Organizational Buying Process and Sales Presentation - Book Report/Review Example

 Organizational Buying Process and Sales Contents Contents 1 Introduction 2 Factors Done Correctly 2 Analysis of the selling process 3 Analysis of the buying process 3 Recommendations 5 Summary 6 References 7 Bibliography 8 Introduction In the contemporary times business competition has increased significantly. In order to cope with the competition in an effective manner it has become extremely important for the sales department of the companies to perform in a productive manner. The present case study deals with a case of selling failure by a sales representative of a leading company Cloverleaf plc. The case study is based on the chronological series of events that had occurred from the point of first call received by the sales representative Mr. Goodman to the point of cancellation of the deal. The purpose of this paper is to focus on the probable reasons that had caused failure of the deal. The theoretical framework of “right set of circumstances” theory, “Buying Formula” theory has been used in this paper to discuss the reasons for failure. The recommendations for future improvement are provided in the last segment. Factors Done Correctly Based on the case study it can be argued that the following factors were done correctly: Firstly, Mr. Goodman was organized and professional in his approach towards the selling process. He never failed on his commitment to meet the key persons during the sales deal and had presented himself in an appealing manner. Secondly, Mr. Goodman was completely aware about the offering of the product made by his company Cloverleaf plc and confidently presented all the additional features that the new bottling machinery could offer to the clients. Thirdly, it was observed from the case study that the salesperson had made an earnest attempt to quote the price of the product. He had consulted his senior Mr. Bull during the price negotiation process in order to quote the most effective price. Finally, the overall behavior and the effort put by Mr. Goodman were also formidable as is evidenced from the letter that was received by Mr. Goodman from Mr. Bernard despite the inability to close the deal. Analysis of the selling process The right set of circumstances is also known as the situation response theory. According to this theory prospects are unpredictable and they behave differently under different circumstances. This theory predicts that successful selling by the salesperson depends on capturing the attention of the customer by creating the right set of stimuli. Both internal and external factors dominate the selling procedure. The attempt of the salesperson and the remarks are considered as the external factors and the desire and mindset of the clients forms the internal factors (Vashisht, 2006). In the case of John Goodman it was found that enough attempts were not made to take care of internal factors. The salesperson did not make any effort to create friendliness with the prospect. In all the meetings a professional stance was maintained that could be equated to lack of external factors. It can be stated that the Mr. Goodman lacked empathy and did not think from the customer’s point of view. This is primarily the reason that prevented Mr. Goodman from adjusting to the feedback he received from his prospects. Mr. Goodman starched the selling process too long that had ultimately led to canceling of the deal. It can also be argued that Mr. Goodman could not create the correct set of stimuli for his prospects because he did not deliver impressive interpersonal skills. It has been found out in the sales literature that listening skills of salesperson were far more important than their talking skills (H. M. Greenberg & J. Greenberg, 1980). Empirical studies conducted on leading organizations have revealed that efficient soliciting by the salesperson allows them to confer to the customer needs (Dubinsky, 1999). In the given case study it has been observed that during the selling process the salesperson was too heavily persistent on delivering the prepared sales pitch. He did not allow the customer to speak adequately which may be one of the reasons that has resulted in his failure. There is no evidence of questions that were being asked to the prospects and Mr. Goodman was in a hurry to explain the product features. Analysis of the buying process The buying formula theory can be applied to analyze the purchasing process of Commercial SA. The buying formula theory describes the process of selling by considering the viewpoint of the buyer. This theory states that the ideal role of the salesperson is to help the buyer find a solution to the difficulties face by the later. The internal factor in this theory is the mind of the buyer and the external factors includes the influence exerted by the salesperson to make the consumer purchase the product (Ingram, et al., 2007). In the given case study the buying process comprised of four key people namely production engineer, production manager, purchasing officer and technical director. The purchasing process required the interaction between the salesperson and these key personnel. It has been pointed out from the case study when the meeting with M. Artois, production engineer was arranged and the prospect had specified his requirements matches closely with the services provided by Hofstead Gm then Mr. Goodman had resorted to technical jargon in order to handle the situation. He was confident that the product offered by Cloverleaf plc was better but too much use of technical logic may have jeopardized the chances of sales and this problem could be equated with the classic “Buying Formula” theory of selling (Ingram, et al., 2007). According to this theory the salesperson should make more effort in making the prospect to realize the need in the first place. If Mr. Goodman was able to create the need in the mind of the prospect then it could have helped him. For instance, Commercial SA had a huge reputation in terms of technical excellence and innovation. Mr. Goodman should