Personal Selling and Relationships : a Review and Explorative Essay
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2008:64 DOCTORAL T H E SIS Lars Bäckström Personal Selling and Relationships Personal Selling Personal and Relationships - A Review and Explorative Essay - A Review and - Essay Explorative Lars Bäckström Luleå University of Technology Department of Business Administration and Social Sciences 2008:64 Division of Industrial Marketing, e-Commerce and Logistics Universitetstryckeriet, Luleå 2008:64|: 402-544|: - -- 08 ⁄64 -- ABSTRACT The overall scope of this doctoral thesis is focusing on selling. The thesis contains two studies; Study A is a synopsis of a licentiate thesis published in 2002, while Study B contains three journal articles. Study A examined industrial selling in Swedish manufacturing small and medium-sized enterprises (SMEs). The research addressed three research questions dealing with selling activities, individuals involved in selling, and selling processes in three different selling contexts. Study A adopted a qualitative research approach; it used a case study research strategy and collected the primary data through personal interviews. The study included four cases, interviewing a total of 19 respondents in various positions within the selected companies. The study’s findings indicate that selling activities performed by manufacturing SMEs in this study are complex and include a variety of activities. The numerous individuals found to be involved in selling represented several different functions within the selling company. Furthermore, the findings indicated that the studied companies included external individuals when performing their selling activities. Finally, the performed selling activities could be described in several selling processes. These findings suggest that the selling processes vary from rather simple and transaction-oriented selling processes to more complex processes dealing with both long-term customer relationships and single transactions. Study B examined relationships in selling in the financial services industry, looking specifically at the relationships between members of a sales force and other members of the same organization as well as relationships between salespeople and customers. All three articles included in this study applied a quantitative research approach. The first article, “The Impact of Incentives on Interfunctional Relationship Quality: Views from a South African Firm,” sought to discover the extent to which different functional groupings perceived the incentives an organization offers its personnel as being “fair.” The setting for the research in this article was a small- to medium-sized marketer of financial services in a South African context. Data were collected using questionnaires; 141 usable responses were received, representing a response rate of 81 percent. The findings from this article provide evidence that small but significant differences exist in the perceptions of the fairness of incentives provided. The second article, “Trusting Relationships. How Salespeople View the Quality of Relationships with Friends and Customers,” as well as the third article “Personal Acquaintances and Salespeople in Financial Services: Differences Between Customers and Friends,” deals with the relationships between salespeople and friends, salespeople and good customers, and salespeople and bad customers. However, the two articles used different scales to measure these relationships. In the second article, relationships were measured using the Trusting Relationship questionnaire; in the third article, relationships were measured using the Personal Acquaintance measure. Data from both articles were gathered from a large Swedish firm in the financial services industry through questionnaires sent to salespeople. The questionnaire resulted in 119 usable responses for both articles, corresponding to a response rate of 60.1 percent. Based on the results presented in both articles, salespeople do not perceive relationships with friends in the same way as they perceive their relationships with customers. Similarly, both articles provide evidence that salespeople perceive relationships with good customers to be different from those with bad customers. ACKNOWLEDGEMENTS My “crooked” journey of writing this thesis started back in 1996 as part of my first doctoral course. I achieved my intermediate goal of a licentiate degree in 2002 and, after a two-year “administrative deviation,” I finally am in a position to prepare for my doctoral defense. I have no doubts that I would never have made it this far without the help and generous contributions of numerous individuals as well as certain organizations. I would like to take the opportunity to thank Esmail, he is—more than anybody else—the reason I have been able to