Sales & Ditribution Unit 2 notes- TYBMS Sem 5


Market Analysis

A Market can be local, regional, national and international. Products that are unbranded have local or regional markets. Products that are branded are in national and global markets. Market is one of the important key factors in market analysis that helps to know the size, growth, competition and their impact on marketing or sales strategy.

Market analysis is the key to sales analysis and sales forecasting. Market analysis is done in terms of various dimensions of a market or factors which characterise the market.


  1. Market size

The starting point of market analysis is to understand the current market size, which is measured in terms of the total sales.  Total market size consists of the size of different sub markets which should be understood properly to know the potential or future growth possibilities.

Information on the market size can be collected through sources such as government, trade association reports, industry, sales tax department, etc.


  1. Market potential

The current market shows actual market size whereas the potential market indicates the possible market size.  The potential market indicates the existence of unexplored segments of the market. Example: Cadbury initially focused only on children that affected the growth of sales, later it targeted parents and universalised the sale of chocolates resulting in more growth of Cadbury in the market.

Sometimes, a new use or a new user group or a more frequent usage can almost suddenly change the size and prospect of a market.


  1. Market growth

The current size of market is important but the growth of the market is equally important. Present sale is possible through large size of market but without market growth neither the sales nor market share may increase. Hence both the size and growth are important for the market attractiveness.




  1. Market competition

The level of market competition is a critical factor in the market structure of a product. There are certain answers the company should seek to understand and evaluate the competitors:

  • What are the objectives, strategies and level of applications?
  • What is the competitors cost structure, cost advantage and disadvantage?
  • Who are the strengths and weaknesses of each competitor?
  • Which are strategic weaknesses that can be exploited?
  • Which are the competitors special resources, competencies, skills that can used against the company?


The answers to the above will give complete clarity of assessment of the magnitude and complexity of market competition.


  1. Market profitability

Competition affects profitability. Intense competition makes profit more difficult to earn. The profitability depends on three factors such as:

  1. Competition level in the market.
  2. Product cost or cost structure.
  3. Selling price of the product.


Profit is measured as pf = p-c

Where    pf = gross profit per unit

p = selling of the product

c = cost per unit

Total cost = manufacturing cost plus marketing or selling cost.


Of the three factors, the company has control only on the cost. Selling price partly depends on quality of the product and more on the market factors like market demand, competitors  price, price elasticity of demand, etc. Except  for niche products.



Sales Forecasting

  • Meaning of sales forecasting

Sales Forecasting represents two words – sales and forecasting.  Sales  means the transfer of some goods or services for some specific consideration.  Forecasting  means to estimate the future on the basis of past trends and present circumstances.

Sales Forecasting is the process of a company predicting what it’s future sales will be. This forecast is done for a particular period of time in the near future, usually the next fiscal year. Accurate sales forecasting enables a company to make informed business decisions. Sales forecasting is easier for established companies that have been operating for a few years than for newer companies. Established companies have years of sales records and can base their forecasts on that past sales data. Newly founded companies have to base their forecasts on less verified information, such as market research and competition analysis to forecast their future business.


  • Importance of sales forecasting

Sales Forecasting gives insight on whether a company should expand or no. It also gives information about cash flow, and the ability to effectively manage its resources. Without forecasting, a company would be unsure of what inventory level to maintain, unsure on how it should allocate resources across the company and it would have a hard time predicting future success.

Sales Forecasting can be for immediate future or for short term, medium term or long term. Each form of forecasts has its own applicability and usefulness for production and sales planning.


  • Short term forecasts

The short term forecasts are generally for a period of three months, but not exceeding six months. The purpose is production and inventory planning and analysing market fluctuations. The factors considered are both external or internal or environmental.


  • Medium term forecasts

These forecasts are generally for the period of more than six months but not exceeding two years. It has direct involvement of planners. The number of factors considered is more than in short term forecasts and more emphasis is given on external factors such as competitors, general business situation and government regulations.


  • Long term forecasts

This forecast is generally for three years or more up to five years. Planned and forecast beyond 5 years usually 10 years is called long range planning and forecast. It is called as perspective planning which can go up to 15 or 20 years at the country level. Long term forecasts are more probabilistic than short term or medium term forecasts due to unpredictability of factors that may increase with the period increase.







  1. Jury of Executive opinion 1. Moving Averages
  2. Sales force Composite method       2. Sales Ratio method
  3. Delphi method                                 3. Market Share Projection
  4. Consumer survey method             4. Regression Analysis

These types of forecasting methods are based on judgements, opinion, intuition, emotions, or personal experiences and are subjective in nature. They do not rely on any rigorous mathematical computations. Following are the types of qualitative methods of sales forecasting:


In this approach, specialists or experts in the field meet and discuss possible sales forecasts. This specialists or experts have intimate knowledge of the product, market and industry. This people can be from either the company- senior sales/marketing managers- or from outside-consultants or industry experts. Usually, the forecasting team committee consists of company managers and external consultants/experts who bring independent views.

The team or committee meets to arrive at a consensus forecast. Each individual- the company manager or the consultants or the industry expert-may prepare or present his/her estimate. These discussed together and finally, the team arrives at a consensus forecast.


  1. a) It is an economical method.
  2. b) It does not require collection and analysis of elaborate statistics
  3. c) It provides forecasts easily and quickly.
  4. d) It is more realistic as it is made by the executives of the same organisation


  1. a) It lacks scientific validity. The forecast may turn out to be off-the-track.
  2. b) It is not possible to fix up responsibility for the final forecast on any one executive.
  3. c) It may give biased estimate.


This approach is also called as grass root approach. This method involves forecasts by the salespeople of the country. The individual salesman’s forecasts are combined and modified to meet management’s conviction. It is a judgement based method. This forecast is done by people who are closest to the market.


  1. a) Accurate forecasts for individual products.(The sales works directly with customers and understands the demand for certain products.)
  2. b) Higher sales totals (When the sales force predicts its own sales, sales personnel are motivated to achieve those numbers.)
  3. c) Inexpensive to sales
  4. d) Provides detailed information.


  1. a) Lacks a long-range view (the sales force may not have enough information about the company’s future plans to accurately predict long-term sales)
  2. b) Sales force resentment due to having to take time away from selling to prepare sales forecast.


It involves company executives and outside experts such as university professors, consultants or industry analysts. It is based on the assumption that several experts can arrive at a better forecast than one. In Delphi method, predictions are made secretly and then averaged together. The results of the first poll are sent to the experts, who are asked to respond with a second opinion. The process is repeated until a very narrow, firm median is agreed upon.


  1. a) Bring geographically dispersed panel experts together(gaining input with minimal personal access)
  2. b) Anonymity and confidentiality of responses
  3. c) Limited time required for respondents to complete surveys.
  4. d) Structured/organized group communication process(condense experts opinions into a few precise and clearly defined statements)
  5. e) Cost effective and flexible/adaptable, fast, versatile.


