Organizational Strategies & The Sales Function

1. Organizational Strategies& The Sales Function Module Three The Strategic Role of the Sales Function

2. The Importance of Sales The Sales function is the company’s primary ‘interface’ with its marketplace… and principal source of revenue or its primary partner in completing the exchange process.

3. Exchange Facilitators The sales organization is designed so that this 'interface function is best suited to the larger needs & limitations of the total dynamic of the overall business organization.

4. Strategy Level Key Decision Areas KeyDecision Makers Corporate Mission SBU Definition Corporate Strategy Corporate Management SBU Objectives Strategic levels of an OrganizationAt the Corporate level

5. Strategy Level Key Decision Areas KeyDecision Makers Target Market Selection Marketing Strategy Corporate Management Integrated Mkt Comm. Marketing Mix Dev. Strategic levels of an OrganizationAt the Corporate level

6. Strategy Level Key Decision Areas KeyDecision Makers Sales Strategy SBU Management Account Targeting Strategy Strategy Types Business Strategy SBU Management Sales Channel Strategy Strategy Execution Relationship Strategy At the SBU level

7. A functional grouping of 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. (SBUs) Strategic Business Units

8. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives & the Sales Organization Build • Build sales volume • Secure distribution. • Prospective and new accounts • Provide high service levels particularly pre-sales service • Product/market feedback Salary plus incentive

9. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives & the Sales Organization Hold • Maintain sales vol. • Consolidate market position through concentration on 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

10. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives & the Sales Organization Harvest • Reduce selling costs • Target profitable accounts • Service most profitable accounts • eliminate unprofitable accounts • Reduce service levels • Reduce inventories levels Salary plus bonus

11. Market Share Objectives Sales Organization Objectives Primary Sales Tasks Compensation System SBU Objectives & the Sales Organization Divest or Liquidate • Minimize selling costs and clear out inventory • Dump inventory • Eliminate service Salary

12. Business Strategy & the Sales Function Low-cost supplier Strategy Type Sales Force Role • Pursue large customers • Minimize cost • Compete on price • Seek customers who are low price shoppers

13. Business Strategy & the Sales Function • Low-cost supplier Differentiation Strategy Type Sales Force Role • Compete on non-price benefits • Provide high quality customer service • Seek customers who are not low price shoppers

14. Business Strategy & the Sales Function • Low-cost supplier • Differentiation Niche Strategy Type Sales Force Role • Serve a distinct target market not served well by others • Provide high quality customer service • Seek customers who are not low price shoppers

15. Advantages Only promotional tool that consists of personal communication between seller and buyer More credible and has more impact Better timing of message delivery Ability to tailor message to buyer Allows for sale to be closed Disadvantage High cost per contact Marketing Strategy & the Sales Function

16. IMCIntegrated Marketing Communications The ‘third P’ ~ Promotions The Promotional -Mix • Advertising • Public Relations • Internet / Interactive • Personal Selling • Direct Marketing

17. The Promotional-Mix For the best IMC Which ‘tools’ to use & when?

18. Personal Selling-Driven vs. Advertising-Driven (IMC) 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

19. 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 &Personal Selling

20. 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

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

22. Major Category Types Organizational Buyer Behavior:ii)Types of Organizations Federal, Provincial and Local Government Agencies Government Organizations Public and Private Institutions Institutions

23. Organizational Buyer Behavior iii) Buying Situations Straight Rebuy Buying Situation • Routinized Response Behavior Modified Rebuy Buying Situation • Limited Problem Solving New Task Buying Situation • Extensive Problem Solving

24. Organizational Buyer Behavior: iv) The “Buying Centre” • Initiators • Users • Gatekeepers • Influencers • Deciders • Purchasers

25. Organizational Buyer Behaviorv) The 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

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:a) Account-Targeting Strategy

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

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

29. Ensuring that accounts receive selling effort coverage in an effective and efficient manner. Sales Strategy / Selling Strategy

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

31. The planned selling approach for each relationship strategy. The Internet Industrial Distributors Independent Representatives Team Selling Telemartketing Trade Shows Sales Strategy & Sales Channel Strategy

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

33. Sales Channel Strategy & Industrial Distributors • Have Their Own Sales Force • May Represent One Manufacturer; Several Non-competing Manufacturers; Several Competing Manufacturers • Normally Carry Inventory

34. Sell complimentary products from non-competing manufacturers. Do Not Normally Carry Inventory Paid for Performance Reduced Control over Selling Effort Reduced Access to Customer Information Sales Strategy with Independent or Manufacturers’ Reps

35. Three Selling Situations New Task Selling Modified Resell Selling Situation Routine Resell Selling Situation Two Types of Team Selling Multilevel Selling Major Account Selling Sales Strategy & Team Selling

36. 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 Strategy & Telemarketing

37. Generate Leads Test Market New Products Introduce New Products Close Sales Gather Competitive Information Service Existing Customers Enhance Corporate Image Sales Strategy & Trade Shows

38. Organizational Strategies & The Sales FunctionExchange Artists • Strategic levels of an Organization • SBU Objectives & the Sales Organization • Business Strategy & the Sales Function • Marketing Strategy &the Sales Function • For the best IMC Which ‘tools’ to use & when? • Organizational Buyer Behaviori)Types of Organizations • Sales Channel Strategy &…