THE EFFECTIVENESS OF PERSONAL SELLING STRATEGIES IN MARKETING OF CAPITAL GOODS

THE EFFECTIVENESS OF PERSONAL SELLING STRATEGIES IN MARKETING OF CAPITAL GOODS

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Personal selling has evolved into one of the most important promotional strategies in marketing, according to L.A. Rogers (1980). He added support to the aforementioned claim by stating that when all theorists and planners had their say and the problems relating to labor, finance, and manufacturing had been settled, someone had to go out and make sales.

Because a product cannot be made in Enugu and is unavailable in places like Lagos, where it is desperately required, this discovery seems to be acceptable. This is the importance behind the salesperson’s claim that they should look into customer needs in addition to satisfying them and aiming to maximize profit goals.

A close examination of the aforementioned claim reveals how crucial personal selling is to the marketing of capital goods. A product may be of the highest quality, but it is useless until it is in the hands of potential customers. The best method for getting things from the manufacturing area into the hands of potential customers is through personal selling.

Personal selling is unpredictable, adaptable, and dynamic. It has historically been mostly linked to business transactions, which have gone through several periods that can be divided into the eras of early traders, American peddlers, and professional salespeople. In most ancient cities, the early tradesmen still remain. Some of these first nations relied heavily on trade with other communities to support their economies. Tradespeople often own the products they sell, which they or members of their close family produced. Sometimes they go above and beyond their contractual commitments to sell by fulfilling marketing duties like transportation and storage.

According to L.A. Rogers (1980) personal selling has become one of the vital promotional tools in marketing.  He further buttresed the above proposition by stipulating that after all the theorists, planners must have had their moment and the predicaments associated with production, finance and labour have been resolved, then someone has to go out and knock at someone’s door and sell.

This revelation is apparently acceptable because a product cannot be produced at Enugu and is not available in place like Lagos where such product is highly needed.  This is the significance behind the notion of sales contention that, they should investigate into the needs of consumers as well as filling them with satisfaction and maximize profit objectives.

A critical analysis of the above statement highlights the importance of the effectiveness of personal selling on the marketing of capital goods.  A product may be of extremely high grade bu8t has no utility until it gets to the hands of prospective buyers, and the most appropriate route for passing products from manufacturing arena to the hands of potential buyers happens to be through personal selling.

Personal selling is dynamic, flexible and volatile.  Traditionally, it is mainly associated with commercial transactions which has passed through distinct eras that are characterized as, the eras of the early traders – the American peddlers and the era of the professional sales people.  The early traders exist in most ancient cities.  Some of these earliest states based the primary portion of their monies on trading with other communities.  Trades typically have the ownership of the goods being sold, manufactured either by themselves or their immediate families.  At times, they perform their marketing functions like, transportation, and storage, in addition to selling obligations.

The American peddlers of the colonial era enable them sell their goods to the then settlers.  Most of these settlers were immigrants who view their respective jobs as one of the available means of getting a fresh start in a new country.  Professional selling started shortly after the World War II.  Under this seen, the economy switched from the previsions situation of sellers’ market to that of buyers’ market in which goods were plentiful in supply.  Due to the industrial revolution of the 17th century which encourage the birth of a number of new companies of which capital goods companies were among.

The companies had varieties of products with moderate qualities. A s at the said era, many industries operated under the philosophy “that the customers will buy any product provided it can be supplied” goods had to be marketed mainly for the facts that consumers now have choices and the selling adopted a radical change to reject this new seen.

MB Anamco is a global and also a franchising company whose head quarter is a Germany with its subsidiary manufacturing plant located at Emene Industrial Layout here in Enugu State.  It started its operation around 1980.  As the company began to experience increase in productivity and sales volumes, it started opening sales branches in different states of the country.  It has been a leading firm in the motor industry with transparent image.

Anambra Motor Company at its inception was not hing but a mere motor assembly plant, but the prevailing situation with the company has changed drastically from a mere assembly plant to a manufacturing company.

The progress and high demanded of the product is a partial brain behind the company’s elevation in product capacity in previous years, and this also created rooms for the absorption of more workers in the divergent department, thus helped to reduce the high rate of social menace that would have associated the situation of mess unemployment.

The aforementioned business, which was thought to have reached the pinnacle of the motor manufacturing industry, has, however, begun to see a decline in its sales volume and market share. A source close to the situation claims that a lot of recent events can be used to explain this experience. From a certain time, there have been an increasing number of businesses producing and selling various automobiles, buses, trucks, and other vehicles, in addition to the development and effective use of a variety of advertising tactics.

Therefore, the management of Anamco is not skeptic about the wonders of personal selling in the marketing of capital goods, and given that this promotional tool could only justify its wonders in the marketing of capital goods when it is successful in doing so, the management is not

1.2 STATEMENT OF THE PROBLEMS

In recent years, the sales volumes of Anambra Motor Company have started to decline. This is how intense industry competition for customers’ business, good customer service, and efficient use of promotional tactics affects sales volumes. This is the exact reverse of what the business filed suit to see in the prior years.
The management of the company is still unsure of the cause of the low sales volumes that have resulted in other major issues including decreased profitability, a small market share, and a decline in the rate of promotion and employment. The performance of the sales team, however, is being seriously questioned by the company’s management.

THE SPECIFIC PROBLEMS TO BE ADDRESSED ARE:

–    Is the ratio of sales to sales call high or low?

–    Is the ratio of sales expense to sales volumes high or low?

1.3   OBJECTIVES OF THE STUDY

Personal selling has been acknowledged as the cornerstone of an organization’s success in the face of fierce competition, regardless of the form and structure of the latter. Thus, the business is able to produce more food for its operations.

The budgetary allocation of a sizable sum to the sales divisions on a regular basis is primarily motivated by the aforementioned reality. To this purpose, the study’s goals are as follows:
– To determine whether the sales expense to sales volume ratio is high or low enough to justify allocating more money to the operations of the sales force.
– To determine what management can do to remedy the condition of excessive cost of sales returns.
– To assess whether there is a high or low ratio of sales calls to sales volume.

1.4   FORMULATION OF HYPOTHESIS

This study is meant to verify the effectiveness of personal selling in the marketing of industrial (capital) goods.  To this regards the following hypothesis are formulated:

H01:   The ratio of sales expense to sales volumes is not high

H02:   The ratio of sales calls to sales volumes is high

H03:   There is a low ratio between current and past performance.

1.5 SIGNIFICANCE OF THE STUDY

Anamco’s public relations department in Enugu claims that the business has been and will continue to uphold its corporate and social obligations. This is consistent with Brown’s assertion that (1974). According to him, a business must maintain a definite competitive edge and manage the marketing mix in a way that will guarantee ongoing client happiness if it wants to maintain the patronage of its clients. Mercedes Benz Anamco has been and will continue to put more effort into its CSR initiatives.

THE PURPOSE OF THIS STUDY IS TO ACCOMPLISH THE FOLLOWING:

– Give suggestions to Anamco’s management regarding how to deal with the issues of low sales volume and high sales expenses to sales volume ratios.
– The researcher’s main belief is that this study will be of the utmost importance in guiding and aiding the bearing and resolution of their difficulties for both existing and upcoming researchers.
– Other businesses in the same sector as Anamco who are struggling to increase sales and profitability will also benefit from the study.

1.6 SCOPE OF THE STUDY

This study’s scope is very broad because it must be conducted throughout all Nigerian departments and branches. Hence, the study will only include employees in the eastern half of the country’s Enugu State’s sales and cost accounting departments as well as some employees of the financial sector. The findings may not reflect the situation in the full branches, but by and large, what happens in Anamco Enugu may be stated to apply to Lagos branches and others.

1.7 DEFINITION OF TERMS

Marketing is a social process that allows people and groups to freely create, trade, and exchange goods of value with one another in order to fulfill their needs and wants.

PROMOTIONAL TOOLS: Activities or approaches used to communicate with a target audience or market are referred to as promotional tools. The target audience is intended to be informed, educated, persuaded, and influenced. These messages might be communicated through advertising or personal PR (the promo tools).

PERSONAL SELLING: A face-to-face sales presentation is known as personal selling. It is a face-to-face meeting between the seller and the buyer with the intention of closing a deal. It is characterized by verbal communication and gestures that enable flexible message alteration to meet the demands, interests, and reactions of the buyer.

CAPITAL (INDUSTRIAL) GOOD: Capital goods are technical items that are purchased in accordance with specifications in order to produce other goods or provide additional services.