  1. a) No guidelines for determining consensus, sample size and sampling techniques
  2. b) Requires time/participant commitment
  3. c) Requires skill in written communication
  4. d) Time delays between rounds in data collection process (multiple data collection, analysis, processing)


This forecasting method gathers information about consumer’s plans to purchase products. This information is gathered to create sales estimates for individual products. Then these estimates are combined to forecast overall sales for the company.


  1. a) Relatively easy to administer
  2. b) Can be developed in less time (compared to other data-collection methods)
  3. c) Cost-effective, but cost depends on survey mode.
  4. d) Numerous questions can be asked about a subject giving extensive flexibility in data analysis.
  5. e) Abroad range of data can be collected (eg; attitudes, opinions, values, behaviour)


  1. a) Consumer may not feel encouraged to provide accurate, honest answers.
  2. b) Consumer may not feel comfortable providing answers that present themselves in a unfavourable manner.
  3. c) Respondents may not fully aware of their reasons for any given answer because of lack memory on the subject, or even boredom.
  4. d) Customised surveys can run the risk of containing certain types of errors.
  5. Quantitative techniques

These are statistical or mathematical methods mostly used on time series analysis. The method ranges from simple past trends to complex regression analysis and computer models. The following are the methods as follows:


  1. Moving averages

Moving averages is a smoothing technique of time series data. All data especially of sales fluctuate every year due to which it is difficult to find trend. The trend becomes clear using smoothing of data. Smoothing is done through a 3 year or 5 year moving average. The forecasted has to decide whether to use a 3 year or a 5 year moving average. The more the annual sales data fluctuate the more advisable is to have a long average period.


               Year              Response Moving Avg.
1994                   2                      –
1995                   5                    3
1996                   2                    3
1997                   2                 3.67
1998                  7                    5
1999                  6                    –



  1. Sales ratio method

In this approach the past trends in the sales ratio of the company are projected to the future. The method is also called as growth rate method. For this method time series analysis of 5 years will be a suitable data. It can be used for long term for a time series of 15 years. The data should be smooth ended as 3 years moving average gets accurate forecast.


  1. Market share protection

Market share protection relates company sales to total market sales and therefore also reflects the competitive level of the company. Market share can be projected based on time series data, either actual or smoothened, and the company’s sales forecast may be made on the basis of market share protections.


market share= (particular companies sales revenue in time period x)/(relevant markets total sales revenue in time period x)

e.g. lets assume company xyz sells $50 million a year in widgets. if the total amount of widgets sold from all companies within the market totals $100 million, then company xyz as market share equal to 50%.


  1. Regression analysis

Regression analysis is purely a statistical technique commonly used for forecasting purpose and. This is a set of relationship between a set of variables which are interrelated or closely associated. One of the variable is dependent variable and one or more independent variables which influences or explains changes or movements in the dependent variable.






























Population (linear relationship)


Regression analysis is wide used for forecasting. It is used to understand which independent variables are related to the dependent variable and to bring out the forms of these relationships. The performance of Regression analysis depends on the form of the data generation processes.






 Sales quota is the quantitative goals set by the managers for the sales person or sales team for the minimum period of time.(months, quarter, year)                                                                                              -Targets can be expressed either in rupees or in units of goods and services.                                                                                           –e.g., A small business with a handful of salespeople and one or two products to sell will probably set a very simple quota – for example, the goal might be for each salesperson to sell $100,000 worth of products per calendar quarter                                                                                                  PURPOSE OF SALES QUOTA                                                                                                                                                                     To evaluate strong or weak spot in the selling structure  or salespeople activities                                                                                                    -To evaluate productivity of salespeople.                                                                                                                     -To improve effectiveness of compensation plans

-To control selling expenses                                                                                                                                                                                                      -To evaluate sales contest results spots strong or weak in the selling structure                                                                                                          -To furnish goals and incentives for the sales force.                                                                                              -To Control are the sum of the total sales of a future period.                                                                                                 A good quota plan is SMART:                                                                                                                                      Specific                                                                                                                                                                            Measurable                                                                                                                                                             Attainable                                                                                                                                                                       Realistic                                                                                                                                                                              Time specific


1.”Sales quota is the sales goal set for a product line, company, division sales is primarily. It is primarily a managerial advice for defining and stimulating sales efforts. ”                                2.”Sales quota is the goal of sales accomplishment, a task, objective, standard that sales organization strive to attain.                                                                                                                                                                                                                                 TYPES OF SALES QUOTA                                                                                                                                          Different company established different types of sales quotas.                                                                        Types of quota based on nature of the business, design of the organization and competition prevailing in the industry.                                                                                                                                                                    Sales quota are of the following types:                                                                                                                         1.Sales Volume Quota                                                                                                                                                    2.Sales Budget Quota                                                                                                                                                3.Sales Activity Quota                                                                                                                                                   4.Sales Combination Quota

  1. Sales Volume Quota: Sales volume quota is the oldest and most common type of quota.                                                                 -Volume-based Quota is where targets are expressed in number of units or money.                              -It communicates “how much for what period”.                                                                                           – It is set for geographical areas, product lines and marketing channels.                                                        -this type of quota evaluate the performance of individual salesman, intermediaries and branch                                                                                                                             e.g., if salesman has to sell 50000 units of stationery items from  April to June then this is called as sales volume quota for that months.                                                                                                      -These quotas are set in the areas mentioned below:                                                                                                                    (i). Product line                                                                                                                                                                         (ii). Product range                                                                                                                                                                    (iii). Branch offices                                                                                                                                                        (iv). Individual sales person


  • TWO TYPES OF SALES VOLUME QUOTA:                                                                                                                                                                                                                                                                                                                                                                                        UNIT VOLUME QUOTA :There are three situation in which the company can’t set sales volume quotas in units i.e. numbers, tonnes or litters. It is used in following situations                                                                                                                       Salespeople selling few product                                                                                                                      2.Prices of product is  high                                                                                                                                                3.Prices of product is changing rapidly                                                                                                                  E.g., while selling the fans to customers, the company has set the sells quotas to branch managers and sales person in rupees and metric tonnes.                                                                                                                           POINT VOLUME QUOTA: In such type of quota the sales people to sell more those product that contributes relatively to the used in following situation:                                                                                                                                     1.Company wants to sell more product to generate more profit.                                                      e.g.,when the salesman is assign the quota of 40000 points by the sales manager, he is supposed to get sales order of 40000 points as combination of any product mix of the firm.

