help in promoting the products.
- Direct contact with the customers thus play an important role in selling.
Online Intermediary Models
Affiliate marketing, in which commissions are paid to agents who may also promote products on their own websites, is an effective alternative for some producers.
Online stores such as Amazon can take over many intermediary functions but may only pay you when your products are sold.
Many producers stick with traditional intermediaries but open a parallel online channel to experiment with new sales models.