Selling Today: Creating Customer Value, Seventh Canadian Edition Solution Manual

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RESOURCE MANUAL
H.L. (Herb) MacKenzie
Brock University
SELLING TODAY: PARTNERING TO
CREATE VALUE
Seventh Canadian Edition
Gerald L. Manning
Des Moines Area Community College
Michael Ahearne
University of Houston
Barry L. Reece
Virginia Polytechnic Institute and State University
H.F. (Herb) MacKenzie
Goodman School of Business
Brock University

ii
Table of Contents
Introduction ..................................................................................................1
Chapter 1 ....................................................................................................15
Chapter 2 ....................................................................................................22
Chapter 3 ....................................................................................................28
Chapter 4 ....................................................................................................39
Chapter 5 ....................................................................................................46
Chapter 6 ....................................................................................................54
Chapter 7 ....................................................................................................62
Chapter 8 ....................................................................................................68
Chapter 9 ....................................................................................................77
Chapter 10 ..................................................................................................84
Chapter 11 ..................................................................................................91
Chapter 12 ..................................................................................................97
Chapter 13 ................................................................................................105
Chapter 14 ................................................................................................112
Chapter 15 ................................................................................................119
Chapter 16 ................................................................................................126
Chapter 17 ................................................................................................132
Appendix 1 ...............................................................................................139
End-of-Part Role-Play Exercises .............................................................163
Written Term Projects for Selling—Guidelines and Outlines .................165
Sales Videos That Accompany the Text ..................................................171

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Chapter 1
RELATIONSHIP SELLING OPPORTUNITIES IN THE
INFORMATION ECONOMY
EXTENDED PRESENTATION OUTLINE
A major goal of this chapter is to describe how personal selling skills contribute to work
performed by knowledge workers. Today’s workforce is made up of millions of knowledge
workers who succeed only when they add value to information. Salespeople, and many other
knowledge workers, add value to information when they collect it, organize it, clarify it, and
present it in a convincing manner.
As part of the Reality Selling Video Series, this chapter features Alex Homer from the Tom
James Company, selling luxury clothing.
I. Personal Selling – A Definition and a Philosophy
A. Definition: Personal selling occurs when a company representative interacts directly
with a customer to present information about a product or service.
1. Personal selling is a process of:
a. Building customer relationships.
b. Discovering customer needs.
c. Matching the appropriate products with these needs.
d. Communicating benefits through informing, reminding, and/or persuading.
2. A product is broadly defined as information, services, ideas, and issues.
B. Developing a personal selling philosophy includes three prescriptions:
1. Adopt the marketing concept.
2. Value personal selling.
3. Become a problem solver/partner.
II. Emergence of Relationship Selling in the Information Age
A. Major advances in information technology and electronic commerce.
B. Strategic resource is information.
1. Information is often too plentiful.
2. Salespeople help filter information.
C. Business is defined by customer relationships.
1. The new economy is the customer economy.
2. Relationships build a conduit of trust for information exchange.
D. Sales success depends on adding value.
1. Value-added selling is defined as a series of creative improvements in the sales
process that enhance the customer experience.

16
2. The value added by salespeople today is increasingly derived from intangibles.
III. Considerations for a Future in Personal Selling
A. Wide range of employment opportunities.
1. The 500 largest sales forces in North America employ more than 21 million
salespeople.
2. Opportunities exist that match your interests, talents, and ambitions.
B. Activities performed by salespeople.
1. Outside salespeople spend 26% of their time in face-to-face sales and 74% in
sales prep, travel, waiting, and administrative tasks.
2. Salespeople have tremendous freedom to manage their time and activities.
3. The proliferation of sales titles in today’s business world has two causes:
a. The shift from selling to consulting and partnering.
b. The increased skill sets and education needed to fill selling positions.
C. Above-average income.
1. Table 1.1 describes base salary and total cash compensation for different sales
positions.
a. Research indicates that salespeople involved in transactional sales earned the
lowest compensation. Sales personnel involved in value-added sales earned
the highest compensation.
D. Above-average psychic income.
a. Psychic income (psychological rewards) gained from a selling career may
include recognition and security.
b. In selling, recognition will come more frequently and with greater intensity
than in most other occupations.
c. Accomplishments of sales personnel seldom go unrecognized.
E. Opportunity for advancement.
a. High visibility affords opportunities for advancement.
b. Sales experience is invaluable in many middle and high management
positions.
F. Opportunities for women.
1. Sales offers women high income and flexible work schedules.
2. There is a growing awareness that gender is not a barrier to success in selling.
IV. Employment Settings in Selling Today
A. Three major settings include:
1. Services Channel.
2. Business Goods Channel.
3. Consumer Goods Channel.
B. Services Channel.
1. Approximately 80 percent of the Canadian labour force is now employed in the
service sector.