PROBLEMS                                                                                                                                                                   1.Unqual treatment                                                                                                                                                        2.Poor morale & manipulation                                                                                                                                          3.Unfair comparison                                                                                                                                              ADVANTAGES                                                                                                                                                                1.Easy Administer                                                                                                                                                             2. Sales Budget Quota:                                                                                                                                                it is also called as sales value quota or financial quota.                                                                                                                                   -inform salespeople that they are responsible not only to obtain desired sales volume but also earn good profits                                                                                                                -Set for various units in sales organization to control expenses, gross margins, or net profit.                                                                                                                                                                           PROBLEMS                                                                                                                                                                1.Different sales person sells different product mixes, so some incur higher expenses than others                                                                                                                                                            2.Variation in coverage difficulty & other environmental factors, make it impractical to set identical expense % for all the territories                                                                                                                         ADAVNTAGES                                                                                                                                                                1. Makes sales personnel more cost conscious                                                                                                                2. Awareness towards expense control

  1. Sales Activity Quota: The total sales of company is directly dependent on the activities of sales person. All of them are not involved in sales realization. e.g., are retail salesperson has the job of providing information only. They also undertake following activities such as: (a)Numbers of old customers contacted                                                                                                                      (b) Numbers of new customers contacted                                                                                                                           (c) Numbers of calls made to recover dues                                                                                                             .(f) Numbers of emails to potential clients etc.                                                                                                                    -Activity quota is set objectives for job related studies this type of sales quota is of great help to inexperienced sales person who tend to do wrong activities.                                                                                 -This type of quota is commonly used in pharmaceutical industry and insurance sector.                                                                                                          -e.g., salespersons is asked to complete 10 cold calls per month and try to convert them into sales.                                                                                                                                                                   – if sales person succeeds in getting some calls converted into sales                                                           indicates his caliber and competency. where the salesperson fails the company can provide interpersonal and communication skills  to improve his performanceProblem in inspiring the sales force                                                                                                                                                                                                                             PROBLEMS                                                                                                                                                                        1.problem in inspiring sales force                                                                                                                                                     2.Non-selling activities are not  quantifiable                                                                                             ADVANTAGE                                                                                                                                                             1.quantify salespersons progress.                                                                                                                      2. Helps to find out strengths and weakness of salesperson

(4). Sales Combination Quota:                                                                                                                                    –It is nothing but combination of volume and activity quota.                                                                             —-They generally use “point” as measure to overcome the problems of different measure use by various quota.                                                                                                                                                                             —it combination quota control performance of both  selling and non-selling activities                                                                                                                           -e.g. ,salesperson can set target of 500 calls per month identifying 70 prospectus,regaining25 lost customers, developing 15 new accounts                                                                                                      PROBLEMS                                                                                                                                                                     1.difficulty in understanding & appraising their own achievements                                                                       2.Reduces expected understanding level of                                                                                      3.salespersonComplex and difficult to understand                                                                               ADVANTAGES                                                                                                                                                            1.plan for different salesperson                                                                                                                              2.Reward specific sales performance



 In order to maintain accuracy, it is necessary to consider sales during a longer period of time. This will depend on the availability of past records. These records and data are kept, tabulated and analysed. Quotas that really help management is based on statistics. These statistics combined with a knowledge of market conditions, sound judgement and common-sense enables setting of accurate quota. If performance of only last year is taken into account it may give misleading data. It is always desirable to consider an average of three or five years. It may not always result in increase of quota. Sometimes quota can be reduced also.


 All sales territories do not have same buying power or the same need for the product. One area can give little more than another. At times, a territory may have a very high sales potential but requires a long period of hard work. Hence during the initial period it can only carry a small quota. Further, all salespersons are not having uniform ability. No business can afford to sell only in the most lucrative areas neither can it hope to employ only result-oriented salespersons. Buying capacity of customers becomes the barometer to decide the quota. Certainly, a territory with financially well-off buyers will get higher quota. Rest depends on the ability of salesforce.


Degree of competition is an important factor to consider while determining sales quota. In case, the competition is acute, chances are lower quota is assigned. On the other hand, where competition is weak, higher quota is determined. If lead is establish higher quota because of the possibility of attaining higher sales


 Every industry is known to indicate demand trend. This trend may be fluctuating upward or downward. The causes of this trend should be understood to set more realistic quota. Demand trend is ascertained through past performance charts and data.


 Companies create a territory based on geographical population and sales potentiality. This territory is assigned to the salesperson to achieve sales quota. Much depends on the potentiality of the territory. In case the territory relates to metro cities or tier I cities, adequate information is available from the secondary sources based on which quota can be assigned. Small companies have to collect their own data to decide about quota. Generally, the potentiality of territory is linked to purchasing power of the buyers and the extent of competition.


Few progressive companies the opinion of salespersons to decide about the quota. It is assumed the salespersons are well-versed with their territories. They are in the position to give estimates about the approximate sales to be generated. Much depends on honesty and objectivity of the salespersons to present fair estimate about the territory. There is a possibility that some salespersons may have the feeling that if they give higher estimates, they will have to work hard. Therefore, the estimates given may involve controversy.


No business can flourish unless it practices sales on credit. Credit has become an integral part of today’s selling. With cashless transactions catching up in India sale on credit has emerged as a basis to sell more. Along with this quality of  goods , instalment payment facilities, discount etc. Motivates  customers to buy the product. Under the circumstances, it is possible to increase sales quota. Sales strategy is a comprehensive plan to get customers to buy product and services. It focuses on making the sale rather than increasing the visibility of the company.


 Economic cycle is a fluctuation of the economy between periods of growth and recession. During the period of growth, the market is more receptive and consumers are prepared to spend money. There are more economic activities and companies assign higher sales quota. Recession is a temporary decline in economy activities. As consumer become saving conscious, companies assign lower sales quota. Accordingly, salespersons adjust their work but are responsible to achieve their quota.


 The determination of sales quota is also influenced by production capacity. When the production is increased, companies are enhance to sales quota for the salespersons to ensure the more products are sold in the market. When, due to economic reasons, production is restricted, companies assign lower sales quota. Once again, to help the salespersons to fulfill their quota. Precisely, production capacity keeps fluctuating depending on market conditions.


Income of the people and their consumption habit also affect the size of sales quota. The sale of capital goods and luxury items largely depends on the economic wellbeing of the consumers. Consumption habits are the index to judge the standard of consumers. Such consumers are certain about the product and services needed by them. If the salespersons can provide the same, sale is made. In a market having economically poor consumers, mostly items of necessities are sold. Companies adjust their sales quota in the light of economic prosperity.



Sales territories are defined on the basis of geographical boundaries. It is the geographical area that identifies and serves a category and a certain numbers of customers. There are some situations where companies build sales territories on the basis of the urgency and frequency of customer’s requirements rather than geographical coverage.

Territories are drawn in such a manner as to minimize the time and travel expense of serving customers. The companies try to balance the potential sales in each territory to compare sales efforts and results.


A pharmaceutical company may assign a territory in the city of Mumbai where there is high concentration of hospitals, health cares and clinics. Another medical representative who is assigned distant suburbs need to be given much smaller quota. Without this balance, the company will assign salespeople either too much or too little.

In order that sales territories are properly assigned, the sales manager must consider the following:

  1. Preparing balanced workload.
  2. Exploring sales potential.
  3. Developing compact territories.
  4. Minimizing disruptions.
  5. Ensuring goods service throughout.



  1. To define sales territories:

The success of selling program largely depends on proper definition of sales territory. When sales territories are properly defined in terms of company’s marketing plan and customer’s expectations, company can get optimum benefit from territories. The most common criteria is no base the territories on geographical basis.

