Organizational Strategies and The Sales Function

1. Organizational Strategiesand The Sales Function Module Three

2. Learning Objectives • Define the strategy levels for multi- business, multi-product firms. • Discuss how corporate and business strategy decisions affect the sales function. • Lists the advantages and disadvantages of personal selling as a marketing communications tool.

3. Learning Objectives • Specify the situations in which personal selling is typically emphasized in a marketing strategy. • Describe ways that personal selling, advertising, and other tools can be blended into effective integrated marketing communications programs.

4. Learning Objectives • Discuss the important concepts behind organizational buyer behavior. • Define an account targeting strategy. • Explain the different types of relationships strategies. • Discuss the importance of different selling strategies. • Describe the sales channel strategies.

5. Learning Objectives • Specify the situations in which personal selling is typically emphasized in a marketing strategy. • Describe ways that personal selling, advertising, and other tools can be blended into effective integrated marketing communications programs.

6. Setting the Stage Customer Relationship Management (CRM) and the Sales Function: Deere & Company • The vignette refers to a dealer who uses a CRM application to keep track of 90,000 customers. What information does that dealer track? • How does management use that data?

7. Strategy Level Key Decision Areas KeyDecision Makers Corporate Mission Corporate Strategy Corporate Management SBU Definition SBU Objectives Strategy Types Sales Strategy SBU Management Strategy Execution Organizational Strategy Levels

8. Target Market Selection Marketing Strategy Corporate Management Integrated Mkt Comm. Marketing Mix Dev. Account Targeting Strategy Business Strategy SBU Management Sales Channel Strategy Relationship Strategy Organizational Strategy Levels Strategy Level Key Decision Areas KeyDecision Makers

9. Corporate Strategy Development Process • Analyze corporate performance and identify opportunities and threats • Determine corporate mission and objectives • Define strategic business units • Set objectives for each strategic business unit

10. Definition ofStrategic Business Units (SBUs) An SBU is a single product or brand, a line of products, or a mix of related products that meets a common market need or a group of related needs, and the unit's management is responsible for all (or most) of the basic business functions." Cravens (1991)

11. Sales Organization Objectives Compensation System Market Share Objectives PrimarySales Tasks Build Build salesvolume; Securedistribution Prospective and new accounts Provide high service levels particularly pre-sales service Product/market feedback Salary plus incentive SBU Objectives andthe Sales Organization

12. Sales Organization Objectives Compensation System Market Share Objectives PrimarySales Tasks Hold Maintainsales volume Consolidate market position through concentrationon targeted segments Secure additional outlets Call on targeted current accounts Incr. service levels to current accounts Call on new accounts Salary plus commission or bonus SBU Objectives andthe Sales Organization

13. Sales Organization Objectives Compensation System Market Share Objectives PrimarySales Tasks Harvest Reduce selling costs Target profitable accounts Service most profitable accounts eliminate unprofitable accounts Reduce service levels and/or inventories levels Salary plus bonus SBU Objectives andthe Sales Organization

14. Sales Organization Objectives Compensation System Market Share Objectives PrimarySales Tasks Divest or Liquidate Minimize selling costs and clear out inventory Dump inventory Eliminate service Salary SBU Objectives andthe Sales Organization

15. Business Strategy andthe Sales Function • Low-cost supplier • Differentiation • Niche Strategy Type Sales Force Role Pursue large customers Minimize cost Compete on price Seek customers who are low price shoppers Compete on non-price benefits Provide high quality customer service Seek customers who are not low price shoppers Serve a distinct target market not served well by others Provide high quality customer service Seek customers who are not low price shoppers

16. When Message Flexibility is Important When Message Timing is Important When Reaction Speed is Important When Message Credibility is Important When Trying to Close the Sale When Low Cost per Contact is Important When Repetitive Contact is Important When Control of Message is Important When Audience is Large Personal Selling-Driven vs. Advertising-DrivenMarketing Communications Strategies Personal Selling Advertising

17. Target Market: A definition of the specific market segment to be served Personal Selling-Driven Promotional Strategies are appropriate when: The market consists of only a few buyers that tend to be concentrated in location The buyer needs a great deal of information The purchase is important The product is complex Service after the sale is important Target Market Situations andPersonal Selling

18. Integrated Marketing Communications The strategic integration of multiple marketing communications tools communicating a consistent message in the most effective and efficient manner.

