6e SM Module03

Module Three
Organizational Strategies and The Sales Function
Learning Objectives
1. Define the strategy levels for multibusiness, multi-product firms. 2. Discuss how corporate and business strategy decisions affect the sales function. 3. Lists the advantages and disadvantages of personal selling as a marketing communications tool.
Professional Selling: A Trust-Based Approach
Module 3: Organizational Strategies and the Sales Function
LaForge Avila Schwepker Jr. Williams Ingram
Learning Objectives
4. Specify the situations in which personal selling is typically emphasized in a marketing strategy. 5. Describe ways that personal selling, advertising, and other tools can be blended into effective integrated marketing communications programs.
Learning Objectives
6. Discuss the important concepts behind organizational buyer behavior. 7. Define an account targeting strategy. 8. Explain the different types of relationships strategies. 9. Discuss the importance of different selling strategies. 10. Describe the sales channel strategies.
Learning Objectives
4. Specify the situations in which personal selling is typically emphasized in a marketing strategy. 5. Describe ways that personal selling, advertising, and other tools can be blended into effective integrated marketing communications programs.
Setting the Stage

Customer Relationship Management (CRM) and the Sales Function: Deere & Company
1. The vignette refers to a dealer who uses a CRM application to keep track of 90,000 customers. What information does that dealer track? 2. How does management use that data?
Organizational Strategy Levels

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

Strategy Level Marketing Strategy Key Decision Areas Key Decision Makers Corporate Management
Target Market Selection Integrated Mkt Comm. Marketing Mix Dev.
Business Account Targeting Strategy SBU Sales Channel Strategy Strategy Management Relationship Strategy
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
Definition of Strategic 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)
SBU Objectives and the Sales Organization

Market Share Objectives
Build
Sales Organization Objectives

Build sales volume; Secure distribution
Primary Sales Tasks

Prospective and new accounts Provide high service levels particularly presales service Product/market feedback
Compensation System
Salary plus incentive

Hold
Primary Sales Tasks
Compensation System
Salary plus commission or bonus
Maintain Call on targeted sales volume current accounts Consolidate Incr. service market position levels to current through accounts concentration Call on new on targeted accounts segments Secure additional outlets

Harvest

Reduce selling costs Target profitable accounts
Primary Sales Tasks

Service most profitable accounts eliminate unprofitable accounts Reduce service levels and/or inventories levels
Compensation System
Salary plus bonus

Divest or Liquidate

Minimize selling costs and clear out inventory
Primary Sales Tasks

Dump inventory Eliminate service
Compensation System
Salary
Business Strategy and the Sales Function
Low-cost supplier Differentiation Niche
Pursue large customers Minimize cost Compete on price Seek customers who are low price shoppers
Personal Selling-Driven vs. Advertising-Driven Marketing Communications Strategies

Personal Selling
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
Advertising
Professional Selling: A Trust-Based Approach Module 3: Organizational Strategies and the Sales Function LaForge Avila Schwepker Jr. Williams Ingram
Target Market Situations and Personal Selling

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

Buying Situation Account Targeting Strategy Relationship Strategy
Buying Center
Organizational Buyer Behavior
Account
Salesperson
Sales Strategy
Buying Process
Sales Channel Strategy
Buying Needs
Professional Selling: A Trust-Based Approach Module 3: Organizational Strategies and the Sales Function
Selling Strategy
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
Organizational Buyer Behavior: Types of Organizations

Major Category
Government Organizations
Types
Federal, State, and Local Government Agencies
Institutions
Public and Private Institutions
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
Organizational Buyer Behavior: Buying Center
Initiators Users Gatekeepers Influencers Deciders Purchasers
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
Personal and Organizational Needs

Personal Goals
Want a Feeling of Power Seek Personal Pleasure Desire Job Security Want to be Well Liked Want Respect
Organizational Goals
Control Cost in Product Use Situation Few Breakdowns of Product Dependable Delivery for Repeat Purchases Adequate Supply of Products Cost within Budget Limits
Sales Strategy: Account-Targeting Strategy
The classification of accounts within a target market into categories for the purpose of developing strategic approaches for selling to each account or account group.
Sales Strategy: Relationship Strategy
A determination of the type of relationship to be developed with different account groups.
Characteristics of Relationship Strategies

Transaction Goal Sell Products Time Short Frame Offering Standardized Number of Many Customers Solutions Partnership Collaborative Add Value Long Customized Few
Sales Strategy: Selling Strategy
A planned selling approach for each relationship strategy. Developing efficient and effective selling strategies is an important sales management task.
Matching Selling and Relationship Strategies

High Collaborative Cost to Serve Partnership Solutions Transaction Low
Commitment
High
Sales Strategy: Sales Channel Strategy

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 Channel Strategy: The Internet

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: 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
Sales Channel Strategy: Independent or Manufacturers Reps

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

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: Trade Shows

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

6e SM Module03

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Module Three

Organizational Strategies and The Sales Function

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Setting the Stage

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Organizational Strategy Levels

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Organizational Strategy Levels

Target Market Selection Integrated Mkt Comm. Marketing Mix Dev.

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Corporate Strategy Development Process

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Definition of Strategic Business Units (SBUs)

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

SBU Objectives and the Sales Organization

Sales Organization Objectives

Primary Sales Tasks

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

SBU Objectives and the Sales Organization

Sales Organization Objectives

Primary Sales Tasks

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

SBU Objectives and the Sales Organization

Sales Organization Objectives

Primary Sales Tasks

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

SBU Objectives and the Sales Organization

Sales Organization Objectives

Primary Sales Tasks

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function

LaForge Avila Schwepker Jr. Williams Ingram

Business Strategy and the Sales Function

Low-cost supplier Differentiation Niche

Professional Selling: A Trust-Based Approach

Module 3: Organizational Strategies and the Sales Function