  1. To collect data:

Most companies use some form of analytics software to figure out the best way to establish their sales territories. The quality of allocation depends on the quality of data. Companies rank customer’s based on the percentage of revenue they generate and time spent servicing them. Data should be collected about the location of customers and how much time a salesperson spends servicing them in person or on phone. Data collected from primary sources is costly but highly reliable secondary data is only supportive.

  1. To consider consumers:

It is necessary to find out the differences between one customer group and the other in terms of their needs and their likely responses to the products and services. Having noted consumers characteristics and wants, it becomes to easier to identify sales territories. By taking into account demographic and behavioral traits of consumers, it is possible to assign territories to salespeople.

  1. To consider presence of competitors:

The role of competitors is highly unpredictable but the company understands that their presence will create obstacles for salespeople. A sales territory that has many competitors will make the task of salespeople difficult where there are few competitor, salespeople are going to give better performance.

  1. To evaluate territories economically:

Companies conduct cost-benefit analysis to determine which territories they should adopt. It is desirable to estimate the potential level of purchase by the consumers. Companies concentrate on those territories that are likely to generate higher sales. Territories having good infrastructure reduce expenses of marketing as compared to those territories which lack proper infrastructure.

  1. To allocate territories:

While allocating territories to salespeople companies should consider various parameters such as size, density of consumers, nature of market etc. every sales person would be given optimum size of the territory with uniform distribution pattern in the form of market coverage. When an optimum size of the territory is assigned to salespeople it helps them to serve the customers properly with motivation and willingness.

  1. To review territories periodically :

Review of sales territories is an ongoing process. Such reviews will take care of the changes influencing the business. The sales manager must be careful not to mess with the territories too often because this will hurt the relationship with customers. It is important to perform regular maintenance on the territories to ensure they are functioning well.


  • Ensure better market coverage.
  • Effective utilization of sales force.
  • Efficient allocation of work.
  • Accountability & evaluate the performance.
  • Control over direct & indirect costs
  • Optimum utilization of sales time.


  • May not prove good in region.
  • Organization with vast geographic area.
  • Small firms do not establish sales territory.






The selling process is the series of steps followed by a salesperson while selling a product. Selling Process is a complete cycle which starts from identifying the customers to closing the deal with them. It is more relevant is B2B business sales where the sales cycle is not short and might take a longer duration to close. In B2C the selling process may be transient and shorter.

Selling Process Steps

The process of selling a product covers various steps like prospecting, pre-approach, approach, presentation, handling objections, closing & follow-up. The 7 steps of selling process are explained below in detail:

  1. Prospecting:The first step in selling process in which potential customers are identified by the salesperson is called prospecting.
    2. Pre-approach: The stage where the salesperson collects information about the potential customers and understands them before making the sales call is called pre-approach.
    3. Approach:Approach is the step where the salesperson actually meets the customer for the first time.
    4. Presentation: The step wherein the salesperson talks about how the product will satisfy the customer’s needs and add value to his/her life is called presentation.
    5. Handling Objections: In this step, the salesperson clarifies all the doubts and questions that the customer has and eliminates all his objections to buying the product.
    6. Closing: The step in which the customer is asked to place and order for the product is called closing.
    7. FollowUp: This is the final step in the selling process where the salesperson follows up with the customers to ensure satisfaction and builds the relationship in order to repeat business with them.




All steps of the selling process ultimately lead to the closing of the sale since it provides the tangible result for the salesman in the form of purchases made by the prospects. Therefore, every salesman aims at closing the sale successfully. These are some of the methods to close sales.

  1. Pick a Date Close

What makes this easy is it allows you the salesperson to break the close up, so it becomes not only easier for them, but also for the customer.  Example: “Which day next week would work best for you to receive the order?”

  1. Assumptive Close

Power of this close is in you the salesperson being confident about the conversation you’ve been having with the customer. With this approach you move right into the close.  Example: “Since what we’ve been talking about is the right solution, let’s go ahead and set it up to ship tomorrow.”

  1. Option Close

Salespeople who may not possess as much confidence as they would like will find this technique very helpful, as it allows the customer to make the decision.  Example: “Would you like 5 or 7 in the initial order?”

  1. Suggestion Close

If the customer views you as an expert and respects your insight, this close is perfect, as it allows the customer to rely on your expertise.  Example:  “Based on your needs and based off of my experience with others, I would suggest we start with 4 units.”

  1. Urgency Close

Nothing helps close a sale more than invoking time.  The urgency close can work in several ways.  One is creating urgency with the customer, because they have a problem that needs to be dealt with quickly.

Another way is by saying that due to customer demand and/or due to the time required to prepare, the order needs to be placed quickly.

The Summary Close

Salespeople who use this closing technique reiterate the items the customer is hopefully purchasing (stressing the value and benefits) in an effort to get the prospect to sign. For example:

“So we have the washing machine with brushless motor, the 10-year comprehensive guarantee, and our free delivery and installation service.”

By summarizing previously agreed-upon points into one impressive package, you’re helping prospects visualize what they’re truly getting out of the deal.



The main motive of any selling process is to have a successful closing. However, not all selling propositions meet their logical consequences. Some of them are unsuccessful due to some reason or the other. Some of the important reasons of failure or unsuccessful closing are as follows:

  1. Wrong Attitude:

Most often, the mental attitude of the salesman considerably dictates the success or failure of the salesman in closing sales. If a salesman is determined and has enough faith and confidence, he can persuade the prospects in favor of a purchase and thereby, close the sale successfully. Some salesmen have the pre-conceived desire of hearing ‘Yes, I’ will buy’, from the prospects, at this stage. Once the prospect expresses his feelings in negation, some salesmen develop the negative attitude immediately about the sales proposition. However, negative replies by the prospects should never deter the salesmen from making continuous efforts in winning the confidence and conviction of such prospects. Therefore, the fear of failure should never override the salesmen’s confidence.

  1. Inadequate Presentation:

The earlier steps of the selling process like prospecting, pre-approach, approach, presentation, demonstration and overcoming objections are to be covered carefully and step-by-step. Once a small mistake is committed and a lapse creeps into any of these stages, the selling process develops vital snags.

As a result, the salesman is bound to meet failure at the time of closing the sale. Therefore, each and every stage of the selling process has to be carefully built up in order to ensure success at the time of closing the sale.

  1. Wrong Interpretation:

Some of the salesmen are of the opinion that the prospects need not be convinced and persuaded to buy a particular product or service. They argue that since the prospect has a need, and has moved through the early stages of the selling process, he will be automatically purchasing the product or service offered for sale. Therefore, the prospects need not be persuaded to say ‘yes’ at the time of closing the sale. However, such an impression is totally wrong. Prospects, as such, need to be convinced and persuaded at the closing stage also. A successful coverage of the earlier stages of the sales process cannot ensure a favorable response of the prospect at the closing stage also.

  1. Interruption:

At times, it may so happen that the salesman might have brought the prospect to the point of closing a sale successfully. At this very juncture, a friend or a relative or an acquaintance may interrupt and for that reason the prospect may withdraw from closing the sale for the salesman. In other words, third party interference may mar the sale transaction leading to the slip between the cup and the lips. In such cases, prospective sales transactions fail to meet their natural and logical consequence of sale.

