1. Strategic Marketing 1. Imperatives for Market-Driven Strategy
2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning
7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing Market-Driven Organizations
15. Marketing Strategy Implementation And Control

2. SALES FORCE, INTERNET, AND DIRECT MARKETING STRATEGIES
CHAPTER 13
SALES FORCE, INTERNET, AND DIRECT MARKETING STRATEGIES
Sales Force Strategy
Internet Strategy
Direct Marketing Strategies
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

3. SALES FORCE STRATEGY
A company’s sales force strategy determines how the organization will use the personal selling function to maintain contact with customers and develop the relationships that management wants in order to achieve marketing and promotion objectives.

4. RELATIONSHIP FEATURE: The Vital Role of Selling at the Boeing Co.
During the 2000s Boeing experienced an intense competitive battle against Airbus for control of the commercial jetliner market. Airbus was winning the battle until 2005 when Boeing’s Asia-Pacific jet sales were $26 billion compared to Airbus’ $9 billion.
Under a new CEO management gave salespeople much more control over selling strategy compared to previous tight and rigid control by top management. Boeing lost many sales to Airbus because of top management’s unwillingness to give competent professionals flexibility in negotiating sales. Salespeople like Larry Dickenson, Boeing’s top salesman who covers the Asia-Pacific market, builds on over 18 years of relationships with airlines like Cathay Pacific, Quantas Airways Ltd., and Singapore Airlines, Ltd., to negotiate winning contracts.
Importantly, Dickenson carefully plans and executes each sales campaign, overseeing every detail in the process that may span several years. The strategy is a combination of attractive pricing, financing, and leasing arrangements in combinations with training and service packages.
Source: Stanley Holmes, “Boeing’s Jet Propellant,” BusinessWeek, December 26, 2005, 40.

5. Determine the role of the sales force in promotion strategy
Sales Force Strategy
Define the selling process (how selling will be accomplished)
Decide if and how alternative sales channels will be utilized
Design the sales organization
Recruit, train, and manage salespeople
Evaluate performance and make adjustments where necessary

6. Challenges in Selling and Sales Management
Two sets of ethical dilemmas are of particular concern to sales managers. The first set is embedded in the manager’s dealings with the salespeople. Ethical issues involved in relationships between a sales manager and the sales force include such things as fairness and equal treatment of all social groups in hiring and promotion, respect for the individual in supervisory practices and training programs, and fairness and integrity in the design of sales territories, assignment of quotas, and determination of compensation and incentive rewards. Ethical issues pervade nearly all aspects of sales force management.
The second set of ethical issues arises from the interactions between salespeople and their customers. These issues only indirectly involve the sales manager because the manager cannot always directly observe or control the actions of every member of the sales force. But managers have a responsibility to establish standards of ethical behavior for their subordinates, communicate them clearly, and enforce them vigorously.
Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 7th ed., Burr Ridge, IL: McGraw-Hill/Irwin, 2003, 21.

7. Business and Marketing Strategy Influences on Sales Strategy
Business Strategy
Promotion Strategy
Market Target(s) Strategy
SALES
STRATEGY
Pricing Strategy
Product Strategy
Distribution Strategy

8. SALES FORCE CHALLENGES
Escalating customer expectations
Marketing productivity crisis
Intense global competition
SALES FORCE CHALLENGES
Mergers and acquisitions
Blurring of industry boundaries
Technology Advances

9. Range of Selling Roles Transactional Selling Consulting-Type
Relationships

10. Defining the Selling Process
Finding Prospects
Opening the Relationship
Qualifying the Prospect
Presenting the Sales Message
Closing the Sale
Servicing the Account
Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, McGraw-Hill/Irwin, 2003,

11. The Selling Process Guides
Recruiting
Training
Effort Allocation
Organizational Design
Selling Support Activities

12. Selecting Sales Channels to End Users
Major Account Management
Field Sales Force
Telemarketing
Electronic/Mail Contact

13. Deployment of Selling Effort
DESIGNING THE SALES ORGANIZATION
Organizational Structure
Deployment of Selling Effort

14. Sales Force Deployment
Size of the Sales Force
Allocation of Selling Effort
Salesperson skills and effort
PLUS
Market potential
Number and location of customers
Intensity of competition
Market (brand) position of the company

15. Designing the Sales Organization
Customer needs
different
Market-Driven design
Product/ Market-Driven design
Simple
product
offering
Complex
range of
products
Geography-Driven design
Product-
Driven design
Customer needs
similar

16. Selecting an Organizational Design
What is the selling job?
How much customer/product specialization is necessary?
Role of value chain (channel) relationships?
How many sales management levels (hierarchy versus process)?
Will sales teams be used?
Sales channels in addition to the field sales force?
Are there any sales structure danger signals (high costs, turnover, large sales variations across territory?

