THE EFFECT
OF SALES-ORIENTED, CUSTOMER-ORIENTED AND SELLER PERFORMANCE ON VENON BRAND
SALES PERFORMANCE IN INDONESIA
Gilang
Pratama Hafidz1, Ardiwiriyanata2�
Fakultas Ekonomi dan Bisnis, Universitas Esa Unggul, Indonesia
[email protected]1, [email protected]2
ABSTRACT
This study explores how individual sales abilities affect sales-oriented
and customer-oriented sales behavior. The population in this study is the B2B
sales of the hair care industry. This research uses quantitative. Research
methods to determine the Validity and reliability of each statement used in the
questionnaire, this study tested the factor analysis method. To determine the
level of significance and interrelationships between each variable used, the
structural equation model (SEM) analysis method was used. Data was collected
using an online questionnaire survey method via Google Forms. Except for the
Competitive Intensity variable. ISC has a positive and significant effect on
SO, and SO can significantly affect SP. Individual Sales Capability and Customer-Oriented
Selling Behavior have a significant influence but have a negative direction. CO
has a significant influence but has a negative direction on SP. Competitive
intensity does not moderate the relationship between SO and Sales Performance.
Furthermore, CI moderated the relationship between CO and SP. This research
shows the importance of onboarding on customers in sales performance. Customer
oriented sales behavior can play an important role in improving sales
performance, especially in situations where market competition is getting
tougher.
Keywords: performance,
brand sales, seller.
Corresponding Author: Ardiwiriyanata
E-mail: [email protected]
INTRODUCTION
In the current era, the pandemic period requires people to spend
more time at home, so the trend for health and beauty care is increasing; this
is shown by the increase in the cosmetic industry in Indonesia, according to
the Central Statistics Agency in the first quarter of 2020, which increased by
5.59%. It is projected to grow by 7% in 2021 (Rizati,
2021). The following is data on the
best-selling care products in Indonesia.
Figure
1. 10 Best-Selling Brands of Body Care Products
In Indonesia, the cosmetics industry has
various sub-industries, including the hair care sub-industry. Research
conducted by Farah Ramadhani (2021) shows the proportion of market share as
follows:
Gambar
2. Market Share Produk Perawatan Rambut di Indonesia
Based on the
data above, one of the players in the hair care sub-industry is PT. Rantaeus
Cipta Pesona, with the Venon brand, is currently a follower in the Indonesian
market share. As a company that wants to continue to grow, it wants to continue
increasing its market share and becoming a market leader. To reach the market
leader point, the company can continue increasing product sales. One of the
spearheads of sales is sales at the company's forefront.
The
relationship between SOCO by Sales and boundary-spanners has been proven ( (Frankwick et al ., 2001) and (Schultz & Good, 2000), with boundary-spanners as activities, & behaviors carried
out by Sales to all customers within the company and outside (Abel et al., 2021). Few people deny that the Impact of companies pursuing long-term
relationships has benefits (Yi & Amenuvor, 2022). The Sales Oriented � Customer oriented (SOCO) approach is
becoming a standard mechanism for analyzing the trend of boundary-spanners for
relational marketing (Saxe & Weitz, 1982). Customer orientation strategies are more likely to form
long-term relationships with Sales ( (Elistia & Rizan, 2009) ; (Amenuvor, Basilisco, et al .,
2022); and (Schultz & Good, 2000). Customer orientation focuses on providing assistance and solutions
to customers in making informed purchasing decisions and prioritizing measures
in customers' best interests rather than direct sales and commissions (Yi & Amenuvor, 2022). On the
other hand, sales-oriented strategies are not so concerned with customer
interests but transactions. Quick and simple to complete. Most salespeople
believe that sales orientation is not fixed and contradicts customer
orientation (Wachner et al ., 2009).
Regardless of
the importance of boundary-spanner sales, a significant gap still needs further
investigation. For example, the activity of reaching strategic sales limits
requires specific capabilities, in previous research was not too focused on
measuring these individual capabilities and how these capabilities can generate
sales behavior. As well as the nature of sales work requires sales to achieve
its goals. Nonetheless, several studies have been conducted regarding the
effect of SOCO sales being influenced by their specific sales skills.