complete this work. Research students have many needs during their years of work, and supervisors have to put up with all of them. I do not believe that anybody could have given better support while simultaneously acting as a “cattle prod” than Esmail. Thank you for everything—I most sincerely appreciate it! I also would like to thank Professor Leyland Pitt, my supervisor, who has helped me tremendously throughout my journey from licentiate to doctoral defense. Thank you for sharing your professional experience and for all your support. In addition, many individuals at the Division of Industrial Marketing, e-Commerce and Logistics have contributed to my work, both professionally and personally. Although I am appreciative of everyone’s generous support, I specifically want to mention a few people. Åsa, thank you for everything. Tim, thank you for your support. Finally, I would also like to thank my family for always being there. Luleå October 29, 2008 Lars Bäckström TABLE OF CONTENTS 1 INTRODUCTION AND PROBLEM AREAS………………………………….. 1 1.1 Background to Selling……………………………………………………………. 1 1.1.1 The Changing Face of Selling…………………………………………………. 2 1.2 Problem Areas……………………………………………………………………. 3 1.2.1 Study A (Industrial Selling)…………………………………………………… 3 1.2.1.1 Definition of Selling…………………………………………………………… 3 1.2.1.2 Small and Medium-sized Enterprises………………………………………….. 4 1.2.1.3 Problem Area for Study A ………………….…………………………………. 8 1.2.2 Study B (Relationships in Selling)…………………………………………….. 9 1.2.2.1 Relationship Marketing………………………………………………………… 9 1.2.2.2 Relationship Quality………………………………………………………….... 10 1.2.2.3 Customers as Friends…………………………………………………………... 10 1.2.2.4 Problem Area for Study B…………………………………..…………………..10 1.3 Structure of the Thesis………………………………………………………….... 11 2 STUDY A: Industrial Selling—Case Studies of Swedish Manufacturing Small and Medium-Sized Enterprises ………………………………………...... 13 2.1 Synopsis of the Literature Review……………………………………………….. 13 2.1.1 Sales Activities………………………………………………………………….13 2.1.2 Multi-person Selling Effort…………………………………………………….. 14 2.1.3 The Sales Process………………………………………………………………. 16 2.1.4 Conclusions from Previous Research on Selling ……………………………… 17 2.2 Research Problem, Research Questions, and Conceptual Framework ………. 18 2.2.1 Research Problem and Research Questions……………………………………. 19 2.2.2 Delimitations…………………………………………………………………… 21 2.2.3 Conceptual Framework………………………………………………………… 21 2.2.3.1 Selling Situations….………………………………...…………………………. 22 2.2.3.2 Research Question One………………………………………………...………. 23 2.2.3.3 Research Question Two…………………………………………………...…… 25 2.2.3.4 Research Question Three……………………………………………………..... 28 2.3 Synopsis of the Methodology…………………………………………………….. 30 2.3.1 Research Approach…………………………………………………………….. 31 2.3.2 Research Strategy………………………………………………………………. 31 2.3.3 Research Methods……………………………………………………………… 32 2.3.3.1 Literature Study………………………………………………………………... 33 2.3.3.2 Sample Selection……………………………………………………………….. 33 2.3.3.3 Data Collection………………………………………………………………… 33 2.3.3.4 Presentation and Analysis of Empirical Findings……………………………... 34 2.3.4 Quality Criteria………………………………………………………………… 36 2.3.5 Summary………………………………………………………………………. 37 2.4 Synopsis of the Empirical Case Studies of Selling……………………………… 37 2.4.1 Case One: Selling in Engi One………………………………………………. 37 2.4.2 Case Two: Selling in Engi Two………………………………………………. 38 2.4.3 Case Three: Selling in Electro One……………………………………............. 39 2.4.4 Case Four: Selling in Electro Two……………………………………............. 40 2.5 Synopsis of the Analysis………………………………………………………….. 40 2.5.1 Within-Case Analysis………………………………………………………….. 42 2.5.1.1 Case One: Engi One………………………………………………………….. 42 2.5.1.2 Case Two: Engi Two………………………………………………………….. 43 2.5.1.3 Case Three: Electro One……………………………………………………….. 44 2.5.1.4 Case Four: Electro Two……………………………………………………….. 44 2.5.2 Cross-Case Analysis…………………………………………………………… 45 2.5.2.1 Comparison of the Four Cases…………………………………………………. 45 2.5.2.2 Industry by Industry……………………………………………………………. 46 2.5.2.3 Small versus Medium-Sized Enterprises………………………………………. 46 2.6 Findings and Recommendations…………………………………………………. 46 2.6.1 Overall Findings……………………………………………………………….. 46 2.6.2 Findings Regarding Research Questions………………………………………. 48 2.6.3 Managerial Implications……………………………………………………….. 50 2.6.4 Suggestions for Future Research………………………………………………. 52 References for Study A…………………………………………………………… 54 Appendix 1: Interview Guide……………………………………………………. 57 3 STUDY B: Relationships in Selling……………………………………………… 61 3.1 Article One: The Impact of Incentives on Interfunctional Relationship Quality: Views from a South African Firm……………………… 62 3.2 Article Two: Trusting Relationships: How Salespeople View the Quality of Relationships with Friends and Customers…………………… 76 3.3 Article Three: Personal Acquaintances and Salespeople