Effectiveness Of Personal Selling In The Marketing Of Capital Goods

Project and Seminar Material for Marketing

Effectiveness Of Personal Selling In The Marketing Of Capital Goods


Abstract


This study focused on the effectiveness of personal selling in the marketing of capital goods. It goes on to explain some processes involved in personal selling and how it can be combined to achieve efficiency. Anambra Motor Manufacturing Company was the company used in this study, its staff were studied as well as their business consumer in other to determine the effectiveness of personal selling in the marketing of their products.

The main purpose was to find out among their things the following.

  1. Effectiveness of personal selling in the creation of awareness
  2. The impact of personal selling on repeat purchase
  3. How ANAMMCO Product demonstration awakens the customers interest.
  4. To know if ANAMMCO’s customer’s patronage is high or low in relation to personal selling
  5. To know if ANAMMCO’s ration of sales expenses to sales volume is high or low.
  6. To study the performance of ANAMMCO sales person and how their performance affects the company’s profit.

The populations of the study were from the management/staff of ANAMMCO and their business consumer in Enugu metropolis.

Topman’s formula was used to determine the sample size since it was not possible to study the entire population in Enugu metropolis.

Questionnaire was used to collect data from respondents. These data were carefully analyzed and interpreted using tables which chi-square statistics were used to test the four hypotheses formulated.

Based on the analysis, the following findings were made.

  1. That ANAMMCO sales persons are performing well in creating awareness for their products.
  2. That the sales person are also not lagging behind in getting the interest of the prospects
  3. That the company is operating at a good profit margin but has not actually measured up to the expected level.
  4. That the customers patronage level needs to be improved
  5. Inadequate motivation of sales force

Based these findings, the reasonable recommended ways with which to solve some of the problems encountered by the company. Such as mapping out the following strategies to improve customers patronage.

  1. Provide additional product information and suggestions for product care and maintenance though brochures or advertising.
  2. Ensure good services and immediate follow up on complaints to provide post-punch have support.
  3. Follow up after the purchase with direct contacts to make the customers understand how to use the products and to ensure satisfaction.
  4. Increase the level of customer involvement with their brand by increasing the importance of a product attribute

It is strongly believed that if the above measures are taken, the company will be placed on the track of efficiency.


Chapter One


Introduction

For over a decade and half now, which specialize in the production of quality Mercedes Benz products like: Benz vehicles such as tippers, lorries, tankers, jeeps and a lot a host of others has for the nation of fears been keeping the nation on a regular speed.

Utilizing considerable ideal components these vehicles are built as nothing but replica of the household Mercedes Benz tradition of excellent and durability.

At its inception, MB ANAMMCO was nothing but a mere motor assembling plant, which was initially planned to produce trucks for the Nigerian market. But today, the prevailing situation with the company situation with the company has changed drastically from a mere assembling plant to a manufacturing company. The plant has diversified its product range to include the full range vehicle for the rapid commercial vehicle for the rapid industrialization of the country. It not only produces trucks such as L800, L1418, and ACTROS, but has gone a step further in design, fabrication manufacturing production and sales of buses and other utility vehicle.

Part of its product range include MBO 800, MBO 1418, MBO 1721, MBO 400 Marcopolo/Busscar, fire fighting vehicles Ambulances, Mobile Clinics, Refuse Collectors and other various specialized types of vehicle.

Unstressed by the evergreen availability of genuine spare parts and efficiently of their sales services which is a major trait of any personal selling effort, MB ANAMMCO has not only been keeping the nation a motion but has also been baron with regard to the incessant strife towards developing the path to establishing an indigenous auto industry.

The company is a joint venture between the federal government of Nigeria and Daimler Chrysler AG. It is a franchising one, which was commissioned on July 8, 1980 and started its official production in January 1981 having been mandated by the original owner of the Mercedes Benz trademark.

At its preamble, Mercedes Bens ANAMMCO was established with its cooperate headquarters at Emene industrial layout PMB 2523 in Enugu state.

However, the aforementioned company having attained the peak in the field of manufacturing as well as the provision of after sales services in the motor industry had decided to spread its sales offices over almost all states in Nigeria. Primarily as a result of increase in the demand for its products and thus positive experience is due mainly to the dissemination of words of mouths to others who have not detected the wonders in the company’s products especially in the areas of efficiency, durability, prestige, comfort and a host of others.

This words of mouth confession being made by both current as well as previous patronized of the firms product is a partial brain behind the company’s elevation in production 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 mass unemployment.

Thus certain individuals particularly the enlightened have been thanking ANAMCO for its laudable act in the continued improvement into our economy through its previous but high productive attainment bin the previous years.

However, the senior assistant manager in charge of franchise and marketing development has not failed to give credence to the various promotional techniques in ensuring the previous attainment. According to him,, the use of promotional tools are indispensable in the marketing of capital (industrial) foods. This is apparent as users of such products are seeking both current information as well as the provision of after sales services and those terms related to the purchase and application of industrial (capital) goods.

