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Tutorial 4 Chapter 3 Linking Strategies & The Sales Role in The Era of Customer Relationship Management A) Essay Questions

This document contains three essay questions about linking strategies and the sales role in customer relationship management. The first question defines and contrasts transactional selling, relational selling, and strategic partnerships. The second question discusses how personal selling activities change in the exploration, expansion, and commitment stages of developing a business relationship. The third question explains what customer relationship management (CRM) is and discusses how CRM can improve customer service and increase repeat business through optimizing customer interactions, acquiring and retaining customers, enabling salespeople to better manage relationships, and allowing companies to compete based on service rather than price.

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Thanh Duy
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50 views

Tutorial 4 Chapter 3 Linking Strategies & The Sales Role in The Era of Customer Relationship Management A) Essay Questions

This document contains three essay questions about linking strategies and the sales role in customer relationship management. The first question defines and contrasts transactional selling, relational selling, and strategic partnerships. The second question discusses how personal selling activities change in the exploration, expansion, and commitment stages of developing a business relationship. The third question explains what customer relationship management (CRM) is and discusses how CRM can improve customer service and increase repeat business through optimizing customer interactions, acquiring and retaining customers, enabling salespeople to better manage relationships, and allowing companies to compete based on service rather than price.

Uploaded by

Thanh Duy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Tutorial 4

Chapter 3 Linking Strategies & the Sales Role in the Era of Customer Relationship
Management

A) Essay Questions

1) Define and contrast transactional selling, relational selling and strategic


partnerships.
One view of exchange is that each and every interaction with a customer is a
unique and independent event. Companies that consistently follow this view are
practicing transactional selling. Transactional selling is at the low end of the
relationship involvement continuum. The exchange environment is characterized
by short-term customer needs. Sales reps make periodic sales calls, with high-
volume customers receiving more frequent visits than low-volume customers.
Buyers and sellers remain independent, and each transaction is conducted as a new
event. Thus, the relationship lasts only as long as necessary to complete the sales
transaction. No long-term commitment or loyalty is involved, and little value is
assigned to understanding long-run buyer needs and expectations. Transactional
selling can be more adversarial than cooperative. Price becomes a key
consideration—neither the salesperson nor the customer is looking for much
beyond the immediate transaction, and issues like service after the sale are
relatively less important. Thus, the most common way to increase value is to lower
price.
(7 marks)

Both relational selling and partnerships adopt the relational view in business
exchanges. Attracting new customers costs significantly more than reselling to
current customers. In a relational exchange, both buyer and seller recognize that
each transaction is just one in a series of purchase agreements. Thus, relational
selling is more customer-centric than transactional exchanges are. The exchange
environment is characterized by a spirit of cooperation between buyer and seller.
Firms seek to develop profitable, ongoing relationships with customers by
delivering high value and creating a sense of loyalty. Thus, relational exchange
relationships are characterized by frequent, even daily contacts between the sales
force and the customer, or by electronic systems that enable the seller to monitor
various aspects of the buyer’s business, such as inventory levels and reorder points.
Relational exchange has a longer-term focus than does transactional exchange. As a
result, salespeople can develop ties that generate repeated transactions. These
relationships require higher levels of trust because switching costs are increased
due to greater dependence. Consider a computer manufacturer that purchases
processor chips via transactional exchange relationships. Over time, the company
will use many different suppliers.
(6 marks)

MKT205 Sales Management Lecturer’s Copy HELP University


Sometimes in relational exchanges the buying and selling firms are so closely
intertwined they become partners. This type of exchange environment is a strategic
partnership. Strategic partnerships arise when the goals, strategies, and resources of
buyers and sellers are so interconnected they develop an integrated, symbiotic
relationship while retaining their independent identities. Strategic partnerships are
at the opposite end of the exchange continuum from transactional exchanges. They
are based more on inter-organizational collaboration than on arm’s-length
aggressive bargaining and are not viewed as competitive. In fact, decision making
often is collaborative, and firms share managerial resources and expertise when
solving key strategic and tactical issues. Companies that skillfully establish
strategic partnering agreements can shore up weaknesses and capitalize on
strengths together, thereby making both partners stronger. Strategic partnerships
result in continuous, recurring exchanges. This requires intensive levels of
communication, relationship openness, information sharing, joint problem solving,
strategic integration, and mutual learning. Strategic partnerships also exhibit high
levels of collaboration among partners; equality; shared vision, benefits, and goals;
and high levels of trust.
(7 marks)

2) There are 3 different stages in developing a business relationship. Name and


discuss personal selling activities change in the different stages of developing a
business relationship?
Exploration stage
The goal is building trust. This can be facilitated by setting proper expectations,
monitoring order processing and delivery, ensuring proper use and assisting in
servicing.
Discuss in detail what the salespeople should do in each stage.

Expansion stage
The goal is to sell new products or increase sales of existing products. Selling
changes to efforts to get customers to upgrade, purchase the full-line of products
and cross-selling.
Discuss in detail what the salespeople should do in each stage.

Commitment stage
The goal is gaining commitment. This can result in preferred provider status. Often
TQM initiatives, placement of sales personnel in the customer's facility or gaining
access to customers' production and sales data increase commitment
Discuss in detail what the salespeople should do in each stage.

MKT205 Sales Management Lecturer’s Copy HELP University


3) According to Johnson & Marshall (2011), the most prevalent formalization of a
customer-centric culture is customer relationship management (CRM). Explain
what CRM is. Discuss how CRM can improve customer service and increase
repeat business.
CRM is a comprehensive business model for increasing revenues and profits by
focusing on customers. It can be any application or initiative designed to help an
organization to optimize the interactions with customers, suppliers, or prospects
via one or more touch points – such as call center, salesperson, distributor, store,
branch office, web or e-mail – for the purpose of acquiring, retaining or cross-
selling customers.

Benefits:
a) CRM and SFA systems will enable salespeople to manage customer
relationships. Specifically, salespeople will be aware of customer needs and
will be able to track previous purchases. This will help make inventory
management efficient, thus reducing opportunity costs. Besides, by tracking
on the customers’ purchases, it makes it easier for the company to track the
effectiveness of a given promotional campaign.
b) CRM makes it easier for the salespeople to target specific customers by
focusing on their needs. This in turn prevents the company from
overspending on low-value clients or overspending on high-value customers.
c) CRM and SFA systems allowing companies to compete for customers based
on service, not prices. It enables the salespeople to have a clear focus on
service attributes that represent value to the customers and that create loyalty.
Salespeople will be able to provide a higher level of customer service, which
will lead to repeat business and build customer loyalty.

MKT205 Sales Management Lecturer’s Copy HELP University

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