Personal Selling and Sales Management Chapter 17 Personal Selling and Sales Management McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

Introduction “The salesperson is the company” The sales representative is the final link in the culmination of a company’s marketing and sales effort Advances in information technology are allowing coordination across advertising, marketing research, and personal selling efforts In this dynamic international environment, the tasks of designing, building, training, motivating, and compensating an international sales group is important This chapter discusses the alternatives and problems of managing sales and marketing personnel in foreign countries

Designing the Sales Force As described in previous chapters, distribution strategies will often vary from country to country Some markets may require a direct sales force, whereas others may not The hard sell that may work in some countries can be in appropriate in others Automobiles have been sold door to door in Japan for years where “Personal selling as a rule has to be localized for even the most global of corporations and industries” (Johanson and Nonaka 1997) The first step in managing a sales force is its design, which encompasses deciding how many expatriates, local nationals, or third-country nationals a particular market requires

Recruiting Marketing and Sales Personnel The sales force can be recruited from three sources: (1) expatriates (2) local nationals, and (3) third-country nationals Sales and marketing executives can be recruited via the traditional media of advertising (including newspapers, magazines, job fairs, and the Internet), employment agencies or executive search firms Some countries to restrict the number of non-nationals allowed to work within the country citing local management content laws over concerns of foreign domination

Selecting Sales and Marketing Personnel To select personnel for international marketing positions effectively, management must choose individuals who have the following traits: 1. Maturity 4. Flexibility 2. Emotional Stability 5. Cultural Empathy 3. Breadth of Knowledge 6. Energetic and 7. Enjoy Travel

Training for International Marketing Selection mistakes are costly, so sales training is important Training for the expatriates focuses on the customs and the special foreign sales problems that will be encountered Expatriates are also captives of their own habits and patterns. Before any training can be effective, open-minded attitudes must be established Training of local personnel require greater emphasis on the company, its products, technical information, and selling methods

Motivating Sales Personnel Motivation is especially complicated because the firm is dealing with different cultures, different sources, and different philosophies The social and competitive contexts still require different motivational systems. Individual incentives that work effectively in the United States can fail in other cultures For example, with Japan’s emphasis on paternalism and collectivism and its system of lifetime employment and seniority, employees seem to derive the greatest satisfaction from being members of a group; so an offer of an individual financial reward for outstanding individual effort may not work Compensation in Eastern European countries typically involve a greater emphasis on base pay than in the United States, and performance-based incentives have been found to be less effective

Designing Compensation Systems The following global sales compensation list of “do’s and don’ts” is based on IBM’s practices: Do involve representatives from key countries Do allow local managers to decide the mix between base and incentive pay Do use consistent performance measures (results paid for) and emphasis on each measure Do allow local countries flexibility in implementations Do use consistent communication and training themes worldwide Don’t design the plan centrally and dictate to local offices Don’t create a similar framework for jobs with different responsibilities Don’t require consistency on every performance measure within the incentive plan Don’t assume cultural differences can be managed through the incentive plan Don’t proceed without the support of senior sales executives worldwide

Preparing U.S. Personnel for Foreign Assignments Annual costs estimates of sending and supporting a manager in a foreign assignment range from $300,000 to $600,000 Several steps can be taken to successfully prepare U.S. personnel for international assignments: Proper selection, training, compensation, and career development policies (including repatriation) should reflect the unique problems of managing the expatriate Overcoming Reluctance to Accept a Foreign Assignment (due to family or advancement reasons) Reducing the Rate of Early Returns (due to adjustment problems)

Successful Expatriate Repatriation Five steps can be taken to successfully repatriate an employee back to the home office: Commit to reassigning expatriates to meaningful positions Create a mentor program, who can act as liaison between the expatriate and various headquarters departments Offer a written job guarantee stating what the company is obligated to do for the expatriate on return Keep the expatriate in touch with headquarters through periodic briefings and headquarters visits Prepare the expatriate and family for repatriation once a return date is set

Developing Cultural Awareness Cultural skills can be learned just as social skills can be learned People with cultural skills should be able to: Communicate respect and convey verbally and nonverbally a positive regard and sincere interest in people and their culture. Tolerate ambiguity and cope with cultural differences and the frustration that frequently develops when things are different and circumstances change Display empathy by understanding other people’s needs and differences from their point of view Remain nonjudgmental about the behavior of others, particularly with reference to their own value standards Recognize and control the SRC, that is, recognize their own culture and values as an influence on their perceptions, evaluations, and judgment in a situation Laugh things off—a good sense of humor helps when frustration levels rise and things do not work as planned