17
2. Career opportunities in the service channel:
a. Hotel, motel, and convention centre services.
(1) Salespeople sell room space, food, beverages, and services related to
hosting seminars, conferences, and meetings.
(2) Competition for convention business is intense.
b. Telecommunication services:
(1) Deregulation of telephone service has resulted in the fragmentation of
major telephone companies and the creation of numerous new communication
companies.
c. Financial services:
(1) There are more than 3000 firms that provide financial services in Canada.
d. Media sales:
(1) Sales force employed by radio/television stations sell broadcasting time to
current and prospective advertisers.
(2) Newspapers and magazines generate their main revenue from advertising
rather than from subscriptions.
(3) Media sales personnel help develop advertising campaigns.
e. Real Estate:
(1) Buying a home is usually the largest single expenditure in an average
consumer’s life.
(2) Real estate salespeople play an important role.
f. Insurance:
(1) One of the most rewarding careers in sales.
(2) Policies sold include fire, liability, life, health, automobile, casualty, and
homeowner’s.
(3) Two broad types of insurance salespeople.
(a) Those employed by major insurance companies.
(b) Independent insurance agents who represent various companies.
g. Business services:
(1) Outsourcing of services is increasing.
h. Other fields of service sales: home and business security, travel and
recreation, pest control, and transportation.
C. Business Goods Channel.
1. Common titles of salespeople:
a. Sales engineer or applications engineer – must have detailed and precise
technical knowledge.
1. Requires expertise in identifying, analyzing, and solving customer
problems.
2. May introduce new products and answer technical questions.
b. Field salespeople – find and meet needs of new customers.
c. Missionary salespeople, (detail salesperson) – primary goal is to develop
goodwill and stimulate product demand.
1. Calls on wholesale, retail, and other customers to help improve their
marketing.
2. Collects information regarding customer acceptance of products.

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18
3. Must be able to offer advice on credit policies, pricing, displays, and so
forth.
D. Consumer Goods Channel.
1. Retail selling:
a. Profile: The Hitch House (Chris Mckee)
1. Success due to expert staff.
2. Customers are willing to pay higher prices because they value the quality
products and assistance provided by salespeople.
3. Well- trained salespeople add value to the shopping experience.
2. Direct selling:
a. Independent contractors who represent manufacturers.
b. The world’s three largest direct selling firms: Amway, Avon, and Mary Kay.
Combined, they employ 1.1 million salespeople and generate $2.2 billion in
sales.
c. There are 900 000 direct selling salespeople in Canada.
V. Selling Skills – One of the “Master Skills for Success” for the Knowledge Worker
A. The following four groups of knowledge workers use selling skills, too:
1. Managerial personnel.
a. Some of the managers’ most valuable information comes from customers.
b. Executive selling helps managers learn more from customers.
2. Professionals.
a. Doctors, accountants, lawyers, engineers, and other professionals need to use
selling skills.
b. Technical skills are not enough in the information age.
c. Professionals need relationship skills to develop new business.
3. Entrepreneurs.
a. Entrepreneurs need to sell their new business plan to investors and others.
b. Business owners rely on personal selling to build their business.
4. Marketing personnel and customer service representatives (CSRs).
a. CSRs have traditionally worked with customers in non-selling areas.
b. CSRs are now learning and applying selling skills.
c. CSRs often discover customer needs.
VI. Learning to Sell
A. Basic question: “Are salespeople made or are they born?”
1. The principles of selling can be learned and applied by a variety of people.
2. Hundreds of corporations spend millions of dollars to develop salespeople.
B. Types of sales training.
1. Business training programs used to develop company salespeople.
2. Commercial firms that specialize in developing salespeople (see Table 1.2).
3. Courses to earn certification, such as CSP, offered by the CPSA.
4. University and college business departments.

