CBSE Class 10 Elements of Business Unit VI: Selling

Unit VI: Selling

(a) Personal selling – meaning and importance
(b) Sales promotion – meaning and techniques
(c) Advertising – meaning and importance and media of advertising

(a) Personal selling:

Personal selling involves oral presentation of message in the form of conversation with one or more of the prospective customers for the purpose of making sales. It is a personal form of communication. Companies appoint salespersons to contact prospective buyers and create awareness about the product and develop product preferences with the aim of making sale.

Features of Personal selling:

(i) Personal Form: In personal selling a direct face-to-face dialogue takes place that involves an interactive relationship between the seller and the buyer.
(ii) Development of relationship: Personal selling allows a salesperson space to develop personal relationships with prospective customers which may become important in clinching a deal.

Merits of Personal Selling:

(i) Flexibility: There is a lot of flexibility in personal selling approach. The sales presentation can be adjusted to suit the need of individual customer.
(ii) Direct feedback: Direct feedback from customers is extremely valuable to adapt to changing needs.
(iii) Minimum wastage: Through this approach target customers can be decided and contacted.
(iv) Effective promotional tool: As a promotional tool personal selling can be very effective as it helps influencing prospective customers especially at the time of product launches.
(v) Lasting relationship: It helps build up personal relationship to forge a rapport with customers.

Importance to customers:

The role of personal selling becomes important for the illiterate and rural customers who do not have many other means of getting product information. The customers are benefited in the following ways:

(i) Help in identifying needs: Personal selling helps customers in identifying their needs and informing them how such needs can be satisfied.
(ii) Latest market information: Customers get latest market information regarding price changes, product availability, newly introduced products etc.
(iii) Expert advice: Customers get expert advice and guidance in purchasing various goods and services which help them make better purchases.

Importance to Society:

Personal selling plays a very productive role in the economic progress of a society.

(i) Conversion of demand: Personal selling converts prospective demand into effective demand, thus
a cycle of economic activity is fostered in the society leading to more jobs, more incomes and more products and services.
(ii) Creating employment: Personal selling offers greater income and employment opportunities to the unemployed youth.
(iii) Career opportunities: Personal selling offers attractive career opportunities which offer security, respect and independent livelihood.
(iv) Product standardisation: Personal selling increases product standardisation and uniformity in consumption pattern in a diverse society.

(b) Sales Promotion

Meaning:

Sales Promotion refers to short-term incentives which are designed to encourage the buyers to make immediate purchase of a product or service. These include all promotional efforts other than advertising, personal selling and publicity. Sales promotion activities include offers of cash discounts, sales contests, free gift offers and free sample distribution. Sales promotional incentives actually supplement advertising and personal selling efforts. Such promos can also be in the form of dealer discount and dealer incentives. Sales persons are also offered bonus on targeted sales as well as special incentives based on contests.

Merits of Sales Promotion:

(i) Attention value: Through sales promotion activities attention of the people is drawn to intended products and generate interest.
(ii) New Product Launch: Sales promotion tools can be very effective at the time of launching of new products. It convinces people to have a look at the new product breaking away from regular buying behaviour and test its usefulness.
(iii) Synergy in promotion: Sales promotion activities are designed to supplement the personal selling and advertising efforts used by a firm. This makes the whole promotional efforts more effective.

Limitations of sales promotion:

(i) Disguised Crisis: Frequent sales promotion campaigns may give the impression that the company is not able to drive sales in normal course and that the demand is on the wane.
(ii) Spoils Product Image: Use of sales promotion tools may give negative impression about a product and the buyers may be wary to purchase it.

Sales promotion Techniques:

(i) Rebate: Offering products at a special price to clear off excess inventory, is a promotional technique frequently adopted by companies. A particular car manufacturer may offer rebates are on particular models and offer such cars at a special price to boost sales.

(ii) Discount: Offering products at less than list price i.e. offering a certain percentage of discount is another way of inducing buyers to buy more.

(iii) Quantity gift: Offering extra quantity of a product in the same packaging is a popular option of sales promotion. For example, a tube of toothpaste may be offered with 20% extra quantity in it and the same is written on the package.

(iv) Refunds: Refunding a part of price paid by a customer on proof of purchase like returning empty foils and wrappers is a time -tested technique of sales promotion.

(v) Freebies: Companies often come up with ‘buy one get one free’ offers. Thus, if a person buys an item, he may get one more item free with it. Often, customers get attracted to such offers and purchase the advertised item.

(vi) Product Combinations: Often two different products are bundled together and offered for sale. One of these is projected as free gift and the other one is sold in the same turn clearing stocks of both the items especially in off-season.

(vii) Assured Gift: ‘Scratch a Card ‘ for free gift is an instant way of inducing buyers to buy a specified item is a pretty common technique when a new product is introduced.

(viii) Real-time benefits: In this technique, a certain minimum amount of purchase is proposed to fetch benefits like free holidays or discount vouchers redeemable at a later date.

(ix) 100% Finance: Many sellers sell electronic goods, consumer durables, cars etc. offering easy instalments in the form of full(100%) interest free finance. This enables customers to access high value items and boost up sales of the company.

(x) Free Samples: Often samples of a products are distributed free of cost to potential customers to draw attention to product improvement.

