Principles of Marketing Lecture-37

Summary of Lecture-36

Sales Force Management

Steps in the Selling Process

Managing the Sales force

Designing Sales force Strategy and Structure Recruiting and Selecting Salespeople Training Salespeople Compensating Salespeople Supervising Salespeople Evaluating Salespeople

Today’s Topics

Sales force Management (cont..) Direct Marketing

Supervising Salespeople

Directing Salesperson Motivating Salesperson

Motivating Salespeople

Organizational Climate Sales Quotas Positive Incentives – Honors – Awards – Merchandise/ Cash – Trips

How Salespeople Spend Their Time

Administrative Tasks 17% Telephone Selling 21% Waiting/ Traveling 20% Service Calls 12% Face-to-Face Selling 30% Companies Look For Ways to Increase the Amount of Time Salespeople Spend Selling.

Evaluating Salespeople

Annual Territory Marketing Plan Annual Territory Marketing Plan Call Reports Call Reports Expense Reports Expense Reports Work Plan Work Plan Sales Report Sales Report Sources of Information Sources of Information

Quantitative Criteria – Orders Number of orders obtained Average order size (units or dollars) Number of orders canceled by customers – Sales volume Dollar sales volume Unit sales volume By customer type By product category Translated into market share Percentage of sales quota achieved

– Margins Gross margin Net profit By customer type By product category – Customer accounts Number of new accounts Number of lost accounts Percentage of accounts sold Number of overdue accounts Collections made of accounts receivable

– Sales calls Number made on current customers Number made on potential new accounts Average time spent per call Number of sales presentations Selling time versus nonselling time Call frequency ratio per customer type – Selling expenses Average per sales call As percentage of sales volume As percentage of sales quota Direct-selling expense ratios Indirect-selling expense ratios

– Customer service Number of service calls Displays set up Delivery cost per unit sold Months of inventory held, by customer type Number of customer complaints Percentage of goods returned

– Selling skills Knowing the company and its policies Knowing competitors’ products and sales strategies Understanding of selling techniques Customer feedback (positive and negative) Product knowledge Customer knowledge Execution of selling techniques Quality of sales presentations Communication skills

Qualitative Criteria – Sales-related activities Territory management: sales call preparation, scheduling, routing, and time utilization Marketing intelligence: new product ideas, competitive activities, new customer preferences Follow-ups: use of promotional brochures and correspondence with current and potential accounts Customer relations Report preparation and timely submission

– Personal characteristics Cooperation Human relations Enthusiasm motivation Judgment Care of company property Appearance Self-improvement efforts Patience Punctuality Initiative Resourcefulness Health Sales management potential Ethical and moral behavior

Developing the Sales force Recruiting Selecting Training

Direct Marketing

One-to-One Marketing

Direct communications with carefully targeted individual consumers to obtain an immediate response.

Direct Marketing  Fastest growing promotional mix element  Easy to narrowly target a segment  Measure outcomes easier  Databases are extremely important

Direct Marketing Better targeting reduces waste Better targeting reduces waste Breaks through ad clutter Breaks through ad clutter

Direct Marketing Consists of Direct Connections With Carefully Targeted Individual Consumers to Both Obtain an Immediate Response and Cultivate Lasting Customer Relationships.

Most Mass Marketing Involves One-Way Communications Aimed At Consumers. Direct Marketing Involves Two-Way Interactions With Customers.

Direct Marketing Focuses on Share of Customer Develops Customers Finds Products for Customers Mass Marketing Focuses on Share of Market Develops Products Finds Customers for Products

Communications Process Differences

Message isPersonalized Personalized Channel isDirect Direct Noise Noise is not present Noise Noise is not present Response Individual Response is captured

The New Direct Marketing Model

 Some firms use direct marketing as a supplemental medium.  For many companies, direct marketing - especially Internet and e-commerce companies - constitutes a new and complete model for doing business.  Some firms use the new direct model as their only approach.  Experts envision a day when all buying and selling will involve direct connections between companies and their customers.

Advantages of Direct Marketing

The ability to identify the most profitable customer. The ability to create long-term relationships with customers. The ability to target marketing efforts only to those people most likely to be interested. The ability to offer varied messages to different consumers. Increased knowledge about the customer.

Factors Driving Direct Marketing Growth

Predictive Modeling Predictive Modeling Customized Products Customized Products Convenience Fragmented Markets Fragmented Markets Shrinking Media Audiences Shrinking Media Audiences Immediate Sales Immediate Sales Price Sensitivity Price Sensitivity

Demassification – Focus is Toward Minimarkets Demassification – Focus is Toward Minimarkets Higher Costs of Driving, Traffic and Parking Congestion Higher Costs of Driving, Traffic and Parking Congestion Consumers Lack of Time Convenience of Ordering From Direct Marketers Convenience of Ordering From Direct Marketers Growth of Customer Databases

Forms of Direct Marketing

Direct Mail Kiosk Marketing Online Marketing Telemarketing Direct-Response TV Marketing Catalog Face-to-Face Selling

Techniques of Direct Marketing

Electronic Media Electronic Media Direct Selling Print Media Print Media Broadcast Media Broadcast Media Direct Mail Telemarketing

Direct Mail

Self-Contained Message Flexibility Thorough Target Market Coverage Fewer Distractions From Other Media Large Number of Mail-Order Buyers AdvantagesDisadvantages High Cost Per Exposure Potential Delivery Delays Lack of Support From Other Media Easy to Ignore Seen as Wasteful, Harmful to Environment

Customer Databases

Customer Databases are an Organized Collection of Comprehensive Data About Individual Customers or Prospects Including: – Geographic, – Demographic, – Psychographic, and – Behavioral Data.

Individualized Information-Intensive Customer-Based Long-Term Oriented Share of Customer With a Focus on... Database Technology Database Technology Direct Marketing is... Direct Marketing is... Through Use of...

Database Marketing

Database Marketing is the Process of Building, Maintaining, and Using Customer Databases and Other Databases for the Purposes of Contacting and Transacting With Customers.

Marketing Database The compilation of names, addresses, and other pieces of pertinent information about individual customers and prospects that affects what and how marketers sell to them.

Identifying Prospects Deciding Which Customers Should Receive a Particular Offer Deciding Which Customers Should Receive a Particular Offer Deepening Customer Loyalty Reactivating Customer Purchases How Companies Use Their Databases ?

Enough for today...

Summary

Supervising Salespeople

Motivating Salespeople

Evaluating Salespeople

Direct Marketing

Better targeting reduces waste Better targeting reduces waste Breaks through ad clutter Breaks through ad clutter

Advantages of Direct Marketing

Factors Driving Direct Marketing Growth

Forms of Direct Marketing

Customer Databases

Next….

Public Relations

Principles of Marketing Lecture-37