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END-OF-CHAPTER ACTIVITIES
Included in this section are answers to review questions, application exercises, the role-play
exercise, and the video case problem.
Answers to Review Questions
1-1. In an era of limitless data, informed salespeople can help customers decide which
information has value and which information should be ignored. Customers who have less
time to adjust to new products and circumstances value this assistance.
1-2. The three prescriptions for the development of a successful personal selling philosophy:
(1) fully accept the marketing concept, (2) develop an appreciation for the expanding role of
personal selling in our competitive national and international markets, and (3) assume the
role of a problem solver/partner.
1-3. According to the employment setting, the classifications include retail, wholesale,
manufacturer, and service careers. (See the responses to Questions 5, 7, and 8 for additional
information regarding these four employment settings.)
1-4. There are growing opportunities for both women and minorities. This is due in part to
equal employment legislation. However, a more important reason is the knowledge that
women and minorities can be highly successful salespeople.
1-5. Most certification programs can result in increased sales competence and a more
professional approach to selling. Earning a certificate can give a salesperson a great deal of
personal pride and greater self-confidence.
1-6. There are two reasons why high performance value-added salespeople earn much more
than high performance transactional salespeople. First, salespeople who are able to add value
during the sales process tend to close more sales. Second, value-added salespeople are often
involved in selling complex products such as commercial security systems, computer
systems, insurance, and other expensive items. Salespeople who sell these products often
earn a generous commission.
1-7. These three types of manufacturing salespeople: (1) Field salespeople who sell well-
established products. A high degree of technical knowledge is not required. (2) Sales
engineers must have a high degree of technical knowledge. They identify, analyze, and solve
highly technical customer problems. (3) Missionary, or detail, salespeople develop goodwill
and stimulate demand for products. These salespeople also train employees and offer advice
on advertising, credit, pricing, display, store layout, and storage.

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20
1-8. Selling careers in the service field: (1) radio and television sales, (2) newspaper
advertising sales, (3) hotel, motel, and convention centre sales, (4) insurance sales, (5)
financial services, (6) real estate sales, (7) bank service selling, and (8) business services.
1-9. Competition in these fields is intense. Personal selling skills are used to build and
maintain a loyal client base.
1-10. Corporate-sponsored training, commercial vendor training, certification studies, and
courses provided by colleges and universities.
Suggestions/Answers for Application Exercises
1-1. The objective of this exercise it to have the students gain a better understanding of the
different types of selling that influence product acceptance. They are also likely to discover
that with convenience products, such as those in a grocery store, even though there is little or
no personal selling at the retail level, there may be a large amount of personal selling effort at
the wholesale and manufacturing levels. At the retail level, a retail sales clerk could handle
the order taking of convenience items, but for other items, such as those found at an
appliance store, a retail salesperson would be required in most cases.
1-2. The objective of this field-based exercise is to get the student talking with someone in the
selling field. The suggested questions will tend to make the visit more informative for the
student. Students can share a large amount of field-based information if they are asked to
make oral reports on their interviews.
1-3. This field interview will give students an opportunity to reflect on some of the new
challenges facing business-to-business salespeople.
1-4. Students will find a variety of information on the listed career choices—from job
descriptions to job ads to periodicals relating to the jobs. After students find information on
their desired career, have them print and submit it.
1-5. This question can generate a considerable amount of discussion. Get several students to
commit to their answers before you explore why they chose the specific personal
characteristics. You might then wish to explore whether the specific selling environment
might have an effect on the specific personal characteristics they chose; that is, selling a
consumer product versus selling a business product, selling a car versus selling insurance. An
actual study that included most of these personal characteristics asked sales managers of
manufacturing firms (B2B sales) to rank 10 indicators and found the three most important
were (1) enthusiastic, (2) obviously ambitious, and (3) well organized. Sociability was
ranked tenth in this study, a surprise to many students. Note that this does not mean
sociability is unimportant, it is simply rated the least important of the ten personal
characteristics in this study.

