Chapter 3 Personal Sales in a Global Context Sales Management: A Global Perspective Earl D. Honeycutt John B. Ford Antonis Simintiras

Important to Understand Forces Affecting Personal Selling Current sales force qualifications Evolution of sales activities Firm orientation Sales force activities Sales careers Ethics

Sales Force Evolution Sales has existed since man formed settlements –Marco Polo, Phoenicians, Chinese merchants Industrial revolution in Europe –Central manufacturing for dispersed clients World Wars and Depression impacted 21 st Century Expectations –Professional, well-trained, helpful

Firm Philosophies Each orientation affects sales force –Production orientation –Product orientation –Sales orientation –Marketing orientation –Relationship orientation –Global orientation

Production Orientation Firm’s focus is on economies of scale and efficient production of goods/services –Efficiencies lead to lower costs and greater availability of products –Sales viewed as after thought –Travel and communicate availability of goods –Little consultation with sales area –Help dispose of goods once they are made

Product Orientation Customers purchase product for features and benefits –“Better mousetrap” syndrome –Sales force role is seen as taking orders and delivering goods –Sales often viewed as playing a less significant role in the firm

Sales Orientation When markets are saturated with goods, firms may believe a strong sales effort needed to convince customers to buy –Sales force told to make sale any way possible –Sales viewed as necessary as long as goals met –Use of threats or bribes by management –Use charm to persuade customers to buy –Sell what is made rather than what is needed!

Marketing Orientation Firm uses marketing research to learn customer needs that are satisfied through marketing program for a profit –Buyers and sellers will benefit –Sales force role is to produce satisfied clients –Customers not always aware of needs –Technology not always known –This orientation does not guarantee success

Relationship Orientation Firm and Customer form a long-term relationship (win-win terms) –Easier to maintain relationship than find new customer –Customer viewed as stream of income –Sales force helps customer solve problems –Customer shares information –Not all customers want a relationship!

Global Orientation Firms view the world as one market and approach this market with a unified strategy –Standardized products/programs = savings –Sales personnel recruited globally –Must be culturally and linguistically competent –May be expatriate, local, or third-country –Highly educated, competent, and equal member of corporation’s business team

Sales Force Activities Functions performed vary by: –Job type, industry, and country Many similarities, but degree of intensity varies considerably (e.g. entertaining) Also cultural differences: –German sales force engages in more training of customers and setting up displays –US sales force expedited more customer orders –Danish sales force engages in less travel

Personal Selling Jobs Types of selling careers can be arranged on a continuum from standing behind a counter waiting for the customer to arrive and ask for a product to a salesperson who sells intangible services by phone. Five specific sales jobs include: –Selling Support, Account Maintenance, Account Winners, Inside Sales, and Direct Sales

Personal Selling Jobs Selling Support – advise clients about the technical aspects of product through samples, literature, and personal visits –Sales Engineers and Pharmaceutical Reps Account Maintenance – Maintain an on- going relationship with current customers –An order taker –Grocery salespersons

Personal Selling Jobs Account Winners – Open new accounts and introduce new products to new and established customers –Industrial suppliers, beverage companies Inside Sales – Handle phone, fax, and internet inquiries Direct Sales – firms that recruit salespersons to represent products/services –Amway, Mary Kay, Tupperware

Ethical Forces Ethics has many meanings in business –Decisions based upon sound moral principles –Firm must be profitable to survive = dilemma? Firm must balance needs for profitability with society’s needs = social responsibility A number of philosophies define ethical behavior for the sales force and firm

Ethical Philosophies Teleological focuses on outcome of action –Egoism – focuses on maximizing the benefits of the individual = wealth, fame, power –Decisions made based upon self-interest –Utilitarianism – the greatest good for the largest number of people Many business decisions take this approach Who computes and defines benefits?

Ethical Philosophies Deontological – decisions should be made based upon rights of individuals and their intentions –Never acceptable to harm an individual –Under no circumstances should certain actions be taken – lying, cheating, killing, etc. –Can adhere to rules (e.g. Golden Rule)

Ethics in Global Marketplace Potential Ethical Dilemmas Found in Global Marketplace: –Discrimination – often justified by cultural norms, but these justifications come into conflict when two cultures interact –Bribery – occurs in many cultures –Product issues – inferior quality or banned –Pricing issues – gouge or dump? –Compliance issues – firm and salesperson must behave ethically toward one another

Ethical Codes of Conduct Many firms provide ethical guidance –Policy guidance for how to behave in market –Not all situations can be anticipated –Will code be followed during difficult times? –Local laws only provide “minimum” guidance

Ethical Questions If you are uncertain how to proceed, ask yourself these questions: –Does the action maximize the benefits of all parties? –Are individual rights respected? –Are actions just and fair for all parties? –How would I feel if my parents (or children) were to learn of my actions?

Summary History and origins provide a basis for better understanding personal selling and sales management –Orientation affects role played by sales force –Sales position determines actions and behaviors –Ethical dilemmas faced by all business people, including salespersons –Understand the what, why, and when of job!

Discussion Questions Compare and contrast the focus of the firm orientation on the sales force. Discuss the distinct job categories presented and how the job affects skills, knowledge, and abilities. What are the long-term outcomes of most unethical behavior? How might unethical behavior impact buyer/seller relationships?