  1. A Trial Close:

As the name implies, trial close is not the final close. A trial close is a question or a set of questions asked by the salesman to the prospects at different stages of the sales talk, in order to get buying signals. Through the trial close, the salesman tries to determine whether the prospect is ready to buy. In fact, it is an attempt to see whether the prospect is on his way to say ‘yes’ to the selling proposition. If the salesman gets clear signals from the prospect regarding the buying decision, he (the salesman) need not continue his sales talk any more. On the other hand, if the prospect does not provide any indication of his buying decision, the salesman can proceed along with his sales talk


All businesses require some type of selling platform. Some companies allow their websites to do all the selling while others use commercials. But selling in person or over the phone is one of the most complicated methods. When customers come into or call a business, having someone on hand who has natural or learned selling skills is important. Successful selling is an art; a successful sales person is usually a very intuitive and observant professional. Relationship or personal selling is one of the most common selling techniques. It requires the sales person to develop trust with the customer and relate to him on a personal level to eventually close a sale.

Some of the successful selling skills are-

Communication skills

The root of sales success is the ability to gather and provide information in a way that makes your prospect want to do business with you. Your value proposition, your pricing, also your product’s features — none of that matters unless you’re able to get your prospects to talk to you. While talking to your prospect ensure that when you’re talking to a prospect, you’re sending the right message.

Pay attention

We’re all busier than ever before, and selling can be an especially pressure-filled career. So it’s understandable that during a client meeting, your mind could wander over. Just because it’s understandable doesn’t make it acceptable. Showing up to a call isn’t just about physically being on the other end of the line. You have to dedicate 100% of your attention to each call, otherwise you’ll miss details and make your prospect repeat things they’ve already told you. It’ll be obvious when you’re not paying attention, and that’s no way to treat buyers.

Be empathetic

You don’t necessarily have to agree with everything your prospect is saying, but you should always at least try to see things from their point of view. And that means more than just saying, “Hmm, I see where you’re coming from.” The best sales reps are able to connect with their prospects because they actually understand the things their buyers do at work every day and the challenges they face. Not only does being empathetic make you more likable, it also increases your chances of closing a deal

Speak in specific

Great communicators aren’t persuasive because they speak in dramatic, sweeping rhetoric. They’re able to convince people because they can point to specific examples or anecdotes that support the point they’re trying to make — and in the case of salespeople, because they can demonstrate exactly how a product or feature will help their buyer.

Be honest

Be aware of the gaps in your knowledge, then ask your prospect to help fill them in. They’ll appreciate your honesty about what you don’t know, and you’ll avoid losing deals because of false assumptions

Non-verbal communication skills for selling

When selling to customers, your non-verbal communication skills and non-verbal cues – are just as important as what you say. Developing these skills will help you understand what your customers want, so you can offer them the most suitable products and services.

Here are some positive and negative examples of non-verbal cues:

Facial expressions

Bad – wrinkling the nose, furrowing the brow or rolling the eyes

Good – smiling, raised eyebrows, relaxed mouth

Eye contact

Bad – avoiding your customer or looking outside your sales space

Good – looking back to your customer’s face and at your products


Bad – closed, firm or expressionless mouth

Good – smiling or relaxed mouth


Bad – hands folded to the chest or near the face

Good – hands moving freely, relaxed, touching the product


Bad – closed arms, dismissive hand gestures

Good – open arms, nodding the head


Bad – slouching, shoulders turned away

Good – standing upright, inclining the body forward


Bad – moving too close, facing away

Good – observing personal space accommodating cultural differences.


Listening skills

Sales managers need to coach their sales reps on the art of listening to prospects. It is one of the quickest ways to improve their sales performance. Here are some powerful tips to teach your reps.

Slow down the conversation

Don’t interrupt

Clarify their doubts

Listen to their emotions

Ask questions.

Trust building skills

High trust equals a higher close ratio and higher profit. Trust is an outgrowth of the salesperson’s ability to give the prospect confidence. Keep these seven points in mind that you can implement to help the prospect gain trust in you.

Speak with authority


Demonstrate credibility

Value the prospects time

Respect the opinion

Be genuine

Be committed.

Negotiation skills

You’ve quoted a price and sent over the contract. All that’s left for the prospect to do is sign, and the deal is done. You’re riding a high during your prospecting calls and follow ups.

But then … you get the dreaded email. “I’d like to talk about some of the details of this contract before I sign.” Even if a salesperson has properly qualified a prospect and correctly managed their expectations through the sales process, the deal can still end in a negotiation. While negotiations can go in a seemingly infinite number of directions, salespeople with the following 9 negotiation skills in their back pocket will be well-equipped to roll with the punches.

Clearly defining concessions

Speaking second

Steering clear of ranges

Refusing to “split the difference”

Writing terms at the right time

Speaking with the decision maker

Getting for a give

Talking more than money being human

Knowing when to walk away


Problem solving skills

You have probably heard the phrase; ‘problems are opportunities’. The truth in this statement is not much help when you can’t find a way to resolve something.

Here are specific techniques that help:

  1. Reverse the Question Suppose you can’t think of a good reason to get back in front of a prospect who is about to make a decision. Ask yourself “What reasons could I give to avoid speaking with them if they called me?” All kinds of excuses will occur to you. Pursue them and see where they lead. Amongst your ideas will be just the reason for talking to them you are looking for.
  2. Mentor Call to mind the most successful sales person, business leader or entrepreneur you know. Imagine yourself in their presence, asking their advice. What would they suggest? If you don’t know any extraordinary sales people, imagine one. It works just as well.
  3. Brainstorm Write your sales problem at the top of a piece of paper. Underneath write every possible solution that occurs to you. Make sure you include any silly or impractical thoughts. Don’t stop to consider them, just keep going until you have at least twenty-five. Don’t worry if none of them make sense.


Conflict management skills

There are many ways to proactively avoid conflicts between your internal sales team and your channel partners, depending on the kinds of situations you anticipate. Here are a few options to consider:

1) Adjust your pricing structure

If you’re worried about direct sales reps undercutting your channel partners, you might consider a pricing structure that includes channel-specific discounts and a fixed price point for direct sales.

2) Adjust your compensation

You may choose to compensate your internal sales reps so that it doesn’t make any difference to their commissions whether the sale goes through the channel or direct. Or you may even take it a step further and offer them an additional incentive for channel sales.

3) Establish assigned segments and/or territories

Other methods that can help reduce channel conflict include segmenting products by seller type (direct or channel), or making certain geographical or vertical territories exclusive to certain sellers.

4) Utilize a lead registration system

HubSpot, like many other SaaS companies with channel programs, uses a lead registration system to help ensure that there is only one sales process for each lead. “Currently, partners can register up to 500 active leads,” explains HubSpot VP Sales Peter Caputa. “Registration lasts for twelve months, and they can re-register a lead if it’s still active after that period.”