Therefore, this study focuses on how SOCO behavior is related to sales and
sales performance is influenced by the intensity of competition. In addition,
previous studies (Yi, Cha, et al ., 2021) and (Yi, Yeo, et al ., 2021) state that several studies have been conducted on subjects at
sales by placing less focus on how SOCO behaves customer-oriented and sales
-oriented sales have an influence on sales performance. Therefore, to fill this
gap, this research was conducted to model the effect of individual sales ability
on sales-oriented and customer-oriented sales behavior. However, previous
research only focused on B2C sales, so this research will focus on B2B sales
and investigate how sales-oriented and customer-oriented sales behavior affect
sales performance. The next GAP in this study is the method used for primary
data analysis using the structural equation modeling (SEM PLS) method.
This study
aims to explore how the sales ability of individual sales influences
sales-oriented and customer-oriented sales behavior. This study also aims to
add to the development of knowledge by looking at the role of sales-oriented
and customer-oriented sales behavior in sales performance and the moderating
effect of competitive intensity with the same relationship. This research has
the benefit of improving understanding of the factors that affect sales
performance. This research can also help in understanding the factors that
affect sales performance, especially in terms of the role of sales oriented and
customer-oriented sales behavior, as well as how moderation in competition
intensity can affect the relationship. This research can show the importance of
orientation on customers in sales performance. Sales oriented and
customer-oriented sales behavior can affect sales performance differently, and
customer orientation can play an important role in improving sales performance.
METHOD
This research uses quantitative research methods. This research was
conducted by collecting data using an online questionnaire survey method via
Google Forms as a data collection technique; the data collected was in the form
of scores from the respondents. Furthermore,
the data that was successfully collected will be measured using the Likert
scale method, which has five alternative answers, namely on a score of five
assessments strongly agree (SS), a score of four assessments agree (S), a score
of three assessments between agreeing and disagreeing (N), a score of two
assessment disagree (TS) and score one assessment strongly disagree (STS) (Munshi, 2014). Measurement of the research variables adopted from measurements
consisting of 5 statements, Salesperson's Sales Capability variable (12
questions) adapted from Spencer and Spencer (1993) Customer-Oriented Selling Behavior variables (7 questions), and
Sales-Oriented Selling Behavior (6 questions) from Saxe and Weitz (1982), Sales Performance variable (6 questions) from Behrman & Perreault in Wachner et al., (2009), and the Competitive Intensity variable (5 questions) from Jaworski, BJ, Kohli, (1993). Precisely, competitive intensity is measured by the following
scale items adapted from Jaworski, BJ, Kohli
(1993): CI1�Competition in the market is very tight; CI2�There are many
�promotion wars� in the market; CI3�Price competition is a hallmark of the
market; CI4�One often hears about new competitive moves in the market. The
scale development and purification methodologies and processes proposed by
DeVellis (2003), specifically for confirmatory factor analysis, were used to
refine all scale items. There are 36 statements; these statements can be seen
in Appendix 2 and Appendix 3.
In the
validity test, using the dimension reduction factor analysis in SPSS, namely by
looking at the Kaiser-Msyer-Olkin measure of sampling (KMO) and measures of
sampling adequacy (MSA) values with an acceptable value of ≥0.500 (Hair et al., 2021). The Salesperson's Individual Sales Capability variable is
declared valid (0.699> 0.5), Sales-Oriented Selling Behavior is declared
valid (0.770> 0.5), Customer-Oriented Selling Behavior is declared valid
(0.699> 0.5), Competitive Intensity is declared valid (0.756> 0.5), Sales
Performance is declared valid (0.880> 0.5). Furthermore, on the reliability
test results, all variables were declared reliable with a Cronbach Alpha value
of > 0.5, according to (Hair et al., 2021).
The
population in this study is the B2B sales of the hair care industry. To
determine the Validity and reliability of each statement to be used in the
questionnaire, this study tested the factor analysis method and to determine
the level of significance and interrelationships between each variable using
the structural equation model (SEM) analysis method. Based on the SEM analysis
method, determining the number of research samples is five times the number of
statements (Hair et al., 2021). This study uses a minimum sample of (36x5) 180 respondents.
