Probabilistic selling vs. markdown selling: Price discrimination and management of demand uncertainty in retailing

Markdown selling (i.e., price reductions over the course of the selling season) is a strategy to implement price discrimination and to manage market uncertainty that has been widely adopted by retailers. This paper explores the potential advantage of introducing an additional tool to the arsenal of retailers, probabilistic selling (i.e., offering consumers a choice to buy a product that can turn out to be any item from a predetermined set of distinct items). We show that both probabilistic and markdown selling strategies serve as price discrimination tools by offering buyers an option to purchase a “damaged” good (an uncertain product under the former and delayed consumption of a product under the latter). However, the two strategies segment markets based on different types of buyer heterogeneity: buyer preference strength under probabilistic selling and buyer patience under markdown selling. Our analytical model reveals that, compared with markdown selling, probabilistic selling can (1) improve margin management by increasing revenue from full-price sales and reducing the magnitude of discounts; and (2) improve inventory utilization by reducing stockouts and the amount of excess inventory. We identify the conditions required for probabilistic selling to be more profitable than markdown selling.     

Customer and selling orientations of retail salespeople and the sales manager's ability-to-perceive-emotions: A multi-level approach

Drawing from the mental ability framework and information processing theory, two studies embedded within the B2C retail setting investigate the role of the sales manager's ability-to-perceive-emotions in the complex non-linear relationships between salespeople's customer and selling orientations on one side, and its outcomes (sales performance and customer re-purchase intention) on the other. Using multilevel data from salespeople and their managers, Study 1 tests a theoretical model of salesperson orientation and performance, while Study 2 further verifies the results of Study 1 from the customer's perspective. Both studies find strong empirical support for a curvilinear, inverted U-shaped effect of a salesperson's customer orientation on sales performance and customer re-purchase intention. This effect is, however, reversed for the link between selling orientation and performance/re-purchase intention, where results indicate a U-shaped curvilinear relationship. Furthermore, we show that the sales manager's ability to perceive emotions facilitates the effect of salespeople's customer orientation on sales performance.     

Coercion in the selling of credit life insurance

Credit life insurance, which repays some or all of a borrower's outstanding debt in the event of death, has been a controversial subject for many years. Critics assert that, despite regulations that limit tied sales, pressure on loan officers to generate fee income through cross selling creates an incentive for coercion of borrowers. Allegedly, some sales techniques leave the consumer with the false impression that the purchase of credit insurance was necessary to obtain the loan. This article measures the frequency with which creditor efforts to sell credit insurance transform the sales message from persuasive to coercive. A methodology is developed for measuring the impact of coercive selling pressure applied to borrowers at the point of sale. Data used to measure the effect of coercive pressure are taken from an extensive survey of borrowers conducted during 1993. Not only are public policy concerns about coercion in the selling of credit insurance addressed, but more generally the article offers a methodology to quantify the influence of the customer's point-of-sale experience on the decision to purchase any financial service. © 1995 John Wiley & Sons, Inc.     

The professionalisation of selling and the transformation of a family business: Kenrick & Jefferson, 1878–1940

Abstract

This article shows that innovation in sales management at a West Midlands SME in the early twentieth century matched contemporary best practices, and that it occurred in parallel with significant developments in sales education at both the University of Birmingham and the region’s colleges. In looking not only at a smaller company than those examined previously by historians of selling but also at what is referred to as the surrounding sales ecosystem, the article contributes to our understanding of a more dynamic sales environment, supported by a more purposeful educational provision, than has hitherto been understood to have existed.     

A personal construct analysis of adaptive selling and sales experience

Customer orientation is a key to successful marketing strategies. In personal selling, customer orientation has been shown to be related to the quality of the customer-salesperson relationship (Saxe & Weitz, 1978). Adaptive selling (Weitz, Sujan, & Sujan, 1986) is a theoretical perspective that suggests sales performance is related to salespeople's ability to shift their customer orientation, by adapting their behavior to different customers in different situations. This article presents personal construct theory (Kelly, 1955) as a framework for understanding how sales personnel perceive and adapt to customers. An interview technique known as laddering (Gutman, 1982; Hinkle, 1965) is used to elicit these constructs from sales personnel. Results of the interviews are compared across levels of sales experience. Consistent with the Sujan, Sujan, and Bettman (1988) findings relating sales effectiveness and breadth of knowledge structures, we find that the number of years of sales experience is related to the breadth of constructs obtained from the laddering interviews. © 1995 John Wiley & Sons, Inc.     

