Figure 2-2: Hierarchy of Sales Objectives Corporate goals Maximize shareholder wealth Business unit objectives 12% revenue growth Marketing objectives Increase product A’s market share by 2 points Sales department objectives Achieve sales revenue of $210 million in product A Sales district objective Achieve sales revenue of $10.5 million in product A Salesperson objective Achieve sales revenues of $1.2 million in product A Major account objective Achieve sales revenues of $95,000 in product A Figure 2-2: Hierarchy of Sales Objectives

Figure 2-6: Customer Base Traingle Major Accounts Middle Accounts Size of Account Minor Accounts Number of Accounts Figure 2-6: Customer Base Traingle

Chapter 2 Strategic -Mission management -Goals planning -Strategies Strategic -Situation analysis marketing -Segmentation & target marketing planning -Marketing mix program Sales force -Market access strategy strategy -Account relationship strategy Operating -Promotion budgets -Selling expense

Michael E. Porter’s Three Generic Strategies 1 Cost leadership 2 Differentiation Broad Target Competitive scope 3a. Cost focus 3b. Differentiation focus Narrow target Lower cost Differentiation Competitive Advantage Source: From Michael E. Porter, Competitive Advantage, New York; Free Press, 1985, p.12.

Sales manager Classification Table 2-1 Sales Manager’s and Marketing Executive’s Product Classifications by Strategy Sales manager Classification Build Strategy Hold Strategy Harvest Strategy Divest Strategy Total Marketing executive classification Build strategy 71ª 29 10 21 129 22 2 0 95 Hold strategy 57 3 1 88 Harvest strategy 49 23 6 88 Divest strategy 21 27 25 94 Total 149 55 32 365 ªA total of 71 sales managers classified their products as build strategies out of 95 so classified by marketing executives. Source: William Strahle. An Exploratory Study of the Relationship Between Marketing and Slaes Strategy (Bloomington: School of Business, Indiana University, unpublished doctoral dissertation, 1989), p. 153.

vs. Source: Presentation by Frederick Webster, “Relationships in Marketing” at Summer Marketing Educator’s Conference, August 8, 1993. Figure 2-7: Traditional versus Relationship Marketing

Alternative Types of Account Relationships Programmatic Purchasing Approach Strategic Partners 3% Major Accounts 7% Contractual Relationships 20% Repeat Transactions 70% Transactional Reactive: respond to demand Selling approach Partnering: create demand Programmatic

Design marketing program Set advertising and promotion expenditure levels Forecast sales Revise expenditure categories Request additional funds as needed Estimate personal selling costs needed to reach sales goals Compare actual expenditures with plans Figure 2-8: The Sales Budgeting Process

Selling Expenses as a Percent of Sales COMPANY SIZE: Under $5 Million (MM) 14.7% $5 - $25 MM 10.5% $25 - $100 MM 7.9% $100 - 250 MM 3.5% Over $250 MM 6.8% PRODUCT OR SERVICE: Industrial Products 4.1% Industrial Services 6.4% Office Products 9.4% Office Services 8.1% Consumer Products 5.4% Consumer Services 7.9%

Selling Expenses as a Percent of Sales INDUSTRY: Business services 1.7% Communications 9.8% Educational services 47.9% Electronics 4.2% Fabricated metals 10.8% Health services 19.9% Hotels 21.4% Machinery 10.1% Manufacturing 13.6% Office equipment 9.0% Paper and allied products 6.8% Wholesale (Consumer goods) 3.7% Wholesale (Industrial goods) 9.5% Average 6.9%

Translating Corporate Objectives into Sales Strategies Become a major Supplier of Consumer Leisure Products and Services Marketing Strategies Build Hold Harvest Divest Secure Added Distribution Outlets Sell New Products to Existing Account Offer Low Prices to Attract Business Emphasize Advertising Support Demonstrate Superior New Product Benefits Offer Easy Credit Terms Service Current Target Accounts Trim Product Line and Push Volume Items Help Dealers Clear Out Inventory Maintain List Prices and Reduce Costs Reduce Selling Costs Help Dealers Find Substitutes or New Suppliers Sales Strategies Promote Product Variations and Improvements Call on Large Accounts Sell Excess Inventory to Export Markets or Jobbers Emphasize Advertising Support Offer Promotional Allowances and Help with Displays Show Superior New Product Benefits Identify and Promote Alternative Uses Offer Easy Credit Terms Offer Key Account or National Account Services Offer Trade Deals to Gain Acceptance