EFFECTS OF PERSONAL SELLING ON SALES VOLUME

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

Every organisation must recognise that the success of any manufactured product or service rendered depends on its level of acceptance in the market. To endear a product to the consumer, many organisations employ different effective marketing tools and promotional strategies to enhance product acceptance. For a product to be accepted by the public therefore, the marketing mix must be available – product, price, place and promotion. This means that for a product to be successful, it needs the right price, the correct strategies and the right promotional activities (Sanusi, Ajilore & Oloyede, 2014). This is why Arens (2004:34) noted that no amount of marketing can sell a bad product. In other words, a product quality must be right, the price must be within the reach of the target audience, it must be available to them where ever they are, and the promotion must be intensified to urge action.

One of the tools that are available to marketers to create awareness as well as create product image in the minds of buyers and potential users is personal selling. The influence of personal selling in the action consumer takes concerning a particular product lies in the frequency of exposure to the message and the usefulness of the product to the indentified needs of the would-be users (Sanusi, Ajilore & Oloyede, 2014).

The successful organizations in business are those that are able to achieve success in the study of consumer behavior and determine the factors that affect the development of marketing strategies, which enable them to reach the target consumers through the process of personal selling. The process of direct contact between buyer and seller plays an active role in strengthening the relationship between both of them. This is reflected, in turn, in the decision to purchase products displayed in retail stores; therefore, organizations are giving a great consideration to hiring salespersons because they are aware that they represent a key element in the achievement of personal selling in contact with buyers and in creating a good impression about the organization and its products. Personal selling is defined as a face-to-face contact process between buyer and seller in order to achieve planned goals, which are sales, and build long-standing relations with consumers (Kotler & Armstrong, 2013).

Personal sales success depends on the implementation of eight processes: searching for salespersons, determining the course of action, assessing needs, nature of the offer, method of presentation, dealing with objections, commitment, and follow-up (Spiro, Rapp, Agnihotri & Forbes, 2008). Personal selling represents the strategy that salespeople use to persuade customers to buy their products, provide them with all the information relating to the products, and work to eliminate consumer fears about such goods (Laura, 2016). Ahlam (2006) indicates that workers in personal selling work to convince consumers to make a purchase decision and that the personal characteristics, which are characterized by a man showing great personal strength and confidence and the ability to persuade and negotiate, are instrumental to winning consumers, influencing buying, guiding decision about replacement of items and even trying to help them get unavailable commodities they are seeking to buy.

Kotler (2013) noted that personal selling is a useful vehicle for communicating with present and potential buyers. Personal selling involves the two way flow of communication between a buyer and seller often in face to face encounter designed to influence a person’s or group’s purchase decision. However, with advances in technology, personal selling also takes place over the telephone, through video conferencing and interactive computer links between buyer and seller though personal selling remains a highly human intensive activity despite the use of technology. Kotler (2013) also noted that personal selling serves three major roles in a firm’s overall marketing effort. Salespeople are the critical link between the firm and its customers; salespeople are the company in a customer’s eyes. They represent what a company is or attempts to be and are often the only personal contact a customer has with the company; and personal selling may play a dominant role in a firm’s sales volume.

Many people have carried out researches to find out if personal selling has influence on sales volume. For instance, Akinyi (2011) carried out a research and found out that indeed personal selling had effect on sales volume, similarly, Kivuva, (2003) found that products with personal selling tends to have more demand than those which do not.  Contrarily, Musyoki (2009) found out that there is no significant effect of personal selling on sales volume. Consequently, the undertaking of this research study will painstakingly examine the effects of personal selling on sales volume with a particular reference to Airtel Nig Ltd.

1.2       Statement of the Problem

As companies are spending large amount of investment on the advertisement because they want to keep their products or services to record better sales volume they also run the risk of making financial loss. No doubt personal selling has proven to be a successful tool for communicating products and services to the consumers on face to face basis, but companies are still in the confusion about what kind of salesperson should be engaged to keep speak on behalf of the products in order to reinforce positive perception without making financial loss in the process.

Admittedly, as organisations spend heavy budget on their promotion strategies to attract consumers and to influence their buying behavior, sometimes these personal selling strategies fail to convince consumers and do not persuade their purchase intentions due to its non effectiveness. Ultimately, consumers remain unchanged in their buying behaviour and as such the personal selling effort is unable to produce emotional feelings essential to increase sales volume for the products or services.

Advertising generally is costly, and for often its effects are uncertain, and sometimes it takes a while before it makes any impact on consumers’ buying behavior or on product sales volume. It is for these reasons that many companies think it appropriate to reduce expenditures on personal selling or to entirely eliminate it. On the other hand, some companies sometimes consider it unnecessary to embark on personal selling when their brands are already enjoying great success without personal selling. Such behavior implicitly fails to consider the fact that advertising is not just a current expense or mere exercise but an investment.  

It is against this backdrop that this study seeks to investigate the effects of personal selling on sales volume with a particular reference to Airtel Nig Ltd.

1.3       Objectives of the Study

The general aim of the study is to examine the effects of personal selling on sales volume. The specific objectives are:

        i.            To examine the effect of personal selling on product sales volume.

     ii.            To investigate the role of advertisement in influencing consumers’ intention to purchase.

   iii.            To find out if personal selling increases organistional profitability.

1.4       Research Questions

The study will be guided by the following research questions:

1.      What is the effect of personal selling on product sales volume?

2.      How does advertisement influence consumers’ intention to purchase?

3.      Does personal selling increase organistional profitability?

1.5       Research Hypotheses

The following research hypotheses will be tested:

Hypothesis One

Ho:      There is no significant relationship between personal selling and product sales      volume.

Hi:       There is a significant relationship between personal selling and product sales        volume.

Hypothesis Two

Ho:      Advertisement has a significant influence consumers’ intention to purchase.         

Hi:       Advertisement has no significant influence on consumers’ intention to purchase.

Hypothesis Three

Ho:      There is no significant relationship between personal selling and organistional      profitability.

Hi:       There is a significant relationship between personal selling and organistional        profitability.

1.6       Significance of the Study