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Role-Play Exercise
This role-play exercise duplicates a typical job interview. Prior to the role-play, students should
think about what they have to sell in terms of work experience, education, leadership positions
held, volunteer work, etc. Most students will change jobs 8 to 10 times throughout their lifetime,
so this role-play can prepare them for future real-world interviews.
Solution for the Case Problem
1-1. Tom James and Alex Homer appeal to the three prescriptions of a personal selling
philosophy. First, they have adopted the marketing concept in so far as the customer is at the
centre of their value proposition – Tom James offers a service rather than just clothing.
Second, Tom James values personal selling because its customers are highly sensitive to the
level of service provided and customer retention is dependent upon superior personal selling
strategies. Third, sales representatives of Tom James, such as Alex Homer, are problem
solvers for their clients, who are under extreme time constraints and need to have a
customized service that identifies and fulfills their needs.
1-2. For Alex Homer, being employed in a sales position that allows for creativity and
autonomy is likely to generate considerable psychic income. In addition, considering 80
percent of the business is generated from repeat customers, it is likely that Alex has
developed long-term, rewarding relationships that develop job satisfaction. At the same time,
the difficulty to find new business is one of Alex’s major challenges and may be one of the
most adverse aspects of his sales job.
1-3. Alex uses a persuasive presentation strategy that is made possible by his experience and
existing knowledge. To gather new information about clients Alex asks detailed and
purposeful situation questions to identify the needs of customers. This utilization of the
selling process allows Alex to advance the sales process and induce buying motives during
the sales call.
1-4. Alex can generate referrals from maintaining the three fundamental prescriptions of the
personal selling philosophy. Overall, his preparation for the sales call is crucial, and if the
customers have a favourable experience with Alex, it will result in referrals to friends and
family members. In addition, it is important that Alex remain honest, trustworthy, and
genuine. It is not good practice to bad-mouth competitors, for instance.
1-5. Alex must have a prowess in several different types of selling skills, including active
listening skills, communication skills, and business and client development skills. Of the four
major sources of sales training (i.e., corporate-sponsored, commercial vendors, certification
programs, and colleges and universities), Tom James could hire educated sales associates and
create a certification program internally that would recognize and promote excellence in
selling.

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Chapter 2
EVOLUTION OF SELLING MODELS THAT
COMPLEMENT THE MARKETING CONCEPT
EXTENDED PRESENTATION OUTLINE
Personal selling is an important force in maintaining the economic vitality of a nation. Many
productive salespeople are using the strategic consultative-selling approach to determine and
fulfill consumers’ product and service needs.
As part of the Reality Selling Video Series, this chapter features Marcus Smith from Liberty
Mutual, selling financial services.
I. Marketing Concept Requires New Selling Models
A. Evolution of the marketing concept.
1. The marketing concept is a principle that holds that achieving organizational
goals depends on knowing the needs and wants of target markets and delivering
the desired products.
2. The foundation for the marketing concept is a business philosophy that leaves no
doubt in the mind of every employee that customer satisfaction is of primary
importance.
3. The marketing concept was introduced in the early 1950s (discuss Table 2.1).
B. Marketing concept yields marketing mix.
1. The marketing mix is a network of marketing activities that will maximize
customer service and ensure profitability.
2. Elements of the marketing mix:
a. Product
b. Promotion (includes personal selling)
c. Place
d. Price
C. Important role of personal selling.
1. Personal selling is often the major promotional method used —whether measured
by people employed, by total expenditures, or by expenses as a percentage of
sales.
2. Firms make investments in personal selling in response to several major trends:
a. Products and services are becoming increasingly sophisticated and complex.
b. Competition has greatly increased in most product areas.
c. Demand for quality, value, and service by customers has sharply risen.
II. Evolution of Consultative Selling

