1. 13. Sales and Cross-cultural Management

2. Chapter Overview 1.Market Entry Options and Salesforce Strategy 2.Cultural Considerations 3.Impact of Culture on Sales Management and Personal Selling Process 4.Cross-Cultural Negotiations 5.Expatriates 2

3. Introduction The salesperson is the front line for many companies. The success or failure of the company rests largely on the ability of its sales force. International sales management can be divided into two categories: (a) international strategy considerations, and (b) intercultural considerations. Issues such as recruiting, training, supervising, and evaluating sales force are an integral part of international sales management. 3

4. Exhibit 13-1: International Sales Strategy and Intercultural Considerations 4

5. 1. Market Entry Options and Sales Force Strategy The sales management “process” starts with setting objectives and strategy. Other issues include: recruiting, training, supervising, and evaluating. In addition, market entry methods and level of integration are equally important (Exhibit 13-2). 5

6. Exhibit 13-2: Degree of Involvement and Sales Management Issues 6

7. 1. Market Entry Options and Sales Force Strategy Low-Involvement Options – Export Management Companies(EMCs) – Export Trading Companies (ETCs) Sogoshosha (Japanese general trading companies) – Examples: Mitsubishi, Mitsui, Sumitomo, and Marubeni Mid-level Involvement High-Involvement Role of Foreign Governments – Issues of host governments’ rules and practices – Companies as “corporate citizens” in the host countries 7

8. 2. Cultural Considerations Personal Selling – At the level of personal selling, there is little true international selling. – The sales task tends to take place on a national basis. – Personal selling is predominantly a personal activity. 8

9. Avon Sales Rep in Brazil 9

10. 3. Cultural Generalization Cultural Generalization Organization (Corporate) Culture Relationship Marketing Myers-Briggs Type Indicator–MBTI (Exhibit 13-3) Popular tool for characterizing people which addresses their cognitive styles and is based on the following four personal dimensions: 1.Extrovert vs. Introvert 2.Sensing vs. Intuitive 3.Thinking vs. Feeling 4.Judging vs. Perceiving 10

11. Exhibit 13-3: Differences in Buyer-Seller Relationships 11 13-3

12. 4. Impact of Culture on Sales Management and Personal Selling Process Sales force management consists of: Setting salesforce objectives Designating salesforce strategy Recruiting and selecting salespeople Training salespeople Supervising salespeople Evaluating salespeople 12

13. 4. Impact of Culture on Sales Management and Personal Selling Process Salesforce Objectives – What the salesforce will be asked to do Salesforce Strategy – Sales structures: territorial salesforce, product salesforce, and customer salesforce Recruiting and Selection Training 13

14. 4. Impact of Culture on Sales Management and Personal Selling Process Supervision – Motivation and Compensation – Management Style – Ethical Perceptions Evaluation – Quantitative evaluations – Qualitative evaluations 14

15. 5. Cross-Cultural Negotiations Conducting successful cross-cultural negotiations is a key ingredient for many international business transactions. Stages of the Negotiation Process: – Non-task surroundings – Task-related information exchange – Persuasion – Concessions and agreement 15

16. Exhibit 13-5: Negotiation Styles and Guidelines in Five Countries 16

17. 5. Cross-Cultural Negotiations Cross-Cultural Negotiation Strategies a.Employ an agent or advisor b.Involve a mediator c.Induce the counterpart to follow one’s own negotiation script d.Adapt the counterpart’s negotiation script e.Coordinate adjustment of both parties f.Embrace the counterpart’s script g.Improvise an approach h.Effect symphony 17

18. Exhibit 13-6: Culturally Responsive Strategies and Their Feasibility 18

19. 5. Cross-Cultural Negotiations Consider these steps prior to strategy selection. 1.Reflect on your culture’s negotiation practices 2.Learn the negotiation script common in the counterpart’s culture 3.Consider the relationship and contextual cues 4.Predict or influence the counterpart’s approach 5.Choose a strategy 19

20. 6. Expatriates Expatriates are home-country personnel sent overseas to manage local operations in the foreign market. Advantages of Expatriates – Better Communications – Development of Talent Difficulties of Sending Expatriates Abroad – Cross-Cultural Training – Motivation – Compensation – Family Discord – Security Risk 20

21. 6. Expatriates The Return of the Expatriate – Repatriation – Repatriation is the return of the expatriate employee from overseas. – GMAC Relocation Services’ 2001 Survey reported a number of effective ways to reduce attrition rates. These include the following: Chances to use international experience A choice of positions upon return Recognition Repatriation career support 21

22. 6. Expatriates Generalizations for Using Expatriates – Expatriates are important whenever communication with the home country office is at a premium. – Expatriates are especially important in complex operating environments, or when elevated political risk requires constant monitoring. 22