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THE EFFECT OF PERSONAL SELLING ON MARKETING PERFORMANCE OF INDUSTRIAL PRODUCT

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND TO THE STUDY

Udeagha (1999), defined personal selling as a process of conversing the sale of a company products or service by salesman or woman, it is a dynamic process involving direct contract between the seller of a product or services and the prospective buyers through oral or face to face or telephone discussion or written mail exchange of ideas through opinion. Luncaste rand Messinghen (2002), simply puts personal selling as involving oral presentation in a conversation with one or more purchasers for the purpose of making sales. No doubt we can decompose personal selling as involving oral communication between a seller and a buyer. Personal selling has the intention of creating exchange. Personal selling can be beneficial to both seller and buyer. It can also help in discharging need states to create satisfaction.

Kotler (2004) avers that personal selling is the most effective tool at later stages of the buying process, particularly in building up buyer preference, conviction, and action. He identified three (3) distinctive qualities. 

Personal Confrontation: Personal selling involves an immediate and interaction relationship between two or more persons, each party is able to observe the other’s reaction at close range.

Cultivation: Personal selling permits all kinds of relationship to spring up, ranging from a matter of fact selling relationship to a deep personal friendship sale representatives will normally have customer’s best interest at heart.

Response: personal selling makes the buyer fell under some obligation for having listened to the sales talk.

Stanton (1981) in making a deep analysis in to personal selling vis-à-vis other promo elements argues that the goals of all marketing efforts is to increase profitable sales by offering want satisfaction to the market over a long run. Personal selling is by far the major promotional method used to reach these goals. The number of people employed in advertising is in thousands. In personal selling the number is in millions. He argued further that in many companies, personal selling is the largest single operating expense, often equaling 8 to 15% of net sales.

Expenditure for sales peoples salaries, commissions, and the expenses of managing these sales people all add up to a tidy sum. To develop, maintain and  sustain a competent team of sales personal needs high degree of investment (money, time, energy, etc) in all the nation’s in general and developing ones in particular like India (skiera and Albers), 2008). This investment is huge and claims a lion share of marketing budget in the case of any brand belongs to any product category in any type of industry.

Menchande and Chintagunta (2004), the costs of recruiting, training, developing and developing a professional team are all time high-(Cespedes, 1990, (Erevelles et al 2004) further, the personal Selling element is the most expensive mode of communication among all the efforts in marketing mix on a straight cost-per contact basis in all sectors (Murthy and Mantrala, 2005). In addition, the sales personnel turnover ratio is continue to be high due to their low level of organizational loyalty added substantial costs to maintain a competen sales force team (Jackson et al., 1994, sager et al., 1988, 19989). Previous studies suggest that the managers have been investing resources in personal selling effort due to its versatility of application on different activities simultaneously (Thevaranjan and Joseph, 1999). Moreover, personal selling usually offers a relatively quick response of sales as compared to other efforts as well as it may not have to be adopted in the contexts of dynamics environment, customers and trade-partners requirements (Cardozo and ship, 1987) cravens et al 1990, plank and Dempsay, 1980, verbeke et el., 2004). Further response is intending to increase in sales sometimes but do not always profitable (power, 1989, person and Abeele, 1981). The selling effort is sometimes failed to generate desired response because there might be a lack of adequate support from the top management, customers, situational variables as well as the difference between self-reported past performance and self-generated expectation of future performance (Decarlo et al, 1999, 2007) Ingram et el, 1992, Jaramillo and Mulki, 2008) Krishna et el, 2002, Roberts et el, 1994).

Personal selling is a branch of marketing that is also broad which is expedient for continued existence of every marketing company. Most marketing organization today does not take into consideration the impact of personal selling; it has to do with person – to person of communication of which an immediate feedback is provided to the audience. To achieve and gain more customers personal selling needs to be strategically planned to be effective in today highly competitive market place. The tactics implementation of the selling strategy takes place in a process according to Adirika (1998:19). Preparation, prospecting, qualifying, pre-approach and planning, approach, presentation and demonstration, trial closing, handling objective follow up and post sales activities.

Personal selling as known as a matter of persuasion i.e persuading others to buy your proposition, when we persuade people we do not merely change their thinking on the subject, we crass them to do something, their actions are modified as well as their thought. People are motivated by their desire for the benefit you offer them, therefore every sales presentation must convince them. In the same view of Edoga and Ani (2000, 293) personal selling serves major roles in firm over all marketing efforts, sales people are the critical link between the firm and its customers, this role requires that sales people match company interest with customer needs to satisfy both parties in the exchange process. In the eyes of consumer they represent what a company attempt to be and affair the personal contract, a customer has with the company.