Difference between Sales and Marketing

1. Timing: Marketing is more campaign oriented, so its functions begin even before sales begin. Sales starts after production is done and goods are for delivery.
2. Focus: Marketing is buyer-centric and focusses on their needs and amends goods accordingly. Sales, on the other hand is concerned about the company’s turnover.
3. Scope: Marketing is an all -encompassing strategy to project a company’s products and includes market research, product planning, advertising. Selling seeks to achieve targeted turnover through the distribution channel.
4. Functionality: Marketing mechanisms create demand through ad campaigns and advertisements while selling meets those demands to satisfy customers.

(c) Advertising – meaning:

Advertising is perhaps the most commonly used tool of sales promotion. It is an impersonal form of communication which is paid for by the marketers (sponsors) to promote some goods and services. The most common modes of advertising are newspapers, magazines, television and radio. We come across hundreds of messages through these channels that tell us about goods like toilet soaps, detergent powder, soft drinks etc., and services like hotels, insurance policies and so on. Advertisement is carried out in two distinctly different ways:
(a) Print media – newspapers, magazines, billboards etc.
(b) Electronic media – Television, social media. Digital ad etc.

The important features of advertising are listed below:

(i) Paid form: Advertising is a paid form of communication. The cost of communicating with the prospective clients has to be borne by the sponsor (advertiser). Thus, the cost of putting up a promotional ad on television (TV commercial) must be borne by the sponsor company.

(ii) Impersonality: There is no face -to – face contact between the prospect and the advertiser. It is, therefore, referred to as impersonal method of promotion. Advertising creates a monologue not a dialogue.

(iii) Identified Sponsor: Advertising is undertaken by some identified individual or company who initiates the advertising efforts and bears the cost of it.

Importance of Advertising:

Advertising, as we have seen, is a medium of communication with prospective buyers and makes great impact on the sales of products and services of businesses. The importance of advertisement can be understood from the following points.

(i) Mass Reach: Advertising is a medium through which a large and diverse range of people can be reached. The messages of advertisement even cover wide geographical area as most ad-campaigns are carried out in different languages in national dailies, magazines, television and digital media. So, advertisement reaches millions of people every day.

(ii) Creating awareness: With forceful media presentation the consumers become aware about new products and their utilities. They also come to know about new technological innovations which can change the quality of life. Modern day advertisements make great impressions on people.

(iii) Buyer confidence: Advertisement creates confidence amongst prospective buyers as they become aware of product quality and functionality. Advertisement makes them comfortable with their choices.

(iv) Economies of scale: It is a known fact that products and services can be offered at reasonable price levels if an economic scale of production can be achieved to reduce costs. Advertisement helps companies achieve greater sales and achieve an economic scale of production. So, the producer and the consumer are both benefited.

Concerns about Advertisement:

(i) Added Cost: Advertisements, especially the ad-campaigns are hugely expensive. These costs are absorbed by the companies by including them in the costs of manufacturing/servicing. The added costs are finally passed on to the buyers in the form of higher prices.

(ii) Undermines social values: Another important criticism of advertisement is that it undermines social values and promotes materialistic culture. Some advertisements show lifestyles which do not find social approval. They can also breed discontent among sections of people who find goods advertised are beyond their purchasing power.

(iii) Confusing Buyers: Advertisement may create confusion among buyers when too many products advertised make it difficult for the buyer to decide which one to go for. Intense competition among manufacturers may make confusing claims about the products, some may even highlight deficiencies
of rival brands to make ideal choice difficult.

(iv) Unethical Advertisement: Advertisement does not distinguish between superior and inferior products and can even persuade people to purchase the inferior product through false claims. In-spite of strict laws, it is not unusual to see companies making dubious claims about the quality of their products or disguise the limitations to convince unsuspecting buyers.

Media of Advertising:

Print Media:

Print media can be termed as the classical medium of circulating advertising messages. This includes newspapers, magazines, catalogues, pamphlets, coupons etc. which are shown in printed format. It has been in existence since the discovery of the printing press.
Printed media appeals to viewers through innovative layout and content. In fact, to register a permanent impression it is unbeatable and companies have used it for dissemination of information and building a brand image since long.

Advantages:

(a) Lasting impression: Newspaper and other print media advertisements hold reader attention
and make a lasting impression on them
(b) Brand image: Print media combines readership and viewership to build a strong brand image.
(c) Target audience: Various advertisements in print media can be targeted at readers who have different interests like finance, education, properties etc.
(d) Flexibility: One can adopt a flexible approach while inserting an advertisement varying its content as per market situation.
(e) Trust build-up: Through repetitive exposure print media successfully builds a bridge of trust between the consumer and the seller

Digital Media:

Digital media is the all- encompassing advertisement campaigns carried through television and internet, radio and social media. It has overwhelming influence on viewers of all sections who immediately identify themselves with content.
The impact of digital media especially television and internet is instantaneous and makes a great impression on viewers. Digital media is everchanging, both in form and content and this versatility gives them an edge over other media formats in modern times.

Advantages:

(a) Speed and Coverage: Digital media operates at great speed and reaches a broad spectrum of people quickly. There is no waiting period. Exposure time is short but very effective.
(b) Cost-Effective: Because of speedy transmission and wide coverage electronic media is cost -effective.
(c) Global Reach: Internet is the vehicle to global markets through speedy networks.
(d) Media Variety: Digital media offers a number of communication options. Radio advertisement is an audio option along with cell phone network. Television and internet offer immersive contents.
(e) Recording and archiving: Recording and saving contents are extremely useful features where one can save contents for future reference.

CBSE Class 10 Elements of Business Unit VI: Selling – Completed

The following topics have been completed in Unit VI: Selling:

(a) Personal selling – meaning and importance
(b) Sales promotion – meaning and techniques
(c) Advertising – meaning and importance and media of advertising