Sales Management 4 Strategic Roles Sales and Sales Management

Integrated Marketing Make sure the Four Ps match. Make sure the Four Ps match.  If selling on price, can’t have most expensive ingredients. Make sure all marketing communications are working together. Make sure all marketing communications are working together.  Same message in ads, sales, literature, PR, promotions

General Business Strategies and Their Implications Type of StrategySales Force Implications PORTER’S TYPOLOGY Low Cost Supplier Aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, usually associated with high relative market share. Servicing large current customers, pursuing large prospects, minimizing costs, selling on the basis of price, and usually assuming significant order-taking responsibilities. Differentiation Creation of something perceived industrywide as being unique. Provides insulation against competitive rivalry because of brand loyalty and resulting lower sensitivity to price. Niche Service of a particular target market, with each functional policy developed with this target market in mind. Although market share in the industry might be low, the firm dominates a segment within the industry. To become experts in the operations and opportunities associated with the target market. Focusing customer attention on nonprice benefits and allocating selling time to the target market. Selling nonprice benefits, generating orders, providing high quality of customer service and responsiveness, possibly significant amount of prospecting if high growth industry, selecting customers based on low price sensitivity. Usually requires a high quality sales force.

Low Cost

Differentiation

Niche Nose Warmers Carving a Niche in Life Niche

4 th Strategy Type: Middle of the Road

Middle-of-the-Road Strategy Standing in the middle of the road is dangerous; you get knocked down by traffic from both sides. - Margaret Thatcher This strategy leads to:

Road Kill

Miles and Snow Typology Prospector Attempt to pioneer in product/market development. Offer a frequently changing product line and be willing to sacrifice short-term profits to gain a long-term stronghold in their markets. Defender Offer a limited, stable product line to a predictable market. Markets are generally in the late growth or early maturity phase of the product life cycle. Emphasis is on being the low-cost producer through high volume Analyzer Choose high growth markets while holding onto substantial mature markets. Analyzers are an intermediate type of firm. They make fewer and slower product market changes than prospectors, but are less committed to stability and efficiency than defenders.

Prospector Primary focus is on sales volume growth. Territory management emphasizes customer penetration and prospecting

Defender Maintain the current customer base. Very little prospecting for new customers is involved. Customer service is emphasized along with greater account penetration.

Analyzer Must balance multiple roles: servicing existing customers, prospecting for new customers, uncovering new applications, holding onto distribution of mature products and support campaigns for new products.

Marketing Strategy and the Sales Function Advantages 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 Disadvantage  High cost per contact

Large Small Number and Dispersion of Customers Low High Buyers’ Information Needs Small Large Size and Importance of Purchase Little Much Postpurchase Service Required Low High Product Complexity Pull Push Distribution Strategy Pre-set Negotiated Pricing Policy Many Few Resources Available for Promotion Advertising Relatively Important Personal Selling Relatively Important

Sources of Increased Profit from Loyal Customers Why loyal customers are more profitable Referrals Price premium Lower costs Increased sales volume Initial sales Years as a customer Cost of new customer Contribution to profits

Using the Internet in Sales Increase Reach Increase Reach Gather Information about Customers Gather Information about Customers Showcase New Products Showcase New Products Conduct Surveys Conduct Surveys Enhance Corporate Image Enhance Corporate Image Obtain Feedback Obtain Feedback Service Existing Customers Service Existing Customers

Industrial Distributors Have Their Own Sales Force Have Their Own Sales Force May Represent One Manufacturer; Several Non-competing Manufacturers; Several Competing Manufacturers May Represent One Manufacturer; Several Non-competing Manufacturers; Several Competing Manufacturers Normally Carry Inventory Normally Carry Inventory

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

Team Selling Two Types of Team Selling –Multilevel Selling –Major Account Selling

Telemarketing 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

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