I n t e r n a t i o n a l M a r k e t i n g Personal Selling and Sales Management Chapter t h E d i t i o n P h i l i p R. C a t e o r a M a r y C. G i l l y J o h n L. G r a h a m McGraw-Hill/Irwin International Marketing 14/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

17-2 What Should You Learn? The role of interpersonal selling in international marketing The considerations in designing an international sales force The steps to recruiting three types of international sales people Selection criteria for international sales and marketing positions

17-3 What Should You Learn? The special training needs of international personnel Motivation techniques for international sales representatives How to design compensation systems for an international sales force How to prepare Americans for foreign assignments The changing profile of the global sales and marketing manager

17-4 Global Perspective International Assignments are Glamorous, Right? Job security Adjustment to other cultures Readjustment upon return to U.S. Will an international assignment really help your career?

17-5 Designing the Sales Force Relationship marketing and customer relationship management Decisions must be made regarding the numbers, characteristics, and assignments of sales personnel Different market requirements regarding direct sales and customer approach Territory allocation Customer call plans

17-6 Recruiting Marketing and Sales Personnel The largest personnel requirement abroad for most companies is the sales force Expatriates –Numbers are declining –Important for highly technical or involved products –High cost –Cultural and legal barriers –Limited number of high-caliber personnel willing to live abroad Virtual expatriates –Manage operations in other countries but don’t live there

17-7 Recruiting Marketing and Sales Personnel Local nationals –Transcend both cultural and legal barriers –Familiar with distribution systems and referral networks –Headquarters personnel may ignore their advice –Lack of availability –Sales positions viewed negatively Third-country nationals –Expatriates working for a foreign company Host-country nationals –Work restrictions

17-8 The 20 Most Expensive Cities to Live on the Planet (in order) Exhibit 17.1

17-9 Selecting Sales and Marketing Personnel Management must define precisely what is expected of people Prime requisites –Maturity –Emotional stability –Breadth of knowledge –Positive outlook –Flexibility –Cultural empathy –Energetic and enjoy travel Mistakes can be costly A manager’s culture affects personnel decisions

17-10 Training for International Marketing The nature of the training program depends on: –The home culture of the sales person –The culture of the business system and foreign market Continual training is important in foreign markets Companies should provide home-office personnel with cross-cultural training The Internet now makes some kinds of sales training much more efficient

17-11 Personal Selling Tips from Brussels to Bangkok Exhibit 17.2

17-12 Motivating Sales Personnel National differences must always be considered when motivating the marketing force Individual incentives that work effectively in the U.S. can fail completely in other cultures Communications are important in maintaining high levels of motivation A company needs to make clear the opportunities for growth within the firm

17-13 Salespeople’s Distribution of 100 Points among Rewards in Terms of Their Importance Exhibit 17.3

17-14 Designing Compensation Systems for Expatriates Fringe benefits Compensations comparisons between the home office and abroad Short-term assignment compensation Using a compensation program to recruit, develop, motivate, or retain personnel

17-15 Global Similarity to U.S. Compensations Plans Exhibit 17.4

17-16 A Compensation Blueprint How IBM Pays 140,000 Sales Executives Worldwide Exhibit 17.5

17-17 Designing Compensation Systems for a Global Sales Force Involve representatives from key countries Allow local managers to decide the mix between base and incentive pay Use consistent performance measures (results paid for) and emphasis on each measure Allow local countries flexibility in implementations Use consistent communication and training themes worldwide

17-18 Designing Compensation Systems for a Global Sales Force 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

17-19 Evaluating and Controlling Sales Representatives In the U.S., emphasis is placed on individual performance – Which can easily be measured by sales revenues generated In many countries evaluation is more complex – Where teamwork is favored over individual effort In U.S. –Primary control tool used by sales managers is the incentive system In other countries –Corporate control and frequent interactions with peers and supervisors are the means of motivation and control

17-20 Preparing U.S. Personnel for Foreign Assignments Cost of foreign assignments –Typically from percent of the annual base salary –Cost increases if the expatriate returns home before completing the scheduled assignment The planning process –Must begin prior to the selection of those going abroad –Must extend to their specific assignments after returning home

17-21 Overcoming Reluctance to Accept a Foreign Assignment Concerns for career –An absence will adversely affect opportunities for advancement Concerns for family –Education of the children –Isolation from family and friends –Proper health care –The potential for violence Special compensations packages deal with concerns

17-22 Reducing the Rate of Early Returns Evaluation of an employee’s family –75 percent of families sent abroad experience adjustment problems with children or marital discord Cross-cultural training for families as well as the employee Local ombudsmen

17-23 Successful Expatriate Repatriation Commit to reassigning expatriates to meaningful positions Create a mentor program Offer a written job guarantee stating what company is obligated to do for returning expatriate Keep the expatriate in touch with headquarters through periodic briefings and headquarter visits Prepare the expatriate and family for repatriation once a return date is set

17-24 Developing Cultural Awareness Expatriate failures –Caused by lack of an understanding of cultural differences and their effect on management skills Cultural skills –Can be learned and developed –Provide the individual with the ability to relate to a different culture even when the individual is unfamiliar with the details of that particular culture

17-25 The Changing Profile of the Global Manager Fewer companies today limit their search for senior-level executive talent to their home countries Some companies believe –It is important to have international assignments early in a person’s career –International training is an integral part of their entry-level development programs Many companies are active in making the foreign experience an integrated part of a successful corporate career

17-26 Foreign-Language Skills Many believe: –Learning a language improves cultural understanding and business relationships –To be taken seriously in the business community, the expatriate must be at least conversational in the host language Many companies are making stronger efforts to recruit people who are bilingual or multilingual

17-27 Summary The company’s sales force is on the front line of a marketing organization The role of marketers in both domestic and foreign markets along with the composition of international managerial and sales forces is rapidly changing The recent emphasis on using local personnel operating in their own lands has highlighted the importance of adapting U.S. managerial techniques to local needs

17-28 Summary The development of an effective marketing organization calls for careful recruiting, selecting, training, motivating, and compensating of expatriate personnel and their families The most practical method of maintaining an efficient international sales and marketing force is careful, concerted planning at all stages of career development