Chapter 6 Global Sales Organizations Sales Management: A Global Perspective Earl D. Honeycutt John B. Ford Antonis Simintiras

Introduction Organizational design can be a planned process or random in nature –Planned process involves an analysis of: Current and potential customers Market environment Competitors Company assets Firm’s ability to serve the marketplace

Analyzing & Building a Sales Organization Firm must balance the needs of three competing forces: –Customer, firm and business environment –Understand via SWOT Analysis Identify firm’s internal/external constraints & demands Identify necessary sales activities needed Sales force structure to address market needs Allocate number of positions Staff organization Evaluate the organization

Analyzing the Environment Sales organizations developed for a variety of reasons –To achieve sales activities and goals –Individual strengths Can we assign responsibility blindly? –Geographical locations –Need to satisfy management’s personal preferences May result in illogical structure

Firm Goals Company goals set at the highest level –Business defined through mission statement –Executives determine which parts of organization receive funding –Overall firm business plan approved Business plan drives marketing and sales plans Sales plan details actions to be taken to achieve marketing plan goals

Market and Buyer Behavior Sales force spans boundary between buyer and seller Three characteristics important –Market complexity – industry, languages, cultures, and legal requirements –Customer location – purchasing/deliver sites –Market variations – market change is constant

Competitors Who are the major competitors? –Consider both direct and indirect SWOT analysis rates new organization with existing –Focus on matching the customer buying process –Design an organization that addresses client needs and is superior to competitors

Sales Force Organizational Concepts Generalist vs. Specialist –Flexibility, Cost, Coverage Centralization –Speed of decisions, Control Span of Control –Standard products vs. customized Line vs. Staff positions –Sales force falls within line organization

Selecting the Best Option Most firms organize their sales force around geographical, product, market, functional, or a combination structure As seen in Table 6-2, each organizational structure has advantages and disadvantages. Management must select the correct structure to provide service to the client at the least cost

Sales Structure in Global Markets Geographical –Undeveloped, small, similar language or culture, single product line Product/Market/Combination –Established markets, broad product lines, large sales volumes, large markets, and distinct languages and cultures

Sales Force Options National Account Management –80/20 rule lead to Key account management –Sales efforts for team may be directed by a senior level salesperson –Work directly with influencers and deciders Global Account Management –GAM coordinates all activities across nations –GAM and NAM work together –Transfer responsibility of Key accounts to GAM

Other Options Company Agents –Manufacturer’s Rep – agents who represent the firm’s offering for a commission –Independent Agents – many varieties –Indirect Channels – wholesalers, distributors, and dealers Indirect channels supplement the firm’s direct sales force

Supplemental Sales Methods Telemarketing –Incoming and outgoing Administrative support Technical support –Sales engineers and Team selling

Evaluating the Organization On a continual basis, managers evaluate the efficiency of the organization to: –Service existing and potential customers –Operate in a changing environment –Lost customers, feedback, travel expenses, sales force turnover, and competitor actions No one structure works best in all situations. Must continue to evaluate as products and markets mature

Summary Structure impacts management of sales force –Dependent upon analysis of SWOT and marketplace to assign firm assets –Firm can choose between company sales force, agents, indirect channels, or partners –Many options – should strive to provide superior service at the lowest cost

Discussion Questions When should a generalist be hired? What limitations do centralized sales forces face? List the advantages and disadvantages of geographical, product, market, and functional sales force structures What criteria or metrics might a firm use to assess organizational efficiency?