17. Salesforce.com Makes People More Productive
INTERNET
FEATURE:
Salesforce.com Makes People More Productive
Salesforce.com is an interesting example of a dot-com start-up which has developed a successful business model supplying customer management software over the Net for use by salespeople. A key feature of the software is that it is sold as a service to customers at a monthly charge for each individual user. Salesforce.com has nearly 450,000 22,700 companies worldwide. Salesforce.com illustrates how Internet information technology can enhance the capabilities and efforts of salespeople. By replacing large up-front software purchases with monthly service charges, Salesforce.com offers customers a compelling value opportunity. Since this feature can be duplicated by software competitors such as Siebel Systems, Oracle, and PeopleSoft, Salesforce.com may have difficulty sustaining its competitive edge.
CEO Marc Benioff launched a new product initiative in 2005 intended to strengthen Salesforce.com’s competitive edge. AppExchange is an online market place enabling software firms and customers to trade and sell applications they develop. There will be no charge for the eBay like service but Benioff expects to expand demand for the firm’s software.
Source: Salesforce.com website and “An eBay for Business Software,” BusinessWeek, September 19, 2005,

18. Sales Force Size Example40 35 30 25 20 15 10 5
Sales
Current level
Maximum profit
contribution level
$ millions
Gross profit
contribution
Selling
expense
Number of salespeople

19. Managing the Salesforce
Finding and Selecting Salespeople
Training/Development
Management Control
Monitoring
Directing
Evaluating
Rewarding

20. Wyeth Reorganizes the Sales Force to Improve Productivity
STRATEGY
FEATURE:
Wyeth Reorganizes the Sales Force to Improve Productivity
Wyeth’s changes in the sales organization are
driven by concerns of physicians about duplicated
sales coverage and the need to improve salesforce
productivity.
The prior approach of multiple salespeople calling on
doctors to market the same drugs is being changed.
Out of Wyeth’s salesforce of 5000, about half call on
primary-care doctors. As many as 750 nay be cut or
reassigned.
The selling strategy is to reduce the frequency of
sales calls, while making each more worthwhile.
Initiatives include assigning each salesforce
responsibility for more drugs, reducing sales calls on
the doctors who write the fewest prescriptions, and
utilizing a part-time sales force for coverage of
selected accounts, and use of Internet-based
seminars.
Source: Scott Hensley, “Wyeth to Revamp, Cut Its Sales Force,” The Wall Street Journal, June 20, 2005, A3, A6.

21. Sales Force Evaluation and Control Performance Standards
Performance Measures
Focus on Management Control and/or Outcomes?
Performance Standards

22. Reinventing the Sales Organization
Customer Relationships
Applying Technology
Coaching
SALES MANAGER CHALLENGES
Performance Huddles
Sales Structure
Internal Relationships
Customer Channels
Keeping Score

23. Deciding Internet Objectives E-Commerce Strategy
INTERNET STRATEGY
Strategy Development
Deciding Internet Objectives
E-Commerce Strategy
Value Opportunities and Risks
Measuring Internet Effectiveness
The Future of the Internet

24. Internet Strategy Alternatives
Promotional Medium
Communication Tool
Value-Chain Channel
Separate Business Model

25. Deciding Internet Objectives
Creating Awareness and Interest
Information Dissemination
Obtaining Research Information
Brand Building
Improving Customer Service

26. Designing Internet Strategy
Customer Groups Targeted
Value Proposition
Communications Strategy
Designing the Website
Structure of the Organization
Alliance Partners
Shareholder Value
Tracking Performance

27. Measuring Internet Effectiveness
Challenging but capabilities are developing.
What should be measured and how?
Major changes are likely through trial and error.
Alternative measures:
Ad impressions, clicks, unique visitors, total visits, page impressions

28. E-Tailing Finally Hits Its Stride
The E-tail Effect
How e-commerce is shaking up the retail landscape:
THE BIG GUNS ARRIVE
After early struggles, online sales at brick-and-mortar giants such as Wal-Mart, Sears, and Gap are soaring. These chains are also using the Web to test new products and move into new markets.
NICHES GO NATIONAL
More and more niche players are succeeding by offering variety rivals can’t match. Luggage seller eBags, for example, is able to stock 12,000 styles, compared with 250 in a typical store.
SEARCH LENDS A HAND
Using Google and similar Websites, consumers can search far and wide for specialized products – say, stainless-steel farm sinks. That’s creating markets for lesser known brands and new merchants.
MORE PRICING PRESSURES
Shoppers are increasingly using price-comparison sites such as Shopping.com and Shopzilla. The result: Ever more cutthroat competition for brick-and-mortar and online stores alike.
Source: “E-Tailing Finaly Hits Its Stride,“ BusinessWeek, December 20, 2004,

29. The Future of the Internet
Revolutionary for certain industries and incremental for others.

30. DIRECT MARKETING Kiosk Shopping Catalogs Electronic Shopping
Direct Mail
Radio/Magazine/
Newspaper
Telemarketing
Television

31. Advantages of Direct Marketing
Socio-economic Trends
Time constraints/
convenience
Low Access Costs
Much lower than face-to-face
contact
Data Base Management
Facilitates direct marketing
initiatives
Value
An attractive bundle of value