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A. Consultative selling emerged in the late 1960s and early 1970s (see Table 2.1) and is
an extension of the marketing concept.
B. Transactional selling is the sales process that serves the buyer primarily interested in
price and convenience.
C. Major features of consultative selling:
1. The customer is seen as a person to be served, not a prospect to be sold.
2. The salesperson doesn’t use a high-pressure sales presentation; two-way
communication identifies (diagnoses) customer’s needs.
3. Consultative selling emphasizes need identification, problem solving, and
negotiation rather than manipulation.
4. Consultative selling emphasizes service at every phase of the personal selling
process.
D. Consultative selling practices are not easily mastered.
III. Evolution of Strategic Selling
A. Strategic selling began receiving considerable attention during the 1980s (see Table
2.1).
B. During the 1980s we witnessed the beginning of several trends that resulted in a more
complex selling environment.
C. Strategic planning is the managerial process that matches the firm’s resources to its
market opportunities. It takes into consideration the various functional areas of
business that must be coordinated such as financial assets, workforce, production
capabilities, and marketing.
D. The strategic market plan is often the guide for a strategic selling plan.
1. Tactics are techniques, practices, or methods you use when you are face-to-face
with a customer.
2. A strategy is a prerequisite to tactical success. If you develop the correct
strategies, you are more likely to make your sales presentation to the right person,
at the right time, and in a manner most likely to achieve positive results.
3. Strategic planning sets the stage for a form of consultative selling that is more
structured, more focused, and more efficient.
E. Strategic/Consultative-Selling Model.
1. The model is divided into four broad strategic areas:
a. Relationship strategy: A well thought-out plan for establishing, building, and
maintaining quality relationships.
b. Product strategy: A plan that helps salespeople make correct decisions
regarding the selection and positioning of products to meet identified
customer needs.
c. Customer strategy: A carefully conceived plan that will result in maximum
responsiveness to the customer’s needs. It involves the collection and analysis
of specific information on each customer.
d. Presentation strategy: A well-developed plan that includes preparation of the
sales presentation objectives, understanding the buying process, and renewing
one’s commitment to provide outstanding customer service.

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2. Interrelationship of basic strategies—the relationship, product, and customer
strategies all influence development of the presentation strategy.
IV. Evolution of Partnering
A. The partnering concept emerged in the early 1990s (see Table 2.1).
B. Partnering is a strategically developed, long-term relationship that solves the
customer’s problems.
C. Today’s customer wants a quality product and a quality relationship. Partnering
requires that salespeople continuously search for ways to add value to their selling
relationships.
D. Partnering is the key to building repeat business and referrals.
Note: The partnering concept is covered in more detail in Chapter 3.
E. Strategic Alliances – The Highest Form of Partnering.
1. The goal of strategic alliances is to achieve a marketplace advantage by
teaming up with another company.
2. Partnering is enhanced with high ethical standards.
3. Partnering is enhanced with customer relationship management (CRM).
V. Value Creation – The New Selling Imperative
a. The information economy will reward salespeople who can create value at every step
of the sales process.
b. Traditional selling has too often emphasized communicating value that lies in the
product rather than creating value for the customer.
c. Creating and Delivering Customer Value Model:
a. Understanding Customer’s Value Needs.
b. Creating the Value Proposition.
c. Communicating the Value Proposition.
d. Delivering the Value Proposition.
END-OF-CHAPTER ACTIVITIES
Included in this section are answers to selected end-of-chapter exercises. Answers are provided
for all review questions, application exercises and case problems. In addition, a brief description
of each role-play is provided.

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CHAPTER 2
Answers to Review Questions
2-1. In adapting to the marketing concept, emphasis is now placed on satisfying the customer
through “partnering.” Instead of “pushing” goods, salespeople now form relationships and
seek to identify specific customer needs.
2-2. The marketing concept sparked development in marketers’ fundamental understanding of
personal selling. This change of mindset altered companies’ focus from an orientation that is
focused on selling to one that is focused on the customer. Models of selling that have
emerged in response to the marketing concept include consultative selling, strategic selling,
and partnering. These models have progressed to our current focus on partnering and are
outlined in Table 2.1.
2-3. Personal selling is the point at which the marketing concept is implemented. A personal
selling philosophy that is centred on partnering allows a company to generate customer
information that is necessary to be customer focused. Further, as personal selling is a
boundary-spanning task, it has considerable impact on customers’ perceptions of a product or
service.
2-4. Consultative selling emphasizes need identification that is achieved through effective
communication between the salesperson and customer. The salesperson assumes the role of
consultant and offers well-considered recommendations. Negotiation replaces manipulation
as the salesperson sets the stage for a long-term partnership.
2-5. The four steps include need discovery, selection of product, need-satisfaction
presentation, and servicing the sale.
2-6. The four broad strategic areas that make up the selling process are (1) developing a
relationship strategy—success in selling depends heavily on the salesperson’s ability to
develop, manage, and enhance interpersonal relations with the customer, (2) developing a
product strategy—products and services represent problem-solving tools, (3) developing a
customer strategy—sales and marketing efforts are organized around the needs and desires of
the customer, and (4) developing a presentation strategy—although the sales call may last no
more than 25 minutes, the presentation is definitely a critical part of the selling process.
2-7. In the 1990s, many companies began to see the merits of maintaining long-term
relationships. With more look-alike products, customers are seeking quality products and
quality relationships.
2-8. Value-added selling can be defined as a series of creative improvements in the sales
process that enhance the customer experience. Salespeople can add value by carefully
identifying the customer’s needs and then prescribing the best possible product solution.
Value-added selling has surfaced in response to increased levels of competition and the

