Essay: The task of selling – a company’s representatives

The case study on the Hyde-Phillips Chemical Company presented by Michael Claxton was formed from the collaboration of Hyde Industrial Chemicals and Phillip Laboratories. This duel company produces chemicals and supplies for the use of industrial products. Hyde-Phillips uses three supplementary selling methods such as company sales persons, industrial distributors, and manufacturers’ agents. Selling methods are essential to a company because it represents how efficient the company applies its sales methods to maintain relationships with customers in an order to maximize profits. With the integration of the two firms, each of the individual firms delivered the collaborated company a series of chemicals intended for the use of industrial purposes. At the end of his study, Claxton stated that Hyde-Phillips should focus on their methods of selling with industrial distributors, and less of its sales forces and manufacturers’ agents in their territories.
Sales representatives represent on behalf of a company, and it is important that the company’s representatives form a strong connection with their customers. This builds loyalty between the company and the customer. Customer loyalty is beneficial to a firm because it helps to generate revenue and maximize profit, as customers will continue to purchase their products. “Selling products or services is critical to the success of any business and salespeople often play a critical role in generating sales by communicating the advantages and purchase conditions of offers” (Wensley, 2002). The responsibility of a salesperson is to successfully sell their company’s goods and services to customers. Hyde-Philips offers a variety of customer service and support to help customers to find the products they are looking for, answer any questions they may have, and to promote their products so customers will buy from them. The company provides informational brochures on their products, online study programs, product sampling, and subscriptions to their website by email. These support options help the customers learn more about what the company has to offer. It is important that the company offers a variety of ways to get their information out to each intended target markets, whether it is on tangible paper or online.
Because selling is a crucial part in marketing, it is important that a company builds a strong customer loyalty base. It strengthens the relationship between both the company and customer. This satisfies the customers needs and wants, and they will continue to do business with the company. In turn, these relationships generate revenue and maximize profit for the company. Hyde-Phillips uses a variety of methods of selling to instill customer awareness, and the intended target markets recognizes what the company has to offer.
Although salesforce management is an essential part to marketing strategy, “the task of selling has had a negative image in society” (Wensley, 2002). This is because of the assumption that customers make based on the experiences they have had with sellers aggressively trying to sell their products and persuade customers to buy them. Persuading customers in this manner can be perceived as manipulative. Salesforces should use their strategic marketing skills to influence customers to buy a product, but this does not mean that they are always doing it in a positive way. This may actually turn customers away from buying the product and associating with the company, which does not benefit for the company. There may also be buyer concerns. This in fact is a “win-lose situation in a buyer-seller relationship” (Chunawalla, 2008). An example of a buying concern may be need-related. A seller may try to encourage a customer to buy a product because it will benefit them more than with a product they already have. The customer may decline the offer if they are not persuaded into purchasing the new product or they may decide they do not need it. Another example of a buying concern may be product-related. The customer may not have enough information on the product due to poor communication and encouragement skills from the salesperson. A concern may be source-related, where customers base their opinions of a company’s product from other sources who may have been unsatisfied with what they had to offer. The last concern may be price-related, which is “the commonest concern in personal selling and requires careful negotiation” (Chunawalla, 2008). The salesperson must inform the customer about the price of the product, and the customer must compare the price to the value of the product to determine whether it is worth a purchase. The price of products may be fatal in the decision-making process of the customer successfully buying the product. Salespeople are hired, trained, and skilled before they begin the job of selling to the public. However, it can be very difficult to manage sales representatives because most of the time, their evaluations are self-reported.
It is imperative to a company for their sales representatives to be appropriately chosen, hired, trained, and skilled. This does not mean that the seller is doing their job the right way. A sales representative may be held accountable for a customer not making a purchase from a company. This is based off experience customers have had when communicating with salespersons. It is essential that salespersons do not break the customer loyalty bond with the company. Unfortunately, this can happen when salespersons are manipulative in the purchase, and push a customer to buy a product they may not want or need. Personal selling can be difficult and it is their responsibility to acknowledge buyer concerns, and to help them and guide them to buy the product that they would want and need.
Manufacturers’ agents are responsible for the distribution of industrialized products to wholesalers (industrial distributors). Manufacturers are the primary producers of these products, created from raw material and other parts to make an industrial product. “These reps usually work under a 1099 agreement, meaning that they are not viewed as employees but as contractors” (Phelps, 2018). They sign a contract with a company (usually a distributor warehouse), and they make an agreement on the product they are creating and the price. There are two types of contracts used with manufacturers. “The revenue sharing contract where a platform appropriates a portion of the manufacturer’s revenue, and the fixed fee contract where a platform charges a fixed rent for each sale” (Zhang, 2018). The manufacturer may receive a share of the revenue from the sale of the goods or service or a fixed amount is paid by a manufacturer that is put to the production of the goods and services. Contracts help make the process organized, and make the buyers aware of what they are receiving from the manufacturer. There are four systems of manufacturing: custom manufacturing, intermittent manufacturing, continuous manufacturing and flexible manufacturing. Custom manufacturing is when a manufacturer makes a product by hand, and it is custom-made for that particular buyer. (LaMarco, 2018). Intermittent manufacturing allows the company to make different types of goods along the same line of production. This type of system helps to send orders out fast. Continuous manufacturing continuously makes the same product in a large abundance. Flexible manufacturing is the most popular and more advanced, because it uses advanced technology robots to put the products together. This type of manufacturing is automated, so “quality control is a lot easier, and unit costs are low” (LaMarco, 2018). Since manufacturers’ representatives work for themselves, they may work for multiple manufacturers’ in order to secure themselves financially. For example, “if you have an independent sales position selling computer parts, finding another position selling networking services may increase your effectiveness and allow you to bring a greater value proposition to your customers” (Phelps, 2018). This will help a manufacturers’ salary rise if they are working for multiple companies.
