Chapter 2: Strategy and Sales Program Planning Part I THE BIG PICTURE Chapter 2: Strategy and Sales Program Planning

Figure 2-1 The Sales Force Decision Sequence LEVEL 1 Top Management Decisions Business Strategy Marketing Strategy Go-to-Market Strategy Supply Chain Management (SCM) Customer Relationship Management (CRM) LEVEL 2 Implementation Decisions Product Development Management (PDM) Structure Competencies Leadership LEVEL 3 Sales Force Program Decisions Sales Process Activities Account Relationship Strategy Figure 2-1 The Sales Force Decision Sequence

Figure 2-2: Factors Influencing Strategic Management Environmental constraints Legal & regulatory Demographics Economic Conditions Technology Competitive conditions Sociocultural factors Resources Financial R&D Personnel Brand Equity Production Distinct competencies Marketing Financial Technology Information Strategic Management Planning Firm’s history management culture Figure 2-2: Factors Influencing Strategic Management 1

Figure 2-3: Hierarchy of Sales Objectives Corporate goals Increase shareholder wealth by 10% Business unit objectives 12% revenue growth Grow pre-tax profits by 18% Marketing objectives Increase product A’s market share by 2 points Grow contributions after sales & marketing by 20% Sales department objectives Achieve sales revenue of $210 million Grow contributions after sales expenses by 25% Sales district objective Achieve sales revenue of $10.5 million in product A Obtain $7 million contributions after direct selling Salesperson objective Achieve sales revenues of $1.2 million in product A Obtain $0.8 million in gross margin dollars Major account objective Achieve sales revenues of $95,000 in product A Obtain an average gross margin of 80% Figure 2-3: Hierarchy of Sales Objectives

Steps in Developing a Go-to-Market Strategy What is the best way to segment the market? What are the essential activities required by each segment? What group of go-to-market participants should perform the essential activities? Which face-to-face selling participants should be used? Figure 2-5:

Figure 2-6 Essential Activities Interest Creation Post-Purchase Pre-Purchase Purchase

Customers and Prospects Figure 2-7 Potential Go-to-Market Participants Customers and Prospects Direct Sales Force Agents Distributors Retailers Integrators Alliances Advertising Promotion Direct Mail Tele- marketing Internet Direct Indirect Sales Force Options Non-Sales Force Options Company

Figure 2-8 Comparing Various Go-to-Market Alternatives Low Cost per Exposure Advertising Direct Mail Internet Telemarketing Efficiency Sales Force High Sales per Exposure Effectiveness

Figure 2-9 Product Development Management Subprocesses Identify customer needs for better solutions Discovering and designing new product solutions Developing new solution prototypes Managing internal departmental priorities and involvement Designing activities to speed-up development process Launching new and redesigned offerings

Figure 2-10 Supply Chain Management Subprocesses Selecting and managing supplier relationships Managing inbound logistics Managing internal logistics Managing outbound logistics Designing product assembly and batch manufacturing Managing process technology Order, pricing, and terms management Managing channel partners Managing product installation and maintenance

Figure 2-11 Customer Relationship Management Subprocesses Identifying high value prospects Learning about product usage and application Developing and executing advertising and promotion programs Developing and executing sales programs Developing and executing customer service programs Acquiring and leveraging customer contact information systems Managing customer contact teams Enhancing trust and customer loyalty Cross-selling and upselling of offerings

Figure 2-13: Alternative Types of Account Relationships Investment by Supplier Enterprise Relationship Consultative Relationship Transactional Relationship Investment by Customer Figure 2-13: Alternative Types of Account Relationships

Figure 2-14: Partnering Effectiveness Index