5) Avoid direct sales altogether it may be a little extreme or only work for particular situations, but the most straight-forward way of avoiding sales team vs. channel partner conflict is to commit to a channel program 100%

Theories of selling

Selling is consider as art by some and science others

This has produce contrasting approaches to the theory of selling


This method or sales under his theory is possible under certain circumstances. They can be

Superior quality of the products under a known brand name needed by many households.

For example:  Dell.

Familiarity or confidence in the sales person

Incentives offered by the firm selling the products etc. We have given in detail about the theory and its applications in the ensuing paragraphs.

The stimulus response theory states that if the salesperson uses the right stimulus of an appropriate strength, the prospect will respond the way the salesperson wants him to in this case buy the product. Some of the stimuli that the salesperson has a control over are:

  1. Self-Physical appearance, mannerism, tone of the voice or modulating the voice and interpersonal skills exhibited by the salesperson.
  2. Price concessions: A salesperson have limited discretions to give price concessions to the most promising and large prospects.
  3. Announcement of price changes: Salespeople can choose their timing to announce changes in the price.
  4. Preferential treatment to important customers like those who buy in large volumes, make on time payment and are willing to help the salesperson in liquidating his stocks.

This theory presumes a passive role of the prospect in the entire selling process. Like a robot, the prospect will follow the salesperson.

Unfortunately in most cases this does not work. In situations where it does work, it more often leaves the customer in a state of post-purchase dissonance. That is because the customer is not convinced. May be at a particular moment of weakness, the customer gave in to the salesperson, or the customer who conned in buying from the salesperson.

This theory works in organizations which have a selling orientation and believe in pushing the sale at all costs.

The stimulus response theory saw firms emphasizing the physical appearance of the salesperson and his or her conversational skills. It also saw firms giving leverage to their salespeople to finalize the order at any cost. Hence, there have been examples where the salespeople made the sale for the firm but it was unprofitable. For, they lowered their prices or allowed extended period of credit to the prospect which had a negative effect on the firm’s bottom line.

Further, as markets become competitive, the thrust will be on relationship management. More and more salespeople will need to have both internal and external focus, if he or she has to be a change agent in the territory. Internally, it’s the sales person who provides relevant information to all departments and coordinates with them in order to ensure high customer satisfaction.

In the stimulus response theory, the principal contact of salesperson in buying organization is the purchase department.

Under this theory there is also a possibility of the sales person offering all sorts of concessions to pursue the customer to change the current product the consumer is using and later on gradually reducing the discounts. Here the sales person takes a chance. If the customer likes their product then he or she may continue to buy his product irrespective of withdrawal of discounts or incentives and can be loyal customer. Otherwise the customer may revert back to his old brand.

EG: Most automotive and computer appliances companies one of which is Dell. It believes having good looking and good communicative skills personals as their sales persons for better sales.

Product Orientation theory of selling

‘Build a better mousetrap, and the world will beat a path to your door’ is a saying from a simpler time when consumers did not have all the buying choices or communications channels that they have today. A company that adopts this ‘better mousetrap’ business philosophy is said to follow a production orientation.

A company that follows a production orientation chooses to ignore their customer’s needs and focus only on efficiently building a quality product. This type of company believes that if they can make the best ‘mousetrap,’ their customers will come to them.

Assumptions of a Production-Oriented Company

Companies that follow a production orientation make the following assumptions:

We can focus all of our efforts on improving the quality of our products, and the products will sell themselves.

We can sell any product if the quality is good enough.

We can make a profit if we sell enough of our products.

Our customers will buy all that we can produce if our price is fair.

Example of a Production-Oriented Company

Gillette Company focuses on producing the best possible disposable razors at an economic rate. Thereby, they distinguish their products with high quality razor blade, ease of use and right pricing strategy. Yet another classic example is the Ford Motor Company, where Henry Ford had made only model of car in black color irrespective of the perspectives of the consumer.




The need satisfaction theory is based on the interactive approach. The selling process is seen as one that involves mutual satisfaction, i.e. both the buyer and the seller gets satisfied. This theory is based on a win-win situation both for Sales Person and the Prospect or Customer.

The theory states that the salesperson should explore and identify the prospects needs and expectations before he or she presents the product to the prospect and closes the deal. Here the salesperson should actively listen to the buyer’s objections and then answer them keeping the customer needs in mind. It is believed that unless the sales people know their prospects needs and have in depth Product knowledge they can never sell, create and retain a satisfied customer.

This Need Satisfaction Theory has three stages which are:

  1. Need Development.
  2. Need Identification.
  3. Need Satisfaction

The need development stage demands the salesperson to probe the prospects and actively listen to them. Open ended probes like what do you do when you have an epidemic in this area, Doctor or tell me Doctor what has been your experience in using our firm drugs? etc have to be used at this stage. An open-ended probe or for that matter all probes help the prospect to get over his or her anxieties, concerns, tensions and even gives such information to the sales person which the sales person may not be able to get to know otherwise. The sales person has to listen patiently while the prospect is revealing such potential information of his/her needs which may ultimately result in selling the product.

The attention paid by the sales person also reassures the prospect that the salesperson is not selfish and is interested in detailing the product in a way that will benefit the prospect.

An alert sales person will be able to identify the prospect needs even before the latter does. But an effective sales person knows only when the prospect identifies the needs will he or she be able to understand better the benefits offered by the sales person. In the need identification stage the sales person probes listens and sums up what the potential customer has listened. Summing up and giving a feed back to the prospect is important as it ensures a mutual understanding of the needs.

The Need Satisfaction stage sees the sales person making a presentation on Product features and how they will benefit the prospect and is able to answer the latter objection much more convincingly. Presentation and explanation skills are required at this stage by the sales person for closing the deal (selling).On the part of buyer the probing, listening and responding skills may help him / her to make the proper selection of the product before purchasing for satisfying his/her needs.

Need satisfaction selling is a sales approach where the sales person probes into the needs of the consumer, both stated or expresses needs and unstated or tacit needs and then prepares his sales pitch or presentation in accordance to these needs in order to satisfy the consumer. This is also called need satisfaction approach.


The diagram below shows the step by step process of need satisfaction selling:


  1. Open: This is where the salesperson opens his or her presentation to the consumer to start the selling process.
  2. Probe: Here, the sales person asks various questions to the consumer and listens to him carefully in order to understand his needs fully. Generally, in this stage, the expressed or stated needs are found.
  3. Support: Here, the sales person shows that the customer’s needs are genuine by supporting him in his argument and approach. In this way, the sales person can extract more information about the customer’s needs, generally the tacit or the unstated needs.
  4. Close: The sales person makes a value proposition to the customer which satisfies his needs and closes the transaction.


This approach is useful when the sales people use effective approaches to convince the customers into buying their products. If successful, it helps build customer trust and loyalty.


AIDAS Theory of Selling

The AIDAS theory of selling is one of the widest known theories and is the basis for training materials across numerous organizations. AIDAS stands for Attention, Interest, Desire, Action, and Satisfaction. The AIDAS theory simply states that a prospect goes through five different stages before finally responding satisfactorily to any product. Thus he/s should be led comfortably through all five stages.