Odo (2003) noted that for personal selling to be effective the personal salesman has to have an in-depth product knowledge which is indispensable in handling the highly technical and professional customers that abound in the industrial sectors. In communicating face to face with these customers, the industrial salesmen use such aids less calendar, cardholders and other small gift items as reminders to the customer of himself, his product or service offering.

General steel mill and General pipe industry is located at Asaba. The company products and marketing building rode, build wire, pipe, cooking gas e.tc. The company markets its product through the industrial sales persons. The importance of these sales people in information gathering and selling functions need not to be over emphasized. It is in the realization of this that the researcher critically looks at the effectiveness of personal selling in the marketing of industrial products.

1.2     STATEMENT OF PROBLEM

Most times, most companies be it large or small do not realize that personal selling is part of the marketing team and that, identify them. It is the key to continuous existence of any organization. Also it was observed that this problem is worsened by the fact that some of the sales persons are half back and lack the ability to express their sales properly and also lack the ability to possessing self-confidence. Furthermore, it was observed that sales people are not good listeners and do not listen to customers complaints. And also do not consider the customer analysis; aid the handling of objections, ignored. General steel mill and general pipe industry in Asaba is not an exception because their sales people lack adequate training and motivation which will help them to perform well on their job.

The company, which started very well, is now faced with competition that is fierce and cut through couple with the income of the customers of General Steel mill and General pipe industry in Asaba, thus no doubt have impacted negatively on sales of the comparing. This research work is focused on the marketing of industrial product by personal selling specifically General Steel mill and General Pipe Industry in Asaba Delta State Nigeria.

1.3     OBJECTIVES OF THE STUDY

The main purpose of the study is to appraise the effectiveness of personal selling strategy on the marketing of industrial product using General Steel Mill and General Pipe Industry as company, other objectives are:

1.  To determine the effectiveness of personal selling strategies in the marketing of industrial product in General Steel Mill and General Pipe Industry.

2.  To determine the contributions of personal selling to the total sales volume.

3.  To aware whether the sales forces are properly motivated.

4.  To assess the condition training of industrial sales men.

5.  To what extent selling impacts on the profit of the company.

6.  To assess the problem encounter by sales representative in the course of doing their job.

1.4     RESEARCH QUESTIONS

1.  In what ways does personal selling strategy affects the marketing of industrial products?

2.  How could personal selling influence the increase in sales volume and not profit of industrial products?

3.  What are the benefits of sales representative in the marketing of industrial products?

4.  What are the problems encounters by sales representative in their personal selling effort?

5.  In what ways does your organization organize training for sales representative?

6.  What types of motivation are given to industrial sales man?

1.4     HYPOTHESES FORMULATION

To give focus to this study the following hypotheses were formulated.

Ho:    Personal selling activities of Ememite Nigeria are not effective in creating customers awareness of their products.

Hi:     Personal selling activities of Ememite Nigerian are effective in creating customers awareness of their products.

Ho2:   Personal selling activities of Ememite do not lead to increase sales.

H2:     Personal selling activities of Ememite lead to increase sales.

Ho3:   Personal selling activities of Emenite do not impact positively on the profit of the company.

H3:     Personal selling activities of Emenite impact positively on the profit of the company.

1.5     SIGNIFICANCE OF THE STUDY

The researcher considers the study very significant on the following bases.

The consumers and customers of Emenite will benefit from the study since if the recommendations of the research are carried out, it will help the company serves them better.

Furthermore, the significance of this study is that it helps the researchers to understand and be able to differentiate between the ordinary sales person and the professional salesperson and to other research as a topic for continual research work in the field of study.

The finding of the study will enable the industries specifically Emenite Nigeria Plc Enugu to solve their sales problem and correct whatever mistakes they have made or are still making inline with their business operations.

From the result of the findings individuals or firms prospecting to go into industrial product production or investment who are interested in investing their money in industrial production will have additional information on personal selling as a channel or sales of industrial product.

1.6     SCOPE OF THE STUDY

The research for this study would have been nationwide but due to time and other constrain, it was limited to Emenite Nigeria Plc Enugu. 

1.7    DEFINITION OF TERM

INDUSTRIAL PRODUCT: These are those product  brought by individual and organization for  further processing or  for  use in conducing a business.

PERSONAL SELLING: This is that aspect of the total promo tool which makes possible the occurrences of direct personal communication between the organization and its prospective buyer for the purpose of faciliting exchange.

CONSUMER PRODUCT: consumer products are those good and service used by the ultimate consumer for satisfying his personal and non business needs such product   could be tangible or intangible durable and non durable products.

SALES PROMOTION: this can be defined as the use of short term inducement of value offered to stimulate interest in buying a good or service.

PUBLIC RELATION: it is a too that established in enduring  relationship between the organization whether company private or public association institution or government department or whole range of public stockholders  customers employers. Etc.

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