6e SM Module03

8/3/2019 6e SM Module03

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Organizational Strategies

and The Sales Function

Organizational Strategies

and The Sales Function

Module Three

8/3/2019 6e SM Module03


Ingram LaForge Avila

Schwepker Jr. WilliamsProfessional Selling: A Trust-Based Approach

Module 3:Organizational Strategies and the Sales Function

Learning ObjectivesLearning Objectives

1. Define the strategy levels for multi-

business, multi-product firms.

2. Discuss how corporate and businessstrategy decisions affect the sales function.

3. Lists the advantages and disadvantages of

personal selling as a marketing

communications tool.

8/3/2019 6e SM Module03


Ingram LaForge AvilaSchwepker Jr. Williams

Professional Selling: A Trust-Based Approach



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.

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6. Discuss the important concepts behindorganizational buyer behavior.

7. Define an account targeting strategy.8. Explain the different types of relationships

strategies.

9. Discuss the importance of different sellingstrategies.

10. Describe the sales channel strategies.

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4. Specify the situations in whichpersonal selling is typically

emphasized in a marketing strategy.5. Describe ways that personal selling,

advertising, and other tools can beblended into effective integratedmarketing communications programs.

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Setting the StageSetting the Stage

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?

Customer Relationship Management (CRM)

and the Sales Function: Deere & Company

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Corporate

Strategy

Corporate MissionSBU Definition

SBU Objectives

Corporate

Management

Sales

Strategy

Strategy Types

Strategy Execution

SBU

Management

Strategy

Level

Key

Decision Areas

Key

Decision Makers

Organizational Strategy LevelsOrganizational Strategy Levels

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Strategy

Level

Key

Decision Areas

Key

Decision Makers

Marketing

StrategyCorporate

Management

Target Market Selection

Marketing Mix Dev.

Integrated Mkt Comm.

Business

Strategy SBUManagement

Account Targeting Strategy

Sales Channel StrategyRelationship Strategy

Organizational Strategy LevelsOrganizational Strategy Levels

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Corporate Strategy

Development Process

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 strategicbusiness unit

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Definition of

Strategic Business Units (SBUs)

Definition of

Strategic Business Units (SBUs)

Cravens (1991)

An SBU is a single product or brand, a

line of products, or a mix of relatedproducts 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."

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Salary plus

incentive

Prospective and

new accountsProvide high

service levels

particularly pre-

sales service

Product/market

feedback

Build sales

volume; Securedistribution

Build

SBU Objectives and

the Sales Organization

SBU Objectives and


Compensation

SystemPrimary

Sales Tasks

Sales

Organization

Objectives

Market Share

Objectives

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Compensation

SystemPrimary

Sales Tasks

Sales

Organization

Objectives

Market Share

Objectives

Salary plus

commissionor bonus

Call on targeted

current accountsIncr. service

levels to current

accounts

Call on new

accounts

Maintain

sales volumeConsolidate

market position

through

concentration

on targeted

segments

Secure additional

outlets

Hold

SBU Objectives and


SBU Objectives and


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Compensation

SystemPrimary

Sales Tasks

Sales

Organization

Objectives

Market Share

Objectives

Salary plus

bonus

Service most

profitable

accounts

eliminate

unprofitable

accounts

Reduce servicelevels and/or

inventories levels

Reduce selling

costs

Target profitable

accounts

Harvest

SBU Objectives and


SBU Objectives and


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Compensation

SystemPrimary

Sales Tasks

Sales

Organization

Objectives

Market Share

Objectives

SalaryDump inventory

Eliminate service

Minimize selling

costs and clear

out inventory

Divest or

Liquidate

SBU Objectives and


SBU Objectives and


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Business Strategy and

the Sales Function

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

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Personal Selling-Driven vs. Advertising-Driven

Marketing Communications Strategies

Personal Selling-Driven vs. Advertising-Driven

Marketing Communications Strategies

When Message Flexibility is Important

When Message Timing is Important

When Reaction Speed is Important

When Message Credibility is ImportantWhen 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

Advertising

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Target Market Situations and

Personal Selling

Target Market Situations and

Personal Selling

Target Market:A definition of the specific market segment to be served

Personal Selling-Driven Promotional Strategies areappropriate 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

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Integrated Marketing CommunicationsIntegrated Marketing Communications

The strategic integration of multiple

marketing communications toolscommunicating a consistent

message in the most effective and

efficient manner.