Attention – Gaining attention is a skill and just like any skill, gaining attention can be improved upon with practice. A common phrase applicable over here is “First impression is last impression”. The initial attempt of the sales person must be to put the customer completely at ease. Casual conversation is one of the best openers after which the sales person can gain customer attention by leading him onto the sale.

Interest – Once you have gained attention, it is very important to maintain interest. Some sales people are very good in the opening but as the technicalities take over, they become uncomfortable while explaining the product. Whereas others who are strong in the product department might open bluntly but create interest in the second stage. Maintaining interest is a crucial part of the sales process and hence is included in the AIDAS theory.

Desire – Have you seen the commercials wherein you just have to get out of your house and get the product? Perhaps a car, an ice cream or a house. The same has to be done by the sales person in personal selling. He has to create enough desire in the customers mind such that he immediately has to buy the product. Imagine an aquaguard salesman or a tupperware salesperson. They highlight the product in such a manner that you might be thinking “Why didn’t I buy this product before”. Thus kindling that desire becomes an integral part of the AIDAS selling theory.

Action – Although there may be desire for the product, the customer might not act on it. He might want to buy the product but he might NOT buy it. In such cases the customer needs to be induced. There are various ways to induce the customer such that he buys the product. It is important for the sales person to understand whether to directly induce the customer or whether to push subtle reminders that you are there for a sales call. Both methods work, but you need to know your customer.

Satisfaction – What would you do after the customer has given the order? Will you stand up, Point at him and shout “Fooled ya”. I don’t think so. The customer has just parted with his money. Just like you part your money and expect good service, he expects the same too. So even after he has bought the product, you need to reassure the customer that he has made the right decision. The product is good for the customer and you only presented the product. It was his decision and he is right about it. These small cues post the sales process really give confidence to the customer and he then looks forward to your product rather than thinking whether or not he/s has made the right decision.






Aggressive and puts a high amount of pressure on the client for purchase

Tactics are calls, forceful sales and unsolicited pitches

It is generally designed to get the customer to purchase goods for a short term.

The salesperson’s attempts may be seen annoyance if the sales are done aggressively, no matter how genuine the offer is.

Important for clients who are ready to buy and aren’t looking around to do a few more meetings.

They are often advertised with the phrases such as “Hurry! Offer only till…..”. “ Last chance to grab…..”

For example:

The Amazon Great Indian Sale of Jan 2o17 was ranked 2nd in the most seen ads on YouTube. The recent report stated that Amazon incurred a significant loss of $487 million just goes on to add more weight to this argument. As expected, the e-commerce giant spent heavily to advertise it’s recently concluded Great Indian Sale in a more aggressive manner just to attract the customers.



Helps the indecisive customer: If the customer is on the fence about making a purchase, this method is enough to convince him to buy your product. He will most likely avoid further discussion as most of the times such people are prone to buy impulsively.


It may result in more short term sales: Sometimes it does lead to increase in short term sales. Someone may feel pressured to immediately act based on a salesperson’s behavior. Sometimes the salesperson uses a harsher tone by which the customer can sense the urgency and may want to deal faster.


It could shut down a sale entirely: it may seem as rather off putting and irritating. Some people may find it offending as the method is considered as brash. Most of the times the customer walk away from the store. Customers than change their mind and has no difficulty in moving on to its substitute

Not good for long term sales: Repeat customers and word of mouth helps to increase the sales of company. Hard selling may give you the sales at first but if the individual gets a negative experience, he may avoid buying the product in future.


Advertising and sales practices denoted by subtle language and a non-aggressive technique. A Soft sell is designed to avoid angering potential customers and pushing them away. Because soft selling is a low-pressure sales technique, it may not result in a sale the first time a product is presented

A salesperson may use a more conversational approach in order to allow the potential customer to relax. Just as with the hard sell, the soft sell requires a certain amount of energy on the part of the salesperson, since he or she has to maintain the customer’s attention.

For example: In 2o1o, when the sale of Fair & Lovely went down, they came out with free trial packs in various medical stores and also gave a money back guarantee if the customers are dissatisfies with their product.


Earns the trust of the customer: it involves the promotions like money back guarantees and free trial period. The promise the customers that they will be happy the very first time they buy their product. In such a method, the marketers tend to gain the trust and repeat buyers and helps you to keep your financial goals on track.

It will help you build a good reputation: soft sell method gives chance to your customers to know more about the reliability of your business. It creates a positive buzz when the salesperson uses a gentler tone. In such a manner word of mouth takes places which ultimately helps you to boost your sales.




May not be enough to convince certain people: some customers are not easily convinced. Soft sell does not make your offer seem urgent or necessary, that means that the individual won’t make a purchase until much later or may entirely skip the process.


Losing out to competition: If the competing firm employ the hard selling method, the customers get bullied into buying their product instead of your as their product seems urgent and of some necessity. While there are some people who won’t make purchase, high amount of them will fall for their trap and ending up purchasing.


It means resolving differences. Different opinions are taken into consideration along with their needs, aims, interest etc.



PREPARE: Prepare well in advance for any negotiation. Know your product well. Know your party that you are negotiating with. Prepare for negotiation and not DEFENCE, or else the other party may end up with the better deal.

ARGUE: It is the best opportunity to exchange information, review issues, influence, persuade and inform.

SIGNAL: they indicate when to put forth the proposal. They may be verbal or non-verbal. Always keep an open eye and mind to such signal as there is an equal chance for both the parties to get a better side of the deal.

PROPOSE: this is where you give your proposal. Make sure your proposal is supported by enough facts and figures.

BARGAIN: the fundamental rule in bargain in TRADE. You should always have the answer to the question “What do I get in return? If necessary put an unreasonable price to an unreasonable demand. The best tactic is to ask for more the first time and when denied ask for the actual amount. The party is more likely to give it to you the second time as they felt bad for the first time denying you.

AGREE: Agree when you get the perfect deal, don’t be too greedy.

CLOSE: this is generally done with a handshake, dated, signed document.

Example:  Disney’s Purchase of Lucas Films

On October 30, 2013 the Walt Disney Company made a surprise announcement that it was acquiring Lucas film, home of the immensely successful Star Wars brand, from its founder, George Lucas, for $4.05 billion, split evenly between stock and cash. Lucas was the sole shareholder in his company.

The acquisition bolstered Disney’s status as a leader in animation and superhero films and gave it the opportunity to reap huge earnings from the already lucrative Star Wars media and merchandising empire. Disney promised to begin producing and releasing new films in the Star Wars franchise every two or three years. The acquisition even included a detailed script treatment for the next three Star Wars films.

The 68-year old Lucas decided to sell his company after beginning to plan his retirement several years ago. According to Walt Disney Chairman Robert Iger, a famous negotiator in Hollywood, he and Lucas conducted the negotiations personally, beginning in early 2011. Speaking of Lucas’ decision to hand over his creative legacy to Disney, Iger told the New York Times, “There was a lot of trust there.”