However, the aforementioned company which either had attained the peak in the motor manufacturing industry has started experiencing a dwindling ground in its sales volume and market share. This current situation has thrown the management of the aforementioned company into chaos as a reliable percentage of their market shares have been captured by other competitions in the same industry.

According to an insider, this nauseating experience is accounted for by a number of recent developments. Some of these developments are:

The incessant increase in the number of companies currently involved in the manufacturing and sales of different cars, trucks etc and besides the increase and efficient application of the divergent promotional tools.

In accordance with his contention, previously, there were relatively few firms in the motor industry and thus tends to reduce the level of competition among the few producers; he further stipulated that under such situation a particular firm will generate a reliable volume with a minimum promotional effort of ANAMMCO as at the said era.
He buttered his points by revealing that increase in the number of companies constituting a particular industry is synonymous to increase in technological developments and innovations as well as extreme competitions coupled with efficient utilization of the promotional strategies.

Before this experience of related sales volume and profitability, the management of the company has been adopting both advertising, publicity sales promotion and personal selling in relating as well as persuading both current and potential customers to indulge in the constant application of the company’s products.

However, the management of ANAMMCO is not skeptical regarding the wonders of personal selling in the marketing of capital goods and that this promotol could only justify its wonders in capital goods marketing, only when it is effective. To this end, the management is interested in knowing if its sales force is effective or otherwise. This is the core of this study.


1.1 Background of the Study

Selling has been a standard business activity for thousands of years. The earliest peddlers were traders who had some type of ownership interest in the goods they sold after manufacturing or importing them. In many cases, these people viewed selling as a secondary activity.

Selling later became a separate business function. The peddlers of the 18th century sold to the farmers and settlers of the vast North American continent. In the 19th century, sales people called drummers sold to both consumers and marketing intermediaries. These early sellers sometimes used questionable sales practices and technique, and they carried undesirable reputations for themselves and their firms.

But selling is far different from what it was in its early years. Far from the fast-talking, joke telling, backslapping caritures in some novels and comic strips, today’s sales person is usually a professional. Professor Ingram and Laforge (1995 defined sales professionalism as, a “a customer-oriented approach that employs truthful, non manipulative tactics to satisfy the long term needs of both the customer and the selling firm”. Professional sales people are problem solvers, focusing on satisfying the needs of customers before, during and after the sale. They are armed with knowledge about their firm’s goods or services, those of competitors and their customers businesses.
Personal selling today is a vital, vibrant dynamic process. It is an interpersonal persuasion process designed to influence certain persons decisions it is an important ingredient available to the executive responsible for determining the promotional mix. It involves face-to-face experience between the seller on his/her representative and the prospective customers as the case may be. The effectiveness of personal selling as a major promotional tools in the industrial (capital) goods industry cannot be over emphasized. Sales forces accomplish this objective in a number of ways.

According to Ropers, (1992 P 40) management, personal selling has become one of the vital promotional tools in marketing. He further buttressed the above 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 a place like Lagos where such product is highly needed. This is the significance behind the notion of sales contention that, the sale people for prospecting, the should investigate into the needs of consumers as well as filling them with satisfaction and optimize profit objective.

A critical analysis of the aforementioned statement highlight the importance’s of the effectiveness of personal selling on the marketing of capital goods. A product may be of extremely high grade but has no utility it gets to the hands of prospective buyers; and the most appropriate state for passing products from manufacturing arena to the hands of potential buyers happens to be through personal selling. It is pertinent to recognize at this moment that personal selling is nothing but a Herculean task.

This is so as the sale-person has little or no time for rest primarily because he/she indulges at home works and at certain times involves himself in some sale calls that, may never result into sales.

A sales philosopher called “stake holders alignment” says that people attempts to become partners with their customers. He continued by saying that sale people should have more of business mentality and contemplate more on the customers profit needs.

How someone sells is an offspring of what is being sold. To this regard, good sales person should be able to identify correctly the persuasive message that is precise in a given sales situation.

MB ANAMMCO is a global and also a franchising company whose headquarter is in Germany with its subsidiary manufacturing plant located at Emene industrial layout here in Enugu state. As the company began to experience increase in productivity sales volumes, it states opening sales branches in different states of the country. It has been a leading firm in the motor industry with transparent image.

However, in recent times the company stated experiencing a reduction in its market share and this is willing but a problem and if not taking care of will affect the companies past glory.


1.2 Statement of the Problems

Anambra motor manufacturing company has started experiencing a reduction in its sales volumes in recent times.

This low sales volume is as result of a keen competition that exists in the industry.

Thos situation is a direct opposite of what the company used to witness in the previous years.

The reason for the new low sales volumes leading to other serious problems like reduced profitability, low market share, reduction in the rate of promotion as well as that of employment is still unknown to the management of the company.

However, the company’s management is seriously questioning the effectiveness of the sales force other problems like.

  1. Is the ratio of sales expenses to sales volumes high or low?
  2. Is the ration of sales to sales calls high on low?
  3. Does the company not budget enough for sales reps, these and other issues will form the task of this research work.

1.3 Objectives of the Study

Whatever the nature and structure of an organization is personal selling activities needs to be inculcated. Personal selling has over he years been seen as the bedrock of a company’s success which helps to generate more funds for company’s operation.

