BUSINESS MARKETING COMMUNICATIONS Managing the Personal Selling Function CH. 17

INTRODUCTION “The Customer is the strategy” -John Chambers(President & CEO of CISCO) Importance of Personal Selling Business Markets v/s Customer Markets Lead role of the salesperson Execution of Sales Strategy

RELATIONSHIP SELLING Relationship Marketing - Selling Center “initiate and maintain relationships with industrial customers” - Buying Center “participate in the purchasing decision and share goals and risks of that decision.” (* Ref:Diagram) Relationship quality - Trust in the salesperson. - Satisfaction with the salesperson.

Relationship Mgmt. Process in Business Marketing

FORMS OF SALES ORGANIZATION IN BUSINESS MARKETING GEOGRAPHICAL ORGANIZATION PRODUCT ORGANIZATION MARKET CENTERED ORGANIZATION

GEOGRAPHICAL ORGANIZATION The most common form of sales organizarion. This method reduces travel distance & time between salespersons & customers, thus contributing to cost reduction. It’s disadvantage of the geographical sales organization is that each salesperson must be able to perform all of the selling tasks for all of the firm’s products and for all customers in a particular territory. Another disadvantage is that the salesperson has substantial leeway in choosing which products and customers to emphasize.

PRODUCT ORGANIZATION Here salesperson specialize in relatively narrow components of the total product line. A prime benefit of this approach is that it enables the sales force to develop a level of product knowledge that enhances the value of the firm’s total offering to customers. Here the drawback is the cost of developing and deploying sales force is high.

MARKET CENTERED ORGANIZATION It involves learning the specific requirements of a particular industry or customer type and to mould the organization to suit those needs and types. In such an organization the salesperson is better prepared to identify and respond to buying influentials.

T RADITIONAL S ELLING V ERSUS K EY A CCOUNT S ELLING Traditional Selling Focus Varies Core product/service Short- term Lower prices and higher quality Limited : Narrow focus on price and product features. Maximize revenue satisfied Customers Key Account Selling Focus Large volume of purchases by the customer, often across multiple business units of the seller. Core product/service plus customized applications and value-added services. Long-term Lower total costs Broader set of strategic benefits Extensive : Broader focus as firms share strategic goals Become preferred supplier Lower customer firm’s total costs Enhance learning in the relationship Sales volume Nature of Product Time Benefits Information Sales Force Objective

F RANK 3 P HASE APPROACH IN SELECTING K EY ACCOUNTS Phase 1 Phase 2 Phase 3

Internal Reputation Enhanced Knowledge of profitability drivers Prioritize relationship building has a key role Forge multiple connections in client organisation Develop strong internal link Successful Engagemen t outcomes Manage client Relationship of multiple Levels Align internal Resource to Client needs Partner with client to shope new Business proposal Knowledge of competitive strategies Early involvement in client Engagement Initiate involvement with client Fig. Cycles of Account Management Success

I SOLATING THE A CCOUNT M ANAGEMENT P ROCESS What makes them successful? Building internal relationships Forging relationships with customer organization Aligning and crafting Enhanced internal reputation

A CCOUNT M ANAGEMENT SUCCESS Building Internal Relationship Forging Relationship Within the Customer Organization Managing the customer Engagement Process Aligning and Crafting Enhanced Internal Reputation

 Recruitment & Selecting Sales Persons  Training,  Motivating,  Supervising,  Evaluating  Controlling the Sales Force SALES ADMINISTRATION

Recruiting and Selecting: Done by? Careful selection is important for two reasons: Substantial costs involved. Mistakes are costly and detrimental to customer relations and sales-force performance. Trade-offs Experience v. inexperience Training: Principal methods used are on-the-job training, individual instruction, in-house classes, and external seminars. Popular training techniques include instructional videotapes/DVDs, lectures, roll-playing exercises, slides, films, and interactive computer programs SALES ADMINISTRATION

Motivation: “amount of effort salesperson desires to expend on each of the activities or tasks associated with his or her job.” Two types of rewards Intrinsically mediated rewards Extrinsically mediated rewards SALES ADMINISTRATION

Job performance Motivation Aptitude Role perception Evaluation & Control “Monitor and control salesforce to see if objectives are being met.” Performance measures Behavior based Outcome Based Setting performance standards SALES ADMINISTRATION

A critical sales management task: deploying the sales force. Deployment Decisions Facing Sales Organizations

T HREE T ERRITORY T RAITS F OR S ALES R ESPONSE S TUDIES Potential is a measure of the total business opportunity for all sellers in a particular market. Concentration is the degree to which potential is confined to a few larger accounts in that territory. Dispersed —sales will probably be lower due to time wasted in travel.

Deployment analysis matches sales resources to market opportunities. A sales resource opportunity grid can be used to classify the industrial firm’s portfolio of PCU’s. PCU opportunity is the total potential that the PCU represents for all sellers. Sales organization strength includes the competitive advantages or distinctive competencies that the firm enjoys within the PCU. Sales Resource Opportunity Grid