Here the customer and the salesperson both comes out with the sense of satisfaction. The salesperson not only gets the sales done but also sets a platform for future long term sales, repeat business and future referrals.

Both of them comes out with the thought they have not taken the advantage of each other and they both have profited personally and professionally from the deal.

It is considered to be more profitable, stable and comfortable approach as compared to that of the others.

In business dealings, that happens when both parties feel the transaction was worth it; through bartering, negotiating, and wheeling and dealing, a fair trade is established for a product—you got what you wanted—you won enough.





ATTITUDE: Salesperson should have a positive attitude. They welcome new challenges and opportunities.

BELIEF: Those who looked beyond short term goals and showed concentrate on long term goals showed the best results. It’s a classic case of the perspective of the sales person as what he sees in the case of glass as half full or half empty.

COOLNESS: While negotiating in this situation, it’s important to stay calm. Both the parties aim to get finding solution to their differences which results in both sides being satisfied.

EXAMPLE: Hiring summer interns from the university continues to be gaining valuable real world experience and business receiving the benefit of employees working for them at lower wages.



Here the company has to decide as to what pricing strategy will it employ in order to sell its product. It mostly depends upon the product itself and the competitor’s product. There are several types of pricing strategies such as


Premium Pricing:   With premium pricing, businesses set costs higher than their competitors. Premium pricing is often most effective in the early days of a product’s life cycle, and ideal for small businesses that sell unique goods. Because customers need to perceive products as being worth the higher price tag, a business must work hard to create a value perception. Along with creating a high-quality product, owners should ensure their marketing efforts, the product’s packaging and the store’s décor all combine to support the premium price.

Penetration Pricing: Penetration Strategies aim to attract buyers by offering lower prices on goods and services. While many new companies use this technique to draw attention away from their competition, penetration pricing does tend to result in an initial loss of income for the business. Over time, however, the increase in awareness can drive profits and help small businesses to stand out from the crowd. In the long run, after sufficiently penetrating a market, companies often wind up raising their prices to better reflect the state of their position within the market.

Economy Pricing: Used by a wide range of businesses including generic food suppliers and discount retailers, economy pricing aims to attract the most price-conscious of consumers. With this strategy, businesses minimize the costs associated with marketing and production in order to keep product prices down. As a result, customers can purchase the products they need without frills.

Psychology Pricing: Psychology pricing refers to techniques that marketers use to encourage customers to respond on emotional levels rather than logical ones.

For example, setting the price of a watch at Rs199 is proven to attract more consumers than setting it at Rs200, even though the true difference here is quite small. One explanation for this trend is that consumers tend to put more attention on the first number on a price tag than the last. The goal of psychology pricing is to increase demand by creating an illusion of enhanced value for the consumer.


It creates a positive consumer experience before and after sales and ultimately helps to add value to the company by being different from the competitors. Various models have been given here, but the most famous one is as follows


Steps in client selling process:

  • Identifying and segmenting customers
  • Learning about their needs
  • Building relationships
  • Engaging in service recovery and continuous improvement.



The fact that Amazon is mentioned here shouldn’t come as a surprise to anyone. They are a model of customer-centricity and maintain practices that keep them leaders in this arena:

Did you know that the CEO of Amazon, Jeff Bezos, will often leave a seat open at his conference tables to remind all those present that the most important person in the conversation is “the customer”.

Amazon installs practices to maintain excellence in customer experience by rewarding those who “raise the bar” for the organization.

From Kindle to FireTV to Echo, Amazon develops products that are meant to address consumer wants and needs. Their   rather than their development team’s opinion.

They cultivate a “culture of metrics” where they routinely engage in head-to-head tests of customers’ reactions to different features or site designs.

Amazon is consistently mentioned in conversations surrounding the most customer-centric companies in the world. This approach has moved beyond just a philosophy, it has become their culture and it is working






Consumers Selling refers to selling of goods to consumer for direct consumption. Organizations selling refers to selling of good to organization for further means of production.
QUANTITY AND DECISION MAKING. Consumers are driven both by need and by want. It is possible to entice a consumer to purchase something he does not need through effective marketing or peer pressure. Organizations generally purchase goods in larger volumes than individuals and are driven by customer demand and need for manufacturing materials.
PROMOTIONAL TOOLS Mass media like print, radio, T.V. and internet advertising as well as sales promotion techniques are used for communication. Promotional tools like personal selling, direct marking, trade exhibitions are used for communication.


NEGOTIATION Generally there is less scope for negotiation about product specification, price, term of delivery, etc. High level of negotiation about product specification, price, term of delivery, etc.
CASH AND CREDIT FLOW It follow   “cash and carry” schemes Cash payment is on spot. It follow “credit and carry” schemes Credit facility can be for 3-6 months. The salesperson should be well versed with different modes of payment such as cheese, demand draft, letter of credit.
RELATIONSHIP Relationship building is for short term. It is consider sale to sale. Relationship building is for long term. Maintaining good relationship is necessary.


INTERACTION The interaction between the sales person and buyer is simple The interaction between the sales person and buyer is complex



Distinguish Between:

National Selling International Selling
MEANING National Selling refers to Selling within the geographical boundaries of the nation. I.e. In local market. International Selling refers to selling the product globally.
COMPETITION The competition is restricted to national or local or regional level. The competition is on global level.
AGENTS Agents are normally local companies or individuals or organizations. They can be big international operator. Agent play an important role, they act as a catalyst for promotion or market development
CURRENCY The national business is conducted in local currency which is stable The international business is conducted in foreign currency that implies the exchange rate fluctuation.
MODE OF PAYMENT The method of payment is normally cheque or cash. The mode of payment is normally by letter of credit or through documentary bills of exchange.
RISK Risk is comparatively less. It is mainly subject to commercial risk. Risk is comparatively high. It is mainly subject to political and commercial risk.
TRADE BARRIERS There are no trade barriers in domestic selling. Trade barriers like tariffs quota etc. are present in international selling
TRANSPORT COST As the sales is done within the country, transportation cost is less. It involve delays and higher cost due to long distance.
PROCEDURES AND FORMALITIES It involve relatively simple procedures and formalities. It involve complex procedures and formalities.


Source:- Prof Vipin Saboo

For any further clarifications, please feel free to contact Prof Vipin Saboo on 9820779873




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Education Qualification: BMS- N M College (University Rank Holder) PGDBM- Sydenham College M Com- College topper Mr Vipin Saboo has been associated with the following institutes as a visiting faculty Lords college, Malad Patkar College, Goregoan Saraf college, Malad Dalmia college, Malad St Andrews College, Bandra Wilson College, Grant Road Thakur college, Kandivili L N College, Kandivili N K College, Malad Dhanukar College, Vile Parle St Xaviers College, Marine Lines Shroff College, Kandivili KES College, Khar Mr.Vipin Saboo also has more than 5 years of industry expertise with corporate like CRISIL, Motilal Oswal Investment Banking and Yes Bank. Mr. Saboo has also published a text book on Logistics and Supply Chain Management for TYBMS Students.


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