RESULTS AND DISCUSSION
Validity and Reliability Test
(pretest)
The KMO test
or Kaiser-meyer-olkin (KMO) and Bartlett's test in this study were used to test
the Validity of the research questionnaire. The KMO value that must be met for
each variable is > 0.50, with Bartlett's test value of < 0.05. Later,
these variables can be analyzed further (Napitupulu et al., 2017). The MSA
value that must be fulfilled for each variable indicator is > 0.50. If the
question indicator has an MSA value of < 0.5, then the indicator must be
discarded and not included in further research. Based on the data processing
results, the results of 5 variables in this study met the requirements of the
KMO test and Bartlett's test. In addition, the MSA value for each indicator was
> 0.50. It can be concluded that all research variables and indicators can
be used for further analysis. The reliability test was carried out referring to
the Cronbach alpha value. The rule for generally accepted α values is
0.6-0.7, meaning reliability is acceptable (Ursachi et al., 2015). Based on the calculation results, it is known that all
indicators of the questionnaire questions used meet the reliability test
requirements with Cronbach alpha > 0.70, meaning that the research
indicators are said to be reliable.
Convergent Validity Test
The magnitude
of convergent Validity can be seen by looking at the value of the loading
factor in the outer loading table and can also be seen by the magnitude of the
AVE value or average variance extracted. The loading factor value is > 0.70
and > 0.5 for the AVE value, which is a constant that must be met to measure
convergent Validity (Hair et al., 2021). In this study, the results obtained for 36 indicators had a
value of > 0.70. Indicators that have an outer loading value of not less
than 0.4 and less than 0.7, these indicators can still be considered for
maintenance (Hair et al., 2021). Therefore, the measurement result, namely convergent Validity for
the 36 indicators, has been fulfilled. Convergent Validity All variables were declared valid
with the criterion of AVE > 0.7, while the Competitive Intensity variable
was declared unreliable with Cronbach's Alpha measurement standard <0.7.
Discriminant Validity Test
Using
empirical standards, discriminant Validity illustrates that one latent variable
is different from the other. The cross-loading value of each indicator of the
latent variable can explain the discriminant validity test. Cross-loading value
shows the correlation between an indicator to its construction and other
constructs. The correlation value of the indicator to the latent variable needs
to show more significant results than the correlation value to the other latent
variables. Based on the results of data processing using Smart-PLS, it is known
that all variables meet the requirements of good discriminant Validity.
Internal Consistency Reliability
Test
The Composite
reliability value can measure the internal consistency reliability test in
SEM-PLS. The Composite reliability value can be reliable if it has a value >
0.7 (Hair et al., 2021). Based on the calculations, the results show that all latent
variables (constructs) have a Composite reliability value of > 0.70. Except
for the Competitive Intensity variable (0.696).
Coefficient of Determination
(Adjusted R2)
The value of
the coefficient of determination explains to what extent exogenous variables can
explain endogenous variables. Based on calculations, it is known that the
variables from the output value are Customer-Oriented Selling Behavior at
62.6%, Sales-Oriented Selling Behavior at 94.9%, and Sales Performance at 88%.
Details of construct
measurements are shown in the table below:
Tabel 1. Coefficient of
Determination (Adjust R2)
|
|
Cronbach�s Alpha |
Composite Reliability (Rho_A) |
Composite Reliability (Rho_C) |
Average Variance Extracted (Ave) |
|
Competitive
Intensity |
0.686 |
0.696 |
0.864 |
0.760 |
|
Customer
Oriented |
0.879 |
0.891 |
0.912 |
0.676 |
|
Sales
Individual |
0.963 |
0.967 |
0.967 |
0.731 |
|
Sales
Oriented |
0.853 |
0.855 |
0.895 |
0.630 |
|
Sales
Performance |
0.918 |
0.927 |
0.937 |
0.712 |
Based on the distribution of
questionnaires conducted online via the Google form, 180 respondents were
collected according to predetermined criteria. From the data obtained, the
number of respondents was categorized by age, namely 20 ≤30 by 41%, 30≤40 by 37%, and 40 ≤ 50 by 22%.
Furthermore, based on respondents' education level, 31% at the high school
level, 69% at the BACHELOR level, and 0% at the SMP level. Furthermore, based
on the workplace, 40% of the respondents worked at the principal, and
60% worked at the Distributor. Furthermore, based on the respondent's tenure in
the company, namely 1≤3 years as much as 14%,
3≤5 years as much as 25%, 5≤7 years as much as 22%, and ≥
seven years as much as 39%. Furthermore, based on respondents' positions, 38%
work as Sales Executive, 18% work in Sales Promotion, and 44% work in Direct
Sales.
Path Coefficient Significance
(Hypothesis Test)
Testing the
hypothesis in this study can be seen through the significance of the path
coefficient. Path coefficient significance values can be obtained using
bootstrapping techniques with Smart-PLS software. According to (Hair et al., 2021), if the p-value <0.05, it can be said that there is a
significant influence, while the direction of the relationship can be
determined by looking at the original sample value.