Fostering creative selling through ethics. An emotion-based approach

Research on salesperson creativity remains as one of the most under-researched topics in the sales literature despite the evidence that encouraging creativity in the sales domain is a source of competitive advantage. This paper aims to fill this research gap by exploring the influence of perceived ethical climate on salesperson creative performance, paying special attention to the role that emotions play in this process. Data provided by 176 supervisor–salesperson dyads confirm that the trust/responsibility dimension of an ethical climate is positively related to salesperson creative selling by increasing salespeople's organizational pride. Similarly, the perception of unethical selling practices negatively affects salesperson organizational pride, reducing the expression of creative behaviors. Moreover, the negative effect of unethical selling practices on creative performance is stronger (more negative) when salespeople's identification with an organization increases. Managerial implications and future research directions are also addressed.     

Exploring communication differences between women and men sales representatives in a relationship selling context

The purpose of this exploratory research is to investigate the different styles of communication used by women and men sales representatives in relationship selling. An analysis of in-depth interviews revealed that the language used by women sales representatives is more conducive to building customer trust and more suggestive of relationship selling behaviour than the language used by their male counterparts. That women sales representatives may draw upon nurturing language and behaviour learned in developing other relationships (wife, mother, daughter, sister or friend) to build customer relationships is consistent with role theory and supports a theoretical explanation for the lower levels of role conflict surprisingly reported by women sales representatives in previous research. The results suggest that in a relationship selling task, marketing managers should consider using sales representatives with a 'feminine' style for sales jobs requiring extensive customer relationships. Directions for future research are also suggested.     

Third‐person perception and purchase behavior in response to various selling methods

Two studies investigated whether various tactics of personal selling that generate different levels of resistance also produce different degrees of third‐person perceptions. Furthermore, the studies compared third‐person perceptions to the actual influence on behavior. Study 1 showed that more direct and blatant selling methods produce more TPP. Study 2 showed that people tend to underestimate the influence of the more direct method, especially with regard to themselves. The study concludes by identifying the ideal selling method as one in which the customers are asked about their willingness to listen to the sales campaign before they are told about it. This method increases sales and creates satisfied customers. © 2009 Wiley Periodicals, Inc.     

Sales driven company

Selling has become dispersed through the use of selling teams that include members from functional areas other than marketing or sales. This now occurs within many firms utilising key account management strategies, within both business-to-business and business-to-reseller environments. This article is aimed at developing a better understanding of factors affecting ‘team selling’ and its impact on sales performance, with clear benefits to company management.     

New selling methods are changing industrial sales management

Changes in the business environment require changes in selling methods, which, in turn, lead to changes in organizational structure. Industrial sales managers face a choice between seeing their jobs shrink around them or planning for these changes.     

Contribution of sales control in salespeople’s creative selling: Work engagement as a mediator

This study investigated the effects of outcome-based control (OBCS) and behavior-based control (BBCS) on creative selling, by exploring their mediating effects on creative selling through work engagement. We also explored the joint effect of the two sales control systems on work engagement, which can eventually increase creative selling. We collected data from salespeople working at an insurance company in South Korea; 270 of the 303 participants were included in the analysis. Our results revealed that OBCS and BBCS increase creative selling. In addition, work engagement was found to mediate the relationship between OBCS and creative selling but not the relationship between BBCS and creative selling. The joint effect of OBCS and BBCS on work engagement was found to function as a hierarchical combination, meaning that work engagement is enhanced when OBCS is high and BBCS is low. These findings suggest that OBCS and BBCS function through different mechanisms to creative selling when they function separately, and the former acts as a primary control and the latter as a supplement to work engagement when they perform jointly.     

The intersection of entrepreneurship and selling: An interdisciplinary review,framework, and future research agenda

Selling is integral to entrepreneurship, yet it has rarely been a focal topic of analysis for entrepreneurship scholars. To address this, we undertake a broad-ranging systematic literature review of research that in some way explores selling within entrepreneurial contexts. We inductively develop a framework that orders extant research into selling antecedents, activities, contexts, and outcomes. Then, drawing on these entrepreneurship-selling intersections, we suggest opportunity theory can be extended by integrating critical insights from selling literatures. In particular, we address ego-centric views of entrepreneurship which prioritize entrepreneurial agency, and advocate for the incorporation of customer agency into synchronized processes of opportunity identification, refinement, and exploitation. The article concludes that a promising avenue for future theory development resides in the study of situated sales interactions, which can serve as an empirical vista to the underexplored entrepreneur-customer nexus.     

