Organizational Strategy & Sales Management What is the motive of Sales Managers behind understanding organizational strategy? Shared Vision “Two men were struggling to get a large crate through the door. They struggled and struggled but the crate would not budge. Finally one man said to the other, “We’ll never get this crate in” Replied the partner, “I thought we were trying to get it out...”
Strategy & Sales Management What is the motive of the Top executives to understand sales function? • Selling Cost is 13% of the Total Product Cost. • 33% of the Marketing budget is towards Sales Force Compensation.
Levels of Organizational Strategy • Corporate Strategy • Mission, business portfolio, and future growth directions for the entire corporate entity. • Business Strategy • action statements for each SBUs • Marketing Strategy • policies for each product-market combination. • Sales Force Strategy • decisions about how to access the target market and the type of relationship the company wants to have with its customers.
Strategic Management Planning Employed to make better use of the company’s resources and create a sustainable advantage over the competition. Components of SMP: • Business Mission • Provides a sense of direction to the employees and helps guide them towards the fulfillment of firm’s potential. • Establishing Goals • specific objectives by which performance can be measured. • Strategies • Means to achieve the objectives
Corporate Mission • Specification of Target customer • Identification of principal products/services • Specification of geographic domain • Identification of core technologies • Expression of commitment towards growth • Specification of key elements of company philosophy • Identification of company’s self concept • Identification of firms desired public image.
Business Strategy • The Business Portfolio Decision • How can each SBU compete successfully against competition? • What advantage should it try to exploit in the market place? What is the core competence of each SBU compared to the competition?
Business Strategy Objectives • BUILD – Build Sales Volume, Secure Distribution • HOLD – Maintain Sales Volume, Maintain Customers • HARVEST – Reduce Selling costs, target profitable customers • DIVEST / LIQUIDATE – Minimize cost & Clear Inventory
Marketing Strategy Target Market Selection Marketing Mix Development Sales Strategy Sales promotion Strategy Personal Selling Strategy
Corporate goalsMaximize shareholder wealth Business unit objectives12% revenue growth Marketing objectivesIncrease product A’s market share by 2 points Sales department objectivesAchieve sales revenue of $210 million in product A Sales district objectiveAchieve sales revenue of $10.5 million in product A Salesperson objectiveAchieve sales revenues of $1.2 million in product A Major account objectiveAchieve sales revenues of $95,000 in product A Hierarchy of Sales Objectives
Translating Corporate Objectives into Sales Strategies Secure Added Distribution Outlets Sell New Products to Existing Account Maintain List Prices and Reduce Costs Offer Low Prices to Attract Business Promote Product Variations and Improvements Emphasize Advertising Support Demonstrate Superior New Product Benefits Offer Easy Credit Terms Identify and Promote Alternative Uses Offer Promotional Allowances and Help with Displays Offer Key Account or National Account Services Corporate Objectives Become a major Supplier of Consumer Leisure Products and Services Marketing Strategies Hold Harvest Divest Build Trim Product Line and Push Volume Items Service Current Target Accounts Help Dealers Clear Out Inventory Reduce Selling Costs Help Dealers Find Substitutes or New Suppliers Sales Strategies Call on Large Accounts Sell Excess Inventory to Export Markets or Jobbers Emphasize Advertising Support Show Superior New Product Benefits Offer Easy Credit Terms Offer Trade Deals to Gain Acceptance