It is therefore one aim of the researcher in this study, which was conducted in Anambra motor manufacturing company ANAMMCO Enugu to focus on the finding on the following activities.

  1. To know the effectiveness of persona selling in the creation of awareness
  2. To study how ANAMMCO product demonstration awakens the customers interest.
  3. To know if the customers patronage is high a low relation to personal selling activities ANAMMCO
  4. To know if the ratio of the company’s sales expenses to sales volume is high or low.
  5. To study the performance of ANAMMCO sales persons and how their performance affects the company’ profit.

1.4 Formulation of Hypotheses

This study is meant to know the effectiveness of personal selling in the marketing of capital goods of Anambra Motor Manufacturing company ANAMMCO.

The following hypotheses are therefore formed for this study

  1. Ho1: Personal selling activities of ANAMMCO do not create awareness of their product.
  2. Ho2: Personal selling activities also in the marketing of ANAMMCO products do not awaken the customers interests.
  3. Ho3: Personal selling activities of ANAMMCO does not head to increased customers patronage of their goods.
  4. Ho4: Personal selling activities of ANAMMCO impacts negatively on the profit of the organization

1.5 Significance of the Study

According to Brown S. (1991:169) “it is a company is to continue answering its customers patronage, then it has no other alternative than the maintenance of a clear cut competitive advantage and managing the marketing mix in a manner that will ensure continuous customers satisfaction”.

Mercedes Benz Anammco has been and will continue to strive holder in the area of cooperate and social responsibilities says the public relation manager MB ANAMMCO Enugu.

To this end the significant of this study are as follows:

  1. To help the MB ANAMMCO management to overcome the problems of low sales volume as well as make use of the recommendations to tackle other problems.
  2. It is also the primarily view of the researcher that both current and potential researchers will find this work relevant with regard to directing and facilitating the bearing and solution of their problem in relation to this study
  3. The study will also be of paramount importance to other companies in the same industry with ANAMMCO in their strife to surmount low sales volumes and low profitability.
  4. This study also will help the researcher to gain more experiences to be a field sales person.

1.6 Scope of the Study

These study aught to have taken a wider dimension to make it more elaborate. However, because the researcher of this study is a student and do not have enough time and resources, to study the whole ANAMMCO branches and customers in the country, the scope was restricted to the findings in Enugu metropolis.


1.7 Definition of Terms

(a) ANAMMCO:

Anambra Motor Manufacturing Company

(b) M.B

Mercedes Benz

(c) Capital / Industrial Goods:

Goods/Products intended to be used for further production (Odoh 2003:2)

(d) Promotools:

All short term devices utilized in boosting sales (Adirika, Ebue, Nnolin 1996: 143)

(e) Sales Force Size:

Number of sales representative in a company (Adirika, Ebue, Nnolin 1996:143)

(f) Trade Ins:

Allowances given for a used item. When a customer purchases a new item. (Boone & Kuntz 1995:721)

(g) Cognition Dissonance:

Post – purchase anxiety that results when an in balance exists among an individuals cognitions (knowledge beliefs, and attitudes). (Boone & Kurtz 1995: 272)

(h) Push Strategy:

Promotional effort by a seller to members of the distribution channel goods and service, thereby pushing it through the marketing channel (Boone & Kurtz 1995:582)

(i) Sales Quota:

Level expected sales on profits for a territory, product, customer or sales person against which actual results are compared (Boone & Kurtz 1995:663).


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings into the effectiveness of personal selling in the marketing of capital goods using ANAMMCA Enugu branch as case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the effectiveness of personal selling in the marketing of capital goods using ANAMMCA Enugu branch as case study.The study specifically was aimed atknowing the effectiveness of personal selling in the creation of awareness; study how ANAMMCO product demonstration awakens the customers interest; know if the customers patronage is high a low relation to personal selling activities ANAMMCO; know if the ratio of the company’s sales expenses to sales volume is high or low; and study the performance of ANAMMCO sales persons and how their performance affects the company’ profit.

The study adopted the survey research design and purposively enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are active staff of ANAMMCA Enugu State.


5.3 Conclusions

Based on the findings of this study, the researcher made the following conclusion.

  1. Personal selling activities of ANAMMCO creates awareness of its product.
  2. Personal selling activities also in the marketing of ANAMMCO products do awakes the customers interests.
  3. Personal selling activities of ANAMMCO does lead to increased customers patronage of their goods.
  4. Personal selling activities of ANAMMCO does not impacts negatively on its profit

5.4 Recommendations

Based on the findings of this study, the researcher recommended that the company should map out such strategies mentioned below to improve customers patronage such as; provision of additional product information and suggestions for product care and maintenance though brochures or advertising; Ensure good services and immediate follow up on complaints to provide post-punch have support; Follow up after the purchase with direct contacts to make the customers understand how to use the products and to ensure satisfaction; Increase the level of customer involvement with their brand by increasing the importance of a product attribute; It is strongly believed that if the above measures are taken, the company will be placed on the track of efficiency.


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