Allocating a Promotion Budget between Advertising and Sales Contest Prizes: An Integrated Marketing Communications Perspective

This paper develops and analyzes a normative model for allocating a fixed, short-term promotion budget between product advertising and prizes of a rank-order sales contest for a homogeneous sales force when sales are driven by both personal selling effort and advertising. The model provides insights into how the optimal budget allocations vary with the synergy between advertising and selling effort, sales force size, salesperson risk-tolerance, perceived cost of effort, selling effectiveness and sales response uncertainty. The analysis highlights the need for and value of close coordination between marketing and sales management in designing a promotion program involving both advertising and sales force incentives.     

Revisiting the Purpose of Selling: Toward a Model of Responsible Selling

Selling as a profession and sales management as an organizational function have undergone major changes that were driven by the evolutionary journey of the marketing discipline. The extant value cocreation paradigm is recrafting the purpose of selling. This paper explores the conceptual development of a selling paradigm that is more responsible to its customers. Specifically, in Business-to-Business (B2B) context, the cost of any selling behavior that compromises customer interest could be of disastrous proportions. Building on the theoretical foundations of self-regulation and job demands-resources theory, this paper develops a conceptual model of responsible selling by integrating self-leadership literature with the emerging paradigm of value-based selling. The conceptual model outlines several research propositions for empirical validation and discusses its potential implications for sales managers and sales organizations.     

Relationship management: Managing the selling and the buying interface

The new age of industrial marketing, now often referred to as business-to-business marketing, is built upon effective relationship management. The industrial marketer must coordinate the marketing relevant activities of a company with the procurement needs and information requirements of the buying company. Managing this relationship requires the management of the selling and the buying interface. Competitive advantage hinges on the selling company's ability to demonstrate value that results from its cross-functional interdependencies and on its ability to influence the buying center participants' procurement decision processes. This article presents a conceptual approach to understanding and structuring relationship management. In addition, this approach provides a managerially useful framework for implementing industrial marketing strategy through managing the selling and buying interface.     

Adaptive selling in a call center environment: A qualitative investigation

Technological changes and innovations have created the means by which organizations can centralize the selling function into a call-center environment. While there are numerous benefits to this centralization, the fact that potential customers are drawn to a call center via telephone or Web-based communication media from a wide geographic area heightens the need for sales representatives to perform adaptive-selling behaviors. In this study we found evidence to confirm this belief, suggesting that a premium is placed on sales representatives who can accurately assess each situation using limited information (e.g., through tone of voice) and then to correctly adapt their behavior to fit the situation. The results also offer implications for Web-based call centers that link sales representatives with potential customers through text-based communication.     

The Selling Cycle

Abstract

The selling cycle, a measure of calendar time from the initiation to the completion of a sale, is a significant factor in planning and assessing sales force deployment. Empirically-based analyses of the selling cycle are nonexistent, however. This paper reports an exploratory study of selected relationships involving the length of the selling cycle in various selling situations and in different types of sales organizations, and then concludes with management implications and further research ideas.     

Values,the key to business in 1990 and beyond∗

This article is concerned with the changes which have affected the personal selling function in industrial markets in recent years. It reviews research findings from the UK, Europe and America, and discusses the implications for sales force management and sales training. It concludes that industrial marketing must focus upon key account relationship management, rather than the manipulation of the four Ps in order to create competitive advantage, and that radical new approaches are needed in sales training which reflect the changing nature of the sales person's role, and which may be demonstrated to have a positive affect on selling effectiveness.     

Redirecting direct selling: High-touch embraces high-tech

Direct selling, defined as a sales channel without a fixed retail location, was built on the premise of leveraging an individual's social networks. This industry is being redirected by embracing social media; here, the challenge lies in providing the benefits of face-to-face selling, augmented by social media. An examination of the Direct Selling News ‘Global 100 Top Direct Sellers’ found that Facebook, YouTube, and Twitter represent the most widely employed social networks in the industry. While 76% of direct sellers utilize social media for promotional purposes, 55% use it for recruiting new distributors and 42% use it for reactive purposes. Consumers are the most popular target for social media, followed by distributors and communities. Social media has evolved as a driver of strategy, and will become even more important in the future. Improved customer relationships are developing by listening and reacting to concerns. The transparency created by social media is enhancing trust and ethical organizational cultures. Finally, consumer brand communities are emerging that increase brand value.