Manufacturers’ are the producers of industrial products typically made from raw materials. Industrial products are widely used throughout our world, and millions of people use them everyday. They are very important products in our world. There are four main types of manufacturing systems, and each of them can be used in their different ways. Since a manufacturers’ agent is paid on commission, there are ways to increase their pay by creating other products for other manufacturer companies or initially contracting with other companies.
Manufacturer representatives are usually paid on commission, meaning that they are given a percentage of sales every time they successfully sell a product. This may be tough for these representatives because they are creating industrial products, which requires a lot of time and money spent in order to be created. Many people do not want a manufacturers’ agent job because of the tedious work that needs to be done to build these products, with the little money they receive in salary. “There is no doubt that manufacturer’s rep. positions are not for the faint of heart” (Phelps, 2018). It is a difficult decision to make when looking at manufacturer representative jobs because of the little salary they are given for the hard work that is put in.
Most manufacturers’ representatives work in personal selling, and are paid on commission for their performance. This is a hard-working and tedious job for the little pay that is given. Many people who are looking into this particular job may not want to be paid on commission for its little pay for salary.
Industrial distributors have an important job in the purchase of buying manufactured products, and selling them to businesses as supplies to be used and sold to customers as goods or services.
Although the jobs of sales forces and manufacturers’ agents are important, the industrial distributors act as the intermediate between the two. “With the cost of sales calls rising sharply, increasing numbers of industrial product manufacturers are looking to independent distributors for marketing help” (Hlavacek, 1983). Distributors are the ones that are responsible for the transportation of goods through the marketing channel. It is important that distributors are selling companies the right products that are suitable for them. There are five major characteristics that assure a manufactured product is suitable for a distributor to sell to companies. The first characteristic is a large potential customer base. Customer retention is important to distributors because it shows that companies will continue to buy from them, and this exhibits customer loyalty and brand loyalty, which is the ultimate goal of a company to keep their profits in good standard. Distributors also benefit from their relationships with suppliers. Their financial benefits they receive maximize their profits as operational costs are decreased. The differentiation benefits are received when distributors enhance their goods and services for their customers. (Ghosh, 2004). The second characteristic is a stockable item. The products are typically bought in bulk, so products should be stocked in warehouses and retrieved when needed. Warehouses can be very large, and can hold many different sizes of storage items as needed. The third characteristic is small-quantity sales. Even though distributors buy their products in large bulks, companies may buy small quantities at a time. They assume they will be able to purchase the products when needed. The fourth characteristic is low-level customers. The chances of low-level customers to buy from a distributor is likely. “The flat organizational structure of an owner-operated business has little or no buying specialization and therefore often buys from a distributor” (Hlavacek, 1983). This is determined by the company’s management operation structure. The last characteristic is rapid delivery and service. Industrial products are used everywhere, and it is crucial that distributors deliver these products as quickly as possible to their specific locations.
Although the responsibilities of sales forces and manufacturers’ agents are important, the industrial distributors act as the intermediate between the two. They purchase the industrial goods or services from a manufacturer, where they hold these products in warehouses until a company is looking to purchase from them. This job is extremely important because distributors are the direct sellers and connect manufacturers to customers in the supply chain.
Utilizing industrial products in a company can have its complications. Companies may decide that the seemingly successful product they bought from distributors may not be suitable for their company, and they are not making any sales. Distributors must assure companies that they are giving them the appropriate products they need. It is important that industrial warehouses have enough storage to fit the goods and services needed when distributors are buying from manufacturers’ large quantities. There may be delays with shipping goods or services to their intended locations. Distributors must make sure their delivery service is quick.
Distributor sales representatives are often seen as “undertrained and undersupported” (Hlavacek, 1983). New distributors must go through lengthy training to acquire and interpret the skills they will use to understand the different types of products.
Industrial distributors act as the connection between manufacturers’ and businesses. This holds a lot of responsibility for these territories to make sure they are properly purchasing the appropriate quantity of goods and services, and making sure they have enough space and storage to hold these products. This does not mean this always happens.
At the end of his study, Claxton stated that Hyde-Phillips should focus on their methods of selling with industrial distributors, and less of its sales forces and manufacturers’ agents in their territories. Wholesalers are the link between manufacturers’ and businesses. Although it is evident that each of the three selling methods have advantages and disadvantages, it is also clear how important sales representation is in the market. Customer loyalty is key when it comes to building a relationship between companies and customers. This satisfies the customers needs and wants, and they will continue to do business with the company. This generates revenue and maximizes profit for the company.