have pointed out that eventually Commercial SA could result in greatly enhancing their manufacturing process by reducing the time needed for bottling as the product offered by Cloverleaf plc was 10 times faster than his competitor. It can also be argued that Mr. Goodman had been incompetent in terms of making his prospects realize the urgency of buying the product from Cloverleaf plc. A robust argument could have been made in favor of the purchase. This is because Commercial SA is one of the industry leaders and it was embarking on expansion. If competitors of Commercial SA purchased the product from Cloverleaf plc and reduced their production costs, as was claimed by Mr. Goodman in terms of reliability and speed of the machine, then they could become tough competition for Commercial SA. Realizing this urgency could have helped Dr. Leblanc in changing his mind about the purchase of the product. It has also been stated in the case study that the products offered by the major competitors were unreliable in terms of quality. Greater market research of Hofstead Gm should have been done to specify the instances where the bottling machinery equipment had failed to deliver a promising performance. Failure of the machinery implies that a significant cost has to be borne by the buying organization to restore the assembly line function. Commercial SA was thinking of expansion and purchasing unreliable product would have created negative financial returns for the company. Additional emphasis and examples of unreliability of Hofstead Gm could have helped Mr. Goodman. This aspect could also be related to trade name of the buyers formula theory where the salesperson should make the prospect understand the reason for which a particular trade name is best among the available alternatives and ensures the buyer maximum satisfaction (Lynch & De Chernatony, 2004). Recommendations The following recommendations are suggested based on the mistakes that were made during the selling process. 1. It has been observed that the sales person was not able to convince the prospect regarding the value of the product. It is recommended that Mr. Goodman could have generated financial value for the customer. It has been observed that prospects are more willing to buy products if they sense a financial gain is associated with the deal. Researchers have shown that purchase of higher quality products can significantly reduce the cost and thereby price of an organization’s products (Miles & Covin, 2000). Based on this argument it can be argued that pointing out to the long term financial need of Commercial SA could have influenced Dr. Leblanc. 2. Mr. Goodman was successful in establishing the fact that the product offered by Cloverleaf plc exceeded the functional value of the client’s expectations yet he could not convince the client to buy his product. Mr. Goodman could have linked the aspect of added functional value with the financial gain obtained from the product and this could have convinced the customer. Researchers have shown that creating value for customer provides competitive edge to the organization (Woodruff, 1997). 3. Listening skills of salesperson can be identified as one of the strongest factors that raise the potentiality of sales. Listening has been identified as a cognitive process of evaluating, sensing and interpreting both verbal and non-verbal communication of the prospective client (Ramsey & Sohi, 1997). Based on this logic it can be argued that probing further to the needs and long-term vision of the clients and listening to their ideas could have resulted in sealing the deal. 4. Enhancing empathy on the part of the salesperson has been found to be a formidable factor that increases the probability of occurrence of sales. Empathy on the part of the salesperson is an important factor that stimulates consumer demand (Marshall, Goebel & Moncrief, 2003). Therefore Mr. Gooman should have been more empathetic as a salesperson to convince his prospective clients. 5. Finally, it has been observed in empirical research that creating urgency in the mind of the buyer often enhances the chances of sales. The rationale behind this is the creating urgency often helps the customer to see negative impacts of delaying the buying process (Girard & Shook, 1989). Mr. Goodman should have created urgency in the minds of his prospects. Summary The skills of a salesperson in closing a deal are of utmost importance in the direct selling process. The analysis of the case study concerning the sales process and the buying process of Cloverleaf plc has revealed few shortcomings of the salesperson Mr. Goodman. It can be concluded that the lack of empathy on the part of the salesperson, ineffective listening skills, incompetency in creating a sense of urgency among the prospect, inability to integrate the financial gain of the prospect with functional value and inadequate market research about the exact incidents of failure of its major competitor Hofstead Gm were the main reasons that had jeopardized the sales of Cloverleaf. Few recommendations like improving listening skills, enhancing empathy, creating urgency, and integrating financial needs with functional ones can improve performance of sales person in general. References Dubinsky, A. J. (1999). Salesperson failure: sales management is the key. Industrial Marketing Management, 28(1), 7-17. Girard, J. & Shook, R. L. (1989). How to close every sale. London: Warner Books. Greenberg, H. M. & Greenberg, J. (1980). Job matching for better sales performance. Harvard Business Review, 58(5), 128-133. Ingram, T., LaForge, R., Avila, R., Schwepker, C. & Williams, M. (2007). Professional selling: A trust-based approach. Connecticut: Cengage Learning. Lynch, J. & De Chernatony, L. (2004). The power of emotion: Brand communication in business-to-business markets. The Journal of Brand Management, 11(5), 403-419. Marshall, G. W., Goebel, D. J. & Moncrief, W. C. (2003). Hiring for success at the buyer–seller interface. Journal of Business Research, 56(4), 247-255. 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