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Buying

Situation

Buying

Center

Organizational

Buyer Behavior Account

Buying

Process

Buying

Needs

AccountTargeting

Strategy

Relationship

Strategy

SalespersonSales

Strategy

Sales Channel

Strategy

Selling

Strategy

The Sales Strategy FrameworkThe Sales Strategy Framework

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Business or

Industrial

Organizations

Major Category Types

Users: purchase products

and services to produceother products and services

Organizational Buyer Behavior:

Types of Organizations



O riginal Equipment

Manufacturers ( O EM):

purchase products to

incorporate into products

R esellers: purchase

products to sell

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Major Category Types

GovernmentOrganizations

F ederal, State, and

Local Government Agencies





Public and Private Institutions

Institutions

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Buying Situations


Buying Situations

Straight Rebuy Buying Situation

± Routinized Response Behavior Modified Rebuy Buying Situation

± Limited Problem Solving

New Task Buying Situation

± Extensive Problem Solving

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Buying Center


Buying Center

Initiators

Users

Gatekeepers

Influencers

Deciders Purchasers

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Buying Process


Buying Process

Phase 1: Recognize Problem/Need

Phase 2: Determine Item Specs/Quantity Needed

Phase 3: Specify Item Specs/Quantity NeededPhase 4: Identify and Qualify Potential Sources

Phase 5: Acquire and Analyze Proposals

Phase 6: Evaluate Proposals/Select Suppliers

Phase 7: Selection of Order RoutinePhase 8: Performance Feedback/Evaluation

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Control Cost in Product

Use Situation

Few Breakdowns of Product

Dependable Delivery for

Repeat Purchases

Adequate Supply of

Products

Cost within Budget Limits

Want a Feeling of Power

Seek Personal Pleasure

Desire Job Security

Want to be Well Liked

Want Respect

Personal Goals Organizational Goals

Personal and Organizational NeedsPersonal and Organizational Needs

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Sales Strategy:

Account-Targeting Strategy

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.

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Sales Strategy:

Relationship Strategy

Sales Strategy:

Relationship Strategy

A determination of the type of relationshipto be developed with different account

groups.

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Transaction Solutions Partnership Collaborative

Characteristics of

Relationship Strategies

Characteristics of


Goal Sell Products Add Value

Time

FrameShort Long

Offering Standardized Customized

Number of

CustomersMany Few

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Sales Strategy:

Selling Strategy

Sales Strategy:

Selling Strategy

A planned selling approach for eachrelationship strategy. Developing

efficient and effective selling strategies is

an important sales management task.

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Matching Selling and


Matching Selling and


Transaction

Solutions

Partnership

Collaborative

Commitment

Costto

Serve

HighHigh

HighHigh

LowLow

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Sales Strategy:

Sales Channel Strategy

Sales Strategy:

Sales Channel Strategy

Ensuring that accounts receive selling effortcoverage in an effective and efficient

manner. Sales channel options include: ± The Internet

± Industrial Distributors

± Independent Representatives

± Team Selling

± Telemarketing ± Trade Shows

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Sales Channel Strategy:

The Internet


The Internet

Used strategically to:

Increase Reach

Gather Information about Customers Showcase New Products

Conduct Surveys

Enhance Corporate Image

Obtain Feedback

Service Existing Customers

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Industrial Distributors


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 NormallyCarry Inventory

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Independent or Manufacturers¶ Reps


Independent or Manufacturers¶ Reps

Outsourcing the selling effort to individuals or

organizations that:

Sell complimentary products from non-competingmanufacturers.

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

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Team Selling


Team Selling

Multiple individuals from the selling

organization working together to developand expand relationships with one or more

accounts. The salesperson typically

coordinates the team¶s selling efforts.

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Telemarketing


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

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Trade Shows


Trade Shows

Generate Leads

Test Market New Products

Introduce New Products

Close Sales

Gather Competitive Information

Service Existing Customers Enhance Corporate Image

Events at which the company exhibits its

wares. Used by organizations to:

6e SM Module03

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