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growing complexity of many products and services. The value added by salespeople today is
increasingly derived from intangibles such as the quality of the advice offered.
2-9. The goal of strategic selling alliances is to achieve a marketplace advantage by teaming
up with another company whose products or services fit well with your own. Both companies
hope to achieve a mutual competitive advantage.
2-10. Because salespeople are a vital link between a company and its customers, buyers will
usually form impressions about the company based on the salesperson.
Suggestions/Answers for Application Exercises
2-1. The outline should include the following topics: Economic benefits—development of
global markets; stimulate our local economy, which reduces unemployment. Consumer
benefits—assistance with the purchase of complex products; service after the sale.
2-2. She will have to (1) research the kind of customer her product appeals to as well as the
customer’s motivation for purchasing the product; (2) improve the product by engineering
product features that will appeal to the customer; (3) package and brand it so it will be
convenient and memorable to the customer; (4) price the product so it will be within the
economic means of the customer and yet allow the company to make a reasonable profit; (5)
select dealers and physically transport and store the product so it will be available in the right
place at the right time; and (6) promote the sale of the product by communicating to the
consumer through the mediums of personal selling, advertising, and other forms of sales
promotion.
2-3. In teaching and selling, Brenda must be able to present scientific ideas accurately and
persuasively. She must be able to motivate others as well as enjoy working with people. The
differences consist of working without a prearranged schedule; she will need to organize her
own time in sales work. Compensation plans, especially extra financial incentive, are usually
found in selling; they are not usually found in teaching.
2-4. Students will find information regarding sales training offered by the company. Have
them print and submit this information. Likely similarities that students will mention are
partnering, win-win exchanges, problem solving, understanding the customer’s business,
value-added selling, adaptive selling, and others.
2-5. This exercise will certainly have those who support and those who do not support that
women make better salespeople. There are a number of research papers that discuss gender in
sales, and how purchasing people view male versus female salespeople. Most studies
conclude that men and women are equally suited to sales positions, although some studies do
suggest that women have some particularly important attributes: the ability to empathize,
greater service-orientation, willingness to listen, etc. Be prepared for a good discussion.
Role-Play Exercise

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Provide students with a brief introduction to the wide variety of pens and pencils available. A
nice gold pen, for example, might sell for $100 or more.
Solution for the Case Problem
2-1. Yes, it appears that Smith has adopted the three prescriptions of a personal selling
philosophy. He demonstrates adoption of the marketing concept because he is constantly
seeking to offer his customers the best value. He appears to value personal selling because he
participates in a high degree of ongoing training. He also approaches selling as a problem
solver because he bundles insurance policies that are in the customer’s best interest and
works with all individuals who directly or indirectly influence the sale.
2-2. Smith has adopted the win-win philosophy; projects a professional image; and maintains
high ethical standards. See page 38 for a description of why a relationship strategy is
especially important in personal selling.
2-3. Smith can create value for his customers by helping them understand complicated
insurance terms, comparing terms across policies (and even competitors), bundling policies
to save the customer money, providing information about new policy types, and quantifying
the benefit of having a particular insurance policy or the risk of not having a particular
insurance policy.
2-4. It is imperative that Liberty Mutual employees in the marketing research and advertising
departments understand personal selling because of the cross-functional demands placed on
the marketing discipline. That is why Smith regularly communicates with employees in other
departments – to understand the highly competitive insurance industry and to share market
knowledge with them. Marketing support people in the departments mentioned in the
question would all benefit from acquiring personal selling skills due to their interaction with
stakeholders of the organization that are external to Liberty Mutual.

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