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Industrial Marketing
Sales ForcePlanning, Organizing and
controlling
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SF
Selecting & recruiting sales force
1 Primary selection criteria: 1.1 Motivation
1.2 Human resources skills 1.3 Job knowledge 1.4 Individuals with good technical skills are better able to
identify buyers problem & Suggest solutions
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SF
Primary methods of selecting
1. Personal Interview
2. Multiple & panel interviews
3. Patterned & Structured interview
4. Realistic Job Interviews
5. Auditioning
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SF
Use of learning theory in training of professional sales force
1 Motivation.
2. Involvement
3. Feedback
4. Experienced versus inexperienced sales people
5. Accelerated learning
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SF
Who should train?
1 Sales managers as trainers.
2. Experienced sales people as trainers
3. Training specialists
4. Hybrid
ORGANIZATION Customer based / Territory based/ Product based/ National
account based
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SF
Domains of training
Company knowledge Product knowledge Industry and market trend knowledge
Competitive knowledge Ethics are important too Sales skill knowledge:1 Professional selling skills2 Human relations skills
3 Negotiating skills:3.1 Preparing for negotiations3.2 Establishing fundamental attitude3.3 Conducting the negotiations
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SF
Motivating the sales force
Motivational theories Content theories
Abraham Maslow
Herzberg Process theories Attribution theory
Motivated or de motivated depending on who is in
control of the action Expectancy theory Pp X Po X valance, where Pp = perceived probability
of performing, Po = perceived probability of obtainingan outcome, Valance = anticipated value of satisfaction
or dissatisfaction of the outcome
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SF
Motivating the sales force
Compensation Salary related to sales Fixed component plus a variable component
Hybrid
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SF
Importance of Personal selling± Own or Manufacturers or distributors
Actualizing the marketing concept
Need recognition and satisfying the needs , wants and demands ± more than Consumer Products
Widia Reducing inserts Inventory by 35% by reducing thevariety being carried by a buyer
SF will recommend , do technical assistance etc
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SF
WHAT DOES BUYERS WANT FROM SALES FORCE Thoroughly informed about COMPANY About PRODUCTS
Understands BUYERS Good technical background Good personality characteristic
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SF
SALES FORCE AUTOMATION Enhances the ability of sales force SFA includes ³software to cell phones to voice mail to AI´
Sales person will be more productive because of SFA He can use data analysis to help buy customer ³Smarter´ SALES EDGE ± a software
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SF
Industrial selling Environment Organizational buying and buying behavior Different communication strategies
Groups and Individuals Influencers Center of Gravity Goal Conflicts ?
USE ± experience, questioning mind and keen observation
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SF
Selling process
Stages Examples1 Searching for and identifying
organizations
Screen potential prospects
2 Making the approach Getting the interview and opening
the sale
3 Qualifying the prospect Profile the needs of prospect
4 Making the sales presentation
High degree of planning
Gaining access
Demonstrate firms ability to satisfy
needs , demonstrate the product
³ Making cumulative efforts of many
calls
5 Answering objections Anticipating unsolved problem areas
6 Closing the sale Asking for order in subtlety
7
Following up Maintain continuous favorable
relationship
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SF
Making sales presentations
Importance of Planning Identifying Prospects This is not about current customers Media Ad
Trade shows Telemarketing Gaining access to Buying center Cumulative efforts of many calls Learning from the environment about environment Sales Presentations Recognize and Respond to the need Developing & Managing customer rapport Sales Edge ± Software
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SF
Managing the Industrial sales force- Qualities of salesman
Aggressive Sensitive to needs Technical knowledge Communication skills
Positive attitude
Planning the sales force deployment Bachelors Short period visits
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SF Typical SF deployment analysis
Intuitiveapproaches
Systematic approaches Decision modelapproaches
Experience Potential
Adjusting marketpotential
Expected valueanalysis
Empirical models
Judgment Workload analysis Judgment basedmodels
Rules of
thumb-heuristics
Return on time invested Combination models
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Adjusted market potential for prospective groups
TATA steels is looking for Market expansion
Group
A
B
C
TOT
Market potential -
Tonnes
800,000
700,000
600,000
500,000
iscussions
with SF
50
80
100
30
Sales Potential
400,000
560,000
600,000
150,000
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Expected Value Analysis
TATA steels is looking for Market expansion
GRP
AB
C
D
TOT
Market
potential
800,000 700,000
600,000
500,000
Discussions
with SF
50%80%
100%
30%
Sales Potential
400,000 560,000
600,000
150,000
P of
suc
0.40.1
0.2
0.8
Expected
Value
160,000 5,600
120,000
120,000
Profit
5 10
5
10
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Expected Value Analysis
TATA steels ± why should they do it?
Concept of Heavy Half ± 70 % from 15 %
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Workload Analysis
To estimate # people needed for the PS
Estimate # selling days Do not forget sales conferences, allowed leave, training
,trade shows From Past Data estimate Average travel time
Estimate the length/duration of sales call ( Average) # existing customers, Proposed expansions to be estimated
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RoTI Analysis
# AC Freq
per
AC
Total planned
calls
Ave call
cost Rs
Cost
Per
Group
Sales pot Gross
@ 20%
RoTI
A 14 9 126 205 25880 500,000 100000 3.86
B 35 5 175 205 35945 400,000 80000 2.23
C 13 3 39 205 8010 250,000 50000 6.24
D 17 4 68 205 13967 50,000 10000 0.72
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Review Problem
RoTI calculations & Analysis
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1500000 .35
2000000 .40
1750000 .25
525000 A
800000 B
437500 C
Market pot % to
firm
525000 .35
800000 .15
437500 .50
Sales pot Prob
183750 A
120000 B
218750 C
Sales pot Cat
Expected value Cat
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3x2
Pot
cust
calls
yr
Total
calls
Call
cost
A 10 8 80 225
B 15 12 180 225
C 22 16 352 225
Cost 4x5 Firm¶s 20% 7/8
group SP mar gin ROTI
A-18000 525000 105000 5.83
B-40500 800000 160000 3.95
C-79200 437500 87500 1.10
RoTI calculations
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Sales org Strength
High Low
Opportunity High Invest in SF resources &take advantage of
opportunity
Invest in SF tomove to strength
or put thoseunits else where
Low Moderate sales force tomaintain current position
Minimum effort
Sales resource opportunity grid
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Simple Complex
sales Lar ge Major
A/C
National
A/C
Potential Small Dyadic
A/C
Minor
A/C
Complexi
ty of customer