Outsourcing salespeople in building arousal towards retail buying

Outsourcing salespeople in building arousal towards retail buying Received (in revised form): 3rd April, 2008 Rajagopal is Professor of Marketing at Monterrey Institute of Technology and Higher Education (ITESM), Mexico City Campus and a fellow of the Royal Society for Encouragement of Arts, Manufacture and Commerce, London. His biography is listed in the Who’s Who in the World, 2008. He holds doctoral degree from Ravishankar University, India and has been conferred the National Researcher — Level-II of Mexican National System of Researchers. He teaches various topics of marketing in graduate, doctoral executive development programmes at the Institute. Dr Rajagopal has held key positions in many premier management institutes in India including Administrative Staff College of India. Keywords outsourcing, sales promotion, consumer behaviour, retailing, inter-personal communications, consumer marketing Abstract The strategy of outsourcing salespeople (sales promoters) to prospect for customers through inter-personal communication and develop pre-purchase arousal for products and services is being increasingly employed by manufacturing and marketing firms. Sales promoters are deployed at strategic locations such as in front of malls, large self-service stores, departmental stores and traffic islands in the city. This paper attempts to analyse behavioural drivers that influence consumers’ leisure shopping behaviour and measure customer value through empirical investigation in Mexico. The study reveals that sales promoters significantly stimulate interest among customers towards buying products and trigger shopping arousal. Consumers are influenced in making buying decisions by the product attractiveness and pre-purchase arousal generated by the sales promoters. Journal of Database Marketing & Customer Strategy Management (2008) 15, 106–118. ;doi:10.1057/dbm.2008.3; published online 12 May 2008 Rajagopal Department of Marketing Business Division, Monterrey Institute of Technology and Higher Education, ITESM Mexico City Campus 222, Calle del Puente, Tlalpan DF 14380, Mexico Tel: +52 55 5483 2251; Fax: +52 55 5483 1341; e-mail: , ; Homepage: http://www. geocities.com/prof_ rajagopal/homepage.html 106 INTRODUCTION Customer-centred companies are increasingly engaged in outsourcing salespeople to enhance the market coverage and augment volume of sales in the competitive business environment. By outsourcing salespeople commonly known as promoters to perform certain activities targeted toward customers, firms are engaging in service networks. Outsourced salespeople are engaged in disseminating brand image of the company and bringing more customers in the business fold by delivering satisfaction and caring their buying intentions. They are deployed by companies and distributors at strategic locations such as in front of malls, large selfservice stores, departmental stores and traffic islands in the city. Services provided by the sales promoters directly for the customer are likely to play an important role in building a firm’s brand image and equity.1 Many firms have discovered that outsourcing sales promotion activities can Database Marketing & Customer Strategy Management Vol. 15, 2, 106–118 www.palgrave-journals.com/dbm © 2008 Palgrave Macmillan Ltd 1741-2439 $30.00 Outsourcing salespeople in building arousal towards retail buying also backfire dramatically and put reputations at risk if promoters mismanage the process. Yet, despite the apparent risks, managers in a widening range of industries are exploring the scope of sales outsourcing. This strategy of promoting sales has helped many companies to cut costs on advertising and publicity, and sharpen their focus on core competencies.2 Personal shopping motives, values and perceived shopping alternatives are often considered independent inputs into a choice model. It is argued that shopping motives influence the perception of retail store attributes as well as the attitude towards the retail stores themselves.3 In the process of making buying decisions in leisure shopping, purchase acceleration and product trial are found to be the two most influential variables. Firms and their distributors outsource salespeople intending to influence customer behaviour and buying decision process in such a way that higher sales targets are achieved. Sales systems can be classified as a behaviour-based sales system (BBSS) and an outcome-based control system (OBSS), which explain the selling process in a market.4 A BBSS aims at the selling process inducing buyers at the pre-purchase stage, and helps retailers to sell higher volumes in view of the customer pull effect generated by the salespeople. On the contrary, OBCS evaluates the sales force in light of end results, and compensation is usually incentive-based. In view of the growing competition among firms however, the OBCS is widely used together with the BBCS in a continuum between the two sales systems.5 Growing use of the BBCS is driven by such economic principles as Agency theory. The Agency theory envisages the sales manager as having predetermined guidelines for outsourced salespeople to act on his behalf and accordingly the firms objectives are affected by the outsourced salespeople or sales promoters.6 This paper attempts to analyse behavioural drivers that influence consumers’ leisure shopping behaviour and measure customers’ value through empirical investigation in Mexico. The role of outsourced salespeople who act as sales promoters for stimulating arousal and satisfaction as behavioural drivers, which influence the buying behaviour of consumers and measures the extent of satisfaction, has been analysed. Customer prospecting strategies of sales promoters in swaying leisure shopping and driving brand loyalty are also discussed in the paper. PREVIOUS CONTRIBUTIONS Developing buying arousal Arousal in shopping makes consumers stay longer in the stores, purchase product and make buying decisions. Perceptions of shopping duration, emotional levels and merchandise evaluations are derived from the level of arousal experienced by the consumers while interacting with the sales promoters.7 Five essential qualities of aesthetic judgment that include interest, subjectivity, exclusivity, thoughtfulness and internality need to be nurtured among consumers to develop conviction in buying. The quality of aesthetic judgment driven by in-store aura and arousal towards new products, exercised by the customers in association with the sales promoters, will determine the extent to which new products and brands promoted enhances quality of life.8 The three distinct dimensions of emotions, which include pleasantness, arousal and dominance, have been identified as major drivers in regard to consumer buying decisions. Convergence of sales promotion, customer’s perceptions, value for money and product features drive arousal among customers.7 There are some common strategies adopted by retailers to (...truncated)