2-68 Techniques for Exploring Personal Markets

2-8. What is market segmentation, how do you do it, and what are its benefits?

2-9. What is prospecting and what are the three sources of acquiring names?

2-10. List the most common prospecting methods. Self-Test Questions Instructions: Read chapter 2 first, then answer the following questions to test your knowledge. There are 10 questions; circle the correct answer, then check your answers with the answer key in the back of the book. 2-1. For prospecting purposes, your friends, relatives, and acquaintances are considered (A) natural markets (B) target markets (C) qualified markets (D) prestige markets 2-2. Which of the following statements about the relationship between marketing and selling is true? (A) Selling is the end result of successful marketing. (B) Marketing and selling are one in the same. (C) Marketing is more important than selling. (D) Selling is planning, while marketing is about exchanging the product for money. 2-3. The continuous activity of finding new people to meet and approach about your business is known as (A) marketing (B) prospecting (C) building prestige (D) cold canvassing Chapter Two 2-69 2-4. Your undifferentiated market, or the one created without any marketing strategy, is known as your (A) target market (B) natural market (C) general market (D) segmented market 2-5. The ability to gain entry to a market with greater ease for reasons other than direct personal knowledge refers to the concept of (A) affinity

(B) market analysis (C) past personal production (D) access 2-6. For prospecting purposes, natural markets include (A) only people you already know (B) only people whose names are in the local phone book (C) known and unknown people to whom you have acces D) people you know but to whom you do not have access 2-7. A marketing strategy should achieve the following objective: I. enable you to see as many prospects as possible II. create a perpetual prospect machine (A) I only (B) II only (C) Both I and II (D) Neither I nor II 2-8. All of the following are objectives of a marketing strategy EXCEPT (A) approach more people on a favorable basis (B) decease your appointments-to-sales ratio (C) provide focus and specialization (D) create a perpetual qualified prospect machine 2-9. All of the following are characteristics of a target market EXCEPT that the group must (A) have common needs and characteristics (B) be identifiable (C) have a networking or communication system (D) be a part of your natural market 2-10. All of the following are characteristics of a qualified prospect EXCEPT (A) they need and value your products and services (B) they can afford to pay for it (C) they can be approached by you on a favorable basis (D) they must be able to provide you with referrals Answers to Self-Test Questions 1-1. A 1-2. D 1-3. B 1-4. A 1-5. B 1-6. C 1-7. C 1-8. C

1-9. B 1-10. C

A-4 Techniques for Exploring Personal Markets Answers to Self-Test Questions 1-1. A 1-2. D 1-3. B 1-4. A 1-5. B 1-6. C 1-7. C 1-8. C 1-9. B 1-10. C Chapter 2 Answers to Review Questions 2-1. Marketing is the planning and implementation of a process to identify specific consumer needs, isolate groups of people who have those needs, and then produce and customize the products and services that satisfy those needs. It is the art of planning when, where, why, how and to whom to sell. Successful marketing focuses on the needs of the consumer and produces a mutually beneficial relationship between a buyer and seller. Because marketing involves planning, much of marketing does not involve interaction with a buyer to make a sale. Many believe that marketing and selling are the same, but in reality selling is a part of marketing. Selling is the end result of successful marketing. It is the transaction resulting from the encounter between buyer and seller, the exchange of the product or service for the buyers cash. 2-2. A qualified prospect is someone who needs and values your products and services, can afford to pay for it, can qualify for it (if applicable to the product), and can be approached by you on a favorable basis. 2-3. Your general market is whomever you can market to without a clearly defined strategy. It could almost be anyone, resulting from a shotgun approach to marketing. There are some boundaries in the general market such as where you and the company or companies you represent are licensed to sell. Establish some geographical boundaries by deciding the areas in which you are willing to market and sell, the time required to get from one place to another between appointments, traffic patterns, and the cost of driving there. Your general market is necessary if you have not developed a more focused market that can support your sales goals. Marketing and selling only in your general market will require a lot more work and cold calling. 2

Answers to Questions A-5 2-4. Any effective marketing strategy you create should accomplish four things: create a perpetual qualified-prospect machine, decrease your appointments-to-sales ratio (efficiency in creating clients), decrease your contacts=made=to=appointments ratio (decrease the amount of time and energy devoted to prospecting), and focus and specialize to create a higher value. 2-5. A natural market is the group of people to whom you have a natural affinity or access because of similar values, lifestyles, experiences, attitudes, and so on. Affinity describes the part of your natural market formed by your friends, family, and acquaintances. You have a certain comfort level with them because of these commonalities. The natural market is not limited to people you know, but also to those to whom you have access for reasons other than direct personal knowledge or acquaintance. Access means that you can approach a group and gain entry with greater ease because you have something in common. For example, you might have been a teacher prior to joining the insurance profession, so one natural market might include teachers because your personal experience gives you insight into how to contact them, the unique challenges they face, and their financial needs. Another example is an advisor who has young children; Prospecting could begin with the parents of her childrens friends, or perhaps the teachers at her elementary school. 2-6. The word natural means normal or effortless. If someone is a natural salesperson, he or she has a knack for helping people to make buying decisions. So a natural market is one where you have that knack for helping people plan their insurance needs. The benefits of natural markets are that you will

have a high probability of understanding their needs and attitudes since you are one of them

feel more comfortable and have more confidence

avoid marketing mismatches that occur if you do not place the same values on money, family, and other critical life values that your prospects have

experience less rejection and frustration

have greater success creating a client since they already trust you

have to do less cold calling since you will receive referrals (if you ask)

deal with more people with similar lifestyle, values, and attitudes as your current clients

enjoy your job more 2-7. Target Marketing is a systematic approach in which you look for a group of people (a segment) that is large enough so that you will never run out of names and small enough that the members are interrelated to the degree that your reputation will precede you. The group is identifiable and accessible, with members who have common characteristics and needs, and who communicate with one another. The benefits of target marketing include: increasing your efficiency within your natural market by organizing it, creating a perpetual qualified-prospect machine, increasing your visibility and prestige, providing