Personal Selling and Sales Management Chapter 13 McGraw-Hill/Irwin© 2005 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Learning Objectives 1. The role of interpersonal selling in international marketing 2. The considerations in designing an international sales force 3. The steps to recruiting three types of international sales people 4. Selection criteria for international sales and marketing positions 5. The special training needs of international personnel

Chapter Learning Objectives 6. Motivation techniques for international sales representatives 7. How to design compensation systems for an international sales force 8. How to prepare Americans for foreign assignments 9. The changing profile of the global sales and marketing manager

Introduction The salesperson is a company ’s most direct tie to the consumer. “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

1.Designing the Sales Force 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. Then more intricate aspects of design can be started,such as territory allocation and customer call plans. 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 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

2.Recruiting Marketing and Sales Personnel 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 The sales force can be recruited from three sources: (1) expatriates (2) local nationals, and (3) third-country nationals The sales force can be recruited from three sources: (1) expatriates (2) local nationals, and (3) third-country nationals

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

4.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

5.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

6.Designing Compensation Systems 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 The following global sales compensation list of “do’s and don’ts” is based on IBM’s practices: 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

7.Preparing U.S. Personnel for Foreign Assignments 1.Proper selection, training, compensation, and career development policies (including repatriation) should reflect the unique problems of managing the expatriate 2.Overcoming Reluctance to Accept a Foreign Assignment (due to family or advancement reasons) 3.Reducing the Rate of Early Returns (due to adjustment problems) 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: 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:

8.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

9.Developing Cultural Awareness Cultural skills can be learned just as social skills can be learned People with cultural skills should be able to: 1.Communicate respect and convey verbally and nonverbally a positive regard and sincere interest in people and their culture. 2.Tolerate ambiguity and cope with cultural differences and the frustration that frequently develops when things are different and circumstances change 3.Display empathy by understanding other people’s needs and differences from their point of view 4.Remain nonjudgmental about the behavior of others, particularly with reference to their own value standards 5.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 6.Laugh things off—a good sense of humor helps when frustration levels rise and things do not work as planned

Summary 1.Designing the Sales Force 2.Recruiting Marketing and Sales Personnel 3.Selecting Sales and Marketing Personnel 4.Training for International Marketing 5.Motivating Sales Personnel 6.Designing Compensation Systems 7.Preparing U.S. Personnel for Foreign Assignments 8.Successful Expatriate Repatriation