Tabel
2. Path Coefficient Significance
|
Relations
Between Variables |
Hypothesis |
Original
Value |
P
Value |
|
ISC -> Customer-Oriented
Selling Behavior |
H1 |
-0.792 |
0.00 |
|
ISC ->
Sales-Oriented Selling Behavior |
H2 |
0.974 |
0.00 |
|
Customer-Oriented
Selling Behavior -> Sales Performance |
H3 |
-0.147 |
0.00 |
|
Sales-Oriented
Selling Behavior -> Sales Performance |
H4 |
0.653 |
0.00 |
|
Competitive
intensity -> Customer-Oriented Selling Behavior -> Sales Performance |
H5 |
-0.081 |
0.02 |
|
Competitive
intensity -> Sales-Oriented Selling Behavior -> Sales Performance |
H6 |
0.040 |
0.105 |
Based on the table above, the
results obtained for all hypotheses are acceptable (H1, H2, H3, H4, H5, H6). a
negative direction (-0.792) between Individual Sales Capability (X1) and
Customer-Oriented Selling Behavior (X3) thus H1 cannot be accepted. Testing H2,
the effect of Individual Sales Capability (X1) on Sales-Oriented Selling
Behavior (X2) obtained a P value of 0.00 <0.05, so it can be said that
Individual Sales Capability (X1) has a significant and positive influence on
Sales-Oriented Selling Behavior (X2) with Thus H2 is acceptable. Testing H3, the
influence of Customer-Oriented Selling Behavior (X3) on Sales Performance (X5)
obtained the result P value 0.00 > 0.05, so it can be said that there is a
significant influence but has a negative direction (-0.147) between
Customer-Oriented Selling Behavior (X3) on Sales Performance (X5) thus H3 is
unacceptable. Testing H4, the effect of Sales-Oriented Selling Behavior (X2) on
Sales Performance (X5) obtained a P value of 0.00 <0.05, so it can be said
that there is a significant and positive influence between Sales-Oriented
Selling Behavior (X2) on Sales Performance (X5) thus H4 acceptable. The H5 test
regarding the effect of Competitive Intensity (X4) which moderates the
relationship between Customer-Oriented Selling Behavior (X3) on Sales
Performance (X5), obtained the results of P value 0.02 <0.05, so it can be
said that there is a significant influence but negatively. Based on the results
of the SLOPE test, an analysis of the Competitive Intensity moderating variable
obtained the pattern as shown in the diagram below.
Figure 3. Competitive
Intensity X Customer Oriented
Testing H6 regarding the influence of Competitive Intensity (X4) which
moderates the relationship between Sales-Oriented Selling Behavior (X2) and
Sales Performance (X5) results obtained a P value 0.105 <0.05, so it can be
said that there is no moderating effect.
Based on the analysis results, there is a relationship between Individual
Sales Capability and Customer-Oriented Selling Behavior. This relationship is
influenced by a salesman's analytic thinking patterns, the drive to build a
sales network/human network, and organizational recognition. This is because
Individual Sales Capability will impact Customer-Oriented Selling Behavior.
However, the higher the ability of individual Venon sales clerks will reduce
the sales orientation focusing on customer interests. Because sales are
starting to think about the result, namely the sales target given to evaluate
its performance compared to the process of fostering outlets such as the
principle of Customer-Oriented Selling Behavior where the stages in building
good relationships, meeting customer needs, or fulfilling customer requests are
to increase customer satisfaction which in the end the customer will fulfill
sales needs. However, this process is considered by sales associates to be
time-consuming and complex, which allows salespeople to think analytically in
the interest of increasing sales volume by distributing goods or sales volume
as wide as possible from Vernon rather than relying on existing outlets so that
they can meet the targets set by the company. This salesman's mindset may
encourage sales associates to build as many sellers (store) network
relationships so that salespeople are oriented to looking for prospects for new
stores or opening new customers and opening new areas on a large scale or
frequency rather than managing existing stores and satisfy it
(Customer-Oriented Selling Behavior). This is also due to the high competition
culture within the company's internal organization, which spurs the level of
competition among salespeople so that all sales compete to get recognition from
the company, so they ignore Customer-Oriented Selling Behavior. The Impact is
that too many outlets have to be fostered regularly, resulting in reduced
salesman capacity in building or maintaining relationships with outlets.
Based on the analysis results, there is a relationship between Individual
Sales Capability and Sales-Oriented Selling Behavior. The salesman's analytic
thinking factor influences this relationship. This means that the greater the
Individual Sales Capability, the greater the orientation of the Sales-Oriented
Selling Behavior. This is because Sales will think of achieving the targets
given by the company by prioritizing transactions with outlets, especially
outlets with large transaction volumes. The greater the sales target will
generate a sales mindset to increase sales volume by relying on the
capabilities possessed. By capitalizing on broad insights, salespeople will market
and distribute products to prospective outlets that are right on target so that
transactions are more likely to occur. Relying on close personal relationships
with outlets, making it easier for sales to ask for help from outlets in
transactions. Opening new outlets will encourage salesman performance with
greater expectations in terms of sales volume compared to building existing and
limited outlets. This Sales-Oriented Selling Behavior orientation will form
itself over time with more fantastic encouragement, demands, and responsibility
from the company.
Based on the analysis results, there is a relationship between
Customer-Oriented Selling Behavior and Sales Performance. Factors and Accurate
information about the product influence this relationship. This means that the
greater orientation of sales toward Customer-Oriented Selling Behavior results
in decreased Sales Performance. This happens because sales perceptions play a
significant role in transaction decisions. If sales feel less confident, it
will impact sales performance. Sales become worried about arguing with the
outlet because it can spoil the atmosphere of the conversation with the outlet;
this becomes doubtful for the salesperson to push his argument with
consideration of the outlet's requirements for his needs so that the
presentation delivered will be less attractive to most outlets. Because the
real needs of outlets are profits and not the product's benefits, as long as
the product can generate large profits and has a good sales cycle, outlets will
be willing to invest their capital. Sales' lack of confidence hinders outlets
from making transactions because they assume Venon's product is not the
solution to store needs.
Based on the analysis results, there is a relationship between
Sales-Oriented Selling Behavior and Sales Performance. This relationship is
influenced by the atmosphere of communication with outlets. The better sales
are in building personal relationships and communication with a pleasant
atmosphere will encourage sales. This means that with encouragement from sales
to help market Venon products, of course, outlets will feel reluctant,
increasing the possibility for outlets to transact or collaborate. Sales also
try to increase sales by prioritizing the products he will sell, such as
products that can generate significant sales or offer new products launched by
the company. Sales will try to achieve the targets given by the company, so the
target outlets are usually capable of generating large sales, such as Pareto
outlets.
Based on the analysis results, Competitive intensity moderates the
relationship between Sales-Oriented Selling Behavior and Sales Performance. The
promotion war factor influences this moderation. The higher the level of
competition or competition in the market it will encourage increased sales.
This means that sales-oriented sales will try harder to maximize sales of their
products; generally, for sales that apply SO (Sales-Oriented), every offer made
by competitors to outlets is undoubtedly a challenge for them and will be
countered with better offers. The higher the competition, the greater the sales
motivation in implementing the strategy. Sales-oriented sales generally will
not allow themselves to experience defeat when facing competition at outlets.
Based on the analysis results, Competitive intensity moderates the
relationship between Customer-Oriented Selling Behavior and Sales Performance.
This moderation is influenced by the promotion war factor that occurs in the
market. The higher the level of competition in the market, the lower the sales
will be. This means that promotion wars in the market often make it difficult
for salespeople to fulfill the aspects needed by outlets. Promotion wars often
occur so that competitors offer better offers. Generally, a customer-oriented
salesperson will feel unsure of the offer he has/is motivated. This obstacle
resulted in a decrease in the organization's sales performance towards
customer-oriented sales.
CONCLUSION
The results of testing the entire
hypothesis show that Individual Sales Capability has a positive and significant
influence on Sales-Oriented Selling Behavior, besides that Sales-Oriented
Selling Behavior can significantly influence Sales Performance. As for the
others, Individual Sales Capability and Customer-Oriented Selling Behavior have
a significant influence. However, they have a negative direction. The result of
the following test is that Customer-Oriented Selling Behavior has a significant
influence but negatively impacts Sales Performance. Furthermore, Competitive
Intensity does not moderate the relationship between Sales-Oriented Selling
Behavior and Sales Performance. Furthermore, Competitive intensity moderates
the relationship between Customer-Oriented Selling Behavior and Sales
Performance.
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