19. Account Targeting BuyingSituation Strategy Relationship BuyingCenter Strategy Sales Organizational Account Salesperson Strategy Buyer Behavior Sales Channel BuyingProcess Strategy Selling Buying Needs Strategy The Sales Strategy Framework

20. Organizational Buyer Behavior:Types of Organizations Major Category Types Users: purchase products and services to produce other products and services Business or Industrial Organizations Original Equipment Manufacturers (OEM):purchase products to incorporate into products Resellers: purchase products to sell

21. Organizational Buyer Behavior:Types of Organizations Major Category Types Federal, State, and Local Government Agencies Government Organizations Public and Private Institutions Institutions

22. Organizational Buyer Behavior: Buying Situations Straight Rebuy Buying Situation • Routinized Response Behavior Modified Rebuy Buying Situation • Limited Problem Solving New Task Buying Situation • Extensive Problem Solving

23. Organizational Buyer Behavior: Buying Center • Initiators • Users • Gatekeepers • Influencers • Deciders • Purchasers

24. Organizational Buyer Behavior:Buying Process Phase 1: Recognize Problem/Need Phase 2: Determine Item Specs/Quantity Needed Phase 3: Specify Item Specs/Quantity Needed Phase 4: Identify and Qualify Potential Sources Phase 5: Acquire and Analyze Proposals Phase 6: Evaluate Proposals/Select Suppliers Phase 7: Selection of Order Routine Phase 8: Performance Feedback/Evaluation

25. Personal and Organizational Needs Personal Goals Organizational Goals Want a Feeling of Power Control Cost in Product Use Situation Seek Personal Pleasure Few Breakdowns of Product Dependable Delivery for Repeat Purchases Desire Job Security Adequate Supply of Products Want to be Well Liked Want Respect Cost within Budget Limits

26. The classification of accounts withina target market into categories forthe purpose of developing strategic approaches for selling to each account or account group. Sales Strategy:Account-Targeting Strategy

27. A determination of the type of relationship to be developed with different account groups. Sales Strategy:Relationship Strategy

28. Goal Sell Products Add Value Time Frame Long Short Customized Standardized Offering Number of Customers Many Few Characteristics of Relationship Strategies Transaction Solutions Partnership Collaborative

29. A planned selling approach for each relationship strategy. Developing efficient and effective selling strategies is an important sales management task. Sales Strategy: Selling Strategy

30. High Cost to Serve Solutions Partnership Collaborative Transaction Low Commitment High Matching Selling andRelationship Strategies

31. Ensuring that accounts receive selling effort coverage in an effective and efficient manner. Sales channel options include: The Internet Industrial Distributors Independent Representatives Team Selling Telemarketing Trade Shows Sales Strategy: Sales Channel Strategy

32. Used strategically to: Increase Reach Gather Information about Customers Showcase New Products Conduct Surveys Enhance Corporate Image Obtain Feedback Service Existing Customers Sales Channel Strategy: The Internet

33. Sales Channel Strategy:Industrial Distributors Essentially, channel intermediaries that: • Have Their Own Sales Force • May Represent One Manufacturer; Several Non-competing Manufacturers; Several Competing Manufacturers • Take Title to the Goods and Normally Carry Inventory

34. Outsourcing the selling effort to individuals or organizations that: Sell complimentary products from non-competing manufacturers. Do Not Take Title to the Goods or Carry Inventory Are Paid for Performance Have Control over the Selling Effort May Control Access to Customer Information Sales Channel Strategy: Independent or Manufacturers’ Reps

35. Multiple individuals from the selling organization working together to develop and expand relationships with one or more accounts. The salesperson typically coordinates the team’s selling efforts. Sales Channel Strategy: Team Selling

36. Using the telephone as a means of customer contact. This low-cost method of customer relationship management may replace field sales force for certain accounts. When integrated with field sales force, activities include: Prospecting, Qualifying Leads, Conducting Surveys Taking Orders, Checking on Order Status, Handling Order Problems Following Up for Repeat Business Sales Channel Strategy: Telemarketing

37. Generate Leads Test Market New Products Introduce New Products Close Sales Gather Competitive Information Service Existing Customers Enhance Corporate Image Sales Channel Strategy: Trade Shows Events at which the company exhibits its wares. Used by organizations to: